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My personal stance on why Blockchain is often not required is that a core feature of the Blockchain - decentralization( based on a lack of trust on a single ent

My personal stance on why Blockchain is often not required is that a core feature of the Blockchain - decentralization( based on a lack of trust on a single entity) is not needed in the business world. In business, trust is an essential factor by which you pick your partners and suppliers, and often businesses reject cheaper offers in favour of business partners they know and trust based on past cooperations.

hansworst 4y ago
Isn’t this an argument for blockchains? If you could rely on blockchains instead of trusting based on past cooperation, you could save money and thus add more value. Obviously blockchains have a cost, but in some cases the cost savings you could achieve may outweigh that.
- rullelito 4y ago
  Bitcoin can't make up for lack of trust in your business partner.
- konschubert 4y ago
  The blockchain can prove that I bought the car and own it now. But that has never been the problem. Trust is still required because I need to trust the seller that the car isn't a lemon and he didn't put explosives into the back seat. The blockchain solves none of that.
  - yenwel 4y ago
    blockchain could be used to put reputation systems on them.
    - bfung 4y ago
      How would that work? We have Yelp, Google reviews, Amazon reviews… how would something like that work on a blockchain/ledger and not be gamed just like the review systems we have now?
    - Mordisquitos 4y ago
      And how would we avoid this reputation blockchain from being populated by maliciously deceptive information, be it positive reputation promoted by the business through bribed or fake customers, or negative reputation promoted by unethical competitors?
    - ben_w 4y ago
      Reinventing existing trust mechanisms but with an extra (computationally expensive) layer of things that can go wrong is the opposite of an improvement.
    - konschubert 4y ago
      I see no reason why a reputation system needs distributed consensus. It needs asymmetric encryption (signatures), but not a blockchain.
  - jstimpfle 4y ago
    Also, did you receive a car in the first place.
- yumaikas 4y ago
  > If you could rely on blockchains instead of trusting based on past cooperation What about blockchains would make them an effective stand-in for building trust over time? One is a ledger, the other is an interpersonal relationship, and the two really are not the same. If I'm going to take a risk, I'd rather take a risk where there's some human expectation of managing bumps in the road, and which has some means of redress if sufficient malice is involved, instead of one where a smart contract bug means that I've lost a lot of money.
- fabian2k 4y ago
  How would a blockchain replace trust in a supplier's ability to deliver on time and with the right quality?
- deleted 4y ago
  [deleted]
- josephg 4y ago
  Most of the ways businesses need to trust each other can’t be captured by rules on the blockchain. It’s things like - I trust my supplier won’t go bankrupt. I trust my supplier will deliver work of a consistent quality. I trust that if I have some problem, I can call someone on the phone and they’ll take my call, listen to my problem and take responsibility for fixing the issue. How would you express any of this stuff on a blockchain in a useful way? We could have “blockchain yelp” but it’s hard to protect that against fake reviews. And seeing a mix of reviews isn’t enough to know if you should go into business with someone.
  - Karrot_Kream 4y ago
    Yes blockchain based tokens (so anything but pure currency) always runs into issues when they meet the physical world. Oracles are just trust anchors and as you say there's no way to avoid the reality that physical auditing is necessary to ensure clean exchange of goods and services. OpenBazaar has run into numerous issues over the years and it's been out there as a marketplace before Ethereum ever existed; they all stem from the general difficulty of interfacing with the physical world. This isn't the case for digital only assets though. There are certainly much fewer digital assets people use than physical ones, but they're there. Domain names, forum membership, entry gates, game skins, etc. How many times have you entered a community and thought it would be great to have a tiny bar to contribution, like a small membership fee, enough to weed out spammers and young children? This is aside from enterprise oriented chains like Ripple that just use chains help facilitate regular business.
  - Eji1700 4y ago
    Some of the "better" arguments i've seen are obsoleting/maintaining anything that is quasi public record. Think all sorts of land/legal transactions where it's basically "once x and y and z have said yes, process transaction from x to z" Codifying ANY logic is doable, but especially simple logic like that has it's upsides in how many middle men it can help eliminate, and the TONS of human error that comes with it. In the examples you're giving, you could have codified "here's what happens if the supplier cannot complete the transaction" or "here's what happens if parties cannot agree on the quality of the work" or a zillion other things that already exist. You did, however, hit on the big one, that when something goes wrong or something is misunderstood or somehow someone needs to talk to a human...well good fucking luck. The obvious downside of all the decentralization mantra is that of course it means you're liable for your own mistakes, which is just NOT a business model that ever works. That said, the crypto space has gotten massively more centralized (because it turns out market forces still don't give a fuck about your philosophy), and I think the future of the tech lies somewhere else entirely, where end users functionally never interact with it.
- atoav 4y ago
  I as a business would not want to work with people who do not trust me to fulfill my (e.g. contractual or financial) obligations. If they have to trust me to pay them, do my job, fulfill my contract anyways, what value is there in some sort of digital system that technically decentralizes trust, but where the other side still has to trust me I did nothing malicious with it? If anything all that the developments in cryptocurrencies show is that a technically trustworthy infrastructure can (and will) be used for nefarious means. That means even if you were to use such an infrastructure you'd still have some interface to the real world, where people cannot pay, not do their job, do their job in a way you did not agree, etc. So you still would have to protect your interest in the traditional way and you'd still have to trust the other side. So using a blockchain is just like using a database and giving up a certain amount of control over it.
- HelloNurse 4y ago
  Given a set of parties that I trust and I am willing to do business with, why should I spend money and technical resources, and give up privacy, for the privilege of using a blockchain to state to the world that I trust them? Why should I embrace a dependency on a crypto provider, or trust someone because the crypto provider's blockchain says that I should? EDIT: replaced "cryptoscammer" with "crypto provider" for generality.
oleganza 4y ago
That's a false dichotomy. Anyone would choose someone they trust most out of other need-to-trust counterparties. If there was an alternative to not use any unnecessary counterparty at all - that would be even better. E.g. if you transfer Bitcoin from country A to country B you know for sure that it will arrive without any intermediate bank inserting their opinion in the process and causing surprising delays.
- hef19898 4y ago
  Banks do provide much more valuable services than just processing money transfers so.
- knorker 4y ago
  Some of the delays are effectively by law, so what you're really saying is "without any laws I may be breaking inserting their opinion, and any pesky police causing surprising delays". Reminds me of how GWB said that it would be much easier to be president if he were a dictator. Yeah, I bet! But despite that it's a terrible idea. Banks don't cause delays because they want to. And it's not a technical problem. Worth repeating: Delays in bank transfers is NOT a technical problem. All these cryptocurrency "solutions" are trying to tear down a fence they have no idea why it's there. Turns out it was put up over centuries to solve actual societal problems. People should work on improving the fence instead of thinking it should be torn down to be replaced by nothing.
  - oleganza 4y ago
    You are right, that's not a technical problem and Bitcoin is not a technical solution either — that's a social game of "let's make ourselves some new money without built-in constraints". Then you would need to add some constraints over it for security, but the key difference would be that it's an open market: you can invent one solution, I can invent another and people will be free to choose between them or nothing at all. When your money comes with some regulatory framework built-in, there is no much room for any choices in that respect and more temptation for all kinds of bureaucrats to abuse their power.
janekm 4y ago
There are scenarios where a multi-party ledger can be useful in business... Think about a logistics chain where everybody needs to know that a record wasn't modified in retrospect. But then you only need a mini-blockchain along the lines of what IBM calls blockchain, you may have a few industry players and say a customs agency agree to sign the entries and then there will be no dispute about whether an entry was signed on a particular day. Energy cost of that is negligible. (and you don't need to put the actual transaction info into the ledger... just the signature is enough so everyone on the chain can confirm later that it wasn't modified). All of this is also pretty ancient tech by now... IBM just basically jumped on the blockchain branding bandwagon I'd say...
- lbriner 4y ago
  You could already do this without blockchain, the problem is adoption. If I create a leger that requires basic crypto-signing, I would need everyone to agree to use the system, perhaps try and make it the only system so there is an incentive to use it - and that is the difficult part. Have some blockchain doesn't solve the problem of how you try and get people to adopt it.
- TomSwirly 4y ago
  You don't need even a "mini-blockchain" - you just need a boring old 1970s vintage Merkle Tree.
- majewsky 4y ago
  > Think about a logistics chain where everybody needs to know that a record wasn't modified in retrospect. Why not just have event payloads signed by a neutral fiduciary?
- littlecranky67 4y ago
  a very simple timestamp hashing service (such as defined in RFC3161) will do that job.
rich_sasha 4y ago
The various crypto meltdowns of the recent years show that crypto actually involves lots and lots of trust. From the frontend doing what it really says, through intricacies of how the smart contracts work, manual control over wallets, and trusting the business logic. Transaction security is kind of the last thing to worry about.
- cannabis_sam 4y ago
  I agree, but none of these trust issues are solved by using blockchai based solutions…
  - cannabis_sam 4y ago
    Hilariously this is a business opportunity, far bigger than any crypto startup being funded by yc…

hansworst 4y ago

Isn’t this an argument for blockchains? If you could rely on blockchains instead of trusting based on past cooperation, you could save money and thus add more value. Obviously blockchains have a cost, but in some cases the cost savings you could achieve may outweigh that.

rullelito 4y ago
Bitcoin can't make up for lack of trust in your business partner.
konschubert 4y ago
The blockchain can prove that I bought the car and own it now. But that has never been the problem. Trust is still required because I need to trust the seller that the car isn't a lemon and he didn't put explosives into the back seat. The blockchain solves none of that.
- yenwel 4y ago
  blockchain could be used to put reputation systems on them.
  - bfung 4y ago
    How would that work? We have Yelp, Google reviews, Amazon reviews… how would something like that work on a blockchain/ledger and not be gamed just like the review systems we have now?
  - Mordisquitos 4y ago
    And how would we avoid this reputation blockchain from being populated by maliciously deceptive information, be it positive reputation promoted by the business through bribed or fake customers, or negative reputation promoted by unethical competitors?
  - ben_w 4y ago
    Reinventing existing trust mechanisms but with an extra (computationally expensive) layer of things that can go wrong is the opposite of an improvement.
  - konschubert 4y ago
    I see no reason why a reputation system needs distributed consensus. It needs asymmetric encryption (signatures), but not a blockchain.
- jstimpfle 4y ago
  Also, did you receive a car in the first place.
yumaikas 4y ago
> If you could rely on blockchains instead of trusting based on past cooperation What about blockchains would make them an effective stand-in for building trust over time? One is a ledger, the other is an interpersonal relationship, and the two really are not the same. If I'm going to take a risk, I'd rather take a risk where there's some human expectation of managing bumps in the road, and which has some means of redress if sufficient malice is involved, instead of one where a smart contract bug means that I've lost a lot of money.
fabian2k 4y ago
How would a blockchain replace trust in a supplier's ability to deliver on time and with the right quality?
deleted 4y ago
[deleted]
josephg 4y ago
Most of the ways businesses need to trust each other can’t be captured by rules on the blockchain. It’s things like - I trust my supplier won’t go bankrupt. I trust my supplier will deliver work of a consistent quality. I trust that if I have some problem, I can call someone on the phone and they’ll take my call, listen to my problem and take responsibility for fixing the issue. How would you express any of this stuff on a blockchain in a useful way? We could have “blockchain yelp” but it’s hard to protect that against fake reviews. And seeing a mix of reviews isn’t enough to know if you should go into business with someone.
- Karrot_Kream 4y ago
  Yes blockchain based tokens (so anything but pure currency) always runs into issues when they meet the physical world. Oracles are just trust anchors and as you say there's no way to avoid the reality that physical auditing is necessary to ensure clean exchange of goods and services. OpenBazaar has run into numerous issues over the years and it's been out there as a marketplace before Ethereum ever existed; they all stem from the general difficulty of interfacing with the physical world. This isn't the case for digital only assets though. There are certainly much fewer digital assets people use than physical ones, but they're there. Domain names, forum membership, entry gates, game skins, etc. How many times have you entered a community and thought it would be great to have a tiny bar to contribution, like a small membership fee, enough to weed out spammers and young children? This is aside from enterprise oriented chains like Ripple that just use chains help facilitate regular business.
- Eji1700 4y ago
  Some of the "better" arguments i've seen are obsoleting/maintaining anything that is quasi public record. Think all sorts of land/legal transactions where it's basically "once x and y and z have said yes, process transaction from x to z" Codifying ANY logic is doable, but especially simple logic like that has it's upsides in how many middle men it can help eliminate, and the TONS of human error that comes with it. In the examples you're giving, you could have codified "here's what happens if the supplier cannot complete the transaction" or "here's what happens if parties cannot agree on the quality of the work" or a zillion other things that already exist. You did, however, hit on the big one, that when something goes wrong or something is misunderstood or somehow someone needs to talk to a human...well good fucking luck. The obvious downside of all the decentralization mantra is that of course it means you're liable for your own mistakes, which is just NOT a business model that ever works. That said, the crypto space has gotten massively more centralized (because it turns out market forces still don't give a fuck about your philosophy), and I think the future of the tech lies somewhere else entirely, where end users functionally never interact with it.
atoav 4y ago
I as a business would not want to work with people who do not trust me to fulfill my (e.g. contractual or financial) obligations. If they have to trust me to pay them, do my job, fulfill my contract anyways, what value is there in some sort of digital system that technically decentralizes trust, but where the other side still has to trust me I did nothing malicious with it? If anything all that the developments in cryptocurrencies show is that a technically trustworthy infrastructure can (and will) be used for nefarious means. That means even if you were to use such an infrastructure you'd still have some interface to the real world, where people cannot pay, not do their job, do their job in a way you did not agree, etc. So you still would have to protect your interest in the traditional way and you'd still have to trust the other side. So using a blockchain is just like using a database and giving up a certain amount of control over it.
HelloNurse 4y ago
Given a set of parties that I trust and I am willing to do business with, why should I spend money and technical resources, and give up privacy, for the privilege of using a blockchain to state to the world that I trust them? Why should I embrace a dependency on a crypto provider, or trust someone because the crypto provider's blockchain says that I should? EDIT: replaced "cryptoscammer" with "crypto provider" for generality.

oleganza 4y ago

That's a false dichotomy. Anyone would choose someone they trust most out of other need-to-trust counterparties. If there was an alternative to not use any unnecessary counterparty at all - that would be even better. E.g. if you transfer Bitcoin from country A to country B you know for sure that it will arrive without any intermediate bank inserting their opinion in the process and causing surprising delays.

hef19898 4y ago
Banks do provide much more valuable services than just processing money transfers so.
knorker 4y ago
Some of the delays are effectively by law, so what you're really saying is "without any laws I may be breaking inserting their opinion, and any pesky police causing surprising delays". Reminds me of how GWB said that it would be much easier to be president if he were a dictator. Yeah, I bet! But despite that it's a terrible idea. Banks don't cause delays because they want to. And it's not a technical problem. Worth repeating: Delays in bank transfers is NOT a technical problem. All these cryptocurrency "solutions" are trying to tear down a fence they have no idea why it's there. Turns out it was put up over centuries to solve actual societal problems. People should work on improving the fence instead of thinking it should be torn down to be replaced by nothing.
- oleganza 4y ago
  You are right, that's not a technical problem and Bitcoin is not a technical solution either — that's a social game of "let's make ourselves some new money without built-in constraints". Then you would need to add some constraints over it for security, but the key difference would be that it's an open market: you can invent one solution, I can invent another and people will be free to choose between them or nothing at all. When your money comes with some regulatory framework built-in, there is no much room for any choices in that respect and more temptation for all kinds of bureaucrats to abuse their power.

janekm 4y ago

There are scenarios where a multi-party ledger can be useful in business... Think about a logistics chain where everybody needs to know that a record wasn't modified in retrospect. But then you only need a mini-blockchain along the lines of what IBM calls blockchain, you may have a few industry players and say a customs agency agree to sign the entries and then there will be no dispute about whether an entry was signed on a particular day. Energy cost of that is negligible. (and you don't need to put the actual transaction info into the ledger... just the signature is enough so everyone on the chain can confirm later that it wasn't modified). All of this is also pretty ancient tech by now... IBM just basically jumped on the blockchain branding bandwagon I'd say...

lbriner 4y ago
You could already do this without blockchain, the problem is adoption. If I create a leger that requires basic crypto-signing, I would need everyone to agree to use the system, perhaps try and make it the only system so there is an incentive to use it - and that is the difficult part. Have some blockchain doesn't solve the problem of how you try and get people to adopt it.
TomSwirly 4y ago
You don't need even a "mini-blockchain" - you just need a boring old 1970s vintage Merkle Tree.
majewsky 4y ago
> Think about a logistics chain where everybody needs to know that a record wasn't modified in retrospect. Why not just have event payloads signed by a neutral fiduciary?
littlecranky67 4y ago
a very simple timestamp hashing service (such as defined in RFC3161) will do that job.

rich_sasha 4y ago

The various crypto meltdowns of the recent years show that crypto actually involves lots and lots of trust. From the frontend doing what it really says, through intricacies of how the smart contracts work, manual control over wallets, and trusting the business logic. Transaction security is kind of the last thing to worry about.

cannabis_sam 4y ago
I agree, but none of these trust issues are solved by using blockchai based solutions…
- cannabis_sam 4y ago
  Hilariously this is a business opportunity, far bigger than any crypto startup being funded by yc…