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.
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.
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.
I think what we've been seeing with generative AI is much more of an argument against blockchains being a revolutionary technology than for it. This is what it looks like for a technology to go mainstream, relentless adoption that touches nearly everyone, and an innovation flywheel that keeps pushing the state of art forward every month.
The past decade and a half of big promises and "is there actually anything to this?" debates on HN is just night and day in comparison.
Your point might be that there just hasn't been another breakthrough on top of blockchains the way chatgpt was a breakthrough on top of neural networks. I think that's a reasonable point, but I still see a notable difference in that blockchains have been hyped as a product technology that has already arrived for nearly this whole time, rather than as an enabling technology still looking for its mainstream niche.
I don't think the comparison was ever relevant in the first place.
The fundamental problem with blockchains is that the computational cost of doing anything increases with the number of users, and there are network effects involved in cryptocurrencies. None of the "layer solutions" like rollups and payment channels can change these fundamental rules.
I think that a problem with generalized uses of "blockchain" to support some $USE_CASE is that you need a decentralized system to reward miners/stakers in order for it to be worthwhile, so you end up reinventing a cryptocurrency with whatever $FEATURE tacked on.
The best case of this is something like filecoin or namecoin. Two very old projects as well.
To a lot of groups, inventing another redundant cryptocurrency is a feature not a bug. A lot of these companies (big ones like Ripple Labs come to mind) essentially want to use the excuse of "cryptocurrency" to release an unregulated funding coin that essentially acts as a security.
Even as a cryptocurrency supporter, it is easy to see how this is detrimental to "real" cryptocurrency because is diluting the purpose of decentralized money with centralized funding tokens and nonsense. It's obvious that blockchains have little use outside of decentralized money due to their obvious inefficiencies.
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.
>After saying it would run out of funds by March, California’s last-resort fire insurance provider will impose a special charge of $1 billion on insurance companies — which will in turn pass the costs along to homeowners — the first such move in more than three decades.
1. Created dangerous conditions through inadequate fire management.
2. Prevented the private market from adequately communicating the risk through price increases. As a result, 7/12 of insurers stopped or restricted selling new policies.
3. Created a moral hazard by selling it's own policies to homeowners who were dropped by the private market.
4. Failed to respond to the fires.
5. Failed to cover claims through its insurance program.
6. Is trying to bail itself out by extracting $1 billion tax from the rest of the state.
Yet we're supposed to be thankful for this?
You could say the people whose homes burned are grateful they are being bailed out at everyone else's expense. But I bet they would be much happier if their homes had never burned down in the first place - a debacle that was entirely avoidable.
The question wasn't "should you be thankful?", the question was "has fire insurance been heavily subsidized by the state?". The answer to that question, which is implicit in multiple of the bullet points in your comment, is: Yes, fire insurance has been heavily subsidized by the state.
Separately, as convenient as it is to blame the state for the fire happening in the first place, the truth is just that wildfires are more common now, and are going to continue being more common, because of climate change. That's a bummer, but it isn't the fault of the state of California alone.
>Yes, fire insurance has been heavily subsidized by the state.
No, it wasn't subsidized by the state. The state has actually made fire insurance more expensive for everyone - including the people who lost their homes.
>Separately, as convenient as it is to blame the state for the fire happening in the first place, the truth is just that wildfires are more common now, and are going to continue being more common, because of climate change.
What's actually convenient is blaming a series of predictable policy failures on "climate change" - something that cannot be held accountable - rather than the politicians who can be.
> 3. Created a moral hazard by selling it's own policies to homeowners who were dropped by the private market.
My friend, that's the subsidy. Those are public policies with subsidized premiums.
It also isn't clear what "predictable policy failures" you think caused the fire and allowed it to spread.
The problem is that fire risk is way up in a lot of places, including LA. Insurers know this, so all else equal, their premiums would also be way up. However, the premiums are now too high for most people to afford. So policy makers can either just let people be priced out of areas with high fire risk, or they can subsidize insuring those areas. Neither option is a good one.
Maybe if we put you in charge of all the governments in these areas, we would find that you do actually have the magical solution to square this circle, but I'm very skeptical. I think you're just doing the normal thing - which is your right as a citizen of a democratic system of government! - of complaining about whichever policy was chosen of the universally bad options available.
That's not a subsidy unless your definition of a subsidy is anytime the government gives anyone anything. It would be a subsidy if the state provided the private market with financial incentives to reduce premiums. That is not what they are doing. Instead, they are offering a product that the market doesn't want to provide, and bailing themselves out by increasing premiums when their genius move goes up in smoke.
>So policy makers can either just let people be priced out of areas with high fire risk, or they can subsidize insuring those areas. Neither option is a good one.
No actually option #1 is exactly what the state should have done. You want to live in a dangerous place? That's your choice, but you should be prepared to pay the price for it.
When the state offers these policies, they are encouraging people to live in harm's way. If those who died had been priced out of these areas, they might still be alive today - just living somewhere else.
I'm sorry man, but subsidized insurance is a subsidy! What are we even doing here?
To your second point. Sure, it's easy to say that as an ideological rando on the internet. In the real world, policymakers are going to try to figure out better solutions than "nobody can live in the western United States because the fire risk is too high everywhere".
It seems like we're just arguing semantics at this point. And no, we don't have to evacuate the entire west because of fire risk, we just have to change incentives so fewer people move to the very hazardous parts.
It's not semantics! This is the refuge of everyone who says something is what it's not (or isn't what it is). "Well sure, yeah, I guess if you use words to mean the things that those words mean, then you have a point!"
You can just say that the public subsidy for insurance distorted the market in problematic ways. I totally agree with that. I don't understand why you got attached to saying that it isn't a subsidy.
But no, it's not as simple as "change the incentives so fewer people move to the very hazardous parts". This already is, and is only going to become more so, an existential problem for insurers, throughout very large swaths of the west.
The recent LA fires weren't in any particularly hazardous place. The hazard levels are higher than people can bear in more places than policymakers can bear to let private insurance markets sort it out. It's a real and giant problem. Just trying to hand wave it away with "foolish policymakers just didn't do the obvious thing" is convenient, but unhelpful.
California's FAIR plan is not a subsidy because it is not trying to lower the price of a good or service. It is rather a safety net program for those who cannot access private insurance (another policy failure caused by price controls). It's really as simple as that and I don't see why you're having so much trouble understanding it.
>This already is, and is only going to become more so, an existential problem for insurers, throughout very large swaths of the west.
Other western states are doing fine, probably because they do more controlled burns, so seasonal fires don't become conflagrations. That, as well as an insurance market where the state doesn't suppress price signals makes fires a non-issue for 99% of people. Also, since more and more people are living in urban areas I would expect fewer fatalities in the future, not more.
I'm not "having so much trouble understanding it", it's just that publicly subsidized insurance is ... subsidized. It's not a complicated or "semantic" question. You've created this other definition of what "subsidy" is, which just isn't what it is. If the government subsidizes something, it's a subsidy.
I don't get why you're so attached to doing contortions to deny that. It kind of seems like you think subsidies are good things, but that this subsidized insurance is bad, so thus it can't be a subsidy. But it's easy to square this circle: sometimes subsidies are good but often they aren't.
To your last paragraph, I think you just aren't aware how much other states are also struggling with this problem. You seem to live in California, so it's understandable to be most aware of what's going on in your own state.
I think that taxes can and should be funded through the single tax on property proposed by Henry George as opposed to sales or income tax. Widespread adoption of private cryptocurrency may be sufficient to enable adoption of the single tax system.
Cryptocurrency makes direct cash-like payments possible over the internet more easily. It makes collection of sales and income tax more difficult to collect.
Is the 2nd part true though? In the US sales taxes are mostly applied at the state level where the governments don't have particularly privileged access to the banking system and is enforced by being able to physically go to the merchant in question.
Bitcoin would probably make that easier for the government as you could now track merchants sales volumes directly on the blockchain.
For the federal government being able to deputize the banks to flag suspicious transactions certainly helps find tax avoidance, we've had an income tax way longer then we've had credit cards.
Banks and centralized payment systems are natural monopolies, so they jack up their fees as much as possible and become weak points for regulation.
A bank transfer costs me 15$ bucks, more than 10x the cost of a bitcoin transaction right now. That's incredible when you consider that the bitcoin is millions of times less computationally efficient than a bank transfer, but not so incredible when you consider that banks need to cover the cost of air conditioned boxes full of bean counters.
Want to set up a bitcoin account and accept bitcoin? Boom, done. You can set up a script to automate it. It's a an API. You can accept bitcoin with a public key, you can authenticate ownership of that key with signatures, and there is no risk of anyone using that public key to pull money out of your account.
Want to set up a bank account and accept bank transfers? Well you are gonna need to go in person, and don't forget your drivers license, your passport, proof of residence, and your mother's maiden name because that's your only form of identification and when this security model inevitably fails it's called "identity theft" and it's your fault. Oops, they're only open during business hours and weekdays, better luck tomorrow! Not to mention that you might get your funds frozen if you sneeze too hard.
I guess a bank is easier if you're over the age of 40 and can't learn new things
> They're deliberately undermining the mechanism that funds our shared existence. They want the benefits of living in society without contributing to its maintenance.
So I pay income tax, property tax, road tax, sales tax and even my savings I have to put in the hands of the govt which has been unreliable, corrupt and mostly serves the interests of the few over the interests of the many regardless of which political party has been elected.
The US government has not been unreliable. It has been very much the opposite of that, for a very very long time. That's why it has the best credit that any entity has ever had.
Sometimes I feel like a lot of you want to break things just so that you can then say "See! I told you it was broken!". I have very little patience for this.
Being able to borrow at low rates is only one outcome of being a very reliable government (to this point).
People struggling financially and being unable to buy property are policy choices that have nothing to do with reliability.
To illustrate: If we had never created the Social Security program, a lot more elderly people would be impoverished, but that wouldn't be unreliable, it would just be a different policy choice. But now that we do have the Social Security program, if people start being unable to get their payments, then that would be unreliable.
The distinction is: Are we keeping up our end of the bargains we've made? Historically, we have done so to an extremely high degree, which is why our credit is very good. And not just in financial terms. The current administration seems hell bent on ruining that long history of reliability, and that's very bad. But it's just not true that the US government has been unreliable historically.
They too are undermining our existence they just do it in a different way. I'm not sure which kind of parasite is more offending to the people doing all of the work.
To stick with the topic, the author argues for voting "openness may be too much, as we can see how each and every person votes, and thus can influence them" How is this different from putting a gun to your head and having you transfer your crypto currency to my account?
I find the topic really boring and unproductive. We have a few dozen kinds of robber barons and no amount of superficial conversation is going to change anything.
Everyone agrees really, everyone wants more for themselves or for the things they consider important.
The thing I'm curious about is what it should actually cost to run a country. Can we even simplify the topic to a point where the different configurations are few enough for mere mortals to understand?
I don't see how I'm to judge your road tax without understanding that. You can do roads on many different scales. 200 years ago the people living in a street had to organize the pavement of it. The road to the next city was financed on a city level.
Indeed. Was Beepboop arguing that inflation is the mechanism that funds our shared existence?
Why do you think cryptocurrency at its philosophical core enables wealth hoarding? If I don’t pay my property taxes, I lose my house, regardless of how much cryptocurrency I own.
Why can’t we have a separation of money and state where the state receives its due through taxes and is unable to inflate the money supply?
Cryptocurrency doesn't enables wealth hoarding at its philosophical core, as demonstrated by some that have a pure linear emission, like 1 coin per second forever, with no benefit whatsoever for their creators.
I think he's just advocating for the idea that money (and monetary policy) should be separated from taxation, like the gold standard. Or maybe an imaginary silver standard, where the citizens hold the precious metal directly (and pay taxes in it) instead of just having the currency backed by precious metal.
Just because the government and banking institutions can't easily censor and restrict the money supply, doesn't mean they can't collect taxes on it. In a word where crypto is the dominant form of money they can just throw you in jail if you don't pay taxes.
If you need to pay X amount of taxes, maybe the government should explicitly collect X amount of taxes transparently instead of collecting Y amount of taxes, selling a bunch of debt that needs to be financed at a later date, inflating the currency, etc. Because the more transparency in a democracy, the fewer ways for politicians to hijack taxation.
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.
One could always retreat to wildlands of Siberia and live their own happy life away from roads and reddit. One would not survive for long without the same society, which produced the survival knowledge, but one could at least try.
> Everything is based on force
How do you reconcile "what's stopping me from hitting you with 5 euro wrench" without the fantasyland non-aggression principle? Without that "social contract" and with absolute personal liberty, any rights/liberties/freedoms exist solely to the extent one themselves can enforce them against the mighty five euro wrench.
Outside cats, at least, are independent. It's evidenced by the existence of so many stray cats. They have leverage that other pets don't.
They don't need to understand the whole household. They only need to understand if they are being mistreated, in which case they can choose to leave and hunt vermon until the end of their (very few) days.
So I think it is better to be a housecat than a lapdog at least.
I mean, there have been a number of examples of people losing access to cryptocurrency trading during times of chaos. The rebuttal is "sure, but not the ones that are actually decentralized!". Ok, but the cryptocurrency industry doesn't actually want "you can only use Bitcoin and Ethereum and only via direct interactions with them, not via intermediaries" to be the message, because then what are all these other projects even doing?
> Ok, but the cryptocurrency industry doesn't actually want "you can only use Bitcoin and Ethereum and only via direct interactions with them, not via intermediaries" to be the message, because then what are all these other projects even doing?
You're 100% correct. The Eth L2s are all incredibly centralized. However most stablecoin transactions (ie payments) don't happen on Eth and it's various L2s anymore and I wonder if the same may be true to tokenized assets (RWAs).
that's not the rebuttal I would go for, the incentive model is to run your own node
during times of chaos, centralized exchanges go down and RPC nodes go down. the incentive model is to run your own RPC node that has processing bandwidth so that your transactions can reach decentralized exchanges and continue doing whatever you wanted to do. times of chaos in this instance would be to swap to a stable value.
the answer truly is "you're holding it wrong"
I think there is plenty to criticize about what crypto proponents say, but there is a technical discussion worth having at the same level of parity we have about many other things on this forum
Right, if you hadn't said it yourself, I would have said that this is just another form of "you're holding it wrong ".
But my point is that if this is actually the target market for these products - people who are gonna run their own nodes - then that market is like five orders of magnitude smaller than the crypto industry wants it to be.
Speculation drives innovation and crypto is the rawest form of that we have, in a global, nonstop market with extremes of selective evolution: permission to fail, instead of guardrails
Practically none of the things that attract people to the space would have been developed without encountering frictions from speculation, and fixing them
the speed of capital formation and lowered barrier of doing so has been great,
the obsolescence of capital controls has been great as well, from the strictest nation state level ones, to the most benign private sector ones. all overridden and circumvented.
at this point I would just say if you're not the target audience that has nothing to do with anyone else that garners their own utility out of the ecosystem.
I think people kind of want to be convinced about why they should adopt with examples of a use case they only make rebuttals about, and that's unproductive for everyone.
tl;dr "you do you"
but if you want to know why and how other people are using this ecosystem, there are plenty of user stories
This to me is the archetypal answer to question about what crypto is useful for. Like it has all these words in it and it seems like a statement of some kind but there’s literally nothing there.
You’re the archetype it’s about: you’re looking for something to convince you and challenge why it didn’t convince you
When a lot of other people derive value and extract value from the space and thats all that matters.
If you’re not those people, then dont worry about it.
If you want to be those people, ask them what they’re doing and what problems they have. They’ll pay you to solve them. Just like every other sector. But then you too will be a part of the crypto economy.
> If you’re not those people, then dont worry about it.
Seems to me they're trying to get me to give them my tax money these days. Not sure "you do you" is really a great response to obvious grift and fraud.
Nor is it an answer to the question of what crypto is actually useful for.
a lot of my vendors and contractors pay or are paid in stablecoins, and we redeem them in our exchanges and banks as domestic transfers. for me in the US, this allows for same-day liquidity in all forms - crypto, bank deposits, cash. In a matter of minutes after invoicing. In comparison to weeks or possibly even months.
these vendors and contractors are worldwide where either an international wire transfer is needed, which would have extremely high scrutiny and unknown settlement times, or other payment methods that are equally subject to random freezes or high fees or transaction size limits
thats one use case for me for 8 years now. I wish it wasnt a friction I would even need to consider but I dont really consider traditional finance a competitor, sometimes I want the currency used by my government and brokerage firms, sometimes I dont.
one person I ask “do you take crypto” and they laugh like its an uncomfortable absurd joke, the next person receives the business and often discounts it due to lower transaction fees and settlement times
Same day money transfers are a pretty well solved problem at this point via Wise or PayPal or Payoneer or SWIFT or plenty of other ways.
Sure they're subject to KYC and so on, but that's kind of the point. Which is that crypto still has only two genuinely viable use cases: 1) speculation and 2) avoiding laws.
all the ways you listed are subject to arbitrary reviews, limits, and freezes even if KYC is done by all parties. and of course, dont cater to all countries.
yes speculation and reducing legal frictions are big use cases. the laws and private sector interpretation of those laws are the friction.
in the US, the executive branch and congress are fully aware that crypto to crypto transfers onchain do not require KYC. there is nothing illegal about that, and nothing wrong with avoiding the other law imposed on other systems in this particular way. additionally, the same feature works in creating freedom in authoritarian regimes, like are we supposed to be dismayed that chinese citizens have other ways of moving more than $50,000 worth out of the country annually? is your dismay towards crypto’s use cases because you are FOR oppression of chinese citizens? rhetorical and only mentioned to highlight the relative morality necessary to even come up with your devils advocacy. crypto is agnostic to the circumstance and opens up markets
if you’re not the audience for that use case then that has nothing to do with anyone else, theyre already in the crypto space and prefer that method
You keep going from the benign circumventing as a matter of convenience, to the hyperbolic evading, but yes the same feature set nullifies both, worldwide. It was a folly for the state-concept to get involved in to begin with. Capital follows the path of least resistance.
But ok this is a sticking point, for you. In a stacked bar chart of why people use it and demand block space, that is one of many use case and user story. Its not an argument it’s a fact of life. Any single person with a single use case validates the entire thing, because their use case is valid
You’re still looking for arguments and that isn’t the point. Its not about selling you, you heard an irrelevant person mention “mainstream adoption” or merchant adoption and thought they were for real, all while getting scammed by them. Lots of people have exposure like that just like lots of people fall for scams and phishing campaigns on the general internet. It has nothing to do with what else is going on.
Its not about selling you, People are already in crypto and prefer that method.
Remember: freedom for the people is authoritarianism to the monied and powerful[0]; and vice versa, the only freedom they care about is the one where they get to put us in chains.
Capital controls make the powerful accountable to democracy, because we're not letting them take their toys and go home. The obsolescence of such controls does not bring about more freedom for us. It just means the rich and powerful can play a shell game with the people.
My country is a democracy does not have limitations on how much money can move in or out of the country, so already I would not be able to relate to you on your quotes.
But there are many reporting aspects, and scrutiny of various transaction methods at certain amounts, scrutiny which can cause delays and seizures. Crypto gets around those too.
NLS, the system demoed in the Mother of All Demos, was a lot less well known in 1984 than it is now and I doubt anyone expected it to be delivered by packet-switched IP or HTTP (which didn't even exist yet).
In 1984 the big hype was ISDN - digital telephony to the home - and all the wonky (and expensive) special services and gadgets you could layer on top of a whole two digital circuits. What killed that future was a combination of corporate ineptitude[0] and government action to kill AT&T's monopoly before AT&T got big enough to just buy out the US government.
The thing about the Internet is that while it was invented very early on, it wasn't accessible until far later. The Internet was a DARPA project that had escaped into college campuses. You needed a hookup at a local college campus in order to even access it. In fact, USENET users refer to the time when normal people could just sign up to AOL and get Internet access as "the Eternal September" because it was an immediate and measurable cultural change. I think it's fair to say that the Internet before September 1993 was a fundamentally different concept than what was available afterwards, and for most people, that is when the Internet launched. September 1993 to 2009 takes us from "hey AOL has these funny new 'Internet' forums" to "tweeting on my iPhone in the bathroom".
Other NLS ideas have similar trajectories. The mouse saw use in workstations but it took Apple and the Macintosh to try and actually make a mouse-driven computer for ordinary consumers. Ted Nelson's Project Xanadu was getting plenty of Autodesk money in 1984, but the hypertext protocol we actually use, HTTP, was invented at CERN in 1991. A lot of technologies are good ideas being held back by a world that isn't ready for them yet.
Blockchain finance[1] is more akin to Xanadu or ISDN: something that exists because it's creators would be rich if it took off rather than because it has some obvious value to it. It runs off hype. As a regular Internet user, it actually provides negative value, because the people who actually gain value from having a financial system with nobody to tell you no[2] are literal scammers and thieves.
[0] ISDN was notoriously poorly rolled out in the US, as BRI lines had been priced as a business service. Most people didn't need two lines over one wire and all the other usages of ISDN were purely speculative. Other countries whose local phone companies didn't have their heads up their asses actually did manage to sell it on the basis of clearer calls.
[1] Being very specific here in case someone shouts "Git is a blockchain, your argument is invalid"
[2] Well, unless what you want to do is raise the base block size of Bitcoin, then there's plenty of people who will tell you 'no'.
the Internet is that while it was
invented very early on, it wasn't
accessible until far later
Same with blockchain. There isn't even a good way to self-custody yet. As soon as you start talking to "not your keys, not your coins" people about the pitfalls of self-custody you end up in an absurd discussion about homemade approaches involving using dice to create private keys, setting up multisig using hardware from different brands and keeping the devices in different locations around the world. And none of these approaches really provide good security.
But that does not mean there is no way to do self-custody in a safe manner. It has just not been ironed out yet.
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.
The article is mostly talking about non-currency uses of blockchain, like provenance tracking of real objects. US blockchain shenanigans have no bearing on its arguments.
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.
Yes. It's entirely a value judgement about which assets are useful for the government to hold and which aren't. Count me on the land useful and crypto not useful side. (Although I don't have a huge issue with them holding onto the seized crypto, and would have been / will be very mad if they start open market acquisition of it.)
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.
The same could be said about tax deductions for charity, which are much more corrosive—they allow billionaires to launder their reputations and money.
The random Bitcoin recovered here and there and put into a pool is not even close to the harm caused to the taxpayer and, in the case of the Gates Foundation, the world.
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.
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
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.
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.
> 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.
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.
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.
"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.
> 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
> 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.
The hash chain in Git itself is effectively immutable, but the names on top of it, like branches and tags, can't be trusted, and that's what we're basing releases on. Obviously the point of a branch is that it will change, but expectations around tags don't meet reality, and there currently isn't really a way to state those expectations other than tossing out tags entirely. It seems an immutable ledger could help in this case to detect tag changes, and that's where people start throwing around blockchain as an answer, but there probably is something simpler and less entangled with the crypto subculture...
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).
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.
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.
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.
> 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.
> 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.
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.
A database would be controlled by a single entity. It could be turned off, have it’s source code vary from what is advertised, or otherwise be manipulated. That’s obviously an incredible risk to security.
I’m not hinting at bet/prediction like applications, there are many uses for oracles aside from this.
Also prediction markets don’t have anything to do with meme coins.
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
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.
Why would you voluntarily want a data store that can't store sensitive values?
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.
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.
> 3. Data records, once written, are never updated or deleted?
This is not a requirement for any blockchain with smart contracts.
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.
Neural networks have existed for decades, and yet their utility has only become apparent after hardware got fast enough
I think what we've been seeing with generative AI is much more of an argument against blockchains being a revolutionary technology than for it. This is what it looks like for a technology to go mainstream, relentless adoption that touches nearly everyone, and an innovation flywheel that keeps pushing the state of art forward every month.
The past decade and a half of big promises and "is there actually anything to this?" debates on HN is just night and day in comparison.
Your point might be that there just hasn't been another breakthrough on top of blockchains the way chatgpt was a breakthrough on top of neural networks. I think that's a reasonable point, but I still see a notable difference in that blockchains have been hyped as a product technology that has already arrived for nearly this whole time, rather than as an enabling technology still looking for its mainstream niche.
I don't think the comparison was ever relevant in the first place.
The fundamental problem with blockchains is that the computational cost of doing anything increases with the number of users, and there are network effects involved in cryptocurrencies. None of the "layer solutions" like rollups and payment channels can change these fundamental rules.
None of that applies to modern AI.
We've been using neural networks as classifiers for decades. They were useful immediately
So what might be blocking applications of cryptocurrency the way computational limitations blocked (many) applications of neural networks?
"You just don't understand bitcoin"
Neural networks were immediately useful, what are you talking about
Illegal commerce, money laundering, and speculation seem to have more than sufficed over that period
I think that a problem with generalized uses of "blockchain" to support some $USE_CASE is that you need a decentralized system to reward miners/stakers in order for it to be worthwhile, so you end up reinventing a cryptocurrency with whatever $FEATURE tacked on.
The best case of this is something like filecoin or namecoin. Two very old projects as well.
To a lot of groups, inventing another redundant cryptocurrency is a feature not a bug. A lot of these companies (big ones like Ripple Labs come to mind) essentially want to use the excuse of "cryptocurrency" to release an unregulated funding coin that essentially acts as a security.
Even as a cryptocurrency supporter, it is easy to see how this is detrimental to "real" cryptocurrency because is diluting the purpose of decentralized money with centralized funding tokens and nonsense. It's obvious that blockchains have little use outside of decentralized money due to their obvious inefficiencies.
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.
>Fiat money exists within a social contract - governments that issue currency must also maintain the infrastructure that makes society work.
Imagine saying this to someone who lost their home in the LA wildfires despite paying high taxes all their life to live there. Some social contract.
Should I say it before after they get their government subsidized insurance money?
Government subsidized?
>After saying it would run out of funds by March, California’s last-resort fire insurance provider will impose a special charge of $1 billion on insurance companies — which will in turn pass the costs along to homeowners — the first such move in more than three decades.
https://calmatters.org/economy/2025/02/homeowners-insurance-...
I'm a little confused... You're citing the existence of the government subsidy as a way to question its existence?
The state (and city of LA):
1. Created dangerous conditions through inadequate fire management.
2. Prevented the private market from adequately communicating the risk through price increases. As a result, 7/12 of insurers stopped or restricted selling new policies.
3. Created a moral hazard by selling it's own policies to homeowners who were dropped by the private market.
4. Failed to respond to the fires.
5. Failed to cover claims through its insurance program.
6. Is trying to bail itself out by extracting $1 billion tax from the rest of the state.
Yet we're supposed to be thankful for this?
You could say the people whose homes burned are grateful they are being bailed out at everyone else's expense. But I bet they would be much happier if their homes had never burned down in the first place - a debacle that was entirely avoidable.
The question wasn't "should you be thankful?", the question was "has fire insurance been heavily subsidized by the state?". The answer to that question, which is implicit in multiple of the bullet points in your comment, is: Yes, fire insurance has been heavily subsidized by the state.
Separately, as convenient as it is to blame the state for the fire happening in the first place, the truth is just that wildfires are more common now, and are going to continue being more common, because of climate change. That's a bummer, but it isn't the fault of the state of California alone.
>Yes, fire insurance has been heavily subsidized by the state.
No, it wasn't subsidized by the state. The state has actually made fire insurance more expensive for everyone - including the people who lost their homes.
>Separately, as convenient as it is to blame the state for the fire happening in the first place, the truth is just that wildfires are more common now, and are going to continue being more common, because of climate change.
What's actually convenient is blaming a series of predictable policy failures on "climate change" - something that cannot be held accountable - rather than the politicians who can be.
In your earlier comment you said:
> 3. Created a moral hazard by selling it's own policies to homeowners who were dropped by the private market.
My friend, that's the subsidy. Those are public policies with subsidized premiums.
It also isn't clear what "predictable policy failures" you think caused the fire and allowed it to spread.
The problem is that fire risk is way up in a lot of places, including LA. Insurers know this, so all else equal, their premiums would also be way up. However, the premiums are now too high for most people to afford. So policy makers can either just let people be priced out of areas with high fire risk, or they can subsidize insuring those areas. Neither option is a good one.
Maybe if we put you in charge of all the governments in these areas, we would find that you do actually have the magical solution to square this circle, but I'm very skeptical. I think you're just doing the normal thing - which is your right as a citizen of a democratic system of government! - of complaining about whichever policy was chosen of the universally bad options available.
That's not a subsidy unless your definition of a subsidy is anytime the government gives anyone anything. It would be a subsidy if the state provided the private market with financial incentives to reduce premiums. That is not what they are doing. Instead, they are offering a product that the market doesn't want to provide, and bailing themselves out by increasing premiums when their genius move goes up in smoke.
>So policy makers can either just let people be priced out of areas with high fire risk, or they can subsidize insuring those areas. Neither option is a good one.
No actually option #1 is exactly what the state should have done. You want to live in a dangerous place? That's your choice, but you should be prepared to pay the price for it. When the state offers these policies, they are encouraging people to live in harm's way. If those who died had been priced out of these areas, they might still be alive today - just living somewhere else.
I'm sorry man, but subsidized insurance is a subsidy! What are we even doing here?
To your second point. Sure, it's easy to say that as an ideological rando on the internet. In the real world, policymakers are going to try to figure out better solutions than "nobody can live in the western United States because the fire risk is too high everywhere".
It seems like we're just arguing semantics at this point. And no, we don't have to evacuate the entire west because of fire risk, we just have to change incentives so fewer people move to the very hazardous parts.
It's not semantics! This is the refuge of everyone who says something is what it's not (or isn't what it is). "Well sure, yeah, I guess if you use words to mean the things that those words mean, then you have a point!"
You can just say that the public subsidy for insurance distorted the market in problematic ways. I totally agree with that. I don't understand why you got attached to saying that it isn't a subsidy.
But no, it's not as simple as "change the incentives so fewer people move to the very hazardous parts". This already is, and is only going to become more so, an existential problem for insurers, throughout very large swaths of the west.
The recent LA fires weren't in any particularly hazardous place. The hazard levels are higher than people can bear in more places than policymakers can bear to let private insurance markets sort it out. It's a real and giant problem. Just trying to hand wave it away with "foolish policymakers just didn't do the obvious thing" is convenient, but unhelpful.
If you really to keep arguing this...
California's FAIR plan is not a subsidy because it is not trying to lower the price of a good or service. It is rather a safety net program for those who cannot access private insurance (another policy failure caused by price controls). It's really as simple as that and I don't see why you're having so much trouble understanding it.
>This already is, and is only going to become more so, an existential problem for insurers, throughout very large swaths of the west.
Other western states are doing fine, probably because they do more controlled burns, so seasonal fires don't become conflagrations. That, as well as an insurance market where the state doesn't suppress price signals makes fires a non-issue for 99% of people. Also, since more and more people are living in urban areas I would expect fewer fatalities in the future, not more.
I'm not "having so much trouble understanding it", it's just that publicly subsidized insurance is ... subsidized. It's not a complicated or "semantic" question. You've created this other definition of what "subsidy" is, which just isn't what it is. If the government subsidizes something, it's a subsidy.
I don't get why you're so attached to doing contortions to deny that. It kind of seems like you think subsidies are good things, but that this subsidized insurance is bad, so thus it can't be a subsidy. But it's easy to square this circle: sometimes subsidies are good but often they aren't.
To your last paragraph, I think you just aren't aware how much other states are also struggling with this problem. You seem to live in California, so it's understandable to be most aware of what's going on in your own state.
I think that taxes can and should be funded through the single tax on property proposed by Henry George as opposed to sales or income tax. Widespread adoption of private cryptocurrency may be sufficient to enable adoption of the single tax system.
Georgism is orthogonal to cryptocurrency.
Like how is cryptocurrency even related to consolidating all taxes into one on the unimproved value of land, this seems like such a nonsequitur.
Cryptocurrency makes direct cash-like payments possible over the internet more easily. It makes collection of sales and income tax more difficult to collect.
More easy? Crypto is significantly more complicated than modern banking/credit cards. The second part is true though.
Is the 2nd part true though? In the US sales taxes are mostly applied at the state level where the governments don't have particularly privileged access to the banking system and is enforced by being able to physically go to the merchant in question.
Bitcoin would probably make that easier for the government as you could now track merchants sales volumes directly on the blockchain.
For the federal government being able to deputize the banks to flag suspicious transactions certainly helps find tax avoidance, we've had an income tax way longer then we've had credit cards.
more easy? requiring ever increasing computational requirements to move money?
we figured out bank transfers decades ago, and there is no exponentially increasing challenges with a wire transfer.
Banks and centralized payment systems are natural monopolies, so they jack up their fees as much as possible and become weak points for regulation.
A bank transfer costs me 15$ bucks, more than 10x the cost of a bitcoin transaction right now. That's incredible when you consider that the bitcoin is millions of times less computationally efficient than a bank transfer, but not so incredible when you consider that banks need to cover the cost of air conditioned boxes full of bean counters.
Want to set up a bitcoin account and accept bitcoin? Boom, done. You can set up a script to automate it. It's a an API. You can accept bitcoin with a public key, you can authenticate ownership of that key with signatures, and there is no risk of anyone using that public key to pull money out of your account.
Want to set up a bank account and accept bank transfers? Well you are gonna need to go in person, and don't forget your drivers license, your passport, proof of residence, and your mother's maiden name because that's your only form of identification and when this security model inevitably fails it's called "identity theft" and it's your fault. Oops, they're only open during business hours and weekdays, better luck tomorrow! Not to mention that you might get your funds frozen if you sneeze too hard.
I guess a bank is easier if you're over the age of 40 and can't learn new things
> They're deliberately undermining the mechanism that funds our shared existence. They want the benefits of living in society without contributing to its maintenance.
So I pay income tax, property tax, road tax, sales tax and even my savings I have to put in the hands of the govt which has been unreliable, corrupt and mostly serves the interests of the few over the interests of the many regardless of which political party has been elected.
The US government has not been unreliable. It has been very much the opposite of that, for a very very long time. That's why it has the best credit that any entity has ever had.
Sometimes I feel like a lot of you want to break things just so that you can then say "See! I told you it was broken!". I have very little patience for this.
By having "the best credit" you mean literally it can borrow money at low rates?
What does that have to do with the fact that most citizens are struggling financially and fewer people than ever are able to buy property?
Being able to borrow at low rates is only one outcome of being a very reliable government (to this point).
People struggling financially and being unable to buy property are policy choices that have nothing to do with reliability.
To illustrate: If we had never created the Social Security program, a lot more elderly people would be impoverished, but that wouldn't be unreliable, it would just be a different policy choice. But now that we do have the Social Security program, if people start being unable to get their payments, then that would be unreliable.
The distinction is: Are we keeping up our end of the bargains we've made? Historically, we have done so to an extremely high degree, which is why our credit is very good. And not just in financial terms. The current administration seems hell bent on ruining that long history of reliability, and that's very bad. But it's just not true that the US government has been unreliable historically.
They too are undermining our existence they just do it in a different way. I'm not sure which kind of parasite is more offending to the people doing all of the work.
To stick with the topic, the author argues for voting "openness may be too much, as we can see how each and every person votes, and thus can influence them" How is this different from putting a gun to your head and having you transfer your crypto currency to my account?
I find the topic really boring and unproductive. We have a few dozen kinds of robber barons and no amount of superficial conversation is going to change anything.
Everyone agrees really, everyone wants more for themselves or for the things they consider important.
The thing I'm curious about is what it should actually cost to run a country. Can we even simplify the topic to a point where the different configurations are few enough for mere mortals to understand?
I don't see how I'm to judge your road tax without understanding that. You can do roads on many different scales. 200 years ago the people living in a street had to organize the pavement of it. The road to the next city was financed on a city level.
Indeed. Was Beepboop arguing that inflation is the mechanism that funds our shared existence?
Why do you think cryptocurrency at its philosophical core enables wealth hoarding? If I don’t pay my property taxes, I lose my house, regardless of how much cryptocurrency I own.
Why can’t we have a separation of money and state where the state receives its due through taxes and is unable to inflate the money supply?
Cryptocurrency doesn't enables wealth hoarding at its philosophical core, as demonstrated by some that have a pure linear emission, like 1 coin per second forever, with no benefit whatsoever for their creators.
I'm having trouble making sense of anything in this comment.
I think he's just advocating for the idea that money (and monetary policy) should be separated from taxation, like the gold standard. Or maybe an imaginary silver standard, where the citizens hold the precious metal directly (and pay taxes in it) instead of just having the currency backed by precious metal.
Just because the government and banking institutions can't easily censor and restrict the money supply, doesn't mean they can't collect taxes on it. In a word where crypto is the dominant form of money they can just throw you in jail if you don't pay taxes.
If you need to pay X amount of taxes, maybe the government should explicitly collect X amount of taxes transparently instead of collecting Y amount of taxes, selling a bunch of debt that needs to be financed at a later date, inflating the currency, etc. Because the more transparency in a democracy, the fewer ways for politicians to hijack taxation.
Libertarians are like house cats, they’re convinced of their fierce independence while dependent on a system they don’t appreciate or understand.
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.
> social contract is a kind of Stockholm syndrome
One could always retreat to wildlands of Siberia and live their own happy life away from roads and reddit. One would not survive for long without the same society, which produced the survival knowledge, but one could at least try.
> Everything is based on force
How do you reconcile "what's stopping me from hitting you with 5 euro wrench" without the fantasyland non-aggression principle? Without that "social contract" and with absolute personal liberty, any rights/liberties/freedoms exist solely to the extent one themselves can enforce them against the mighty five euro wrench.
Outside cats, at least, are independent. It's evidenced by the existence of so many stray cats. They have leverage that other pets don't.
They don't need to understand the whole household. They only need to understand if they are being mistreated, in which case they can choose to leave and hunt vermon until the end of their (very few) days.
So I think it is better to be a housecat than a lapdog at least.
Tradfi turned of retail access at the same time a few months ago. During this time distributed blockchains didn’t stop access to markets.
I mean, there have been a number of examples of people losing access to cryptocurrency trading during times of chaos. The rebuttal is "sure, but not the ones that are actually decentralized!". Ok, but the cryptocurrency industry doesn't actually want "you can only use Bitcoin and Ethereum and only via direct interactions with them, not via intermediaries" to be the message, because then what are all these other projects even doing?
> Ok, but the cryptocurrency industry doesn't actually want "you can only use Bitcoin and Ethereum and only via direct interactions with them, not via intermediaries" to be the message, because then what are all these other projects even doing?
You're 100% correct. The Eth L2s are all incredibly centralized. However most stablecoin transactions (ie payments) don't happen on Eth and it's various L2s anymore and I wonder if the same may be true to tokenized assets (RWAs).
that's not the rebuttal I would go for, the incentive model is to run your own node
during times of chaos, centralized exchanges go down and RPC nodes go down. the incentive model is to run your own RPC node that has processing bandwidth so that your transactions can reach decentralized exchanges and continue doing whatever you wanted to do. times of chaos in this instance would be to swap to a stable value.
the answer truly is "you're holding it wrong"
I think there is plenty to criticize about what crypto proponents say, but there is a technical discussion worth having at the same level of parity we have about many other things on this forum
Right, if you hadn't said it yourself, I would have said that this is just another form of "you're holding it wrong ".
But my point is that if this is actually the target market for these products - people who are gonna run their own nodes - then that market is like five orders of magnitude smaller than the crypto industry wants it to be.
Ah ok, that’s fine to me
Speculation drives innovation and crypto is the rawest form of that we have, in a global, nonstop market with extremes of selective evolution: permission to fail, instead of guardrails
Practically none of the things that attract people to the space would have been developed without encountering frictions from speculation, and fixing them
the speed of capital formation and lowered barrier of doing so has been great,
the obsolescence of capital controls has been great as well, from the strictest nation state level ones, to the most benign private sector ones. all overridden and circumvented.
at this point I would just say if you're not the target audience that has nothing to do with anyone else that garners their own utility out of the ecosystem.
I think people kind of want to be convinced about why they should adopt with examples of a use case they only make rebuttals about, and that's unproductive for everyone.
tl;dr "you do you"
but if you want to know why and how other people are using this ecosystem, there are plenty of user stories
This to me is the archetypal answer to question about what crypto is useful for. Like it has all these words in it and it seems like a statement of some kind but there’s literally nothing there.
You’re the archetype it’s about: you’re looking for something to convince you and challenge why it didn’t convince you
When a lot of other people derive value and extract value from the space and thats all that matters.
If you’re not those people, then dont worry about it.
If you want to be those people, ask them what they’re doing and what problems they have. They’ll pay you to solve them. Just like every other sector. But then you too will be a part of the crypto economy.
> If you’re not those people, then dont worry about it.
Seems to me they're trying to get me to give them my tax money these days. Not sure "you do you" is really a great response to obvious grift and fraud.
Nor is it an answer to the question of what crypto is actually useful for.
I don't know who "they" is, and "they" are not capable of representing that entire sector
I've already told you that the most productive thing is asking people what they use it for.
OK what do people use it for?
a lot of my vendors and contractors pay or are paid in stablecoins, and we redeem them in our exchanges and banks as domestic transfers. for me in the US, this allows for same-day liquidity in all forms - crypto, bank deposits, cash. In a matter of minutes after invoicing. In comparison to weeks or possibly even months.
these vendors and contractors are worldwide where either an international wire transfer is needed, which would have extremely high scrutiny and unknown settlement times, or other payment methods that are equally subject to random freezes or high fees or transaction size limits
thats one use case for me for 8 years now. I wish it wasnt a friction I would even need to consider but I dont really consider traditional finance a competitor, sometimes I want the currency used by my government and brokerage firms, sometimes I dont.
one person I ask “do you take crypto” and they laugh like its an uncomfortable absurd joke, the next person receives the business and often discounts it due to lower transaction fees and settlement times
Same day money transfers are a pretty well solved problem at this point via Wise or PayPal or Payoneer or SWIFT or plenty of other ways.
Sure they're subject to KYC and so on, but that's kind of the point. Which is that crypto still has only two genuinely viable use cases: 1) speculation and 2) avoiding laws.
yes and via crypto.
all the ways you listed are subject to arbitrary reviews, limits, and freezes even if KYC is done by all parties. and of course, dont cater to all countries.
yes speculation and reducing legal frictions are big use cases. the laws and private sector interpretation of those laws are the friction.
in the US, the executive branch and congress are fully aware that crypto to crypto transfers onchain do not require KYC. there is nothing illegal about that, and nothing wrong with avoiding the other law imposed on other systems in this particular way. additionally, the same feature works in creating freedom in authoritarian regimes, like are we supposed to be dismayed that chinese citizens have other ways of moving more than $50,000 worth out of the country annually? is your dismay towards crypto’s use cases because you are FOR oppression of chinese citizens? rhetorical and only mentioned to highlight the relative morality necessary to even come up with your devils advocacy. crypto is agnostic to the circumstance and opens up markets
if you’re not the audience for that use case then that has nothing to do with anyone else, theyre already in the crypto space and prefer that method
> if you’re not the audience for that use case then that has nothing to do with anyone else
You just described evading laws governing money transfers again using a lot more words.
Everyone gets it. Crypto is useful for evading laws.
However saying that breaking the law has nothing to do with anyone else isn’t real compelling as an argument.
You keep going from the benign circumventing as a matter of convenience, to the hyperbolic evading, but yes the same feature set nullifies both, worldwide. It was a folly for the state-concept to get involved in to begin with. Capital follows the path of least resistance.
But ok this is a sticking point, for you. In a stacked bar chart of why people use it and demand block space, that is one of many use case and user story. Its not an argument it’s a fact of life. Any single person with a single use case validates the entire thing, because their use case is valid
You’re still looking for arguments and that isn’t the point. Its not about selling you, you heard an irrelevant person mention “mainstream adoption” or merchant adoption and thought they were for real, all while getting scammed by them. Lots of people have exposure like that just like lots of people fall for scams and phishing campaigns on the general internet. It has nothing to do with what else is going on.
Its not about selling you, People are already in crypto and prefer that method.
> Capital follows the path of least resistance.
Huh? Capital doesn't have agency.
People either follow laws or break them.
The argument against crypto is that it's primarily a tool for breaking the law.
Which, you know, is fine for you if you don't care, but that's a pretty relevant point.
You are saying is that you do not see a use of it for yourself. They are saying that others see a use for it for themselves. Hope that helps.
Why do you consider this a positive?
Remember: freedom for the people is authoritarianism to the monied and powerful[0]; and vice versa, the only freedom they care about is the one where they get to put us in chains.
Capital controls make the powerful accountable to democracy, because we're not letting them take their toys and go home. The obsolescence of such controls does not bring about more freedom for us. It just means the rich and powerful can play a shell game with the people.
[0] A pleonasm, I know.
My country is a democracy does not have limitations on how much money can move in or out of the country, so already I would not be able to relate to you on your quotes.
But there are many reporting aspects, and scrutiny of various transaction methods at certain amounts, scrutiny which can cause delays and seizures. Crypto gets around those too.
Updating financial system is not the easiest one, also we would like to update it without a third world war.
The internet that connects computers and all the awesome things we could do with it were demonstrated in 1968:
https://en.wikipedia.org/wiki/The_Mother_of_All_Demos
Since 16 years later, in 1984 we still did not have Amazon, Google, Facebook, Instagram and Hacker News, the internet is obviously useless.
Oh wait, it's 57 years later and we DO use the internet ...
NLS, the system demoed in the Mother of All Demos, was a lot less well known in 1984 than it is now and I doubt anyone expected it to be delivered by packet-switched IP or HTTP (which didn't even exist yet).
In 1984 the big hype was ISDN - digital telephony to the home - and all the wonky (and expensive) special services and gadgets you could layer on top of a whole two digital circuits. What killed that future was a combination of corporate ineptitude[0] and government action to kill AT&T's monopoly before AT&T got big enough to just buy out the US government.
The thing about the Internet is that while it was invented very early on, it wasn't accessible until far later. The Internet was a DARPA project that had escaped into college campuses. You needed a hookup at a local college campus in order to even access it. In fact, USENET users refer to the time when normal people could just sign up to AOL and get Internet access as "the Eternal September" because it was an immediate and measurable cultural change. I think it's fair to say that the Internet before September 1993 was a fundamentally different concept than what was available afterwards, and for most people, that is when the Internet launched. September 1993 to 2009 takes us from "hey AOL has these funny new 'Internet' forums" to "tweeting on my iPhone in the bathroom".
Other NLS ideas have similar trajectories. The mouse saw use in workstations but it took Apple and the Macintosh to try and actually make a mouse-driven computer for ordinary consumers. Ted Nelson's Project Xanadu was getting plenty of Autodesk money in 1984, but the hypertext protocol we actually use, HTTP, was invented at CERN in 1991. A lot of technologies are good ideas being held back by a world that isn't ready for them yet.
Blockchain finance[1] is more akin to Xanadu or ISDN: something that exists because it's creators would be rich if it took off rather than because it has some obvious value to it. It runs off hype. As a regular Internet user, it actually provides negative value, because the people who actually gain value from having a financial system with nobody to tell you no[2] are literal scammers and thieves.
[0] ISDN was notoriously poorly rolled out in the US, as BRI lines had been priced as a business service. Most people didn't need two lines over one wire and all the other usages of ISDN were purely speculative. Other countries whose local phone companies didn't have their heads up their asses actually did manage to sell it on the basis of clearer calls.
[1] Being very specific here in case someone shouts "Git is a blockchain, your argument is invalid"
[2] Well, unless what you want to do is raise the base block size of Bitcoin, then there's plenty of people who will tell you 'no'.
But that does not mean there is no way to do self-custody in a safe manner. It has just not been ironed out yet.
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.
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.
The article is mostly talking about non-currency uses of blockchain, like provenance tracking of real objects. US blockchain shenanigans have no bearing on its arguments.
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.
> 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
Yes, they are spending tax-payer money. Previously, seized crypto would have been sold and could be used to reduce taxes.
Would you extend this logic to all government assets, or just cryptocurrency? The government owns nearly a third of all land in the country.
Yes. It's entirely a value judgement about which assets are useful for the government to hold and which aren't. Count me on the land useful and crypto not useful side. (Although I don't have a huge issue with them holding onto the seized crypto, and would have been / will be very mad if they start open market acquisition of it.)
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.
The same could be said about tax deductions for charity, which are much more corrosive—they allow billionaires to launder their reputations and money.
The random Bitcoin recovered here and there and put into a pool is not even close to the harm caused to the taxpayer and, in the case of the Gates Foundation, the world.
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/
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
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.
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.
Do you need a digital, decentralized, permissionless money? Yes: you need blockchain. No: you don't need blockchain.
A fungal colony is decentralized. A blockchain isn't decentralized, it's just differently centralized.
> 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
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.
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.
> No offense but I don’t understand why people with such limited knowledge of Bitcoin feel compelled to comment in these threads.
You and me both, buddy.
"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.
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.
It took over a decade but Blockchain has been de-hyped. Do I have to wait until 2035 for AI to do the same?
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.
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.
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”
I don't think this tracks at all.
okay! cool
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.
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.
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.
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.
... but we don't know which 5%
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.
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.
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.
Got use that LLM to bridge to the Hawk tuah coin
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.
It's a technique failure, but found its way in fraud, money laundry, black market, corruption...
Does blockchain have any use case in implementing version control systems?
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.
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.
> 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.
The hash chain in Git itself is effectively immutable, but the names on top of it, like branches and tags, can't be trusted, and that's what we're basing releases on. Obviously the point of a branch is that it will change, but expectations around tags don't meet reality, and there currently isn't really a way to state those expectations other than tossing out tags entirely. It seems an immutable ledger could help in this case to detect tag changes, and that's where people start throwing around blockchain as an answer, but there probably is something simpler and less entangled with the crypto subculture...
We just need tokenized t-bills on chain...That will change everything.
They already are, there’s FOBXX from Franklin Templeton and sUSD from Solayer for example.
What I mean was waiting the right regulations from SEC, once it is done, we will take off forever.
Money for criminals, gangsters, drug dealers, etc...
That's the only use case for blockchain.
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.
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).
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.
Most of them have pivoted to LLMs since that's where the money is
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.
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.
But money laundering is an especially noxious crime because it enables and incentivizes all the other large scale crimes.
"Carried away" implies that they didn't know what they were doing rather than cynically exploiting a bubble they knew would collapse eventually.
Still short sighted though. I feel like they are speed running "how to create backlash".
I would use cash for that. Especially US dollar.
It's probably increasingly hard to launder large sums of cash.
> Written by Product Manager at PARSIQ. Co-host at Basic Block podcast. Bitcoin, Ethereum, InfoSec.
Everyone's a grifter nowadays, innit?
Very timely.
Are you from the past? The article is over six years old.
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-oG2yNQf...
> 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.
> 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.
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.
A database would be controlled by a single entity. It could be turned off, have it’s source code vary from what is advertised, or otherwise be manipulated. That’s obviously an incredible risk to security.
I’m not hinting at bet/prediction like applications, there are many uses for oracles aside from this.
Also prediction markets don’t have anything to do with meme coins.
> A database would be controlled by a single entity.
There is literally no downside to that once you put all the trust on a single entity anyway.
> Also prediction markets don’t have anything to do with meme coins.
So what's the underlying asset that is the object of transaction if not memecoins?
If you came up with a near 0 probability of collusion between oracles and use a set of them you can prevent double spend.