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Interesting that the NYT let Paul Krugman write this article. For context, he is the same man who famously said that "the Internet's Effect on the World Economy

Interesting that the NYT let Paul Krugman write this article. For context, he is the same man who famously said that "the Internet's Effect on the World Economy Would Be 'No Greater Than the Fax Machine's". See: https://www.snopes.com/fact-check/paul-krugman-internets-effect-economy/ https://www.snopes.com/fact-check/paul-krugman-internets-eff...

willmadden 4y ago
Krugman has gotten so many things wrong that it makes him valuable. He's best used as a contrary indicator. It's the same with that goofball Jim Cramer.
rhaway84773 4y ago
People make bad predictions all the time. Because making predictions is a fool’s game for the most part. And he isn’t even making a prediction. He’s asking a simple question. What does the blockchain provide that we cannot already do in a much better way. Unfortunately the crypto folks are simply unable to answer that question and so go through a variety of obfuscation strategies.
- sshine 4y ago
  Programmable money. The way blockchains do it better is that you can build a system of reversible transactions on top of a system with irreversible transactions, but you cannot do it the other way around. Irreversibility is the stronger primitive, which means you can define the terms of reversibility flexibly on top. Systems where reversible transactions rely on a bank employee’s whim are the worst. If you don’t see the value in this, perhaps you haven’t tried to be paid by foreign customers. Banks will essentially withhold money without explaining anything and without your ability to know where they went, how long they will be in transit, if they’re flagged, why they were flagged, if there’sa process going on, or not. Then they may charge you a processing fee and deny the transaction even though you can prove that you’re performing a legitimate business transaction.
monkeydreams 4y ago
For context he is also a Nobel prize winner. Not sure what any of these facts have to with crypto and the fact that crypto is primarily a gambling platform that enables some of the largest financial crimes in human history.
- based69 4y ago
  For context, the econ prize isn’t a real nobel prize
- sshine 4y ago
  It is the gold rush all over. I’m sure if we discovered gold in our day, we’d be equally appalled by the behaviours of gold diggers. But we don’t hate on gold now. We outsource the mining to a few companies worldwide.
- fsflover 4y ago
  Cash enables even more crimes.
  - kentm 4y ago
    As a percentage of the total volume?
basch 4y ago
I very much think we are in the period of "this is such a fundamental change, its hard to envision its impact." Everyone is like "but can't a simple database do that" and the answer is no. The fundamental change a blockchain enables is a transition from double entry to triple entry accounting. The technology is the means to that end. In current double entry accounting every firm keeps their own copy of internal books. AP and AR create corresponding entries between firms. This creates tons of redundancy and room for error. Triple entry accounting distributed across a public database allows multiple firms to be looking at the same book. For a change like this to be meaningful, every ERP in the world needs a fundamental redesign, and to agree on interoperability. The world changing events are when corporate accounting transitions and logistics edi transitions. Most of the world is still sending data through pdfs, xls, and edi/text emails. They are still using OCR because everybody is rasterizing data to transfer it to each other. It will make a meaningful change if it can replace health records being locked behind epic and cerner/oracle. It may be useful when data portability becomes a human right. The idea of storing data neither in your own private vault at home, nor in a proprietary institutions vault is still foreign. The idea of a database surviving the collapse of the institution that created it is rare, outside of acquisitions. The best we get is individual takeouts. Blockchains are a social change. Where competing firms work together to maintain a distributed ledger of truth. It establishes a consensus reality that everyone can agree is a base for all other decision making. It eliminates reconciling two firms versions of reality. Blockchain REQUIRES mass adoption across industry to be useful. Blockchain enables multiple competing/adversarial but also cooperative parties to modify a single book in a constructive fashion. This previously required a third party, which has now been automated. There will be naysayers saying "this cant work" because they still arent looking at the world fourth dimensionally, errr triple entry'y. Krugman is wrong because he is looking at the technology, and not the change to human behaviors and best practices it enables. He sees it as a drop in replacement for a past analog. Whereas, it should be evident, there is no current analog for public, immutable, redundantly stored, appendable by anyone, distributed databases. They didnt exist. Bitcoin got a bunch of competing firms to backup and host identical copies of the same constantly changing database. That is revolution. He sees no value in it. That is crazy to me, and on par with his "the internet is nothing more than fax machines" lack of vision. Change needs to be shaped around this, at a foundational level. That takes time. And agreement. I believe distributed, collaborative databases, that exist outside individual firms to be inevitable. The answer to "what is blockchain good for" is creating public, decentralized trust and resilient records resistant to rot. Something very human, and not at all mathematical or databasey. ---------- This is almost 20 years old already. https://iang.org/papers/triple_entry.html https://iang.org/papers/triple_entry.html

willmadden 4y ago

Krugman has gotten so many things wrong that it makes him valuable. He's best used as a contrary indicator. It's the same with that goofball Jim Cramer.

rhaway84773 4y ago

People make bad predictions all the time. Because making predictions is a fool’s game for the most part. And he isn’t even making a prediction. He’s asking a simple question. What does the blockchain provide that we cannot already do in a much better way. Unfortunately the crypto folks are simply unable to answer that question and so go through a variety of obfuscation strategies.

sshine 4y ago
Programmable money. The way blockchains do it better is that you can build a system of reversible transactions on top of a system with irreversible transactions, but you cannot do it the other way around. Irreversibility is the stronger primitive, which means you can define the terms of reversibility flexibly on top. Systems where reversible transactions rely on a bank employee’s whim are the worst. If you don’t see the value in this, perhaps you haven’t tried to be paid by foreign customers. Banks will essentially withhold money without explaining anything and without your ability to know where they went, how long they will be in transit, if they’re flagged, why they were flagged, if there’sa process going on, or not. Then they may charge you a processing fee and deny the transaction even though you can prove that you’re performing a legitimate business transaction.

monkeydreams 4y ago

For context he is also a Nobel prize winner. Not sure what any of these facts have to with crypto and the fact that crypto is primarily a gambling platform that enables some of the largest financial crimes in human history.

based69 4y ago
For context, the econ prize isn’t a real nobel prize
sshine 4y ago
It is the gold rush all over. I’m sure if we discovered gold in our day, we’d be equally appalled by the behaviours of gold diggers. But we don’t hate on gold now. We outsource the mining to a few companies worldwide.
fsflover 4y ago
Cash enables even more crimes.
- kentm 4y ago
  As a percentage of the total volume?

basch 4y ago

I very much think we are in the period of "this is such a fundamental change, its hard to envision its impact." Everyone is like "but can't a simple database do that" and the answer is no. The fundamental change a blockchain enables is a transition from double entry to triple entry accounting. The technology is the means to that end. In current double entry accounting every firm keeps their own copy of internal books. AP and AR create corresponding entries between firms. This creates tons of redundancy and room for error. Triple entry accounting distributed across a public database allows multiple firms to be looking at the same book. For a change like this to be meaningful, every ERP in the world needs a fundamental redesign, and to agree on interoperability. The world changing events are when corporate accounting transitions and logistics edi transitions. Most of the world is still sending data through pdfs, xls, and edi/text emails. They are still using OCR because everybody is rasterizing data to transfer it to each other. It will make a meaningful change if it can replace health records being locked behind epic and cerner/oracle. It may be useful when data portability becomes a human right. The idea of storing data neither in your own private vault at home, nor in a proprietary institutions vault is still foreign. The idea of a database surviving the collapse of the institution that created it is rare, outside of acquisitions. The best we get is individual takeouts. Blockchains are a social change. Where competing firms work together to maintain a distributed ledger of truth. It establishes a consensus reality that everyone can agree is a base for all other decision making. It eliminates reconciling two firms versions of reality. Blockchain REQUIRES mass adoption across industry to be useful. Blockchain enables multiple competing/adversarial but also cooperative parties to modify a single book in a constructive fashion. This previously required a third party, which has now been automated. There will be naysayers saying "this cant work" because they still arent looking at the world fourth dimensionally, errr triple entry'y. Krugman is wrong because he is looking at the technology, and not the change to human behaviors and best practices it enables. He sees it as a drop in replacement for a past analog. Whereas, it should be evident, there is no current analog for public, immutable, redundantly stored, appendable by anyone, distributed databases. They didnt exist. Bitcoin got a bunch of competing firms to backup and host identical copies of the same constantly changing database. That is revolution. He sees no value in it. That is crazy to me, and on par with his "the internet is nothing more than fax machines" lack of vision. Change needs to be shaped around this, at a foundational level. That takes time. And agreement. I believe distributed, collaborative databases, that exist outside individual firms to be inevitable. The answer to "what is blockchain good for" is creating public, decentralized trust and resilient records resistant to rot. Something very human, and not at all mathematical or databasey. ---------- This is almost 20 years old already. https://iang.org/papers/triple_entry.html https://iang.org/papers/triple_entry.html