Or, another way: each exploit and oops only improves the system, rather than being a signal of its failure.
And let's be honest, the competition is still "Oops, I accidentally sent $900M to the wrong party." [1]
The counterargument there is that Citibank is currently pursuing a resolution in the courts to that issue, and if they win they will get their $900M back. If you flub a DeFi transaction, you're shit outta luck.
Who is it that uses these smart contracts, and for what? Is it mostly a gadget for research and speculation (still)?
But - like the internet - it's just a fad that will soon pass.
Or if Amazon ever starts a blockchain-based certification system to crack down on counterfeit products, the legit distributors are not going to push down on all their suppliers? Of course they will.
Brands like Nike often don't touch their products after they produce the design.
Manufacturing, distribution, shipping, warehousing, sales are all handled by a massive web of smaller entities with long term contracts. Most of these businesses use very very old tech, and will actively resist change.
Its a chicken or egg problem too, since having half of your products on a blockchain is pretty much worthless, it's an all-or-nothing problem which makes it that much more of a massive undertaking.
I've studied this pretty extensively and honestly don't think it'll ever happen. At least unless the current paradigm of supply changes massively.
"I don't think we will see any changes in the industry, unless the industry changes." Kind of tautological, no?
> Most of these businesses use very very old tech, and will actively resist change.
I don't think we are disagreeing. Maybe we are just thinking in different timescales.
I don't doubt current business will resist change. What I am saying is that there will be a point where adopting the technology will be such an obvious advantage for the large players that the existing business will either be forced to adopt or be disrupted by some new business.
Kind of not-at-all what I said no? Change is inevitable, blockchain is not the right tool for this job.
>adopting the technology will be such an obvious advantage for the large players
A centralized solution from a trusted third party has all of the benefits of blockchain with just about none of the downsides. Many institutions could fill this role from technology companies to major law firms in the supply chain space.
So why hasn't it happened yet?
Also, who in their right mind would rely so much on a "trusted third party" to coordinate global supply chains?
What would be cost to have an organization that is able to maintain this level of trust?
What about the politics of it? Even if the entity were to be trusted, how can we be sure that there would be no countries forcing their political/economical might to bend this entity to do what they want? As an example, after the global pandemic, do you trust WHO more or less? Do you still believe that they are completely independent?
You are never going to hear from me that blockchain is a perfect solution for all problems, but a "centralized solution with a trusted third-party" is quite a spherical cow in comparison.
Just about every major brand.
You can think it's absurd all you want, but it's already a major industry.
If different entities do not all trust the same centralized party, then it is not happening. You are pulling a spherical cow again as an answer. What is so hard to understand about that?
Why do you keep arguing about a space you're clearly unfamiliar with?
To make an analogy: I don't need to know all of the details of foreign trade and banking regulations around the world to know that people can use blockchain-backed cryptocurrency to send money all around the world in a way that is faster and cheaper that any banking or remittance company ever will be able to.
As blockchain tech matures and gets easier to be adopted by the masses, it will not matter if currently we have a gazillion different banks and if companies each are using their own ad-hoc method for managing world-wide transfers and FX: the moment that consumers are able to say "I want to use my crypto to pay for this", companies that are not on-board with that will simply lose business.
---
To sum up: you are arguing that the status quo is the only way to make things and that the only way to have any change is when they are of interest to the status quo. I am arguing that the status quo will not matter the moment that blockchain technology gets more accessible and makes more economical sense as a way to verify and coordinate work among entities that do not trust each other.
What matters in the end (to quote from the OP that started our discussion) is "The whole paper trail around a bill of lading isn't a joke if you are shipping from say China to South America". This is something that blockchain is basically designed to solve. It doesn't matter if the companies now don't want to use it, when the people holding the purses start asking for a solution that only blockchain can solve efficiently, the companies that don't adopt will lose business and fade away.
So you're extrapolating a general principle that has yet to be proven anywhere into an industry you know nothing about. Great. This sort of attitude is part of why folks generally sneer at BlockChain enthusiasts.
> you are arguing that the status quo is the only way to make things and that the only way to have any change is when they are of interest to the status quo
You keep building a strawman of my argument that's easy for you to tear down. Are you aware that there are more choices than "status quo" and BlockChain?
> when the people holding the purses start asking for a solution
That's the thing, consumers DGIF, and have proven this for generations by purchasing based on cost and quality alone.
If it is a general principle, it doesn't matter the specific application. That's the whole point of abstract thinking. But you don't seem to care about that. So, let's go back at the comment from OP:
I work in old industry and the supply chain guys as well as finance is having a boner from the idea of moving their crufty systems to blockchain.
> This sort of attitude is part of why folks generally sneer at BlockChain enthusiasts.
Again, I will borrow the words from OP:
But (Blockchain) - like the internet - it's just a fad that will soon pass.
I will say this in the nicest way possible: your head is so stuck inside the box of the status quo and their current issues that you are not even able to contemplate a thought outside of it. You are dismissing something that can disrupt entire industries because the current implementation is not good enough. The moment that you stop thinking in a static way, perhaps you won't calling everyone "naive enthusiasts".
> Are you aware that there are more choices than "status quo" and BlockChain?
Sure there are! Yet none of the things you present as choices actually (a) solve the problem of coordinating work and attesting validity of information in a global scenario with competing actors and (b) have the potential to be automated/scaled to eliminate a lot of human intervention in the way that blockchain does. You are talking about big firms, big contracts, CYA agreements and certifications whose costs can not reduce with scale. How do you want me to believe that this is going to compete with technology that will be exponentially cheaper and simpler to operate and deploy?
- World GDP: 142 trillion USD.
- Global cost of corruption: At least 5% of World's GDP according to WEF. [0]
- Cost of violence: estimated to be 11% of GDP in 2012 [1]
We are already at 16% and we are not even counting resources and parts of the world economy under the control of authoritarian regimes.
[0]: https://www.un.org/press/en/2018/sc13493.doc.htm
[1]https://www.researchgate.net/publication/261037678_Estimatin...
[0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645
You are now talking about how much of a "real economy" blockchain can handle, which is a different matter and a totally unfair comparison. Let's talk about a "real economy" when people are allowed to enter a work agreement and have a contract specifying a salary in crypto.
You are grasping at straws and you know it. Right now all your argument is based on your preconceptions against blockchain, but you are misattributing a whole lot of things to it.
Come back when you have a significant number of cases of people being attacked in order to get their bitcoin wallets stolen, banks being robbed for private keys in paper wallets or corrupt officials locking people up and demanding crypto for payment. Then I will start listening to you in regards to "violence that is caused by the nature of cryptocurrency and blockchain"
Because that's what real-world security ultimately boils down to: men with guns, ready to drag you where the law tells them to. It's not perfect, but it achieves 99% of the effect at the fraction of a cost of a "trustless" proof-of-work system.
But that's assuming the judge knows who the thief is. One of the main characteristics of cryptocurrency is that you can hold it without giving anyone your social security number.
In that respect it's much the same as cash -- if you get away with it you keep the money, but if you get arrested, they can order you to return it, and seize your house/car/wages/etc. if you don't.
The issue, which creates the demand for cryptocurrency, is that we don't have a digital equivalent of cash that isn't based on proof of work. But the regulatory system could create one quite easily.
You can, but AFAIK it's harder to do that when you're trying to cash out your cryptocoins in fiat (though arguably, this becomes less of a problem for criminals with the growing numbers of goods and services you can pay for with crypto). Still, I think if governments ever allow for a mainstream, sanctioned adoption of digital currency, they won't let it keep this level of anonymity.
It also becomes less of a problem if any of the things you can buy for cryptocurrency can then be resold for fiat, which is already the case.
> Still, I think if governments ever allow for a mainstream, sanctioned adoption of digital currency, they won't let it keep this level of anonymity.
But that's the problem. If you can get it from cryptocurrency then it's available, so the only consideration is whether it's available from the system that isn't built on environmental destruction, thereby removing the demand from the system that is. It would be better if we'd admit that and get on with it.
> the court can still order the thief to send back the money.
What if the court can not find the thief? What if the thief is from another nation? What if the thief is another nation?
We are talking about a scenario where cryptocurrency become prominent enough that people would be trading with it. Governments and financial institutions can only control the on- and off-ramps from fiat to crypto. So now the US can claim to a quarter billion USD from North Korea [0], but what about a scenario where your assets are just numbers in a ledger that no one can control and these fiat ramps simply are irrelevant?
You want to talk about Governments trying to make it illegal? That is debatable, but a better argument. You want to make the argument that States and Institutions will create their own blockchains with backdoors so that they can override it? That is possible (or actually implemented if you look at Ripple), but that will be no real disruption of the existing global financial system.
I fail to see how "Governments will allow it as it is, but control it" is a possibility, though.
[0]: https://www.forbes.com/sites/danielcassady/2020/08/27/feds-m...
I do not claim that. I believe governments will allow it iff it's in a shape and form they can control. If some features prevent effective oversight, these features will have to be removed for the cryptocurrency to be officially sanctioned.
That is certainly is a possibility and a valid view, but to me a very short-sighted one. It assumes social-political systems are static. It makes us take for granted that global top-down Governments (hopefully democratic) will be the only legitimate form of power for a long period of time.
Blockchain or not, that leaves me with a very grim outlook of our future.
Once a group reaches more than couple dozen members, interpersonal pressures crumble as two random people don't really know each other or depend on one another - and you need to create a level of governance in order for the group to grow and stay coordinated. Rinse repeat, and you end up with hierarchical governance we know from every single society throughout history.
I know that "blockchain with backdoors" (or, "blockchain with anarcho-capitalist guarantees removed") goes entirely against the vision on which leading chains are built. But then, I disagree with that vision and consider it naive. I may be wrong about this, though. Time will tell.
> Hierarchical governance seems natural to us, pretty much written into fabric of social reality.
Hierarchies have existed for basically forever and it's almost always the natural state of organizations not just for humans. I wouldn't argue the opposite. What has changed and almost certainly will keep changing is the nature of these different hierarchies. Moreover, we have more than one single type of hierarchy co-existing. Just compare Switzerland to China in present time, or compare the independence of Hellenic city-states with the growing centralization of the EU and you will know what I mean.
The one thing that is recent (and IMO misguided and/or totalitarian) is the idea that we can organize ourselves into one single global hierarchy, an all-encompassing entity that would be able to subject all different countries into one unified set of rules. Some look at Europe and the EU as a way to show that would be a good thing, but completely ignore the fact that the EU it is not an unanimous organization. Libertarians think that all-out globalization and absolute free-flow of commerce will smooth out every international issue and will completely ignore the fact that this only works if every one is on similar level of individual freedom and economic development. Communists refuse to accept past failed attempts because in their view Communism can only work if the whole world adopts it.
Every Utopian project that requires every one to conform to one single set of rules has failed and will always fail due to the impossibility of satisfying the needs, values and wants of everyone at a global scale. I hope we can agree on that.
> Once a group reaches more than couple dozen members (...) you need to create a level of governance in order for the group to grow and stay coordinated.
Right, and the beauty of blockchain is precisely that it solves the Byzantine Generals Problem. You can have any number of people that don't know and don't trust each other able to coordinate without any central authority.
Granted, this is not a perfect solution. It's not like that just because we can have a computer network telling us "who controls X and who should have access to Y" that people will blindly follow it. You will still have groups trying to control things by force, abuse the system and so on. Societies will still have to have their military forces.
The key difference is that now these disparate people and societies no longer requires nation-states to organize themselves. People won't be forced to swear allegiance with to one tribe or another just because of the place they were born, etc.
In any case, Ethereum still has a lot of characteristics of a research project. If you follow closely, you start seeing that ideas are explored, some approaches are validated, some are proven impractical, etc. Some delays and hiccups are inevitable. As long as the Ethereum Foundation keeps its transparency and does not overpromise I am fine with it.
Blockchains solve a very specific problem - decentralized transactions. Unfortunately solving that problem for the world's organized criminals brought a massive amount of heretofore hidden financial activity to light. Consequently, people, most of which don't actually understand blockchains, are trying to replicate this 'bonanza', like moths chasing a light bulb.
There many other use cases for decentralized transactions. But, with so much perceived opportunity at stake, industrial -strength pretzel logic is being applied to the problem, along with eye-popping amounts of venture and FOMO money.
In theory in crypto currency world "staking" is this process.
And you can install your trust root if you want, for example I can't find any Russian ones in that list, so probably the Russian government uses internal ones. (Their tax authority interestingly uses Sectigo a CA from the UK.)
This is not necessarily true. If the system architecture is highly complex and poorly designed, each exploit will result in a patch which will only make the system more complex and more brittle. IMO this is exactly what is happening with Ethereum.