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The rest of the article is good, but this part is wrong: >This can be incredibly useful, and is necessary for some applications. There is no reason to have a

The rest of the article is good, but this part is wrong: >This can be incredibly useful, and is necessary for some applications. There is no reason to have a system "without trust", the very idea of that makes no sense and there is no such thing as a system "without trust". Examples: To even use a computer or use a computer network you have to on some level trust the manufacturer of the systems as well as the supply chain that built it. To use any blockchain you have to trust that at some point it's not going to get 51% attacked. To use any businesses that work on the blockchain you have to trust those businesses on some level instead of just trusting "the blockchain" or a smart contract, if eventually you expect to receive a good or service that transfers into the real world, because agreements about those things can only be upheld by lawyers, not blockchains. The amount of entities you have to trust to realistically interact with any blockchain is massive. The idea that they're somehow "trustless" is simply wrong. And I've made comments about this before but I'll make it again. Blockchains are useless and are unnecessary for every application. They do nothing that isn't better achieved by another consensus mechanism. The only reason to use PoW/PoS or any of the other blockchain consensus algorithms is to use them to implement cryptocurrency, which is only useful as a form of unregulated and volatile and mostly useless money that you can pay people in those tokens for running the network. If you can come up with any other way to pay people to run a network, then you don't need cryptocurrency.

zamadatix 4y ago
Note your quote from the author was talking about collaboration without requiring trust in collaborators not a system without requiring trust in the system. 51% attacks are the closest to what the author was actually talking about but that has more to do with trusting and accepting how the system (and as you say, somewhat reality) works than any particular trust in a collaborator. That said it still doesn't make the list of cases this capability is needed any longer.
thebean11 4y ago
No safeguard is foolproof, including protections against 51% attacks. That doesn't make the precautions pointless though. It's like saying locks are useless because they can be picked.
- throwaway82652 4y ago
  Sure but every blockchain I've seen make an effort to be decentralized has its "precautions" mostly in the form of an NGO that tries to manage the competing interests of every participant through various methods, to varying levels of success. A lot of them look suspiciously like unregulated credit unions or trust funds. There's that word "trust" again...
  - thebean11 4y ago
    Including Bitcoin and Ethereum? Maybe I'm not sure exactly what you mean.
- ben_w 4y ago
  From what I’ve seen from LockPickingLawyer, I now think locks are only useful to help honest people know what not to take: https://youtu.be/ULUz4u5FLYg https://youtu.be/ULUz4u5FLYg
  - FastEatSlow 4y ago
    An interesting point from the LockPickingLawyer that I'd like to point out is that while many, many locks are easy to break if you're interested, it's still effort. Your average locker or bike thief isn't picking locks, they're just taking whatever's easiest.
  - idontpost 4y ago
    I think that perspective is overblown. Yeah, anyone with the inclination to practice a bit can bypass a lock. You're not going to stop a professional burglary ring with any kind of lock. But there are a lot more lazy crackheads and dumb teenagers than professional burglars.
sk55 4y ago
Rather than viewing it as “trustless” you can view it as “trust minimized”. Then it might make more sense. Trust with your counterparty falls on a spectrum. You trust your friend, but maybe not an anonymous online individual. So you might use the blockchain to accept payments from the anonymous individual whereas with your friend, you might accept a check or Venmo.
- toomuchtodo 4y ago
  The only situation where trust is minimized or absent is jurisdictions where there is no law or less law, in which case you’re going to use force instead of code to enforce law. Trust is an inherent property of a functioning society, and hence why the bonafide use cases for blockchain and crypto are so few. If you live somewhere where the police, a judge, or government can make you whole in a dispute, not a lot of need for web3. If you live somewhere where that isn’t the case (failing nation states, authoritarian regimes), that’s a better product market fit for web3.
  - SilasX 4y ago
    And in about four hours I'm going to hear an equally-confident HN lecture about how "it's not worth it to sue" for less than $1000. Crypto-skeptics talk like the legal system is currently equipped to robustly make you whole in those transactions. It is manifestly not. Those transactions do, in fact, depend on other means of establishing trust. To be sure, a legal system is an important mechanism for facilitating trust. But also, be careful not to overstate its relevance either.
  - thebean11 4y ago
    > If you live somewhere where the police, a judge, or government can make you whole in a dispute You're missing the point. If you create a system where you won't need to make use of the legal system because transactions execute correctly by default, your transaction costs are suddenly way lower. Obviously your counterparty can still sue you after the fact, but thats a much better position to be in than needing the legal system to push the transaction through in the first place.
rglullis 4y ago
Don't fall into the trap of word-thinking. When people talk about "trustless" systems, it just means that there is no hidden state. What one sees as the consensus is valid for everyone.
- renewiltord 4y ago
  "Word-thinking". I like that phrase: when you over-index on the specific word as opposed to the meaning intended. For instance, thinking "act of god" is meaningless in a legal document etc. Takk takk
  - deleted 4y ago
    [deleted]
- deleted 4y ago
  [deleted]
ipaddr 4y ago
Absolute statments usually don't hold up well. Have you considered: Settlement is much quicker. Did you know it could take upto 7 years to settle a cheque/check. You don't have to trust the business as much as the business has to trust you before they send the goods. Chargebacks and unfavorable refunds can eat into profit. Quick settlements elimate this issue.
- short_sells_poo 4y ago
  > Did you know it could take upto 7 years to settle a cheque/check. The solution to cheques isn't blockchain, but simply to advance out of 19th century banking. Even a 20 year old mainframe would be an upgrade over cheques.
- endisneigh 4y ago
  Why are you using the worst case scenario? Plenty of banks settle a check in a single business day.
- melenaboija 4y ago
  > Settlement is much quicker. Did you know it could take upto 7 years to settle a cheque/check That has nothing to do with blockchain and does not mean at all it is the best way to solve the problem
- rvz 4y ago
  > Absolute statments usually don't hold up well. There you go. Otherwise I would not see YC's most valuable startup ignoring all these critics and reconsidering and using it for Crypto Payouts if it was so-called 'unnecessary' or 'useless' in the first place. [0] That is the problem with statements that take a very absolutist direction. It goes either way for anti-crypto supporters and also crypto supporters. > Chargebacks and unfavorable refunds can eat into profit. Quick settlements elimate this issue. The customer can instead contact the merchant for a refund instead of abusing the disputes system with chargeback fraud. [0] https://stripe.com/blog/expanding-global-payouts-with-crypto https://stripe.com/blog/expanding-global-payouts-with-crypto
colechristensen 4y ago
“Useless” is a strong statement which probably goes too far. One of the strongest usecases for blockchain is a distributed ledger among mostly trusted entities who frequently exchange resources. One or more of the big banks is developing blockchain to facilitate payments between banks who end up settling enormous amounts of money between them on a daily basis. It is just nicer and much lower overhead to have a distributed and cryptographically proven way to interact with this ledger than having one bank administer it. The mostly trusted nature of the relationships between them also means if there is an error, transactions can easily be reversed or fixed and there’s no concept of anything being stolen because the ledger doesn’t actually store any value.
vmception 4y ago
Is anybody else using blockchains as compute nodes? Like lambda that your users pay for to update the state of your application instead of you, while reading is completely free? I haven't seen an equivalent system thats so economical for developers. I don't care that my application doesn't need to be on all 7000 nodes, not even a factor. And as far as funnels go, in Web 2.0 logic the point of the "funnel" was to convert a user into a paying user, in Web 3 they are already paying users at the beginning of the funnel, and pay to update the state of your application before you ask them to do anything, this is heavily optimized for driving revenue when applying the funnel concept. So if you design your application for this, you can strip out most of the complicated frontend and backend stack and don't have to pay subscriptions to any SaaS service, and get revenue because your funnel is 1 step too.
- swalsh 4y ago
  "I don't care that my application doesn't need to be on all 7000 nodes, not even a factor." This is an interesting topic, blockchain security is very useful for a bunch of applications (i'd prefence that to say stop trying to touch the real world with the blockchain, and you realize it's fucking amazing) but you don't need the same amount of distributed security for all applications. Banking apps need high security, gaming apps need a lot less. Avalanche is really interesting in this respect. It has the main C-Chain which has thousands of validators but it also has subnets which might have just a few validators. This gives you the ability to toggle your security needs to your application (it also let's you toggle the VM, so you do things like add stateful precompiles which let you do things that may not be practical in the EVM.
deleted 4y ago
[deleted]
yupyup54133 4y ago
ScPrime and Storj use the blockchain to reduce micro-payment fees to data centers for data storage and bandwidth. Sure this could be done via traditional banking arrangements but the transaction fees would take a major bite out of the data center's profits.
t_mann 4y ago
We may not be able to go completely "without trust", but we can signifiantly reduce the amount of trust required. For financial contracts that can actually make a lot of sense. There's an army of banking regulators in every country, and yet we still see bank failures where people lose money every year (even in developed countries with functioning deposit insurance there's usually a limit on the amount that is insured), plus we get the occasional financial crisis every few decades, after the memory of the last one has faded.
tshaddox 4y ago
While I suppose I technically agree with you that you can't literally remove all trust by some definitions, that doesn't mean it's not vitally important to talking about and carefully considering who you trust and in many cases use technology to remove the reliance on trusting particular parties. For example, if I say "I want to use TLS to order something from an online retailer because I don't want to trust my ISP with my credit card and purchase information" it would not be appropriate to respond with "well that's just ridiculous, because there's no way to remove all trust, after all you still have to trust the online retailer to ship you the item, you have to trust your credit card company to not overcharge you, etc."
- throwaway82652 4y ago
  You're correct but that's not the way that these systems are promoted. I wouldn't have any problem with that particular aspect if the trust issue was framed that way, and there was some kind of real threat modeling going on. The idea of cryptocurrency is still terrible however.

zamadatix 4y ago

Note your quote from the author was talking about collaboration without requiring trust in collaborators not a system without requiring trust in the system. 51% attacks are the closest to what the author was actually talking about but that has more to do with trusting and accepting how the system (and as you say, somewhat reality) works than any particular trust in a collaborator. That said it still doesn't make the list of cases this capability is needed any longer.

thebean11 4y ago

No safeguard is foolproof, including protections against 51% attacks. That doesn't make the precautions pointless though. It's like saying locks are useless because they can be picked.

throwaway82652 4y ago
Sure but every blockchain I've seen make an effort to be decentralized has its "precautions" mostly in the form of an NGO that tries to manage the competing interests of every participant through various methods, to varying levels of success. A lot of them look suspiciously like unregulated credit unions or trust funds. There's that word "trust" again...
- thebean11 4y ago
  Including Bitcoin and Ethereum? Maybe I'm not sure exactly what you mean.
ben_w 4y ago
From what I’ve seen from LockPickingLawyer, I now think locks are only useful to help honest people know what not to take: https://youtu.be/ULUz4u5FLYg https://youtu.be/ULUz4u5FLYg
- FastEatSlow 4y ago
  An interesting point from the LockPickingLawyer that I'd like to point out is that while many, many locks are easy to break if you're interested, it's still effort. Your average locker or bike thief isn't picking locks, they're just taking whatever's easiest.
- idontpost 4y ago
  I think that perspective is overblown. Yeah, anyone with the inclination to practice a bit can bypass a lock. You're not going to stop a professional burglary ring with any kind of lock. But there are a lot more lazy crackheads and dumb teenagers than professional burglars.

sk55 4y ago

Rather than viewing it as “trustless” you can view it as “trust minimized”. Then it might make more sense. Trust with your counterparty falls on a spectrum. You trust your friend, but maybe not an anonymous online individual. So you might use the blockchain to accept payments from the anonymous individual whereas with your friend, you might accept a check or Venmo.

toomuchtodo 4y ago
The only situation where trust is minimized or absent is jurisdictions where there is no law or less law, in which case you’re going to use force instead of code to enforce law. Trust is an inherent property of a functioning society, and hence why the bonafide use cases for blockchain and crypto are so few. If you live somewhere where the police, a judge, or government can make you whole in a dispute, not a lot of need for web3. If you live somewhere where that isn’t the case (failing nation states, authoritarian regimes), that’s a better product market fit for web3.
- SilasX 4y ago
  And in about four hours I'm going to hear an equally-confident HN lecture about how "it's not worth it to sue" for less than $1000. Crypto-skeptics talk like the legal system is currently equipped to robustly make you whole in those transactions. It is manifestly not. Those transactions do, in fact, depend on other means of establishing trust. To be sure, a legal system is an important mechanism for facilitating trust. But also, be careful not to overstate its relevance either.
- thebean11 4y ago
  > If you live somewhere where the police, a judge, or government can make you whole in a dispute You're missing the point. If you create a system where you won't need to make use of the legal system because transactions execute correctly by default, your transaction costs are suddenly way lower. Obviously your counterparty can still sue you after the fact, but thats a much better position to be in than needing the legal system to push the transaction through in the first place.

rglullis 4y ago

Don't fall into the trap of word-thinking. When people talk about "trustless" systems, it just means that there is no hidden state. What one sees as the consensus is valid for everyone.

renewiltord 4y ago
"Word-thinking". I like that phrase: when you over-index on the specific word as opposed to the meaning intended. For instance, thinking "act of god" is meaningless in a legal document etc. Takk takk
- deleted 4y ago
  [deleted]
deleted 4y ago
[deleted]

ipaddr 4y ago

Absolute statments usually don't hold up well. Have you considered: Settlement is much quicker. Did you know it could take upto 7 years to settle a cheque/check. You don't have to trust the business as much as the business has to trust you before they send the goods. Chargebacks and unfavorable refunds can eat into profit. Quick settlements elimate this issue.

short_sells_poo 4y ago
> Did you know it could take upto 7 years to settle a cheque/check. The solution to cheques isn't blockchain, but simply to advance out of 19th century banking. Even a 20 year old mainframe would be an upgrade over cheques.
endisneigh 4y ago
Why are you using the worst case scenario? Plenty of banks settle a check in a single business day.
melenaboija 4y ago
> Settlement is much quicker. Did you know it could take upto 7 years to settle a cheque/check That has nothing to do with blockchain and does not mean at all it is the best way to solve the problem
rvz 4y ago
> Absolute statments usually don't hold up well. There you go. Otherwise I would not see YC's most valuable startup ignoring all these critics and reconsidering and using it for Crypto Payouts if it was so-called 'unnecessary' or 'useless' in the first place. [0] That is the problem with statements that take a very absolutist direction. It goes either way for anti-crypto supporters and also crypto supporters. > Chargebacks and unfavorable refunds can eat into profit. Quick settlements elimate this issue. The customer can instead contact the merchant for a refund instead of abusing the disputes system with chargeback fraud. [0] https://stripe.com/blog/expanding-global-payouts-with-crypto https://stripe.com/blog/expanding-global-payouts-with-crypto

colechristensen 4y ago

“Useless” is a strong statement which probably goes too far. One of the strongest usecases for blockchain is a distributed ledger among mostly trusted entities who frequently exchange resources. One or more of the big banks is developing blockchain to facilitate payments between banks who end up settling enormous amounts of money between them on a daily basis. It is just nicer and much lower overhead to have a distributed and cryptographically proven way to interact with this ledger than having one bank administer it. The mostly trusted nature of the relationships between them also means if there is an error, transactions can easily be reversed or fixed and there’s no concept of anything being stolen because the ledger doesn’t actually store any value.

vmception 4y ago

Is anybody else using blockchains as compute nodes? Like lambda that your users pay for to update the state of your application instead of you, while reading is completely free? I haven't seen an equivalent system thats so economical for developers. I don't care that my application doesn't need to be on all 7000 nodes, not even a factor. And as far as funnels go, in Web 2.0 logic the point of the "funnel" was to convert a user into a paying user, in Web 3 they are already paying users at the beginning of the funnel, and pay to update the state of your application before you ask them to do anything, this is heavily optimized for driving revenue when applying the funnel concept. So if you design your application for this, you can strip out most of the complicated frontend and backend stack and don't have to pay subscriptions to any SaaS service, and get revenue because your funnel is 1 step too.

swalsh 4y ago
"I don't care that my application doesn't need to be on all 7000 nodes, not even a factor." This is an interesting topic, blockchain security is very useful for a bunch of applications (i'd prefence that to say stop trying to touch the real world with the blockchain, and you realize it's fucking amazing) but you don't need the same amount of distributed security for all applications. Banking apps need high security, gaming apps need a lot less. Avalanche is really interesting in this respect. It has the main C-Chain which has thousands of validators but it also has subnets which might have just a few validators. This gives you the ability to toggle your security needs to your application (it also let's you toggle the VM, so you do things like add stateful precompiles which let you do things that may not be practical in the EVM.

deleted 4y ago

[deleted]

yupyup54133 4y ago

ScPrime and Storj use the blockchain to reduce micro-payment fees to data centers for data storage and bandwidth. Sure this could be done via traditional banking arrangements but the transaction fees would take a major bite out of the data center's profits.

t_mann 4y ago

We may not be able to go completely "without trust", but we can signifiantly reduce the amount of trust required. For financial contracts that can actually make a lot of sense. There's an army of banking regulators in every country, and yet we still see bank failures where people lose money every year (even in developed countries with functioning deposit insurance there's usually a limit on the amount that is insured), plus we get the occasional financial crisis every few decades, after the memory of the last one has faded.

tshaddox 4y ago

While I suppose I technically agree with you that you can't literally remove all trust by some definitions, that doesn't mean it's not vitally important to talking about and carefully considering who you trust and in many cases use technology to remove the reliance on trusting particular parties. For example, if I say "I want to use TLS to order something from an online retailer because I don't want to trust my ISP with my credit card and purchase information" it would not be appropriate to respond with "well that's just ridiculous, because there's no way to remove all trust, after all you still have to trust the online retailer to ship you the item, you have to trust your credit card company to not overcharge you, etc."

throwaway82652 4y ago
You're correct but that's not the way that these systems are promoted. I wouldn't have any problem with that particular aspect if the trust issue was framed that way, and there was some kind of real threat modeling going on. The idea of cryptocurrency is still terrible however.