Can you provide a single problem where the right solution space is blockchain? Ive thought about this a good amount, and cannot come up with a single use case where current established centralized technology is not a better solution.
1. Making money by trading fun bucks.
2. Anything where you need a currency but all the way better options aren't viable (crime).
With crypto, you fly anywhere in the world with a private key in your luggage. That key could have $100 or $1,000,000,000.
Thinking of international drug smuggling, one serious problem is moving all of the cash out of the country. Crypto solves that easily.
These cryptocurrency implementations along with some infrastructure would let you build a cheap low-cost micropayments system where you would just need to have some local trust. You could build out a federated payment network and build out infrastructure based on needs. All while avoiding the massive waste that comes from "everyone store every transaction ever"
The problem of credit card companies and the like charging really high rates still affects a lot, and "Paypal, but federated" could help tackle this with some cryptocurrency concepts in the background.
Though to be honest, I don't think this is going to happen. The communities are so focused on completely trust-free models that they don't see how they could build something extremely useful with way less cost and more utility by being more flexible on that point
Why not just use the real Paypal?
Some of us are banned for no actual reason from Paypal. Some others, banks.
cryptocurrency micropayments could potentially be much smaller. What if you could pay per packet the wifi access point forwards for you? Or pay per watt some charger gives you? Maybe nanopayments is a better name for them.
Fair point about nanopayments. But what's the win? Why split up the cost per single watt or packet? No one cares about losing one cent per day due to rounding errors
Honestly with this question you've summed up most of my feelings about blockchains. Humanity feels like it's become more powerful in some very specific way. We have a new tool and we're trying to figure out what it's good for.
I've pattern matched this to early reactions to the internet. Many of the critics pointed out that the internet didn't really make anything new possible, we could already quickly communicate with people across the world! But, it radically lowered the cost of that communication and put it into a format computers could use and that was enough to put companies like Blockbuster out of business.
It's really hard to work backwards from a new tool to places it could successfully be applied. And if 10 years from now we haven't found a use for nanopayments I'll admit it was a silly idea, but it sure does seem interesting.
Why do you need another 10 years? Bitcoin has already been around for 10 years. The micropayment and tipping use case has been explored fully and has failed.
NSFNet started in 1985 and with it the US could finally transfer Megabits of internet every second! By that point more people had computers but they weren't on them enough for things like e-commerce to make any sense at all.
It took until 1991 for the Web to be invented, and arguably in 2000 the web had still failed to really find it's niche.
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I make no claims as to whether crypto will have as much of an impact as the Internet had, I suspect it will impact only a few domains. However, we're still decidedly in the ArpaNet phase. Bitcoin can only process ~5 txns/second, Ethereum can only process ~13/sec. This isn't good for anything at all! I'd argue the nanopayment use-case hasn't been explored at all, because there's still no good way for me to spin up a server and accept nanopayments with it. Bitcoin transaction fees just spiked to ~$1, ETH transactions currently cost 15 cents.
You're looking at a steam engine the size of a building and telling me it'll never fit onto a train. And you're right! It took something like a hundred years for them to be compact and strong enough to power any vehicles.
A lot of people with a lot of money are working on newer designs which can process a lot more transactions for a lot cheaper, it's only once those cryptocurrencies have been built that the experimentation can really begin.
Though the idea of even jokingly giving miniscule amounts of money to friends has some traction in stuff like WeChat. If the systems were more open then you could run a collection system on your site pretty easily.
I have found it to be very useful during these conversations.
I suppose in theory all of the industry players could get together and establish a joint venture or nonprofit company specifically for the purpose of creating and maintaining an accurate database of provider contact information. But that seems a lot more complex.
Also, replacing trust in centralized banks with trust in mostly-centralized crypto software developers and mostly-centralized majority of miners.
I think the same arguments that come up about privacy can also apply to currency - I'm not doing anything illegal, why I do I care if I'm being monitored? or I'm not buying anything illegal, why do I care if banks and payment processors can block transactions? It's nice to have an alternative and be able to do things outside of that system just in case.
I don't, however, really understand the fanatics that want every cup of coffee they buy to use crypto. I definitely don't see any practical benefit to that.
Hey, the public also use bank notes with unique serial numbers. That has no bearing at all on institutions who hold your assets for you, as they don’t generally let you audit them.
Not sure if you're familiar with crypto by this comment, but inflation control was the key feature that enabled Bitcoin (and the rest) to exist.
The whitepaper is worth a read: https://bitcoin.org/bitcoin.pdf
Any blockchain going through repeated attack would be pointless to use anyway, so anyone with such hashpower has an incentive to cooperate in the long-term. It's also not possible to stop others from contributing hashpower, so you don't really own it in a meaningful sense.
51% attacks do not allow double spending on the blockchain. If a block is overwritten the attacker may choose to change the destination of their own transactions for that block, but the previous spends are undone. This is why merchants wait for multiple confirmations. Typically 6, which would require a 98% attack to undo.
At this point it'd take a nation-state to produce that much of bitcoin's hashpower, if it's even still possible.
Edit: Strugglinng to type on my phone.
Note that my use of the term "blockchain" here isn't limited to public blockchains. You most likely wouldn't want to store police evidence publicly on a blockchain like Ethereum. You'd want that to be private, but there do exist private blockchain consensus algorithms like BFT that do have the same tamper-proof properties without requiring a public proof of work network.
Writing data on a decentralized blockchain inherently provides a secure timestamp that cannot be modified without being noticed. Not to mention the extreme costs involved with trying to rewrite a blockchain's history. [2]
I disagree with the parent comment on one thing-- I would much rather trust a public blockchain with a respectable hashrate over a private blockchain. You could simply store a salted hash of the data on the public blockchain, and still keep the actual evidence private.
[1] https://en.wikipedia.org/wiki/Trusted_third_party [2] https://en.wikipedia.org/wiki/Trusted_timestamping
That would be the judiciary. If they -- the people with the guns and the resources of the state -- become corrupted, you'd be unwise to think that your cryptographic signatures are going to help much.
In the example given, having lodged the evidence with the court would have prevented the abuse.
It was you who suggested simple cryptographic signatures in your initial reply to the parent comment. I was only pointing out that securely signing a message with a timestamp requires a cryptographic entity known as a "Trusted Third Party". Please see the first link in my original comment.
> That would be the judiciary. If they -- the people with the guns and the resources of the state -- become corrupted, you'd be unwise to think that your cryptographic signatures are going to help much.
If there was verifiable proof on a globally distributed blockchain that evidence had been tampered with by a judiciary member of a democratic country, I find it very hard to believe they would get away with it in the long term.
No, you were pointing it out and then saying that the flaw of this system was that the judiciary could be corrupted.
> If there was verifiable proof on a globally distributed blockchain that evidence had been tampered with by a judiciary member of a democratic country
Putting aside the many many political and practical ways in which this fantasy will stay firmly a fantasy, why does this need a blockchain instead of simply a published list of documents, if this is globally distributed?
What centralized entity would you trust to run and maintain this database? What if this centralied goes bankrupt and shuts down the servers? If you are a small game developer, you are screwed. Even if it's Google, you still can't be certain that Google will not shut down the project and turn off the database like it has with certain projects in the past.
A public open blockchain is a neutral database that it would be reasonable for many small game developers to use for this purpose without fearing that it will get shut down, or the rules would be changed.
Looking at the hard forks in existing cryptocurrencies I wouldn't trust the rules to not change
Compare this to a centralized entity like Blizzard changing rules in World of Warcraft. Wouldn't you agree that it's much much easier for Blizzard to change the rules in their game, than to change the rules of a blockchain by hard forking?
This is a made up problem.
For bitcoin - paperclips are PoW hashrate.
The network rewards people that contribute to it's growth.
It doesn't care about people and people values - it's like a new kind of living organism that uses people as substrate to exist
Ownership of a property is a difficult concept to prove, and there is an enormous industry of title insurance which exists to dig through the records and insure a purchase against unknown claims against the property.
A public ledger would make property title/ownership simple and knowable.
Overall I think blockchain technology is incredibly over-hyped, but does have some suitable applications, particularly where public records are involved.
We implicitly trust a tremendous amount of digitized information because we trust its sources - for instance, digital banking works because we trust banks to only log verified transactions to our account. Sourcing that information is absolutely very difficult, but it doesn't mean it can't or shouldn't be done.
Only if all the property records are already in the ledger, right? If I buy a house via blockchain, someone can still come along and say their great-aunt should have inherited it 80 years ago, before blockchain records existed. So you still need title companies.
It wouldn't be easy, but it is a good use for the tool.
Company ownership information seems like much the same thing, and is a solved problem in all countries (that want to have solved it).
And "my computer got hacked" is kind of a blanket argument against using technology in general - by that same argument you should probably never use digital banking/investment or anything online to manage your life, and nothing should ever be digitized.
Why would a blockchain magically fix this?
> "my computer got hacked" is kind of a blanket argument against using technology in general
Many (most?) financial actions you can take with a computer can be rolled back if shown to be fraudulent, because the asset isn't stored on the computer itself. This is specifically not true of crypto assets.
What digital assets enable are markets around digital goods. Software can be funded and operated using new tokens specifically for that project. I believe it can be one solution for financing and creating real gains from open source.
But I still fail to see how blockchain is relevant here? A centralized system for managing supply and demand equilibrium through dynamic price changes seems like the best system here.
I do not feel as though have answered my question - would you mind expanding on your answer?
The use cases are novel and not necessarily directly applicable to current problems, just as the Internet was novel and required entrepreneurs to invent new business models.
But let’s imagine you created a new protocol for email. You decide that all emails in the new protocol require the use of a token. You are now incentivizing early users to bootstrap, improve, develop, and promote the protocol. What was previously unfundable is now profitable.
I’m only scratching the surface, but with some imagination you can see how “not crazy” this is.
In your email example, what is the advantage to you over charging a subscription? How do you create ongoing revenue?
Similarly, someone creates a new open-source project and AWS hosts it and earns all the money.
Blockchain allows you to create protocols that actually profit as more people use the base layer. This is a brand new thing.
1. Better efficiency 2. The third party is there to help when things go wrong 3. The legal system can help when 2 won't work 4. It's more accessible to the less tech-literate 5. The third party always has skin in the game, and therefore an incentive to always be improving the system
I don't know how anyone over the age of twelve cannot see #2 and #3
Code has bugs. Things will go wrong. You need lawyers.
It is much more difficult to censor crypto payments than it is to censor credit card, paypal, or bank transactions.
Crypto payments being censored just isn't something that is happening, even though crypto has been around for 10 years. The evidence proves that it is more difficult to censor.
It is something that happens with or without a court order, to people who have broken zero laws. Yes, the government often censors perfectly legal financial transactions, to people who aren't criminals.
And crypto makes such censorship against people who have broken zero laws, much more difficult. It makes it no longer as easy as just calling up a bank, or a couple credit card companies, and telling them to cancel all of their transactions to people who didn't commit any crimes.
It makes it no longer as easy as a couple monopoly companies making a quick agreement to screw over an entity that didn't do anything illegal.
Of course there is a way to do this. You go to a store and pay for food with crypto if the store accepts it.
Is has an advantage over credit cards, as a couple companies could block your transactions, whereas this is much more difficult with crypto.
Lots of in person stores have had problems with the visa MasterCard duopoly.
Being able to escape from the risk of censorship from visa and MasterCard, for brick and mortar stores, is useful in and of itself.
Money is digital. And you can use digital money to pay for physical things. And you can get around censorship, enacted by private companies, using digital payments that are harder to censor, and this works for real life physical goods.
Such a system could allow you to move purchases between devices and apps, and prevent vendor lock-in.
Coinbase like to claim they have solved this issue but it is total BS because they won't let you purchase BTC on their platform without a state ID. Useless for an expat who moved overseas long ago.
But if I need to be paid by someone in another country who can buy BTC then that is usually the best solution for me.
It is a small market so not a driver in the crytocurrency space.
I admit to knowing almost nothing about the US banking system, but is it really true that one can't make an electronic transfer using an IBAN (International Bank Account Number)?
I live in Austria and just paid a number of invoices, through online banking, to bank account holders in France, Czechia, Slovenia and the UK. All I needed was their IBAN.
The comment you’re replying to is actively soliciting examples of those
(And yes that’s a much smaller space than the block chain hype machine makes it out to be, but it is something tangible.)
Such as......?
Also, no one is saying that blockchain in its current state solves all problem better than what we have now. What matters, and why some people would bet on certain blockchains/tokens/projects/etc is the belief that there are certain projects that have real potential to disrupt a big incumbent like Visa.
We would have to make a few changes though - we couldn't send all transactions to all nodes - instead we'd need a tree of confirming networks or something. And we might need a 2PC protocol for transactions. (Eg first I send money and generate a hash. Once thats been confirmed you can commit a receive money message. Or something like that).
But I acknowledge that the burden of proof is on me here. And I'm not convinced its worth doing - I agree that there aren't many good use cases for this.
My gut feeling on this is no, having used it with some frequency over the past 7 or 8 years, and I've yet to hear a really convincing argument about why Bitcoin is so much better.
But governments could announce certain coins are not spendable and enforce that on companies or people subject to their jurisdiction. Prosecuting anyone who accepted one of those coins with a crime.
1. Althea (https://althea.org/) is incentivized mesh networking. Currently, mesh networking is an under-provisioned public good. It's a public good because how would you even pay for it? If you want to provide bandwidth to some mesh network you need to spin up your router and then form some sort of business arrangement with all the other routers in range. If you want to consume bandwidth from some mesh network you must first form a business relationship with every router you'll be using. With a protocol such as Althea all you have to do is start your router and set a price in $/byte . Your router broadcasts that price, and assuming the price is competitive packets will start to be forwarded and you'll start to receive payments.
With Althea all of these business relationships I described before are still formed! However, they exist in the form of standardized smart contracts which are cheap and quick to create. Like in all liquid markets, there's no negotiation over terms.
While incentivized mesh networking is theoretically possible without a blockchain, the transaction costs are so high that I'm not aware of any deployments. The blockchainless answer for reducing transaction costs seems to be: create some central entity which everyone signs up for. It collects information on who routed packets through who and collects and distributes payments accordingly.
The blockchain answer gives you:
- no intermediary who takes 20% just for matchmaking
- an easy way of paying other parties
- no need to sign up or register for anything. You're just communicating with your peers!
2. Filecoin is distributed file storage much like Amazon's S3. Currently, there are only a couple suppliers (Google, Amazon, Microsoft, etc) who store your files. They have some healthy competition and economies of scale which bring your price down but supply is still rather limited: mostly because there's no standardized "file storage contract". Also, they seem to enjoy premium pricing, even with all those economies of scale they manage to be most expensive options. Backblaze and some company called Wasabi are much cheaper for what appears to be the same service. Can you really trust them though? My data is important. I'll put it into S3 just to be sure.
The Filecoin network goes through some crazy steps to prove that providers are actually storing the files they claim to be storing and actually replicating them the number of times they claim to be replicating them. This lets you trust any supplier on the network and turns object storage into a commodity. Filecoin also has the same blockchain benefit of requiring little registration. Do you have a desktop computer with a 2 TB hard drive, even though you're only using a few hundred GB of it? Start the Filecoin daemon and wait, after some time passes you'll have money.
This 0-registration is a level of UX which blockchains cannot currently provide but in principle they could. However, it's something that would be very difficult for any central service to provide. And again, the file storage becomes a commodity without any intermediate market-maker taking x%. The blockchain acts as that market-maker.
A lot of things with M2M communications, be it microgrids, industrial IoT networks, self driving cars that can manage payments and invoicing themselves, blockchain networks can be very effective. Fetch.ai was an interesting project that came out.
Data marketplaces are interesting, checkout numeraire and ocean network
Having non fungible assets on the internet currently is an impossibility, say having a special gun in fortnite that no one else can have. This may not appeal to everyone but I know a lot of gamers who would treat these as assets. I’m not sure but I don’t think any service on the Internet today can guarantee that only one copy of a digital piece of information exists, Blockchain’s can.
Current internet infrastructure depends on us trusting one organisation to manage critical infrastructure and I don’t think that’s really the optimum way for anything.
Governance and management of networks was something we've never thought of, but some of the best experiment in governance are running in the crypto world. I do think networks like Google and Facebook were something people never imagined, and the capitalistic model clearly rewards the builders asymmetrically. A network like Google or Facebook was built by its users and is still being built by its users. SV has propagated this stupid ideology that 10 upstarts were able to build a network that powerful and all the credit should go to them. I'm not sure what the solution to this is, but I do think users should receive a fraction of the value the networks make. And blockchains make it possible to build networks like this. Steem is an interesting experiment but hasn't gained much steam.
BAT is a great experiment that could change the direction of the internet. I'm not sure if their model would work, but I do think its an experiment that must happen. The future of the internet is at stake with the ad driven cess pool that it has become.
In terms on energy inefficiency, this has been a problem people have acknowledged and have been trying to solve, I think we’re less than 2 years away from a breakthrough in PoS which would make PoW redundant.
Either way, I think people obsess over payments too much. I'd obsess more over how this is the first time in the history of mankind we don't need a third party to supply trust. There is no trust premium on services, which can upend multiple services, finance being the obvious one but I think it's much larger than finance. I do think that there is a lot of noise in this space and its hard for anyone rationally observing to get a clear perspective on what's going on. I could go on all day and maybe even write a scifi fantasy but yeah, there's a lot of people working towards building the future, sadly its a small fraction compared to the number of people speculating and creating noise.