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Comment by tjs8rj | Hacker News Reader

I’m usually in total agreement about blockchain just being stuffed anywhere, but observationally, there must be a good reason why blockchain shows up in these situations so often. There’s definitely the hype factor, but blockchain does have value in that it’s reasonably trusted by average people (perhaps unlike signing a contract everytime you wanted to purchase a piece of a creator - coins gamify it), and it’s easy to setup trust systems - Alex setup his own token in a weekend for a “human IPO”, rather than running through the cost and time of properly setting it up with a lawyer and contracts.

Maybe blockchain’s biggest value proposition right now is that it’s lightly regulated and has hype, so using it greases the wheels when growing an audience or building a usually regulated product.

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> blockchain does have value in that it’s reasonably trusted by average people

I don't think you and I would agree on what constitutes "average people".

> it’s easy to setup trust systems - Alex setup his own token in a weekend for a “human IPO”, rather than running through the cost and time of properly setting it up with a lawyer and contracts.

Easy to set up, but how easy it is it to enforce?

Author mentions the ponzi scheme, and quite right. As long as the general trust is there and the investments are on the up and up you’re fine.

But the insidiousness is once you’re in, you’re in. Once you bought 4000 Tupperware to resell (insert any pyramid scheme here) , you can’t find fault in it, and when it crashes you’re burned.

I don’t want to bash blockchain, there might be interesting use cases, but I haven’t seen it yet in it’s current implementations.

It's sort of useful for sending money to Asia without losing 1.5 to 5% on transaction fees, but that doesn't involve actually investing in it

Meh, one probably loses more by converting from fiat to crypto and back then on transaction fees for sending fiat directly.

> that it’s reasonably trusted by average people (perhaps unlike signing a contract everytime you wanted to purchase a piece of a creator - coins gamify it), and it’s easy to setup trust systems

This is absolutely backwards though; the contract is enforcible, whereas the coin isn't. If Alex simply chooses not to pay back his investors, nothing happens other than a loss of face.

> it’s lightly regulated and has hype

Exactly.

The incentive here is economic, not some governmental force. If some company stopped paying dividends, the stock price would crash. Some governmental entity coming in after the fact and forcing the company to pay dividends would be null at this point as the company would most likely be bankrupt. The same thing would happen here, the price of alex would crash to nothing making the other 90% that he owns worthless.

does blockchain solve the trust problem here though? my trust issue would be that the person doesnt report their entire income, or purposely delays deals past the term, which is all out of band of the coin

The only trust problem that blockchain solves is that of transaction settlement. Anything else requires a hybrid solution with a trusted third party.

I think the setup in, for example, US equity markets makes it clear why blockchain is used for any kind of “securitization” of assets or contracts. You have a single company, DTCC, that physically owns all publicly traded stock certificates and so settlement of trades is just shuffling numbers in their ledger.

Blockchain is just a ready-made DTCC for whatever asset/contract you want to securitize.

Dont you need some legal contract in any case? Whats gonna hold Alex legally liable to give part of his income then? The coins themselves are not worth anything...

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