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You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work (2019)

88 points by Tomte 2y ago

drpossum 2y ago
Very timely.
- tigereyeTO 2y ago
  Are you from the past? The article is over six years old.
deleted 2y ago
[deleted]
josefritzishere 2y ago
It took over a decade but Blockchain has been de-hyped. Do I have to wait until 2035 for AI to do the same?
- ghaff 2y ago
  AI as a general category has been around for a very long time and I expect it to remain. I do think its use cases and specific technologies will evolve. And once some become popular, we won't even think of them as AI any longer.
  - giantrobot 2y ago
    Everything that was machine learning for the past two decades now has a glossy "AI" branding to appease it to wide eyed breathless morons. Even just basic searching and sorting algorithms get the AI branding to ride the hype train. That's not to say there's not legitimate uses of LLMs/LVMs or anything but every computation on a computer labeled "AI" has reached a fever pitch of ridiculousness.
    - ghaff 2y ago
      I agree and disagree. Yes, everything ML is branded AI these days. On the other hand, route optimization on maps would have been legitimately hailed as a breakthrough not that long ago.
- m3kw9 2y ago
  Got use that LLM to bridge to the Hawk tuah coin
- ipdashc 2y ago
  They're totally different beasts IMO (albeit both are buzzwords). I never saw anyone in my life actually using blockchain for anything other than cryptocurrency, and even that only for trading/speculation/gambling. Meanwhile it seems like a majority of people I know are using LLMs in their day to day life, and some are using AI art too.
  - trial3 2y ago
    i do feel like your comment has made me have the thought “i guess using LLMs in your day to day life is a form of gambling, also”
    - sanderjd 2y ago
      I don't think this tracks at all.
      - trial3 2y ago
        okay! cool
  - tengwar2 2y ago
    There are a couple of use cases I have come across. One is supply chain, using what is now called an NFT (the application predates that term). The case mentioned in the article is based on assuring that a physical item (a bottle of wine) is not a fake. This doesn't work, for the reason given. However a different supply chain application is avoiding real items of forbidden provenance being introduced into the supply chain - specifically conflict diamonds. Large diamonds are marked with a microscopic serial number, which addresses the problem of how to associate the physical item with a blockchain token. The company which first sells the diamond adds a record of a transfer to a new owner, associating this serial number. [Point of trust: you have to assume that De Beers et al. will not introduce a conflict diamond]. Every time the diamond is sold, the transaction is recorded. If someone tries to sell a diamond with a new serial number, it is clear that the origin was never recorded. If someone tries to duplicate a serial number, it is evident that they are not the owner. This was implemented for diamonds, and I have seen it in at least prototype form for other materials such as tropical hardwood. I'm not sure if the second case was ever implemented, but it was receiving serious commercial attention. There is a type of disaster insurance which does not insure against damage, but against circumstances which can cause damage. So you might want to insure against a flood if you have a house next to a river. Rather than a loss adjuster checking damage and months later you get a cheque, an alternative is that the contract says if the water level is above level x, you get $y. Because this does not require any judgement, just an oracle giving the water level, it can disburse funds quickly. A smart contract is one way to handle this. It's one of the few cases where suitable machine-readable oracles often exist already. The advantage to the policy holder is quick access to fund when needed for emergency response. The insurer can in theory reduce operational cost, though most of the saving comes from the type of policy (no loss adjuster needed) rather than the mechanism.
- andrewmutz 2y ago
  95% of the discourse surrounding AI is meritless hype. The other 5% is actually a really big deal and going to drive significant economic growth.
  - crabsand 2y ago
    ... but we don't know which 5%
- rsynnott 2y ago
  There've been periodic outbreaks of AI hype since the 1950s. The current one will probably die off quicker than blockchain, tho, hype-wise; the sheer _cost_ of maintaining the bubble is so high that it really won't be allowed the sort of long wind-down period that the blockchain hype cycle had.
- sanderjd 2y ago
  It really is an interesting question. But my prediction is that AI will be "de-hyped" by then in the same way that the internet was "de-hyped" in the mid-2000s, by being pervasive but mature.
- tim333 2y ago
  AI hype may be worse 2035. See "AI that can match humans at any task will be here in five to 10 years, Google DeepMind CEO says" etc.
lenerdenator 2y ago
Counterpoint: this was before the US government decided to create a pool of liquidity for cryptocurrencies, likely at taxpayer expense. I'd say that's a use case. It's not a good use case for society as a whole, but it's a use case if the goal is to make money with cryptocurrency you hold based on a blockchain.
- ok123456 2y ago
  They're not going to spend tax-payer money on crypto—thank God. Instead, they will take seized crypto from criminal activity, which would otherwise be frozen on exchanges or hard drives in evidence lockers, and put it into a reserve pool.
  - JumpCrisscross 2y ago
    > They're not going to spend tax-payer money on crypto Feds, not yet. But some red states are [1]. [1] https://x.com/samuelarmes/status/1864059964928442424 https://x.com/samuelarmes/status/1864059964928442424
  - bryanlarsen 2y ago
    Yes, they are spending tax-payer money. Previously, seized crypto would have been sold and could be used to reduce taxes.
    - Acrobatic_Road 2y ago
      Would you extend this logic to all government assets, or just cryptocurrency? The government owns nearly a third of all land in the country.
      - kasey_junk 2y ago
        Yes? I think most people find it reasonable for the federal government to use taxpayer dollars on land in ways they don’t for crypto. Or fine art or Porsches or other seized property.
      - 2y ago
feverzsj 2y ago
It's a technique failure, but found its way in fraud, money laundry, black market, corruption...
cryptoboy2283 2y ago
> Written by Product Manager at PARSIQ. Co-host at Basic Block podcast. Bitcoin, Ethereum, InfoSec. Everyone's a grifter nowadays, innit?
emddudley 2y ago
Similar to the cited "Do you Need Blockchain" there is NISTIR 8202: Blockchain Technology Overview, page 42. 1. Do you need a shared, consistent data store? 2. Does more than one entity need to contribute data? 3. Data records, once written, are never updated or deleted? 4. Sensitive identifiers WILL NOT be written to the data store? 5. Are the entities with write access having a hard time deciding who should be in control of the data store? 6. Do you want a tamperproof log of all writes to the data store? https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf
- sanderjd 2y ago
  I think the interesting interplay with this is in "need" vs. "want". I share the conventional wisdom that nothing, or very nearly nothing, needs these properties. But I don't think it's unreasonable that people have been looking around for things that want them.
  - not_kurt_godel 2y ago
    Why would you voluntarily want a data store that can't store sensitive values?
    - sanderjd 2y ago
      I don't know, but I also think it's reasonable for people (who aren't me) to see if they can figure out use cases where they do want that, and actually make them work. I'm not particularly bullish on any of these projects, I just also think that thinking outside the box in this way is one of the ways that interesting things come about. I'm personally pretty happy to be conventional and milquetoast, but I think it's fairly self defeating to be stuck in the box of "only projects that work on traditional database architecture could ever make sense", so I'm glad people are out there trying different things, even when I think they're pretty likely to fail.
    - olalonde 2y ago
      I can think of two reasons: 1) The data store offers some other interesting property that necessitates this tradeoff. 2) You want your data store to be transparent/auditable by anyone.
lvl155 2y ago
I am glad the crypto bros stopped this nonsensical narrative on blockchain. At least now they can admit cryptos exist for money laundering. Oh, wait. They still don’t.
- ilrwbwrkhv 2y ago
  I think a lot of folks in tech got carried away with it. For example, the whole a16z Marc Andreesen shift to the right has a really simple explanation. They over leveraged themselves in their crypto investments and Trump was the only one who would not regulate crypto and keep the valuation from crashing. So to save their investments they have to do this whole drama now.
  - lvl155 2y ago
    To be completely fair, crypto is an ingenious money laundering vehicle. And money laundering is going to happen whether we like it or not because people will continue to engage in illegal economic activities.
    - chrchr 2y ago
      But money laundering is an especially noxious crime because it enables and incentivizes all the other large scale crimes.
  - sanderjd 2y ago
    Still short sighted though. I feel like they are speed running "how to create backlash".
  - this_user 2y ago
    "Carried away" implies that they didn't know what they were doing rather than cynically exploiting a bubble they knew would collapse eventually.
- m00dy 2y ago
  I would use cash for that. Especially US dollar.
wslh 2y ago
As trying to have a constructive discussion around this I wrote a preface for crypto skeptics here [1]. I understand the arguments against blockchains, and the reality is showing an universe of memecoins, hacks, scams, etc. I think returning to the base concept of smart contracts is useful. [1] https://docs.google.com/document/d/1L0Me9si4iMclOq8n-oG2yNQfZ7xBpWppi_cPc7brO9A/edit?tab=t.0#heading=h.eedbdw5fjye3 https://docs.google.com/document/d/1L0Me9si4iMclOq8n-oG2yNQf...
- friendzis 2y ago
  > I understand the arguments against blockchains > and the reality is showing an universe of memecoins, hacks, scams, etc > I think returning to the base concept of smart contracts is useful. Sorry, but those are contradictory, unless by useful you mean something bad-faith. The only good-faith argument that matters are oracles. If you allow for external oracles , there's negative value in blockchain/dlt tech anyway, therefore the only reasonable definition of blockhains includes resistance to external oracles. In this world, the only type of object that can exist at all are blockchain-borne digital tokens - some form of memecoin and the lack of external oracles by definition rewards scams and hacks. Yes, you can talk about smart contracts, but those smart contracts will eventually deal with scams, hacks and memecoins. However, crucially, whatever wisdom you might have regarding smart contracts, it is 100% limited to blockchains and therefore has zero applicability outside scams, hacks and memecoins of blockchain.
  - nailer 2y ago
    > If you allow for external oracles , there's negative value in blockchain/dlt tech anyway, therefore the only reasonable definition of blockhains includes resistance to external oracles. You’re not explaining this well. If your concern is oracle manipulation common onchain apps don’t rely on single oracles.
    - friendzis 2y ago
      Use case: two parties want to transact with cryptocoins on one end and two pizzas on another Problem: you need an external oracle to verify "real world" part of the transaction and blockchain part simultaneously. Implications: The security and associated cost of DLT/blockchain is useless as the trust of transaction is offloaded from the distributed consensus to real world entity, which could simply update an entry in a postgres database without sacrificing any security at all, but with lower alternative cost, hence negative value add. I don't think it's possible to design a general scheme, backed by a smart contract, with economic incentives for all three parties to play nice. In the real world, the inherent mutability of transactions enables economic (dis-)incentives for functional oracles. > If your concern is oracle manipulation common onchain apps don’t rely on single oracles. What you are hinting at are bet/prediction-like applications, which eventually deal with the same on-chain objects - memecoins described, circumventing the oracle problem.
m00dy 2y ago
We just need tokenized t-bills on chain...That will change everything.
- nailer 2y ago
  They already are, there’s FOBXX from Franklin Templeton and sUSD from Solayer for example.
  - m00dy 2y ago
    What I mean was waiting the right regulations from SEC, once it is done, we will take off forever.
cainxinth 2y ago
It's been 16 years since the original Satoshi whitepaper. You have to assume if there were tons of viable applications for blockchain, we'd have seen more of them by now.
- m00dy 2y ago
  Updating financial system is not the easiest one, also we would like to update it without a third world war.
- beepbopboopp 2y ago
  Id take it a step further. The immorality of cryptocurrency isn't complicated and defines why it never has become more. Fiat money exists within a social contract - governments that issue currency must also maintain the infrastructure that makes society work. They're accountable for everything from roads to retirement plans. When cryptocurrency advocates push to separate money from government, they're not just pursuing financial innovation. They're deliberately undermining the mechanism that funds our shared existence. They want the benefits of living in society without contributing to its maintenance. This isn't freedom - it's freeloading. Cryptocurrency, at its philosophical core, enables wealth hoarding while disconnecting the hoarders from any responsibility to the communities that made their wealth possible in the first place.
  - friendzis 2y ago
    Libertarians are like house cats, they’re convinced of their fierce independence while dependent on a system they don’t appreciate or understand.
    - card_zero 2y ago
      It's true, am a cat. But tax is coercion. Make it voluntary, and people won't pay it. Despite this, a lot of people are fine with it because it gets them roads and state pensions and healthcare or whatever. Some people want it to be increased, thereby volunteering to pay more and volunteering others to do the same. Everything is based on force, and the social contract is a kind of Stockholm syndrome.
sepositus 2y ago
Interestingly, the author notes: > Personally, I believe that smart contracts will find their niche. That’s why I am working in the field already. However, this is my personal belief, which has not been neither confirmed nor refuted yet. Which I would posit has become more true ~6 years later. I work in the industry and have seen far more money going towards this than any other area.
scryers_bloom 2y ago
Does blockchain have any use case in implementing version control systems?
- bri3d 2y ago
  Well, yes and no. They share the same primitives (hash tree) but those have been around for 40+ years. If you think about Git, it’s already a blockchain without the mining blocks; it’s chained hash trees in the same way. So adding mined blocks doesn’t really add any value unless you’re trying to attach some kind of reward system to it.
  - chuckadams 2y ago
    One problem with git is that it's mutable, and real problems have arisen (some quite recently) because of that. An immutable git might benefit from some kind of blockchain integration, but there's also way less complicated ways to do the same. Proof-of-work mined coins should be outlawed.
    - bri3d 2y ago
      > One problem with git is that it's mutable, and real problems have arisen (some quite recently) because of that. What are you referring to? As far as I know, nothing about git is mutable in the hash-chain sense? If I sign the last commit to a Git repository, I can be assured that both the current state and history cannot be modified without invalidating my signature, no? Of course one can rewrite history, but that will always change all hashes from the point history was modified onwards. The difference with blockchain is that the signature changes from "bri3d said this commit matched the current state of his history" to a distributed system that says "more than 50% of miners agree that this commit was the current state of history at the point this block was mined." Are there other implementation issues with Git I'm not familiar with? The common practice of truncating a SHA to make a 'short commit' is of course highly vulnerable to all sorts of nonsense, but that's obvious any time a SHA is truncated.
      - 2y ago
olalonde 2y ago
Do you need a digital, decentralized, permissionless money? Yes: you need blockchain. No: you don't need blockchain.
- kibwen 2y ago
  A fungal colony is decentralized. A blockchain isn't decentralized, it's just differently centralized.
  - olalonde 2y ago
    > A blockchain isn't decentralized, it's just differently centralized. That's incorrect. In fact, the whole point of blockchain is decentralization and it's what made Bitcoin so revolutionary: it was the first digital money system that didn't require a trusted central authority[0]. If a central authority is acceptable, you don't need a blockchain. [0] See the Bitcoin white paper: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf
    - kibwen 2y ago
      Your training data is out of date. Bitcoiners have long since given up on being money, the block size debate saw to that years ago. On top of that, Bitcoin definitely wasn't the first. Learn your history. And on top of that, yes, blockchains are centralized because they rely on the existence of a single, centralized source of truth. Distributing access to the centralized ledger doesn't change the fact that it's a centralized authority. Any divergence from the chain causes a catastrophic fork.
      - olalonde 2y ago
        It was the first decentralized blockchain. It solved the double spending problem in the absence of a centralized authority (aka solution to the Byzantine Generals' Problem). By the way, the term "blockchain" gained popularity years after Bitcoin's release. Bitcoin has changed very little since its inception. A Bitcoin Core release from a decade ago still works fine today, and how "bitcoiners" feel about Bitcoin on a psychological level is irrelevant to any technical discussion about decentralization (btw, "bitcoiners" are not a homogenous group). Moreover, your last sentence is so incoherent that it’s hard to even formulate a rebuttal. There is no "centralized source of truth," no "centralized authority," and no risk of a "catastrophic fork." No offense but I don’t understand why people with such limited knowledge of Bitcoin feel compelled to comment in these threads.
deleted 2y ago
[deleted]
4fterd4rk 2y ago
Is there any reason that your blockchain use case wouldn't be better served by one of the many freely available SQL database servers? This question would have eliminated 95% of 2019 era blockchain projects.
bobro 2y ago
One glaring defect in our collective ability to think critically about blockchain is that many have invested in it, making it extremely difficult to be objective.
diego_moita 2y ago
Money for criminals, gangsters, drug dealers, etc... That's the only use case for blockchain.
- theragra 2y ago
  I sent money to Russia recently. This is not disallowed per se, but close to impossible right now. I am not a criminal, but government machine I so ruthless there is no other way.
scyclow 2y ago
I feel like a lot of the use cases listed here (which, to be fair, were often touted in 2019) misunderstands what blockchains are actually useful for, which is the ability to index information without a third party. Instead, they conflate digital objects with physical objects... which obviously leads to nonsensical business models. So, I think the author is rightly picking out the things that don't make sense, but is missing the forest for the trees. > 1. Supply chain management I don't really know enough about supply chain management to go one way or another on this, but I suspect it could be more useful as a realtime marketplace for goods than as a source of truth whether a certain even happened. I think the author is right that verifying events is largely an IoT issue. But maybe there's some value in having the assurance that "A says X event happened" as opposed to "X event conclusively happened". > 2. Object authenticity guarantee I always thought this was stupid as it relates to physical objects. Again, the author rightly notes that this is more of an IoT issue. But I think the value proposition is much clearer for digital objects such as NFTs. Whether or not NFTs are inherently stupid is a different discussion, but it's pretty clear that you get very strong authenticity guarantees with them. > 3. Statement authenticity guarantee As noted, you don't need a blockchain to make the guarantee. That's just cryptography. But if you want to timestamp it or the ability to revoke it, then a blockchain would be more useful. I'm sure a lot of authenticity guarantees could be managed by decentralized databases, but I can see some value to putting them on chain if you want to allow the guarantees to interop with other applications. > 4. Voting It really depends what you're voting on. In many cases simply collecting digital signatures is fine. Again, that's just cryptography, not blockchain. But if you want flexible realtime governance to a system with complex voting rules, then smart contracts could be a good way to manage that. As noted, this isn't suitable for private votes, but there might be some ways to pull it off with ZK proofs. > 5. Proof of authorship My point here is more or less the same as with 2. > 6. Land registry Really, the use case here is "deeds and ownership registries of other financial assets". I don't think there's anything wrong with the enforcer having special permissions over the asset. The use case here isn't " protecting you against the fraudulent activities of both the regulatory authorities and any individual officials". The asset only has meaning in the context of a larger institution, so it doesn't make sense to try to strip it form that institution. I think the real use case here is more that you can interop your asset with other onchain applications. Additionally, it allows you to pick and choose which specific permissions belong which parties. Everything doesn't automatically default to whoever is running the infrastructure > 7. Interbank transfers I don't buy the premise that banks would necessarily need to defer to a private chain in order to obfuscate payments. Applications like Tornado Cash exist and ZK technology has come a long way since 2019. But even if they did, I don't think "setting up a distributed database and resolving any disputes in court" is a great outcome. I think there's value to having the system settle (and avoid) disputes automatically without having to wait for things to be resolved in court. > 8. Token for token’s sake Sure. I think memecoins are stupid, but I have a hard time seeing them working outside of a blockchain. > Blockchain as a trigger Having worked at an enterprise blockchain company where most of the clients were using blockchains as a trigger, I can say that this is almost always a bad idea. For most use cases, blockchains are a straight up bad fit, and would lead to a worse application. > Money I actually think that bitcoin is terrible money, but I can see blockchain-based payment systems using stablecoins taking off. > Smart contracts I think there is definitely a lot of unexplored territory here, partially because a lot of the product development in the crypto space is driven by idiots. But you can't tell me that there are no use cases globally decentralized, censorship-resistant, general purpose computation. If nothing else I think there were a lot of ideas thrown around several years ago that weren't possible due to scaling issues, which are now possible due to L2s (ex. disintermediating online marketplaces like uber + airbnb, social media with sovereign identity, gaming state + asset management).
fallinditch 2y ago
One of my pet gripes is how so many tech websites do a terrible job at communicating what they do and what their tech is for, and deFi projects are among the worst offenders. I came across one the other day [1] , flashy website, flashy jargon, but it's impossible to deduce what it does by reading the website. I had to feed a YouTube transcription into an AI and do some deep research and AI chatting before I could understand what they do. Perhaps I am dumb, judge for yourself. [1] https://flare.network/ https://flare.network/
- shawabawa3 2y ago
  It's just a lot of industry jargon so not surprising if you aren't deep in blockchain you don't understand it - layer 1, means it runs natively on an EVM Blockchain (Ethereum, Avax, polygon etc) - data platform, it seems like an oracle service, bring data sources from off chain onto the chain for smart contracts - proof of stake, people stake funds to assert the truth of data sources to ensure people don't lie
  - fallinditch 2y ago
    Yes, but you've proven my point because you missed the complex mechanism at the heart of the system. the nitty gritty is where it gets opaque, for example: a user sends BTC to an 'agent' (collateralized data provider), the btc is 'wrapped' as wbtc and then the user can participate in deFi services in flare network. The user therefore enters a contractual relationship with the agent to look after their btc while they participate in deFi activities, and everyone trusts that the agent doesn't run off with the btc.
  - fallinditch 2y ago
    You're correct, apologies for my previous misinformation. On further examination: the Flare approach, in contrast to wrapped BTC, takes a 'non custodial' approach and instead wraps BTC, xrp etc as FBTC using their FAssets system of overcollateralization + enshrined oracles. So the Flare network is more decentralized than the wrapped BTC approach, but it's not completely trustless, and introduces more potential attack surface. So in comparison to the wbtc bridging systems, one risk (of custodial misappropriation) is replaced by other risks of data manipulation. It's interesting to learn about this stuff, but the Flare.network website does a rubbish job of telling visitors what it does.
kryptonomist 2y ago
"Can we use a distributed database instead? If the answer is ‘Yes’, why go for blockchain at all? Indeed, blockchain is slower and more resource-intensive." The key factor when assessing a blockchain project is indeed to see what is the advantage of a blockchain vs a usual database. Most of the time, there is none. Worse, cost of a blockchain is more expensive as pointed by the article. And you still need an authoritative registry somewhere if there any physical item involved. In addition to that, blockchain projects faces another business issue: to be really decentralized, you have to lose control of what you put on the blockchain, which is hard to conceive for a private company.

88 points by Tomte 2y ago

drpossum 2y ago

Very timely.

tigereyeTO 2y ago
Are you from the past? The article is over six years old.

deleted 2y ago

[deleted]

josefritzishere 2y ago

It took over a decade but Blockchain has been de-hyped. Do I have to wait until 2035 for AI to do the same?

ghaff 2y ago
AI as a general category has been around for a very long time and I expect it to remain. I do think its use cases and specific technologies will evolve. And once some become popular, we won't even think of them as AI any longer.
- giantrobot 2y ago
  Everything that was machine learning for the past two decades now has a glossy "AI" branding to appease it to wide eyed breathless morons. Even just basic searching and sorting algorithms get the AI branding to ride the hype train. That's not to say there's not legitimate uses of LLMs/LVMs or anything but every computation on a computer labeled "AI" has reached a fever pitch of ridiculousness.
  - ghaff 2y ago
    I agree and disagree. Yes, everything ML is branded AI these days. On the other hand, route optimization on maps would have been legitimately hailed as a breakthrough not that long ago.
m3kw9 2y ago
Got use that LLM to bridge to the Hawk tuah coin
ipdashc 2y ago
They're totally different beasts IMO (albeit both are buzzwords). I never saw anyone in my life actually using blockchain for anything other than cryptocurrency, and even that only for trading/speculation/gambling. Meanwhile it seems like a majority of people I know are using LLMs in their day to day life, and some are using AI art too.
- trial3 2y ago
  i do feel like your comment has made me have the thought “i guess using LLMs in your day to day life is a form of gambling, also”
  - sanderjd 2y ago
    I don't think this tracks at all.
    - trial3 2y ago
      okay! cool
- tengwar2 2y ago
  There are a couple of use cases I have come across. One is supply chain, using what is now called an NFT (the application predates that term). The case mentioned in the article is based on assuring that a physical item (a bottle of wine) is not a fake. This doesn't work, for the reason given. However a different supply chain application is avoiding real items of forbidden provenance being introduced into the supply chain - specifically conflict diamonds. Large diamonds are marked with a microscopic serial number, which addresses the problem of how to associate the physical item with a blockchain token. The company which first sells the diamond adds a record of a transfer to a new owner, associating this serial number. [Point of trust: you have to assume that De Beers et al. will not introduce a conflict diamond]. Every time the diamond is sold, the transaction is recorded. If someone tries to sell a diamond with a new serial number, it is clear that the origin was never recorded. If someone tries to duplicate a serial number, it is evident that they are not the owner. This was implemented for diamonds, and I have seen it in at least prototype form for other materials such as tropical hardwood. I'm not sure if the second case was ever implemented, but it was receiving serious commercial attention. There is a type of disaster insurance which does not insure against damage, but against circumstances which can cause damage. So you might want to insure against a flood if you have a house next to a river. Rather than a loss adjuster checking damage and months later you get a cheque, an alternative is that the contract says if the water level is above level x, you get $y. Because this does not require any judgement, just an oracle giving the water level, it can disburse funds quickly. A smart contract is one way to handle this. It's one of the few cases where suitable machine-readable oracles often exist already. The advantage to the policy holder is quick access to fund when needed for emergency response. The insurer can in theory reduce operational cost, though most of the saving comes from the type of policy (no loss adjuster needed) rather than the mechanism.
andrewmutz 2y ago
95% of the discourse surrounding AI is meritless hype. The other 5% is actually a really big deal and going to drive significant economic growth.
- crabsand 2y ago
  ... but we don't know which 5%
rsynnott 2y ago
There've been periodic outbreaks of AI hype since the 1950s. The current one will probably die off quicker than blockchain, tho, hype-wise; the sheer _cost_ of maintaining the bubble is so high that it really won't be allowed the sort of long wind-down period that the blockchain hype cycle had.
sanderjd 2y ago
It really is an interesting question. But my prediction is that AI will be "de-hyped" by then in the same way that the internet was "de-hyped" in the mid-2000s, by being pervasive but mature.
tim333 2y ago
AI hype may be worse 2035. See "AI that can match humans at any task will be here in five to 10 years, Google DeepMind CEO says" etc.

lenerdenator 2y ago

Counterpoint: this was before the US government decided to create a pool of liquidity for cryptocurrencies, likely at taxpayer expense. I'd say that's a use case. It's not a good use case for society as a whole, but it's a use case if the goal is to make money with cryptocurrency you hold based on a blockchain.

ok123456 2y ago
They're not going to spend tax-payer money on crypto—thank God. Instead, they will take seized crypto from criminal activity, which would otherwise be frozen on exchanges or hard drives in evidence lockers, and put it into a reserve pool.
- JumpCrisscross 2y ago
  > They're not going to spend tax-payer money on crypto Feds, not yet. But some red states are [1]. [1] https://x.com/samuelarmes/status/1864059964928442424 https://x.com/samuelarmes/status/1864059964928442424
- bryanlarsen 2y ago
  Yes, they are spending tax-payer money. Previously, seized crypto would have been sold and could be used to reduce taxes.
  - Acrobatic_Road 2y ago
    Would you extend this logic to all government assets, or just cryptocurrency? The government owns nearly a third of all land in the country.
    - kasey_junk 2y ago
      Yes? I think most people find it reasonable for the federal government to use taxpayer dollars on land in ways they don’t for crypto. Or fine art or Porsches or other seized property.
    - 2y ago

feverzsj 2y ago

It's a technique failure, but found its way in fraud, money laundry, black market, corruption...

cryptoboy2283 2y ago

> Written by Product Manager at PARSIQ. Co-host at Basic Block podcast. Bitcoin, Ethereum, InfoSec. Everyone's a grifter nowadays, innit?

emddudley 2y ago

Similar to the cited "Do you Need Blockchain" there is NISTIR 8202: Blockchain Technology Overview, page 42. 1. Do you need a shared, consistent data store? 2. Does more than one entity need to contribute data? 3. Data records, once written, are never updated or deleted? 4. Sensitive identifiers WILL NOT be written to the data store? 5. Are the entities with write access having a hard time deciding who should be in control of the data store? 6. Do you want a tamperproof log of all writes to the data store? https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf

sanderjd 2y ago
I think the interesting interplay with this is in "need" vs. "want". I share the conventional wisdom that nothing, or very nearly nothing, needs these properties. But I don't think it's unreasonable that people have been looking around for things that want them.
- not_kurt_godel 2y ago
  Why would you voluntarily want a data store that can't store sensitive values?
  - sanderjd 2y ago
    I don't know, but I also think it's reasonable for people (who aren't me) to see if they can figure out use cases where they do want that, and actually make them work. I'm not particularly bullish on any of these projects, I just also think that thinking outside the box in this way is one of the ways that interesting things come about. I'm personally pretty happy to be conventional and milquetoast, but I think it's fairly self defeating to be stuck in the box of "only projects that work on traditional database architecture could ever make sense", so I'm glad people are out there trying different things, even when I think they're pretty likely to fail.
  - olalonde 2y ago
    I can think of two reasons: 1) The data store offers some other interesting property that necessitates this tradeoff. 2) You want your data store to be transparent/auditable by anyone.

lvl155 2y ago

I am glad the crypto bros stopped this nonsensical narrative on blockchain. At least now they can admit cryptos exist for money laundering. Oh, wait. They still don’t.

ilrwbwrkhv 2y ago
I think a lot of folks in tech got carried away with it. For example, the whole a16z Marc Andreesen shift to the right has a really simple explanation. They over leveraged themselves in their crypto investments and Trump was the only one who would not regulate crypto and keep the valuation from crashing. So to save their investments they have to do this whole drama now.
- lvl155 2y ago
  To be completely fair, crypto is an ingenious money laundering vehicle. And money laundering is going to happen whether we like it or not because people will continue to engage in illegal economic activities.
  - chrchr 2y ago
    But money laundering is an especially noxious crime because it enables and incentivizes all the other large scale crimes.
- sanderjd 2y ago
  Still short sighted though. I feel like they are speed running "how to create backlash".
- this_user 2y ago
  "Carried away" implies that they didn't know what they were doing rather than cynically exploiting a bubble they knew would collapse eventually.
m00dy 2y ago
I would use cash for that. Especially US dollar.

wslh 2y ago

As trying to have a constructive discussion around this I wrote a preface for crypto skeptics here [1]. I understand the arguments against blockchains, and the reality is showing an universe of memecoins, hacks, scams, etc. I think returning to the base concept of smart contracts is useful. [1] https://docs.google.com/document/d/1L0Me9si4iMclOq8n-oG2yNQfZ7xBpWppi_cPc7brO9A/edit?tab=t.0#heading=h.eedbdw5fjye3 https://docs.google.com/document/d/1L0Me9si4iMclOq8n-oG2yNQf...

friendzis 2y ago
> I understand the arguments against blockchains > and the reality is showing an universe of memecoins, hacks, scams, etc > I think returning to the base concept of smart contracts is useful. Sorry, but those are contradictory, unless by useful you mean something bad-faith. The only good-faith argument that matters are oracles. If you allow for external oracles , there's negative value in blockchain/dlt tech anyway, therefore the only reasonable definition of blockhains includes resistance to external oracles. In this world, the only type of object that can exist at all are blockchain-borne digital tokens - some form of memecoin and the lack of external oracles by definition rewards scams and hacks. Yes, you can talk about smart contracts, but those smart contracts will eventually deal with scams, hacks and memecoins. However, crucially, whatever wisdom you might have regarding smart contracts, it is 100% limited to blockchains and therefore has zero applicability outside scams, hacks and memecoins of blockchain.
- nailer 2y ago
  > If you allow for external oracles , there's negative value in blockchain/dlt tech anyway, therefore the only reasonable definition of blockhains includes resistance to external oracles. You’re not explaining this well. If your concern is oracle manipulation common onchain apps don’t rely on single oracles.
  - friendzis 2y ago
    Use case: two parties want to transact with cryptocoins on one end and two pizzas on another Problem: you need an external oracle to verify "real world" part of the transaction and blockchain part simultaneously. Implications: The security and associated cost of DLT/blockchain is useless as the trust of transaction is offloaded from the distributed consensus to real world entity, which could simply update an entry in a postgres database without sacrificing any security at all, but with lower alternative cost, hence negative value add. I don't think it's possible to design a general scheme, backed by a smart contract, with economic incentives for all three parties to play nice. In the real world, the inherent mutability of transactions enables economic (dis-)incentives for functional oracles. > If your concern is oracle manipulation common onchain apps don’t rely on single oracles. What you are hinting at are bet/prediction-like applications, which eventually deal with the same on-chain objects - memecoins described, circumventing the oracle problem.

m00dy 2y ago

We just need tokenized t-bills on chain...That will change everything.

nailer 2y ago
They already are, there’s FOBXX from Franklin Templeton and sUSD from Solayer for example.
- m00dy 2y ago
  What I mean was waiting the right regulations from SEC, once it is done, we will take off forever.

cainxinth 2y ago

It's been 16 years since the original Satoshi whitepaper. You have to assume if there were tons of viable applications for blockchain, we'd have seen more of them by now.

m00dy 2y ago
Updating financial system is not the easiest one, also we would like to update it without a third world war.
beepbopboopp 2y ago
Id take it a step further. The immorality of cryptocurrency isn't complicated and defines why it never has become more. Fiat money exists within a social contract - governments that issue currency must also maintain the infrastructure that makes society work. They're accountable for everything from roads to retirement plans. When cryptocurrency advocates push to separate money from government, they're not just pursuing financial innovation. They're deliberately undermining the mechanism that funds our shared existence. They want the benefits of living in society without contributing to its maintenance. This isn't freedom - it's freeloading. Cryptocurrency, at its philosophical core, enables wealth hoarding while disconnecting the hoarders from any responsibility to the communities that made their wealth possible in the first place.
- friendzis 2y ago
  Libertarians are like house cats, they’re convinced of their fierce independence while dependent on a system they don’t appreciate or understand.
  - card_zero 2y ago
    It's true, am a cat. But tax is coercion. Make it voluntary, and people won't pay it. Despite this, a lot of people are fine with it because it gets them roads and state pensions and healthcare or whatever. Some people want it to be increased, thereby volunteering to pay more and volunteering others to do the same. Everything is based on force, and the social contract is a kind of Stockholm syndrome.

sepositus 2y ago

Interestingly, the author notes: > Personally, I believe that smart contracts will find their niche. That’s why I am working in the field already. However, this is my personal belief, which has not been neither confirmed nor refuted yet. Which I would posit has become more true ~6 years later. I work in the industry and have seen far more money going towards this than any other area.

scryers_bloom 2y ago

Does blockchain have any use case in implementing version control systems?

bri3d 2y ago
Well, yes and no. They share the same primitives (hash tree) but those have been around for 40+ years. If you think about Git, it’s already a blockchain without the mining blocks; it’s chained hash trees in the same way. So adding mined blocks doesn’t really add any value unless you’re trying to attach some kind of reward system to it.
- chuckadams 2y ago
  One problem with git is that it's mutable, and real problems have arisen (some quite recently) because of that. An immutable git might benefit from some kind of blockchain integration, but there's also way less complicated ways to do the same. Proof-of-work mined coins should be outlawed.
  - bri3d 2y ago
    > One problem with git is that it's mutable, and real problems have arisen (some quite recently) because of that. What are you referring to? As far as I know, nothing about git is mutable in the hash-chain sense? If I sign the last commit to a Git repository, I can be assured that both the current state and history cannot be modified without invalidating my signature, no? Of course one can rewrite history, but that will always change all hashes from the point history was modified onwards. The difference with blockchain is that the signature changes from "bri3d said this commit matched the current state of his history" to a distributed system that says "more than 50% of miners agree that this commit was the current state of history at the point this block was mined." Are there other implementation issues with Git I'm not familiar with? The common practice of truncating a SHA to make a 'short commit' is of course highly vulnerable to all sorts of nonsense, but that's obvious any time a SHA is truncated.
    - 2y ago

olalonde 2y ago

Do you need a digital, decentralized, permissionless money? Yes: you need blockchain. No: you don't need blockchain.

kibwen 2y ago
A fungal colony is decentralized. A blockchain isn't decentralized, it's just differently centralized.
- olalonde 2y ago
  > A blockchain isn't decentralized, it's just differently centralized. That's incorrect. In fact, the whole point of blockchain is decentralization and it's what made Bitcoin so revolutionary: it was the first digital money system that didn't require a trusted central authority[0]. If a central authority is acceptable, you don't need a blockchain. [0] See the Bitcoin white paper: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf
  - kibwen 2y ago
    Your training data is out of date. Bitcoiners have long since given up on being money, the block size debate saw to that years ago. On top of that, Bitcoin definitely wasn't the first. Learn your history. And on top of that, yes, blockchains are centralized because they rely on the existence of a single, centralized source of truth. Distributing access to the centralized ledger doesn't change the fact that it's a centralized authority. Any divergence from the chain causes a catastrophic fork.
    - olalonde 2y ago
      It was the first decentralized blockchain. It solved the double spending problem in the absence of a centralized authority (aka solution to the Byzantine Generals' Problem). By the way, the term "blockchain" gained popularity years after Bitcoin's release. Bitcoin has changed very little since its inception. A Bitcoin Core release from a decade ago still works fine today, and how "bitcoiners" feel about Bitcoin on a psychological level is irrelevant to any technical discussion about decentralization (btw, "bitcoiners" are not a homogenous group). Moreover, your last sentence is so incoherent that it’s hard to even formulate a rebuttal. There is no "centralized source of truth," no "centralized authority," and no risk of a "catastrophic fork." No offense but I don’t understand why people with such limited knowledge of Bitcoin feel compelled to comment in these threads.

deleted 2y ago

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4fterd4rk 2y ago

Is there any reason that your blockchain use case wouldn't be better served by one of the many freely available SQL database servers? This question would have eliminated 95% of 2019 era blockchain projects.

bobro 2y ago

One glaring defect in our collective ability to think critically about blockchain is that many have invested in it, making it extremely difficult to be objective.

diego_moita 2y ago

Money for criminals, gangsters, drug dealers, etc... That's the only use case for blockchain.

theragra 2y ago
I sent money to Russia recently. This is not disallowed per se, but close to impossible right now. I am not a criminal, but government machine I so ruthless there is no other way.

scyclow 2y ago

I feel like a lot of the use cases listed here (which, to be fair, were often touted in 2019) misunderstands what blockchains are actually useful for, which is the ability to index information without a third party. Instead, they conflate digital objects with physical objects... which obviously leads to nonsensical business models. So, I think the author is rightly picking out the things that don't make sense, but is missing the forest for the trees. > 1. Supply chain management I don't really know enough about supply chain management to go one way or another on this, but I suspect it could be more useful as a realtime marketplace for goods than as a source of truth whether a certain even happened. I think the author is right that verifying events is largely an IoT issue. But maybe there's some value in having the assurance that "A says X event happened" as opposed to "X event conclusively happened". > 2. Object authenticity guarantee I always thought this was stupid as it relates to physical objects. Again, the author rightly notes that this is more of an IoT issue. But I think the value proposition is much clearer for digital objects such as NFTs. Whether or not NFTs are inherently stupid is a different discussion, but it's pretty clear that you get very strong authenticity guarantees with them. > 3. Statement authenticity guarantee As noted, you don't need a blockchain to make the guarantee. That's just cryptography. But if you want to timestamp it or the ability to revoke it, then a blockchain would be more useful. I'm sure a lot of authenticity guarantees could be managed by decentralized databases, but I can see some value to putting them on chain if you want to allow the guarantees to interop with other applications. > 4. Voting It really depends what you're voting on. In many cases simply collecting digital signatures is fine. Again, that's just cryptography, not blockchain. But if you want flexible realtime governance to a system with complex voting rules, then smart contracts could be a good way to manage that. As noted, this isn't suitable for private votes, but there might be some ways to pull it off with ZK proofs. > 5. Proof of authorship My point here is more or less the same as with 2. > 6. Land registry Really, the use case here is "deeds and ownership registries of other financial assets". I don't think there's anything wrong with the enforcer having special permissions over the asset. The use case here isn't " protecting you against the fraudulent activities of both the regulatory authorities and any individual officials". The asset only has meaning in the context of a larger institution, so it doesn't make sense to try to strip it form that institution. I think the real use case here is more that you can interop your asset with other onchain applications. Additionally, it allows you to pick and choose which specific permissions belong which parties. Everything doesn't automatically default to whoever is running the infrastructure > 7. Interbank transfers I don't buy the premise that banks would necessarily need to defer to a private chain in order to obfuscate payments. Applications like Tornado Cash exist and ZK technology has come a long way since 2019. But even if they did, I don't think "setting up a distributed database and resolving any disputes in court" is a great outcome. I think there's value to having the system settle (and avoid) disputes automatically without having to wait for things to be resolved in court. > 8. Token for token’s sake Sure. I think memecoins are stupid, but I have a hard time seeing them working outside of a blockchain. > Blockchain as a trigger Having worked at an enterprise blockchain company where most of the clients were using blockchains as a trigger, I can say that this is almost always a bad idea. For most use cases, blockchains are a straight up bad fit, and would lead to a worse application. > Money I actually think that bitcoin is terrible money, but I can see blockchain-based payment systems using stablecoins taking off. > Smart contracts I think there is definitely a lot of unexplored territory here, partially because a lot of the product development in the crypto space is driven by idiots. But you can't tell me that there are no use cases globally decentralized, censorship-resistant, general purpose computation. If nothing else I think there were a lot of ideas thrown around several years ago that weren't possible due to scaling issues, which are now possible due to L2s (ex. disintermediating online marketplaces like uber + airbnb, social media with sovereign identity, gaming state + asset management).

fallinditch 2y ago

One of my pet gripes is how so many tech websites do a terrible job at communicating what they do and what their tech is for, and deFi projects are among the worst offenders. I came across one the other day [1] , flashy website, flashy jargon, but it's impossible to deduce what it does by reading the website. I had to feed a YouTube transcription into an AI and do some deep research and AI chatting before I could understand what they do. Perhaps I am dumb, judge for yourself. [1] https://flare.network/ https://flare.network/

shawabawa3 2y ago
It's just a lot of industry jargon so not surprising if you aren't deep in blockchain you don't understand it - layer 1, means it runs natively on an EVM Blockchain (Ethereum, Avax, polygon etc) - data platform, it seems like an oracle service, bring data sources from off chain onto the chain for smart contracts - proof of stake, people stake funds to assert the truth of data sources to ensure people don't lie
- fallinditch 2y ago
  Yes, but you've proven my point because you missed the complex mechanism at the heart of the system. the nitty gritty is where it gets opaque, for example: a user sends BTC to an 'agent' (collateralized data provider), the btc is 'wrapped' as wbtc and then the user can participate in deFi services in flare network. The user therefore enters a contractual relationship with the agent to look after their btc while they participate in deFi activities, and everyone trusts that the agent doesn't run off with the btc.
- fallinditch 2y ago
  You're correct, apologies for my previous misinformation. On further examination: the Flare approach, in contrast to wrapped BTC, takes a 'non custodial' approach and instead wraps BTC, xrp etc as FBTC using their FAssets system of overcollateralization + enshrined oracles. So the Flare network is more decentralized than the wrapped BTC approach, but it's not completely trustless, and introduces more potential attack surface. So in comparison to the wbtc bridging systems, one risk (of custodial misappropriation) is replaced by other risks of data manipulation. It's interesting to learn about this stuff, but the Flare.network website does a rubbish job of telling visitors what it does.

kryptonomist 2y ago

"Can we use a distributed database instead? If the answer is ‘Yes’, why go for blockchain at all? Indeed, blockchain is slower and more resource-intensive." The key factor when assessing a blockchain project is indeed to see what is the advantage of a blockchain vs a usual database. Most of the time, there is none. Worse, cost of a blockchain is more expensive as pointed by the article. And you still need an authoritative registry somewhere if there any physical item involved. In addition to that, blockchain projects faces another business issue: to be really decentralized, you have to lose control of what you put on the blockchain, which is hard to conceive for a private company.