Blockchain is a useless technology | Hacker News Reader

Blockchain is a useless technology

glennchan.wordpress.com

65 pointsjakarta50 comments

Not sure why this was flagged. It seems a pretty well-thought out, non-troll argument even if you don't agree.

Personally I think that bitcoin-style blockchains are pretty useless outside of some very specific cases. Consensus between parties that don't trust each other is pretty much what our entire system of banks, governments, and lawyers (when things go wrong) was created to deal with. Replacing all that with an simplistic algorithm is the worse case of Engineers Disease.

I know that a some people have made a lot of money from bitcoin - good luck to them. And bitcoin does have some value if you want to move value around without those pesky government controls. But I don't see how the whole system will not just fade away once the smart people have extracted all the money from the suckers.

But I don't have any bitcoin, feel free to ascribe this comment to sour grapes.

If you didn’t notice a lot of people on HN are heavily evangelising bitcoin. Probably as you say they have made millions on the shoulders of other people. Flagging anything that may deflate just a bit the bubble is part of their modus operandi.

   on the shoulders of other people

... that have contracted with the systems voluntarily

...under false marketing pretense & propaganda

If you believe that a mathematical interpretation of those people and governments is more trustworthy and can stand the test of time, then blockchain technology is impressive. And if you don't, then it's not impressive.

This reminds of an article from a few months ago:

>Ten years in, nobody has come up with a use for blockchain

https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...

Blockchain technology seems to be the ultimate case of a solution in search of a problem. I'm sure there are some niches where it maybe useful, but the hype around it is so absurd it borders on the religious. How often do you see comments here, for example, professing faith in its glorious, inevitable future? It's sometimes like talking to a fervent Christian about the Kingdom of Heaven that will come when Jesus returns.

Not really. Satoshi's whitepaper pretty clearly lays out the problems that Bitcoin was attempting to solve.

  I'm sure there are some niches where it maybe useful

Like a worldwide instantaneous transfer payment and a currency competing with an over-regulated financial system and central banks ?

What a small niche indeed.

No, that would be one of those religious fantasies since the reality of blockchain technology has certainly not played out in this manner at all. But don't lose faith, brother, the Kingdom awaits one day.

Arguments ?

I'm sure we could figure out a way to use carrots as a building material, but I'm still going to use steel.

How do you know which one is better if you don't know how to build a house or don't have dozens of year of human knowledge and praxis that confirms that this material is better ?

"instantaneous" => it is faster for me to send a payment via venmo, than waiting 24h on a congested bitcoin network. "currency" => I thought Bitcoin at this point is done as a currency. Merchants have dropped it, payment processors (Stripe) have let it go. The next best use case is "store of value", but even there, with a volatility of +/- 50% in 60 days, I doubt that.

Talking about blockchain, not bitcoin (which already have good competition)

I think the point of the article (perhaps wrong) is that blockchain is a terrible solution instantaneous transfer because it is slower and less secure than other solutions.

Like a broken payment system that takes hours for a confirmation, north of 50$ of commission even if you are transferring a single cent, instantaneous theft of hundred of millions USD and countless hard forks? I would say I’m very, VERY lucky of not being part of this small niche that apparently burns more electricity than me, my children, my grandchildren and so on until the 50th generation and over...

Talking about blockchain here, not bitcoin (which already have really good competition)

   that apparently burns more electricity than me, my children, my grandchildren and so on until the 50th generation and over

So you are going to get ride of every electricity consuming technology you have and get back living in a cavern ?

Have you computed the amount of electricity consumed by the actual financial system, payment systems and banks ?

Here is why I cannot see bitcoin becoming a "currency" - lack of a central authority which can enforce stability on its value.

If a loaf of bread is going to cost 1 milli-btc today and 2 milli-btc tomorrow, that will simply wreak havoc in the society. Most folks just want a stable predictable life with as little volatility as possible.

Say what you want about modern central bankers, they have kept things mostly stable. 2008 crash was the worst thing happened on their watch, which is mild in comparison to other horrors of the past (like great depression).

Blockchain's primary utility is in creating what initially was a complicated way to allow people to convert money into another currency that was easy to transfer around the world and use in ways that people would not want to use real fiat currency for. Without that utility, the whole thing would be a boring article somebody wrote back in 2008. Without the obfuscation of blockchain and mining and distributed ledger and all that, if people in china said "hey I want to convert my RMB into something called magic money that allows me to move 1 billion RMB into another country", the government would block them. But when they did it with bitcoin nobody initially freaked out because they were confused.. so eventually blockchain will be improved and as it improves it will become more centralized, more reliable, and less anonymous.. no big surprise this has happened many times before in the various era's of the internet...

> Blockchain's primary utility is in creating what initially was a complicated way to allow people to convert money into another currency...

Blockchain's primary utility has nothing to do with money. An attempted alternative to fiat currency is just an easy, obvious application of the distributed ledger/consensus capability that a blockchain offers.

This myopic focus on "blockchain == cryptocurrency" misses so much of the point, it would be laughable — if it weren't tragic.

It was incredibly myopic of Satoshi Nakamoto to start with a white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System" for sure. That Nakamoto guy missed _so much_ of the point.

Or maybe people want the point to be something other than it was.

Yeah, that's the laughable part.

You're confusing Bitcoin with blockchain. The former is a specific implementation — the first, yes, but that doesn't limit its other uses — of the latter. The latter is an abstraction that has uses far beyond mere money.

That's the myopia. If you (the general you) can't see the difference, I'm not the one who's short-sighted.

Totally agree that they are separate things but I’m talking about how the technology was immediately leveraged.. for example if we were talking about how roads can be used for lots of things other than allowing cars and trucks to drive fast.. Blockchain is infrastructure, so without a use for the infrastructure it’s just boring new tech.. I mean maybe an example of what I mean by boring new tech is like a new programming language.. “Blap programming language allows you to write everything as a monad! All monads all the time!”... that kind of thing.. it’s like ok some new infrastructure but what does it allow me to do with it? That’s what I’m talking about.. I think Blockchain is super cool and I love the distributed nature of not trusting people, but I am concerned that the history of other technologies that are cool initially because they are decentralized will end up being controlled by people who benefit from the tech the most and people that benefit are likely to be subject to scrutiny by various governments.. so that’ll end up screwing everything up.. so that concerns me..

I'm not confusing them. I'm pointing out that the first implementation didn't even use the word blockchain, but was focused entirely on bitcoin as a currency.

That someone can come along later and imagine (though not really demonstrate) other uses of an underlying technology is fine and dandy, but it's definitely not myopic to think that the person who initially created and linked the two concepts wasn't stupid.

The author should consider replacing "blockchain" with "Bitcoin" in their title. They spend the entire time talking about Bitcoin and do not make mention of any of the (many) alt coins that are attempting to solve various subsets of the problems they present.

None of their criticisms of Bitcoin are novel.

None are novel, but it is a good summary of all of the problems. And there aren't any good answers to these criticisms, so they're worth repeating.

There are plenty of answers to the criticisms. For example:

   * fast payment confirmation and network capacity - for BTC, the Lightning Network.  Plenty of alt coins have solutions for both of these

   * overhead that does not cost billions of dollars a year - there are alternatives to PoW

   * account security - paper and hardware wallets

Cryptocurrency is not without its problems, but you can't just list them all and conclude that the blockchain is useless. Especially when there are plenty of applications being used right now.

Applications such as money laundering and getting uneducated people to invest in a "currency"? It doesn't seem like the supporters of Bitcoin have much reason to support it

Blockchains are very inefficient if the ledger can be controlled by trusted sources. Git for example is far more efficient at managing local copies of object state and history. Most organizations have no use for trustless data structures, so I would agree that blockchains have limited use outside of pure p2p anonymous networks.

"I just don’t know when the bubble will pop."

I've been wondering this as well. Surely someone must have a rough idea when Bitcoin will tank.

I mean like a Big Short-style idea. I understand people are straight pumped about bitcoin but I don't care about those people; I want to know when Bitcoin will pop.

There must be someway to figure this out.

It just isn't going to happen man. Sorry to break it to you.

Sell now and maybe you’ll get out ahead. ;)

“The market can stay irrational longer than you can stay solvent.”

-John Maynard Keynes

It's worth noting that the "star" of Big Short, FrontPoint Partners, very nearly went bankrupt because the collapse took longer than Steve Eisman thought it would. "The market can stay irrational longer than you can remain solvent"

The article just seems to be willfully ignorant. Blockchain has already proven itself useful to the millions of people who have bought things off of darknet markets. He tries to make the argument that the ability to fork the protocol is essentially the same as having a centralized third party control the protocol which is just astoundingly wrong.

He basically completely ignores the idea of a blockchain as a way for non-trusting parties to quickly and easily agree on truth but then makes the argument that since the smart tech companies AMZN, FB, and GOOG aren't offering blockchain services, that the technology must not actually have any real use cases, another ridiculous point.

> idea of a blockchain as a way for non-trusting parties to quickly and easily agree on truth

Truth of what exactly? It would seem like many useful applications require off-chain oracles which completely subvert the point of the block chain. The only truths I can think of that two non-trusting parties could agree upon is are outputs of deterministic algorithms (i.e. math/logic/hard truth), which has to be utterly useless to the real world, except maybe to harness idle computational to compute prime numbers, PDEs, etc. (i.e. still pretty useless). I'm clearly missing something if all of the hype is warranted and would appreciate if you could point me to any resources/examples that cover this.

> A company’s stance on blockchain can also serve as a test of a company’s management. In my view, companies pushing blockchain technology (e.g. IBM, Microsoft, Intel, Oracle) are disconnected from customers’ actual needs and have mediocre management. Companies that don’t talk about blockchain (e.g. Facebook, Amazon, Google, Apple) are more likely to produce sensible technology that will work in the real world.

And yet, IBM, Microsoft, Oracle, and Intel are solving their customers’ needs on a daily basis. Could it be that blockchain tech is in its infancy like the Altair was at Xerox PARC?

I’m not sure what repulsed me more: the author’s smug attitude, or the trash design of his blog riddled with ads.

I don't agree that distributed ledgers are a bad idea, though ones that can be controlled by large amounts of computing power might be. In general, though, something that doesn't rely on central trust to accurately record something seems like a really good idea, to me. I'm more interested in applications in civics such as voting, though. I don't know whether blockchain is the best solution because AFAIK it would be difficult to anonymize individuals, but if a workable solution could be made this could renew public trust in historically corrupt institutions around the world, and steel other ones against becoming corrupt.

Anyone who has to deal with UCC1 filings at the State & County level can point to a blockchain use case that is a killer app. I've approached a few of the ICO's on this use-case without interest.

I am sure there will be people who will comment about how bitcoin =! blockchain. This is one of the biggest issue in cryptocurrency space. There is no branding. I think someone might start a coin called Block Chain or blockChain just to muddy waters.

Still it will be interesting to see a survey - Maybe Coinbase can run it on their platform on what a novice cryptocurrency investor thinks blockchain means. Is it a coin or bitcoin or technology?

I also find the betting against cryptocurrencies using AMD a fascinating hypothesis. Any traders on this forum have insights on this?

Blockchain tech is more than just Bitcoin.

To ignore that at this stage in the game makes me think the author is a trader looking at the tech from an investment perspective.

on the same page with banks faking Libor, his main argument is governments can ban banks working with bitcoin and everything is dead in the water, first of all, a global enforcement of it must be done, seconds there are even constitutional rights here at play, and you can buypass banks all together, and in Japan is legal tender.

If bitcoin can challenge banks & money printing machines even a little then it kind of achieves its goal, and I think is happening already otherwise you won't see so much bad press, don't tell me bankers are just trying to inform, they are really worried about me losing money speculating on bitcoin, they didn't cared when they crashed the economy in 2008, also I saw a news story the other day, the poland central bank or so, paid 30k euros to a famous local youtuber to trash bitcoin.

> Disclosure: I am short a company (not mentioned in this article) that hypes its ‘blockchain’ solutions. Short AMD. Long FB and GOOGL.

Is the author short Riot Blockchain? Because that's an easy one to short. Maybe Long Blockchain Corp? Kodak?

I heard Bitcoin described as "an environmentally unfriendly way to hate the government". I think that about sums it up.

Spoiler: it's not.

Nice opinion piece from a nobody. Lost credibility from me when his about me page was filled with ads.

Maybe you see something else, but I see 1 fairly standard side ad and 2 pretty small ads at the far bottom of the article.

I wouldn't call 3 ads on a 3.7k word article "filled with ads".

For those who didn't make it to the bottom, the author is short on AMD's stock. AMD stands to benefit from the activity of crypto currency mining.

So the author who finds blockchain useless is willing to put money where their mouth is?

Yes, and they also have a financial incentive to downplay the tech which people should know before reading the article, not after.

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