6 ms·

Even then I personally don't really see how this is useful in practice. Of course an immutable and verifiable ledger sounds interesting, but the problem is the

Even then I personally don't really see how this is useful in practice. Of course an immutable and verifiable ledger sounds interesting, but the problem is the connection to the real world. The moment I want to use this ledger to prove anything about the real world I need some kind of trusted authority again to enforce or validate my claim. And in that case a plain old database would work better.

deet 5y ago
Indeed. I've always wanted to know "Okay, so if we record real property ownership on a blockchain, and someone trespasses in my house, who do I call?" If the answer is "the police", I'm not really sure what having the blockchain gets us, if anything at all. Recording changes at the county recorder is easy and cheap enough already, so what's the point?
- d0gbread 5y ago
  Can you explain why proof of ownership has anything to do with enforcement of that proof? We don't call the county recorder for trespassing.
  - MereInterest 5y ago
    Because existence of a trusted authority means that there's no need to shoulder the immense costs of full decentralization. The fact that you can call someone is the relevant point, not the details of who you call. Blockchain only makes sense to use if two parties (1) do not trust each other, (2) do not have some mutually trusted authority, and (3) have no set of N partially trusted authorities whose shared authority they would each trust. In any other circumstances, there exists a more efficient method to establish consensus. In the case of calling the police, it establishes that there exists a trusted authority, breaking condition (2).
  - deet 5y ago
    Because the concept of "ownership" doesn't really mean anything unless it can be enforced. What's the point of owning a house if you can't live in it because someone else is squatting in it? Since there doesn't seem to be a way to decentralize the enforcement of real property ownership (as enforcement could involve violence, which the state has a monopoly on given our current social contracts), we're stuck with centralization in at least one component of the "ownership-enforcement" pair... So then what's the point of decentralization at all?
    - WFHRenaissance 5y ago
      > Since there doesn't seem to be a way to decentralize the enforcement of real property ownership Private security firms exist. One theory for a way forward (not advocating): https://mises.org/library/private-production-defense https://mises.org/library/private-production-defense Anarchy, State, and Utopia by Nozick addresses some of the holes in this text, but there are options.
      - dsr_ 5y ago
        These theories ineveitably boil down to "the group with the ability to maintain a monopoly on the use of violence wins", and then argues that group should be selected on the basis of payment rather than voting.
        WFHRenaissance 5y ago
        Yep, Nozick's conclusion is that the competition of different security providers would ultimately culminate in a monopoly taking hold and functioning as a minimal state. SEE: minarchy
      - elevader 5y ago
        That sounds like a horrible "might makes right" scenario. If everybody just hires their own goons then the actual enforcement lies in who has more guns/people to enforce whatever they want, not in magical internet points.
        WFHRenaissance 5y ago
        Eh, I see your point, but theorists of polycentric law seem to think that it's possible that most firm versus firm violence would be mitigated via reparatory payments and agreements. They'd be businesses after all.
  - notahacker 5y ago
    You need the centralisation for enforcement. And the centralised entity trusts other branches of itself, not the blockchain. The police and courts do call the county recorder if they need to establish whose ownership they're enforcing. If that centralised entity is corrupt enough to surreptitiously mutate records, immutable records that you've made arent much help At best, the blockchain is superfluous, at worst misleading, since whilst the tangible benefits of ownership rests with what the county recorder says, you can sell notional claims to ownership of the property on blockchains to other people, potentially multiple other people all thinking their token on their blockchain is canonical. The priority of the enforcing agency is a much bigger issue for real world property rights than the mutation of records
    - memelordxx 5y ago
      >If that centralised entity is corrupt enough to surreptitiously mutate records, immutable records that you've made arent much help This seems like the opposite of true to me; if they intend to mutate the records doesn't it become extremely helpful that the records are immutable? What am I missing?
      - notahacker 5y ago
        How many land registries are currently on a public blockchain? Why would a corrupt one that wishes to mutate records be the first to switch?
        dsr_ 5y ago
        And why would a non-corrupt one which trusts itself and its future self want to switch?
        x1798DE 5y ago
        I think the argument would be that formerly corrupt enforcement entities, or entities with no track record, would use a blockchain as proof of their commitment to impartial enforcement going forward. "We know you don't trust us, but here is a public record that you know we didn't manipulate, so if we are going to steal your land we have to do it openly." That said, the same thing can be accomplished by outsourcing the public ledger to a third party with a reputation for trustworthiness. The same way that countries that cannot make a credible commitment to not devalue their money will often peg their currency to the dollar or the euro.
  - breischl 5y ago
    FWIW, my impression is that enforcement per se doesn't matter, but it does matter what source of truth the enforcement authority looks at. Somebody puts an entry on the blockchain that says they own my house. OK so what? Nobody cares. They can't get that enforced. If you want to make the sale "real" to the authorities, you have to enter it into the land registry - but now you have a coordination problem. Do we put it into the blockchain first (and hence you pay first) and then the land registry? Or vice versa? Either one requires trust. Hm, maybe we better involve a trusted third party like an escrow company... oh wait we just reinvented the existing system. All of this is not dissimilar to people selling NFTs of someone else's art. And you'll see the same problems if/when they try to violate copyright on that basis. If you could convince the relevant authorities that the blockchain was the system-of-record then you'd have something useful. But with all the problems of losing ownership, hacking, inability to recover defrauded assets, etc, what are the odds of that happening?
tcgv 5y ago
There's at least one useful use case for me. I can convert my country's currency to USD pegged stablecoins (USDC, DAI) at nearly market rates through a centralized exchange (ex: Binance) before sending them to my crypto wallet. Then I'm able to generate yield on this amount through apps like AAVE, Curve, Uniwswap, etc. This way I can hedge against the depreciation of my country's currency in an efficient way. There are a lot of risks of course, to name a few: Stablecoins could suddenly lose their value; Dapps can be hacked and funds permanently lost; For what it's worth I'm allocating a small portion of my "liquid" reserves in crypto (10%), only using stablished/audited dapps and avoiding Tether for reducing overall risk.
- beej71 5y ago
  While this seems to be a perfectly valid use of cryptocurrency, it doesn't scream "web3" to me.
  - RestlessMind 5y ago
    Now you are just moving the goalposts. Your gp comment asked - "Even then I personally don't really see how this is useful in practice." And your parent comment provided a legit answer. I have met people who transferred crypto to their home countries with unstable currencies and hyperinflation, which is then used by their families to procure stuff (on black market, of course).
kkielhofner 5y ago
The dirty little secret (which is showing more and more) is that to build a real business/application/etc on blockchain you're almost certainly using a "node provider". It turns out that running these decentralized nodes and doing so at anything approaching the needs of a real business is really, really hard. This is why almost all real crypto applications (including Coinbase and Opensea!) use a handful of node provider(s) with the two biggest being: https://www.alchemy.com/ https://www.alchemy.com/ (currently valued at $3.5B) https://infura.io/ https://infura.io/ (actually Consensys and valued at $3.2B) For IPFS there's the Infura product and Pinata (which actually uses AWS). While these may not be "crazy" valuations for the space it seems that many people and investors are aware that the utopian concept of everyone running their own node or whatever for access to/participation in these blockchains is more-or-less a pipe dream. You can check my comment history for examples of why these node providers are a necessity for anything other than toy blockchain use cases. What's interesting about these providers is that (once again) you're trusting a single source. The blockchain isn't the blockchain - the blockchain is whatever your commercial and centralized node provider says it is. I have no reason not to trust them but the reality is not only are we back to centralized providers, we're back to inherently trusting them. The gist of it is: if web3 is real and actually "takes over" companies like Alchemy and Infura are just the new AWS and GCP: https://www.alchemy.com/company https://www.alchemy.com/company Consensys is even more telling: https://consensys.net/products/ https://consensys.net/products/ Large node provider, wallet (MetaMask!), and popular development suite (Truffle) - among others.
- miracle2k 5y ago
  It's not that a small number of large node providers is a /good/ thing. But it's also incorrect to say that the result is the same as AWS or GCP, and it frustrates me to no end that the debate around this is so imprecise. First, your apps API to one of those node providers is standardized and stateless. Switching to a different one could not be more simple: changing a url in your config file; there is basically no lock-in. Second, running your own is by no means impossible. If you don't need an archive node, it is almost straightforward. It's certainly much easier than replacing all of your AWS dependencies. Third, for simple apps, the interaction with the node can be entirely browser-side, so it can be users choice which provider is used. For complex stuff you need to write an indexer to create the state you need, which is actually a more interesting problem because it does often mean that the smart contracts themselves cannot be served by a static HTML page, ergo making your product a centralizing factor. This is essentially what the The Graph is trying to solve. Fourth, there is another layer below all of this product-node interaction, that is more important - the nodes running the consensus. The nodes we are talking about here are just to access a copy of the state. There is value in consensus being spread over 20k nodes, even if all the web apps use Alchemy. Fifth, "trust" is nuanced. You have to ask yourself what failure cases you want to address. What power does Alchemy have over the network or the ecosystem? The answer is not much.
folex 5y ago
take plain old database, then add requirements 1) to be public, 2) not controlled by a single entity, 3) stored data is objectively consistent, and you basically get a blockchain
azangru 5y ago
> The moment I want to use this ledger to prove anything about the real world I need some kind of trusted authority again to enforce or validate my claim The moment someone buys a cup of coffee with bitcoin using the lightning network, don't they perform a transaction involving the real world?

deet 5y ago

Indeed. I've always wanted to know "Okay, so if we record real property ownership on a blockchain, and someone trespasses in my house, who do I call?" If the answer is "the police", I'm not really sure what having the blockchain gets us, if anything at all. Recording changes at the county recorder is easy and cheap enough already, so what's the point?

d0gbread 5y ago
Can you explain why proof of ownership has anything to do with enforcement of that proof? We don't call the county recorder for trespassing.
- MereInterest 5y ago
  Because existence of a trusted authority means that there's no need to shoulder the immense costs of full decentralization. The fact that you can call someone is the relevant point, not the details of who you call. Blockchain only makes sense to use if two parties (1) do not trust each other, (2) do not have some mutually trusted authority, and (3) have no set of N partially trusted authorities whose shared authority they would each trust. In any other circumstances, there exists a more efficient method to establish consensus. In the case of calling the police, it establishes that there exists a trusted authority, breaking condition (2).
- deet 5y ago
  Because the concept of "ownership" doesn't really mean anything unless it can be enforced. What's the point of owning a house if you can't live in it because someone else is squatting in it? Since there doesn't seem to be a way to decentralize the enforcement of real property ownership (as enforcement could involve violence, which the state has a monopoly on given our current social contracts), we're stuck with centralization in at least one component of the "ownership-enforcement" pair... So then what's the point of decentralization at all?
  - WFHRenaissance 5y ago
    > Since there doesn't seem to be a way to decentralize the enforcement of real property ownership Private security firms exist. One theory for a way forward (not advocating): https://mises.org/library/private-production-defense https://mises.org/library/private-production-defense Anarchy, State, and Utopia by Nozick addresses some of the holes in this text, but there are options.
    - dsr_ 5y ago
      These theories ineveitably boil down to "the group with the ability to maintain a monopoly on the use of violence wins", and then argues that group should be selected on the basis of payment rather than voting.
      - WFHRenaissance 5y ago
        Yep, Nozick's conclusion is that the competition of different security providers would ultimately culminate in a monopoly taking hold and functioning as a minimal state. SEE: minarchy
    - elevader 5y ago
      That sounds like a horrible "might makes right" scenario. If everybody just hires their own goons then the actual enforcement lies in who has more guns/people to enforce whatever they want, not in magical internet points.
      - WFHRenaissance 5y ago
        Eh, I see your point, but theorists of polycentric law seem to think that it's possible that most firm versus firm violence would be mitigated via reparatory payments and agreements. They'd be businesses after all.
- notahacker 5y ago
  You need the centralisation for enforcement. And the centralised entity trusts other branches of itself, not the blockchain. The police and courts do call the county recorder if they need to establish whose ownership they're enforcing. If that centralised entity is corrupt enough to surreptitiously mutate records, immutable records that you've made arent much help At best, the blockchain is superfluous, at worst misleading, since whilst the tangible benefits of ownership rests with what the county recorder says, you can sell notional claims to ownership of the property on blockchains to other people, potentially multiple other people all thinking their token on their blockchain is canonical. The priority of the enforcing agency is a much bigger issue for real world property rights than the mutation of records
  - memelordxx 5y ago
    >If that centralised entity is corrupt enough to surreptitiously mutate records, immutable records that you've made arent much help This seems like the opposite of true to me; if they intend to mutate the records doesn't it become extremely helpful that the records are immutable? What am I missing?
    - notahacker 5y ago
      How many land registries are currently on a public blockchain? Why would a corrupt one that wishes to mutate records be the first to switch?
      - dsr_ 5y ago
        And why would a non-corrupt one which trusts itself and its future self want to switch?
      - x1798DE 5y ago
        I think the argument would be that formerly corrupt enforcement entities, or entities with no track record, would use a blockchain as proof of their commitment to impartial enforcement going forward. "We know you don't trust us, but here is a public record that you know we didn't manipulate, so if we are going to steal your land we have to do it openly." That said, the same thing can be accomplished by outsourcing the public ledger to a third party with a reputation for trustworthiness. The same way that countries that cannot make a credible commitment to not devalue their money will often peg their currency to the dollar or the euro.
- breischl 5y ago
  FWIW, my impression is that enforcement per se doesn't matter, but it does matter what source of truth the enforcement authority looks at. Somebody puts an entry on the blockchain that says they own my house. OK so what? Nobody cares. They can't get that enforced. If you want to make the sale "real" to the authorities, you have to enter it into the land registry - but now you have a coordination problem. Do we put it into the blockchain first (and hence you pay first) and then the land registry? Or vice versa? Either one requires trust. Hm, maybe we better involve a trusted third party like an escrow company... oh wait we just reinvented the existing system. All of this is not dissimilar to people selling NFTs of someone else's art. And you'll see the same problems if/when they try to violate copyright on that basis. If you could convince the relevant authorities that the blockchain was the system-of-record then you'd have something useful. But with all the problems of losing ownership, hacking, inability to recover defrauded assets, etc, what are the odds of that happening?

tcgv 5y ago

There's at least one useful use case for me. I can convert my country's currency to USD pegged stablecoins (USDC, DAI) at nearly market rates through a centralized exchange (ex: Binance) before sending them to my crypto wallet. Then I'm able to generate yield on this amount through apps like AAVE, Curve, Uniwswap, etc. This way I can hedge against the depreciation of my country's currency in an efficient way. There are a lot of risks of course, to name a few: Stablecoins could suddenly lose their value; Dapps can be hacked and funds permanently lost; For what it's worth I'm allocating a small portion of my "liquid" reserves in crypto (10%), only using stablished/audited dapps and avoiding Tether for reducing overall risk.

beej71 5y ago
While this seems to be a perfectly valid use of cryptocurrency, it doesn't scream "web3" to me.
- RestlessMind 5y ago
  Now you are just moving the goalposts. Your gp comment asked - "Even then I personally don't really see how this is useful in practice." And your parent comment provided a legit answer. I have met people who transferred crypto to their home countries with unstable currencies and hyperinflation, which is then used by their families to procure stuff (on black market, of course).

kkielhofner 5y ago

The dirty little secret (which is showing more and more) is that to build a real business/application/etc on blockchain you're almost certainly using a "node provider". It turns out that running these decentralized nodes and doing so at anything approaching the needs of a real business is really, really hard. This is why almost all real crypto applications (including Coinbase and Opensea!) use a handful of node provider(s) with the two biggest being: https://www.alchemy.com/ https://www.alchemy.com/ (currently valued at $3.5B) https://infura.io/ https://infura.io/ (actually Consensys and valued at $3.2B) For IPFS there's the Infura product and Pinata (which actually uses AWS). While these may not be "crazy" valuations for the space it seems that many people and investors are aware that the utopian concept of everyone running their own node or whatever for access to/participation in these blockchains is more-or-less a pipe dream. You can check my comment history for examples of why these node providers are a necessity for anything other than toy blockchain use cases. What's interesting about these providers is that (once again) you're trusting a single source. The blockchain isn't the blockchain - the blockchain is whatever your commercial and centralized node provider says it is. I have no reason not to trust them but the reality is not only are we back to centralized providers, we're back to inherently trusting them. The gist of it is: if web3 is real and actually "takes over" companies like Alchemy and Infura are just the new AWS and GCP: https://www.alchemy.com/company https://www.alchemy.com/company Consensys is even more telling: https://consensys.net/products/ https://consensys.net/products/ Large node provider, wallet (MetaMask!), and popular development suite (Truffle) - among others.

miracle2k 5y ago
It's not that a small number of large node providers is a /good/ thing. But it's also incorrect to say that the result is the same as AWS or GCP, and it frustrates me to no end that the debate around this is so imprecise. First, your apps API to one of those node providers is standardized and stateless. Switching to a different one could not be more simple: changing a url in your config file; there is basically no lock-in. Second, running your own is by no means impossible. If you don't need an archive node, it is almost straightforward. It's certainly much easier than replacing all of your AWS dependencies. Third, for simple apps, the interaction with the node can be entirely browser-side, so it can be users choice which provider is used. For complex stuff you need to write an indexer to create the state you need, which is actually a more interesting problem because it does often mean that the smart contracts themselves cannot be served by a static HTML page, ergo making your product a centralizing factor. This is essentially what the The Graph is trying to solve. Fourth, there is another layer below all of this product-node interaction, that is more important - the nodes running the consensus. The nodes we are talking about here are just to access a copy of the state. There is value in consensus being spread over 20k nodes, even if all the web apps use Alchemy. Fifth, "trust" is nuanced. You have to ask yourself what failure cases you want to address. What power does Alchemy have over the network or the ecosystem? The answer is not much.

folex 5y ago

take plain old database, then add requirements 1) to be public, 2) not controlled by a single entity, 3) stored data is objectively consistent, and you basically get a blockchain

azangru 5y ago

> The moment I want to use this ledger to prove anything about the real world I need some kind of trusted authority again to enforce or validate my claim The moment someone buys a cup of coffee with bitcoin using the lightning network, don't they perform a transaction involving the real world?