Blockchain Is Dangerous Nonsense
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eisfunke.com
> But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.
I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
> Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans. However, in the world of blockchain there is no human supervisory authority.
This is a well-known, probably inevitable effect of what is probably the main point of using blockchains. Clearly people feel it is a price worth paying.
I do agree that 99% of blockchain usage is pointless at best, but that is really a different question. It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea.
It's more like blaming a water utility company that doesn't give potable water, and its supporters tell you "but you can always buy a bottle of water from the store. Or maybe dig for water yourself!".
Yes, one can build the "fraud prevention" and other measures on top of blockchain. But then you have a financial institution just like a bank, and you can drop the blockchain part - anything it "solves" can be solved much simpler and with 1000x less energy once you have the other trappings of a financial institution.
Outside of that use case crypto is a speculative investment vehicle. Maybe BTC will replace gold as a store of value. But that is just speculation.
Well, so is Git!
The big difference is that the blockchain requires all transactions to appear on all nodes, and has a wildly expensive and slow consensus phase.
Thing is, these two features provide great negative utility for the average person and no positive utility at all unless you are an anonymous entity wanting to transact with other anonymous entities with no legal framework at all.
I have experienced bank accounts of mine and those I know be frozen, emptied without warning due to identity theft, a false criminal accusation, forgotten debts, etc. I also know very well that banks have data sharing relationships with Visa, etc, that form a full map of where and when you spend money to aid data brokers in selling changes in your behavior to advertisers. Do you really want metadata on every purchase you make at a sex shop or a pharmacy stored in databases and sold to the highest bidder?
Cash has limits though. It is impractical and unsafe to put cash in the mail when paying friends back for dinner after we all go our separate ways or if I am buying something online I wish to be anonymous like a VPN subscription. In those cases Bitcoin solves a problem and I have legitimately used it on a regular basis for many years. I never use venmo etc and friends and I regularly settle debts with Bitcoin.
I would prefer not to have to carry around cash all the time so when possible to use Bitcoin in retail, I do. I have used bitcoin to buy drinks at bars in Germany, electronics at big box stores in Japan, meals at various restaurants, and coffee hundreds of times. I can also get cash from Bitcoin ATMs worldwide without having to deal with a bank denying me my own money because I am in an unexpected country.
Bitcoin, when purchased with cash, gives me all the privacy of cash with all the portability of a visa card.
Your bank account has been frozen and emptied at least four times?!
Surely the common factor in these incidents is you!
But I like to think this is like buying medicine from a street dealer. Maybe it's faster or more convenient, maybe you get the same quality. But those "maybes" are clearer for people when buying medication from a back alley. It's not at all visible to people using crypto as a replacement for their classic currency.
Every time there's an exchange hack, a massive fraud, a price crash, etc. more people start feeling the drawbacks and push for the kind of regulation, oversight, supervision that today are antithetical with cryptocurrencies and its associated parties.
A person probably wouldn't use bitcoin at the grocery store to buy milk, but it works better for sending grandma (located in a third world country) a bunch of money.
In fact bitcoin makes it harder[1], so we probably need MORE people doing these investigations.
So we actually maybe need millions MORE people to work these things.
[1] mostly. In some ways also easier. But probably on net harder.
Even when fraud occurs, the recipient is a known actual person. Know your costumer rules successfully prevent these kinds of scams to a sufficient degree.
Banks will also monitor transactions and will delay execution when there are signs of fraud. That's why so many scams rely on other methods of payment, especially gift cards, western union and... Crypto coins.
Not really. It's easy enough to set up fake identity that people who go and scam people on the internet usually do that.
I mean crypto and gift cards are way worse than banks of course. I'm just saying that there's no expectation in Europe that most payments are reversible.
These features and capabilities are usually implied for financial systems. It's really just common sense.
Blockchain currencies are basically counterfeit-proof, digital cash with an audit trail. comparing them to credit cards is an apples:oranges comparison.
Regulation around "cash" transactions are quite strict here (including the definition of a verbal contract etc.), so unless one is engaged in "under the counter" activities, you can benefit from similar protections. Of course, in contrast to credit cards and online transactions, recovery from cash fraud/mistakes is more complicated since you'd need to contact the authorities/the other party yourself and deal with the whole process "manually" (instead of just clicking a button in your bank's web portal and letting them take care of it)
There's no part of the article that ever said crypto people aren't aware of this problem, it pointed out the problem. It's a problem. "I have intentionally chosen a path that runs into this glaring problem" is not helpful or interesting at all. If you have nothing more to say beyond "they know", then I guess I don't have anything more to say either.
I’m not a blockchain die-hard, but there are some solid practical uses. For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help. Have a look at Corda/R3 as an example; there’s a reason why big financial institutions are investing a lot in this space because it can really drive efficiencies.
As with most things in life, the answer is seldom black or white. The same rule applies to blockchain as well.
When does that happen?
Banks act as facilitators of such as transaction on import / export side, often have to interact with shipping / logistics and insurance providers to ascertain that goods have been sent in order to clear and settle payment from buyer to seller. It’s an entirely event-driven and very paper-based business with lots of complex processing logic which can very well be replaced by a smart contract, especially because each party may not trust each other a lot (eg exporter wishing to audit transactions of the importer’s bank). A blockchain works quite well for this type of problem.
Disclaimer: I do not work for Corda.
I don't think this argument is nonsensical. It's true that these things were not goals.
The author's point, I think, is that obviously they should have been. Because this is how people lose money. You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers.
> Clearly people feel [the loss of reversal] is a price worth paying.
I don't think so. I think the vast majority of even pro-bitcoin people are actually either in the camp of not realizing the full meaning of this, or they don't truly understand that there's no recourse, until it actually happens to them.
Certainly people in general expect "the bank" or "the police" or "courts" to "just fix it". If cryptocurrency people were honest about this in their MLM pitches then people would tell them to piss off.
> It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea.
Well, "store of value" is the idea now, now that the initial plan proved a massive failure.
Different people have different perspectives. Clearly a lot of coiners think it's totally fine to put the burden on the user. Of course the author is free to disagree, but it's silly to pretend there is only one possible set of priorities.
The governments of the world - pretty much all the major ones - are behaving in a completely irresponsible way. "Trustless" isn't something to be applied to a neighbour. It is a polite way of saying that people are really sick of the lies emanating from the halls of power about what good economic management looks like.
It still baffles me that the official policy is that prices should rise exponentially. I haven't seen evidence it is a good policy and it is weird that there are no serious political challenges to it. Easy to explain, but still weird.
In a sense, it admits that traditional banking has the advantage in that regard because it has things like traceability, reversibility, insurance, accountability, and legal guarantees. These have been put aside on purpose in the crypto market, and while I think I understand the whys and wherefores, I don't see giving up these consumer protections is worth it.
Well, not to me anyway, but I'm not getting rich off of crypto.
...so therefore crypto is better?
And if you're afraid of cancel culture coming to a financial instrument near you, why would you want to put all your financial transactions on a permanent record? Sure, it's pseudonymous, but your entire purchase history is one hell of a fingerprint.
Traditional currency has a perfectly anonymous payment method: send cash.
Crypto currencies being volatile is not inherent in the technology. You can easily imagine a crypto currency pegged to something like gold, ideally not run by scammers like in the case of tether. The purchase history is also a non-argument, that's not inherent in the concept of a crypto currency.
Also, the problem with inflation is not really volatility as such, it's depreciation. Having a currency that jumps up and down by a factor of 2 like bitcoin in the last year is still better than one that melts away, so if BTC can remain as "stable" as it is now that would be pretty acceptable
How so? It has no control mechanism to prevent it. I get that the brakes (central banks) don't always work perfectly, but removing them entirely is an odd choice.
> Having a currency that jumps up and down by a factor of 2 like bitcoin in the last year is still better than one that melts away
To whom? When?
> You can easily imagine [...], that's not inherent in the concept of a crypto currency
It's easy to win an argument when you compare a real world system to one that doesn't exist.
But it's not a binary question. Some people are already "giving up consumer protections" in some cases. And not just by buying crypto. Ordering stuff from Wish is also a gamble.
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
The problem is any payment system DOES need that. And the competition has it.
Abstract goals without connection to real life needs are nice. Not useful.
It's like saying that any messaging system needs to be traceable, so you can see who sent you something. That is convenient and useful, but we survived until email without it.
If you get a contract/receipts you can use the legal system to attempt to recover your cash. With blockchain that's technically impossible?
There recently was a piece of news about some blockchain believers who locked themselves out of 20 million in <random crypto coin> because they used a "smart contract" and their code was buggy. Both the payer and the payee would like the transaction to go through but neither can do anything about it.
Edit: random link
https://vnexplorer.net/aku-ethereum-nft-launch-ends-with-34m...
Doesn't matter if "it was a goal".
It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation.
>Clearly people feel it is a price worth paying.
People felt that for smoking too. Then they didn't. And tons of people are just misinformed with Amway-style proselitization, and when they lose money without recourse they are surprised...
Why are you the one to decide what should have been a goal? And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries.
Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
Notice how this is an absurd strawman. Also how this is not an argument.
I'm not claiming "I am the one to decide", if it wasn't obvious.
I'm stating my opinion on what should have been decided, followed by some arguments/qualifiers on where/why it should be applicable.
Generally, when people say something, it's their opinion. No clarification is required on that, it's a convention of human discussion. Even though people state things should be X or Y, they don't necessarily make the claim that they are the sole arbitrers of the ultimate authority on a subject: they convey their take on what should be/have been done.
>And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries
We've had inflation and catastrophes and we managed to move value without the blockchain.
>Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
You can trust the blockchain even less then.
Nobody claims that life is impossible without crypto, we were talking about reasons and situations where it makes sense, and one example is when fiat currencies fail or are inflated away. No, it's not the only solution, but it's a solution.
>> Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
> You can trust the blockchain even less then.
That's objectively false. Bitcoin, for example, is not controlled by any single entity, especially not any political entity, so obviously you can trust "the blockchain" not to steal your money for supporting the wrong politics, that can't even happen in theory. But we did just see it happen in the regular banking system in a supposedly free democracy.
It can only do this for as long as ownership of a certain private key is valuable. Some keys have shown to hold value for ~10 years (those tied to the BTC ticker symbol), but some keys have gone from valuable to worthless pretty quick. The fact that you have to bet on holding the right kind of private key I think makes it pretty clear that blockchains do not, in fact, reliably store value.
> transferring value in a decentralised way
There are no longer any decentralized blockchains that also have significant value (ie. worth transferring). For instance, the figurehead known as Bitcoin has been centralized for a while [0].
[0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...
It depends on how many parties, relative to the whole, are coordinating. It is a very strong indication when 2 devs are coordinating a fundamental decision for thousands of people.
You have to realize also that "bugfix" is subjective to human judgement. It's often unclear whether a given behavior is truly contrary to intent or not, and it takes humans in authority to judge this for the rest to avoid perpetual conflict.
And there's a reason you never hear it as an argument - the lack of such fundamental protection is a massive weakness of these blockchain currencies. The extremely technical savvy early adopters do not care, because evading authorities is actually an objective and they profit regardless as long as the value of their holdings goes up, but protecting normies from scams is actually kind of important if you want to be used as a "normal" currency rather than a speculative asset.
A central authority with the ability to deal with bad actors is a fundamental aspect of making fiat currency actually work in the real world.
If people really thought it were a price worth paying, everyone would be using Ethereum Classic instead of Ethereum.
One example of those smart contracts was involving a trusted third party into a payment. The smart contract in that payment would only clear if two parties signed off on the payment. That's definitely a way to avoid fraud.
I was never asked and I really don't think phone scams and ransomware, which are both enabled by cryto currency, is a price worth paying. In fact, I think it's a major disservice to humanity really.
I bring that up on all Blockchain discussions.
This "could" happen, but in practice it rarely happens because the money has moved on as soon as it hits the account. Additionally, for many types of fraud, there has to be an actual court order to get a bank to take action. So the argument is predicated on a false assumption.
But yes, there are plenty of other types of transactions, like gift card scams, that you would not be made whole for.
That's the advantage of a high trust society. Heck, once an ATM retracted my cash because I wasn't quick enough, I called the bank and they just credited my account with the €300 or whatever it was. No questions asked.
In my experience transfers are pretty much always successfully reversed.
Hell, when one of the PirateBay founders hacked a bank and tried to rob it they actually reversed/prevented most of that, even though he had full access to the bank mainframe. He only managed to extract a couple of thousand that his accomplices took out of an ATM, IIRC.
I personally, believe there is a quite novel concept behind the trust-less consensus mechanisms. It amazes me that computers can come to an agreement in a hostile environment--fully decentralized.
How that is put to use in practicality maybe debatable. But I think arguments like this tend to just throw the baby out with the bathwater.
My friends and I were into bitcoin in mid-2009. We mined some coins on our 8800 GT.
At the time, I read the papers and the wiki and understood that the technology will not scale so greatly, in a way it wasn’t even designed to; it felt like an interesting proof of concept, the ability to actually buy things with bitcoins felt largely like a novelty, I remember buying a coffee in Prague a few years later for like 16 bitcoins or something.
I was ambivalent on the technology, but understood that fundamentally it was quite wasteful (computationally).
But something changed, suddenly people were using it to launder money, then once it started earning value (due to it being finite and so many people having already mined the majority of coins and probably losing the wallets) scammers crept in.
Now I see reels on Instagram glorifying “trader” life, so many of the old tired schemes from 100 years ago that used to plague the markets are new again.
Just like how our bodies have no tolerance to thousand year old virus’ that have long since gone extinct; our brains are not easily capable of understanding these schemes anymore: because they’ve been illegal and regulated for more than our lifetimes, we have no “natural immunity” to them.
When alls said and done, the initial promise isn’t even kept, there’s very few “super miners” who if they worked together would be able to control the entire bitcoin economy, which is the situation with central banks.
So what were left with is a scam ridden, fundamentally wasteful technology that doesn’t scale properly and does not solve the problem it was meant to; and the main reason that this is the case is because scammers adopted it so readily.
You can see exactly what I mean when you look at Monero. Objectively Monero solves the problems with bitcoin, but because it’s very difficult to trade with (due to it being privacy focused and no exchange willing to trade it) the price is very stable, since it can’t easily be used for money laundering or scams due to it’s higher barrier to entry.
That said, I’m still fairly ambivalent but leaning towards negative.
I will not work for a “crypto” company or with “NFTs” for example.
Was that a coffee shop in the Holesovice area? I remember a café where you could only pay in Bitcoin, which I thought was a rather dumb idea.
> When alls said and done, the initial promise isn’t even kept, there’s very few “super miners” who if they worked together would be able to control the entire bitcoin economy, which is the situation with central banks.
> You can see exactly what I mean when you look at Monero. Objectively Monero solves the problems with bitcoin, but because it’s very difficult to trade with (due to it being privacy focused and no exchange willing to trade it) the price is very stable, since it can’t easily be used for money laundering or scams due to it’s higher barrier to entry.
> There is no way to actually proof that.
Every day it becomes more and more true; even if you can't prove that it's true now (which, it probably is true now) it will eventually be true, economic effects cause centralisation: https://www.nasdaq.com/articles/how-centralized-is-bitcoin-m...
They couldn't mine it, but if someone somehow learned the number h such that H = h * G (where G,H are the generators of Pedersen commitments), then they could undetectably mint arbitrary amounts of Monero.
Critics like Diehl repeat this often, but without ever referencing the solutions. What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network? Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?
I would love to see the following succinctly solved by a non-crypto and non-blockchain solution:
- User A holds digital asset X (such as a valuable domain name "xyz.eth") and User B holds digital asset Y (such as a valuable sum of stablecoin tokens) and these users wish to exchange them in a single public + cryptographically verifiable transaction (i.e. atomic swap), without relying on the trust (and for-profit services) of a third-party escrow agent.
> What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network?
Literally any trusted central authority or database.
> Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?
You haven't actually stated a problem here, you've described a solution in search of a problem.
> User A holds digital asset X (such as a valuable domain name "xyz.eth")
You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.
> You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.
Your argument feels in bad faith, but I’ll bite: “.eth” and ENS is a valuable construct for those transacting in the network. These assets do have clear market value, even if you personally feel they shouldn’t.
The bigger issues in pure decentralized and distributed networks in finance are around KYC/CFT etc. Who ensures compliance if there is no control about flow of funds, for example.
But they said peer-to-peer network.
OK, how do they do this? Let's say X has 1M gold in World of Warcraft, and Y has 100M Gil in Final Fantasy XIV. How can X and Y use a blockchain to exchange these atomically?
Edit: if your question is “how does this technically look in practice”, here is an example: [1]
[1] https://github.com/niftyhorde/swap.kiwi/blob/master/contract...
Please tell me how Ethereum solves the problem of exchanging WoW gold for FF14 Gil in a trust less manner.
The problem of transferring digital goods controlled by the same entity in a trust less manner is trivial and solved by many technologies predating Bitcoin. I can already trustlessly sell a piece of copper in World of Warcraft for gold without involving any other third party.
That question sounds like an XY problem.
And this is a rhetorical technique: When we talk about economics, we talk about business or human problems. But the trustless-online-decentralised-ledger problem is a technical one. So the GP was saying "there is no business problem that crypto solves that hasn't been solved in a better way already. And then the crypto-bros come in and say "nuh-uh! If you for whatever reason want to run digital assets on physical infrastructure that needs to be maintained off chain without trusting anyone (say, the person the network depends on for maintaining the power infrastructure) then this is the only solution!".
YES! Well done. This is even useful, in a horrible hellscape where dog eats dog, everyone carries their own portable nuclear reactor and uses unstoppable point to point laser communication to run the internet and we forego all of the efficiency gains offered by using social consensus and democratic decision making to build webs of trust and centralised infrastructure with checks and balances (for example, by having the root certificates expire and be re-legitimised by some social ceremony repeatedly...say in an election). But in the real world, at some point everyone wants to build a society, put some basic trust down and improve living standards. And while people like Putin and the Kims and warlords still alive can fuck this up
1. They generally only survive because they are leeching of the more functional parts of society which uses trust (not unlike crypto with its Ponzi structure)
2. Crypto won't save you from them because they'll physically take away your electricity and/or torture you to get your keys
So what problems that aren't technical toy problems but real business and coordination problems in realistic settings (remember, if you have a state you trust to protect your private property rights, you can probably also use that to run the root certificate and organise the ledger) does crypto solve again?
Perhaps you do not see a value in that, or do not feel the risks outweigh this benefit, which is fine. We are acting on a different set of interests.
Trusting a central authority (bank) is not a solution to trust-less prevention of double spending.
Strawman?
A bank is not a central authority any more than large mining pools are central authorities. Or China (when it controlled enough BTC to double spend at will).
The banking system is vastly distributed. Trust is a giant network of accountants, central banks, regulators, investors, and lots more that help ensure there is no double spending. There are checks all throughout the system, ledgers, reports, audit trails, and, unlike BTC, when something is actually stolen, lots of protections and methods to claw back stolen money.
BTC can be double spent via majority control, so double spend protection is at best a statistical claim, just like real banking.
A large problem with Bitcoin is developers were unaware of modern (or even ancient) banking and money systems and have tried to reinvent simple money with all the same problems that mankind moved from millennia ago.
Then people unaware of the why of modern money systems think crypto solves an important problem that modern economies and users don't care about, while ignoring all the problems modern systems solved as if they don't exist.
And honestly, in all my life, I have never heard of anyone in the normal banking system double spend. So chalk one more up to the Bitcoin make believe event crowd. How many double spend events have you performed in your entire life via normal banking?
Bitcoin helps live without paying taxes and fund opposition without repercussions. In fact, cryptocurrency payments are the only way for Russians to fund anti-Putin opposition. So anyone who says that cryptocurrencies are useless, please, kindly, stop saying this nonsense. If you are lucky to be born in a first world country you simply don't know how easily banking can be used to suffocate a person in a (lawless) cashless society. Bitcoin is a hedge against that, and a powerful one.
Your comment just feels like typical crypto-booster vague handwaving to me - can you give an actual example of such a situation where the existing third parties that alreayd exist to solve these kind of problems cannot be used? Be concrete.
The typical answer is "just trust a third-party service" which side-steps the constraints in the question.
FWIW there is a variety of reasons you may not want to use a service like escrow.com — they take a cut of the exchange, operate as a for-profit business in a particular US-based jurisdictions, only operate on a limited set of currencies, request personal/private data sharing, and tend to settle the transaction in days, not seconds or minutes.
Even considering only these digital assets, you have an implicit notion of trust. The xyz.eth representation on the Ethereum blockchain is considered valuable because most people think it does represent what people expect to find at xyz.eth. But the ICANN can change this at any moment by adding .eth to https://en.wikipedia.org/wiki/List_of_Internet_top-level_dom... and this will all be gone.
Humans don't live in a blockchain, and blockchain rules don't apply outside of it, so you can't solve this boundary problem. Or rather, you solve it by trusting whoever's in charge of this boundary.
In order to solve this in a centralized way, you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper... the third party company which has enormous financial incentive to cheat, on behalf of literally all its customers.
But with distributed ledgers with attestation, the record is unfalsifiable. Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard and the value of the lie is low.
You could achieve this with paper and signatures for each tomato, but it would be a lot of paper.
The flaw is that there is never any way to actually tie the real world to the Blockchain. It's literally impossible. You can have all the fancy mathematically proven Blockchain records you like, but it's just impossible to tie that to an actual tomato or actual pesticide.
We have track and trace system already for crops and they have the same problem: all the paperwork in the world can't prevent someone from, say, weighing a box of tissues instead of the box of cigars you intend to sell. In the end you need to trust someone.
And how does blockchain prevent them from lying?
> you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper
Instead they all need to sign up onto the blockchain and lie directly on the blockchain
> Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard
Fertilizer put on the record that tomatos are fertilized.
Sprayer put on the blockchain that tomatos were sprayed.
Transporter put on the record that tomatos were transported.
You arrive at the shop to find rotten potatoes instead.
How did blockchain help?
Also note that in this current world that is so horrible according to you you arrive at a shop to find tomatos that have passed all inspections and have been delivered to you. What eaxctly does blockchain intend to solve?
All of human society is based on trust, and it works just fine and has for centuries.
Who would even want to live in a trust less society? That sounds like hell.
Many kinds of fraud attack the fallible human element, not technology. And blockchains cannot change that, as you can see with a glance at crypto news.
You need to trust this other channel through which you're receiving it.
So, I can buy a car from someone I don't trust by using a blockchain, with no need to rely on courts or other third parties?
The more i've tried to hack with smart contracts for physical stuff, the more I realize that's not what it's good for. But if you stop thinking of the physical world, and only think of the digital world, and you use a modern chain (I use avax). It works pretty good. I think there's a few missing pieces of infrastructure still, but the people who "are in it to build, and not for the money" (I include myself in this) stick around to build what I consider the first purely digital economy.
Sure there are countries with no functioning legal systems and extreme levels of corruption but most people affected by that would probably have a hard time using blockchain technologies directly and would have to rely on 3rd parties anyway.
It is about money and getting rich.
Whichever problem a certain blockchain is supposed the solve, the main reason for its existence is that the people who create it want to get rich, fabulously rich and fast.
Besides getting rich, majority of these projects are solutions to non-existent or solved problems, which use a very complicated distributed immutable database that very few investors actually understand.
If it's complicated and convoluted, then it must be the future.
Fabulously rich is hypnotising and it can easily become the most important thing in someone's life.
They're betting a lot on being right.
Others, who see the side effects of these people's mission in life, try to wake them up from this hypnosis, but that's impossible.
And so far, they have been right and many got rich.
But I have yet to see a project that solved a real problem (besides dark markets and the ones that enable crypto)
The side effects are not negligible though, they really affect others - scams, ransomware, energy use, etc ..
So it's going to stay polarized.
I don't remember a technology that has attracted such an incredibly irritating fanbase. Twitter is unusable because of crypto shills. Even someone genuinely curious about crypto is probably going to assume that it's all a dumpster fire because of the absolute scum on Twitter that spam every thread with crypto nonsense.
If it weren't for those people, I can guarantee the technology itself would not have broken through to mainstream consciousness. In and of itself, it's not a particularly polarizing thing.
Of course, the outrage of the original cryptocurrency (Bitcoin) essentially being "proof of burning fossil fuels" isn't helping either.
1. Technological innovation: distributed ledger with trust-less consensus. However, that innovation is largely unnecessary for almost all practical purposes, and it leads to resource use that is about a billion times higher than without that innovation (due to duplicated work and Proof of Waste).
2. Legal/process/social innovation: circumvention of rules and regulations, like Uber. Some people love that innovation, some people think it is rather harmful.
Personally, I think encrypted and uncensorable flow of information is a net positive, and should be retained. Encrypted and uncensorable flow of money, not so sure.
An internet with a door fee is a failed internet, I hope the web3 bubble bursts before we lose anything
And of course it has happened.
This is an illusion created by spending time online. The loudest people are polarized, but the majority of people are still in the middle somewhere, sometimes in a very ambivalent state.
A great example of this is Elon Musk. Online (Twitter, reddit, etc.) people worship him or loathe him. But the average person rarely thinks about him at all and doesn't care that much about him. They certainly don't have a strong opinion.
If you look at research (I read a lot of Pew surveys), this is true for most topics. There are 5-25% of people on the extremes, and everyone else can be said to be "not extreme" about the topic in some way (either ambivalent or just not knowledgeable enough to give a response).
Maybe is that why companies like Stripe are still using it then for crypto payouts? [0]
What is nonsense is totally thinking that it is going to go away 100% due to the scam projects, fraud, etc like what the author has said AND totally thinking ever project is going to survive or go for mass adoption.
This is where you get complete nonsense [0] from HN users who reply back and have admitted they have not read the article and scream 'CrYPtO IS SCaM' and either cannot answer basic questions or reply back with another question without given a concrete answer to the first.
Perhaps there is a reason why in particular Stripe ignored everyone and looked at a select few cryptocurrencies / blockchain technologies again despite all the other scams going on.
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
Blockchains and cryptos are innovative tools. They can be used for good and bad, but they are an interesting development.
It's really sad how many on HN have fallen for this black and white thinking.
I have also spent years trying to figure out a use-case for blockchain that is not solved by some other technology with less risk, and I can't figure one out.
> More precisely: The trust in institutions controlled by humans and bound by established laws and rules is instead replaced — by unconditional trust in the infallibility of code (“in code we trust” is a popular phrase in the scene). As code is written by humans, it’s seldom actually infallible.
> But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.
https://en.wikipedia.org/wiki/Nirvana_fallacy
"The perfect solution fallacy is a related informal fallacy that occurs when an argument assumes that a perfect solution exists or that a solution should be rejected because some part of the problem would still exist after it were implemented"
In the end, you either believe in the individual's choice, and individuals will do really stupid and bad stuff, and they will also fall for scams, but do you give the individual freedom of choice to fall for scams and speak freely?
This is a high risk option, perhaps. But it is also likely to be most effective at delivering progress to humanity, considering the difference between innovation over the last 200 years, has it happened in places with more freedom or less?
On the other hand, you have the crowd obsessed with control, obsessed with how the idiot needs to be protected from their own stupidity, and the crowd needs to be protected from the speech of the idiot. But somehow when you control things, in the end they start being used by those in power to cement their power, and suddenly you have less freedom, less creativity, and more suffering. But it's nice for some, because everything is under control.
Make your choice which side you are on.
How so? So far, crypto seems to amplify its worst trait: greed. It takes its destructive properties to new levels.
> you have the crowd obsessed with control
These controls are there for a reason. Controls create trust, and trust removes friction. Creating a stable currency and protecting people's money from scammers has nothing to do with censoring speech. It's a false equivalence.
> you have less freedom, less creativity, and more suffering
You also get this in an environment where the slightest mishap can irreversibly empty your savings account.
> used by those in power to cement their power
That's a problem with capital, not the currency with which it's expressed.
Part of new technology is many scammers entering it and exploiting the situation. Of course in many cases this isn't actually planned scamming, just taking risks in a new market and losing money.
What most here in this thread are basically arguing is blockchain is evil and shouldn't exist. Well, then neither should the internet or steam railways. It's shows a complete lack of understanding of human behaviour and history.
Really sad to see from the HN crowd. They are falling for the narrative built by people threatened by crypto, which is basically the people in power currently. Of course these are also the people against free speech. It's not an accident this is happening.
However these eventually become regulated. Lawlessness was a bug that was progressively fixed. In the case of crypto, it's a feature.
> Of course these are also the people against free speech
Leave those strawmen alone. Be the HN user you want HN to have.
It has happened in places with just enough freedom. The Wild West wasn't exactly known for its great pace of technological innovation. On the other hand, China today is a major innovator (e.g. in solar tech), and it is a much less free country than, say, Indonesia, which is not nearly as innovative.
In particular, legislation and enforcement against fraud are extremely necessary for a functioning system. Fraud directly keeps resources away from innovators (since people who thought they were investing into/buying an innovative solution are giving money to a fraudster instead); and it also indirectly dis-incentivizes belief in innovation, as someone who has been burned by a fraudster will be less inclined to believe the next innovator.
You surely can't expect to author perfect code and set it in stone.
Just pointing out the advantage. Clearly there are also disadvantages, and most people think the latter dwarf the former. I just want an honest and nuanced discussion.
I think most coiners, who skew strongly libertarian, would argue that it's up to you to make sure your smart contracts work.
Ah yes, it's up to the user to review and debug code written in an esoteric programming language to make sure that it works... When even creators of said contracts can't find bugs in their code and fall prey to mistakes (sometimes after multiple audits)
It doesn't mean however that we should just throw everything blockchain cryptocurrency related into the same sack and say its nonsense.
When is the last time you needed to debug the contract when you buy coffee?
Whether "do not require trust in a centralized authority" (with caveats regarding the protocol itself set aside) is more important than "useful for humans conducting human business" (without extra layers that re-introduce centralized authority) is up to everyone to decide themselves.
Calling this a Nirvana fallacy borders on bad faith.
An umlimited supply of currency like that underpinning our current financial system is hugely predatory and benefits only those in power and those closest to them.
Fiat incentivises huge environemntal destruction, you can just print more money and allocate it to those closest to you, who are inventivised to spend it as quickly as possible because it is always losing value. This encourages short term thinking and quick turnarounds, which results in mass produced crap that is horrible for the environment, or long drawn out wars that are even worse for it. At the bottom of the pyramid, rampant consumerism is caused by this same reason.
A rational, limited digital currency is a miracle. It will incentivise the opposite. Because you can't just "print more" and watch its value halve over your lifetime, you'll be much more careful in how it is spent. Look at how many shoddy products there are now, and how much consumer habits have changed since currencies moved off the gold standard. I loathe having my finances tied up in such a mess. We have a chance to right this wrong with all the benefits of an open and distributed system. That's the promise of BTC.
What about this is intrinsically "dangerous nonsense"? Honestly, the "bitcoin bad" crowd so often loses me by conflating cryptocurrency - a ledger built on blockchain - with blockchain itself. Personally, I can see all the challenges faced by cryptocurrency and understand the skepticism, but these takes that write off blockchain due to cryptocurrencies' problems exhibit a sort of surface-level perspective that I can't take very seriously. And the fact that such shallow takes keep climbing to the top of HN is shameful, to say the least.
I would agree, if there were any use for the blockchain or PoW.
It's dangerous nonsense because it's an industry consisting entirely of producing scams, with huge impact to the environment, availability of graphics cards, hard drives (thanks Bram Cohen), and free tiers of everything[1].
Even bandwidth has been turned into a get-rich-quick scheme! Waste bandwidth for coins! (Obvious result: increase in use of ISP transfer caps, and/or just a congested Internet for us all)
It's one stop short of "mine my new cryptocurrency by throwing away food". People will start stealing your food deliveries in order to throw them in the trash, for money.
That's the equivalent of what's happening whenever some blockchain-buzzword new scam is created, but in internet form.
So the fact that it ruins everything is why it's dangerous. It only creates problems, and only "solves" problems by the definition of "when I want to break the law then it's a problem that I'm not allowed to". That's why it's nonsense.
[1] You can't launch a free tier turing complete anything today without having ALL your resources be taken by freeloading cryptojerks. Like if your free online puzzle game was accidentally turing complete (or less, since that's not even a hard requirement) then someone somewhere will start burning all your quota and money calculating hashes.
Like if you make "the game of life" processed server side I'm sure someone will turn it into a bitcoin miner.
Edit to answer this question:
> What about this is intrinsically "dangerous nonsense"?
The article isn't about the tech itself, it's about the interfaces of the tech and the real world. The problems there are shameless shilling, deception & efficiency problems.
I think any adversarial system has something to gain from blockchain. When participants of a system are naturally pitted against one another due to being competitors (a la engaging in a zero-sum game), the solution is usually to agree to auditing by a third-party. However, this method is easily corruptible by replacing the auditors with biased parties[1]. This is not an uncommon problem. Try searching "biased auditors", and you'll get a wealth of literature and perspectives on the issue.
A lot of blockchain proponents are majorly against the idea of "private blockchains", but I'm not. I believe private blockchains hold a lot of promise as a way of auditing an adversarial system, in place of a corruptible third-party. Plus, auditors don't amount to much more than middle-men, and thus add an additional layer of complexity to the system, meaning more can go wrong. Redirecting the cost of auditors to maintaining a system hosted by the adversaries would result in a more lean system (by less nodes) with little chance of bias corrupting the audit process (because you can't inject former employees into a blockchain). Instead of the SEC having to oversee both the members of the network and the auditors to prevent trusts from forming, they would just need to monitor the blockchain updates.
What the technical implementation of this would look like would vary wildly by industry, and thus would require some brainstorming to ensure feasibility, but no such brainstorming would ever begin if the members of an adversarial system are convinced that blockchains are "dangerous nonsense".
Of course, such a technology would take a massive chunk from a very profitable industry, so I expect a lot of people (employed auditors) to be averse to the idea, but maybe those people need to do some soul-searching. When your job depends on the continued existence of a problem, you aren't really incentivized to diminish the problem. Rape-whistle companies sell less rape-whistles if people rape less.
[1] https://www.nasdaq.com/articles/ernst-young-auditors-to-pay-...
2. How do you incentivise expending the PoW work without cryptocurrencies?
3. Why not have one central/permissioned authority issue chains of blocks, and everyone that wants can verify them cheaply? That is millions of times more efficient than PoW.
That said, the movement of "tangible assets" to "blockchain assets" is without a doubt a huge challenge for blockchains, but usually only when dealing with "real things" vs "systemic things", eg exchanging fiat for cryptocurrency. Integration into a private blockchain can be wholly systemic (so system-to-system vs reality-to-system). Integrating a new company into the system could be done by a joint effort between the members of private blockchain (who are all incentivized to help, because it's in their interest to ensure that no member of their industry goes unchecked.)
The economic incentive to commit to PoW is intrinsic to the adversarial network itself - basically, the desire of a company to survive the zero-sum game (success in such is typically measured by market share.)
To revert to a centralized authority is not an invalid approach, and may very well be the "happy medium" that allows this concept to solidify into something feasible. However, it is a "half-in, half-out" solution and is still vulnerable to corruption.
This is -of course - all speculative, but my overall point is that the discussion to reach solutions to these challenges will not be had if blockchains are written off as "dangerous nonsense".
Did you skip that one on purpose? How do non-blockchain technologies solve the the Byzantine General's problem without relying on a (corrupt) central authority? Address this before you make more demands.
Math or not, police & courts overrule them.
Actually, blockchain isn't even mathematically a solution to BGP, is it? You need to define your actors better, here.
A 51% attack means communication can be denied. And there's still the question of how does A know that B has seen that A has seen, that B has seen…
Am I missing something?
The fact that communication happens on the blockchain doesn't mean it's not communication.
I just read a couple of articles about blockchain and BGP, and I think they all misunderstood what BGP is.
I'm A, and see that B is "committed on the blockchain to attack, assuming A is too". I can then add my block that says "I see B commits to attack. I agree let's both do this. I'll attack if you attack".
Ok. So now B sees that. Do they attack?
If you think the answer here is clear, then you've misunderstood BGP.
But, given the 'real world' context I tried to stress, do you think blockchain is a good solution to the variations of that problem in real world contexts?
People are increasingly aware that governments/authorities do not deserve the trust that they have been given + the opaque nature of the system only allows authorities to abuse their power. Thus the technology you love to hate so much does in fact serve "real world" problems and is more trusted, so much so that Ethereum for instance processes 4.5x more transactions than Visa [0].
There are many more arguments how this technology delivers real value to real people NOW, but I have no interest in entertaining more of this kind of bad faith discussions. The better technology will survive and eventually dominate, with or without you.
[0]: https://www.investing.com/news/cryptocurrency-news/ethereum-...
Something I dislike though is that so many conversations that enquire roughly 'why not use a more traditional technology' end up with rant about not trusting governments - that is 'cringe'.
[0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...
Also the author fails to consider the situation of 80% of humanity who live in countries that experience hyperinflation frequently. https://bitcoinmagazine.com/culture/check-your-financial-pri...
I see this argument against crypto a lot. It's valid, but it's also missing a very very important point. With crypto, practically, you still have to trust external entities. However, you can choose who you trust. You can choose to trust entities far beyond the reach of your corrupt local government, or you can choose which financial institutions you entrust. You can distribute your trust among multiple entities. You're in control.
This isn't the case with the traditional financial system where you're pretty much forced into trusting a specific pre-selected set of options that are all substantially identical.
More people need to read this. Developers can betray trust too, and I'm a little tired of reading "In a shocking turn of events, new cryptocurrency previously supported by Seemingly Trustworthy Source is actually a pump-and-dump. More news at 11."
(A nonexhaustive list of examples: Save The Kids, Tether, Safemoon)
When the team consists of one person with a monkey as their profile picture and no other details other than he's rich, another is a 20year old 10x dev who's been creating smart contracts "for years", one's the cool looking marketing genius who posts on twitter a 1000 times per hour and the rest is made up of stock imagery of middle age white men who are the "advisory board"
Can you be a bit more specific about what it means to "choose the team" according to best practices?
It is however concerning how of all people, a computer science student at a technical university is so closed minded, emotional, and primitive in their conclusions.
Blockchains are insecure because I say they are. Scams and stuff. I've Googled for 3 scam cases so it's only scams. Let me link you further into 3 other crypto hate blogs as "research".
Every new crypto project is useless nonsense. I've actually never used a single one of them, don't have any idea what they're about or how any of them works, but they're useless.
It's not that any of these sweeping conclusions are fully false. And with proper research one might come to similar yet probably more nuanced conclusions, the issue is that no case is made at all. It's a narrative with zero substance. If you're going to do that, at least be efficient about it: just write "crypto sucks" as headline and publish.
FWIW I do own some crypto money, but it's nothing more than a casino game with positive expected winnings to me.
https://en.wikipedia.org/wiki/Blockchain
"A blockchain is a growing list of records, called blocks, that are securely linked together using cryptography."
So, yeah, git and mercurial are "dangerous nonsense".
But of course they're really talking about cryptocurrencies and smart contracts, right?
So why not put that in the title?
But more importantly, git isn't what people usually think about when they hear block-chain. The irony is that it's probably a good example of how such systems can contribute value to society through decentralisation.
Normally, when people hear "block-chain", they think of the bitcoin-flavoured public append-only ledger where forking and merging aren't a thing, conflicts get resolved via proof of work with some built-in cryptocurrency. Those are, almost exclusively, "dangerous nonsense"
Certificate Transparency is a blockchain that your browser queries for every website you visit.
If you just don't like the name blockchain, we can call it Fluffernutterstructures.
The important thing is that the article is very clearly referencing the concept of a blockchain used as a permission-less DB, which Git clearly isn't. None of the arguments in the article apply to Git, and saying "Well, but Git is a block chain" would not make the article moot - the author at best needs to clarify that they are talking about a blockchain + consensus mechanism.
I'd also note that Git and Hg predate the first use of the term "Block chain" (2011, according to Merriam-Webster) by 6 years, and their design was in turn inspired by even older systems.
The Merkle tree or Hash tree data structure that underlies the design was invented in 1979, and also fits the definition of "block chain" on Wikipedia.
https://stackoverflow.com/a/67090776
> Why is Git not considered a "block chain"?
> ....
> And this is what Git does, and hence Git is a blockchain, or works as one, if you prefer.
> To close the circle, let's ask again: Why is Git not considered a “block chain”? It could be because many people, perhaps even a large majority, do not focus on the essence of a concept but on blinking accidents.
I guess, as the question/answer implies, ultimately, it's personal opinion.
I look at Git and other DVCSs implementations and see that they match the definition of blockchain.
> A blockchain is a growing list of records, called blocks, that are securely linked together using cryptography.[1][2][3][4] Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leafs).
https://en.wikipedia.org/wiki/Blockchain (and... 'see also Version Control' on the same page...)
Coming from academia, I take the definition in the wiki page (I keep quoting, sorry), and for me, that neatly defines, most modern DVCSs.
Example of two typos in two consecutive sentences:
>Blinded by the shine of the *enrmous* revenues of the crypto bubble, a lot of companies and government organizations look over that. *Everbody* wants a piece of the tasty blockchain cake and tries to shove a little blockchain into something, anything.
I see this in myself too: I used to be very sceptical of cryptocurrencies, but generally liked the idea as a concept. I used to think of it as a technology in need of some more smart ideas before it could eventually become very stable.
But with time, and specially with the appearance of NFTs (which, let's be clear about it, are nothing more than a scam in 99% of cases), as well as the incredibly bullshit I heard from some web3 advocates, I ended up hating anything crypto, including cryptocurrencies, which I objectively find to be one very useful application of public append-only ledgers.
So here's the thing: I think at some point, the bubble will burst. It has to, at some point; that's just inevitable for a bubble of this size. NFTs will crash and be forgotten for a few years until some legitimate applications start to show up.
Web3 will either be talked about until web4 comes around (whatever unfounded hype that will be about) and quickly forgotten, or it will stay around long enough to show to the world how utterly pointless the whole idea really is. In either case, it isn't here to stay.
Bitcoin will probably stay around for a while, constantly increasing in value as wallets continue to be lost until at some point it is accepted that it simply isn't sustainable anymore. At that point, people will probably jump over to some newer cryptocurrency, hopefully a more reasonable one without too much bullshit built in.
Citation needed.
That still doesn’t prove your original statement.
I was also able to donate money to Ukrania in war literally in a Sunday night in 30 seconds, again with Ethereum.
Yeah, "dangerous nonsense".
What if a group of trusted organizations run a blockchain together?
You can call that a blockchain if you want, but we already have a much older and more specific term for it: Merkle hash tree.
Blockchains should be banned and be considered pyramid-scheme fraud. Trading or paying with blockchain-based currency should be forbidden.
But crypto brings too many other problems: climate change; local pollution; scams; gambling addiction; sucks up tech talent that could be working on something else;
No, it’s not just trust in code, you’re also trusting the people that wrote the crypto coin client apps and operate the crypto exchanges. Sketchy crypto apps and exchanges already have made off with clients’ coins. That’s not a blockchain vulnerability, rather that’s a vulnerability in every market where you transact through brokers - you’re implicitly trusting your brokers.
A Blockchain is just a linked list of records with accumulative crypto signatures, which gives a you a crypto-verifiable indelible ledger. To make it a trusted financial ledger you just need to have trust in everyone involved between the finance clients and the ledger.
The fact that so far this has been the case for every ranticle I've seen on HN the past 6 years would suggest that we aren't as quick to recognise new tech as we'd like to think - not by a long, long long shot.
This probably sounds like a pitch, because I'm not a marketer, but the facts are the facts. Block lattice outperforms blockchain on every metric, and never gets talked about here.
The author cannot see value in self-sovereign, censorship resistant, permission-less monetary systems, fine, however, to claim "crypto" is dangerous nonsense because "fraud" is ridiculous.
> As code is written by humans, it’s seldom actually infallible.
Absolutely true, it doesn't have to be perfect, it has to be good enough. With over a decade as a high value target, most serious crypto projects have proved their code is the latter.
Even if we all know knifes are dangerous
Probably in the future most enterprise applications will have some sort of transaction blockchain for auditing
Saying that X is made of code that may have errors so it's not useful, is a ridiculous argument. The person saying this is gaining attention posting things on a platform that is made of code that has a chance of errors.
They should write down their anger on calf skin parchment delivered by hand by a hundred centuries old post system, to be coherent.
The future is elsewhere, that past is already gone.
> Honestly, cryptocurrencies are useless. They’re only used by speculators looking for quick riches, people who don’t like government-backed currencies, and criminals who want a black-market way to exchange money.
and he points out that many forms of trust provided by e.g. credit cards or currencies are non-technical and not solved by blockchain. For example, they allow you to cancel a transaction you made by mistake, or to prevent someone stealing your card.
This is fair, but note:
(1) we use cash, and sensible people don't want to abolish cash, even though it has the same problems as bitcoin (e.g., if you lose your wallet, you lose your money; someone can steal it from you) (2) services can be layered upon bitcoin, just as they can be layered upon cash. For example, if someone steals your cash, you can go to the police. And if someone steals your bitcoin, you can go to the police. (I appreciate that if "someone" is in Russia, you're out of luck as of 2022.) Similarly, an honest retailer will refund your cash for a mistaken transaction, and they could do the same for bitcoin. (3) The set of "people who don’t like government-backed currencies" is quite large, and it is not limited to libertarian ideologues. Especially, many people in developing countries would like their savings to be safe from government-caused inflation and/or from "financial repression" where interest rates are kept artificially low to support favoured borrowers.
This suggests that cryptocurrency has at least one valid use: an alternative to gold. I don't know if there are any others.
Is winning such races at all valuable?
Not sure what the use cases for high frequency cash transfer in sub second space are.
The situation is a bit worse for US people living outside the US. My baseline experience for cash transfers between my own accounts involves about 1 week of latency and some phone calls at like 2 in the morning :)
There are usually lower limits on daily transfer here as well, but you can change them. I think €100k is more a system limit, but I might be wrong.
Blockchains solve state-machine replication in a distributed, permissionless, partially synchronous setting with Byzantine fault tolerance. This is a fundamental breakthrough in distributed systems. It's up to us to figure out what to do with it.
Just because some people are using the wrong tool for the job does not make a blockchain "nonsense" for all jobs.
Bitcoin does provide a lot of value for me as a currency. A credit card payment processor once chose to disable the company's account I worked for [1]. Bitcoin enabled us to not having to immediately let go members of our team. I'm actually glad that there are so many people out there in the tech community who are happy to pay with Bitcoin.
I don't see any value in all the alt coins though. Most of the crypto purchases at the SaaS were made with Bitcoin. All those alt coins with their own blockchain are just made for junkies for love trading by charts. Just pure speculation and the side with more liquidity wins. Furthermore, the only application of blockchains which I have seen as a value creation tool is the application as the public ledger in Bitcoin.
Also, let me quote Hal Finney why alt coins don't work: "Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won't happen again?
Rebooting now may benefit a few thousand early adopters. What happens when hundreds of millions use Bitcoin 2? They'll be just as jealous and envious of you as you are of others. Given the precedent you want to set, how will you argue against yet another reboot?" [2]
[1] https://news.ycombinator.com/item?id=30632086
[2] https://bitcointalk.org/index.php?topic=10666.msg152988#msg1...
> Text gives an example of said thing being used
> Comment points out how the example doesn't prove the thing is bad
Congratulations, you've almost figured out how examples work.
Well, I'm just trying to say that Bitcoin is actually useful, but the other applications are not :)
Under this logic, Geocities must be the predominant social media service today. Because if MySpace were able to replace it, how would investors know the same could not later happen to MySpace with Facebook, etc.?
Look, a social media service has way more features and works in a completely different way than transferring wealth from Alice to Bob.
"blockchains can’t do anything against ... plain old typos in a coin transfer."
It is difficult to use properly crafted software and form a tx to a non-existent address on Bitcoin. It is not impossible, but not easy. The typical consumer is not meant to use layer-1 finance tools in any digital domain, modern, traditional, or blockchain based. Its not that hard to conceive of Bitcoin banks which have the same protections whilst offering currency sovereignty impossible in status quo finance.
https://www.reddit.com/r/Bitcoin/comments/26s1i5/can_you_los...
"However, in the world of blockchain there is no human supervisory authority."
There certainly are. One of the biggest hacks in history was reverted by human supervisory authority and community migration. This is an extremely unlikely method to help individuals who make some any mistakes on layer-1, however.
"The absolutely perverted energy usage in times of climate change is only one of those (this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency)."
This is a 'using energy bad' argument. With this logic we can also write off automobiles, smart-phones, artificial intelligence, hamburgers; if you do not quantify the value vs. the cost you cannot make an argument. Crypto skeptics are usually incapable of steelmanning the value proposition of crypto and make circular arguments like "crypto is not valuable because it uses so much energy," or appeals to their own ignorance.
You can't say Bitcoin is inefficient if you don't understand (or demonstrate that you understand) what it does. Somehow skeptics believe the proper response to pointing this out is to retort "I know what Bitcoin does, it uses energy to promote gambling!" That is not the response of a tech literate critic.
"this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency"
Proof of work is intensely 'out of style' even in the crypto space and sans Bitcoin and its much smaller forks (which almost invariably use mere fractions of Bitcoin's energy) there are only a few new, layer-1, relevant projects sticking to proof of work. Equating the number of tokens which exist on smart contract languages to the amount of energy used by proof of work is deceptive.
"(By the way: some of the advantages promised by blockchains, but without the nonsense, is implemented by Merkle trees 9. They already exist since 1979 and blockchains build on their technology. But please don’t also start trying to use Merkle trees for stuff it’s not useful for.)"
This is nonsense. It's like saying you have all the advantages of a cart or carriage by simply removing everything but the wheels.
"The main objective of blockchain is to decentralize trust and consent (even that it doesn’t do well, as explained"
This was not explained (you only need read a few paragraphs to prove this), and the author failed to state the view they are claiming to lampoon therefore have not demonstrated they understand what they are critiquing.
Let's acknowledge what the blog post gets correct:
There was, and still is to a lesser extent, an epidemic of trying to solve problems by engineering a blockchain solution. The absolute culling of anything spurious from the last market cycle has greatly decreased those endeavors and most money is in tokens on existing layer-1 protocols at this point. Skeptics and believers alike appreciate that mentality being ousted. Decentralizing services doesn't require a new chain for every new use innovation. Most of the important decentralization can be done off chain since most data isn't so important as Bitcoin account balances.
There is a large number of speculative 'scams,' or more realistically failed projects up-selling their potential. The likelihood of one's success investing in crypto without having done significant research or access to a trusted person who has is low. If a team has found genuine innovation the messaging around it will immediately be co-opted competent and incompetent, honest and malicious teams. You cannot determine which teams are competent and honest from their messaging alone, it takes digging. It is not a welcome or recommended place for anyone who cannot do and understand the results of serious digging.
Take it from someone who believes in the value of blockchain tech and has undoubtedly spent more time than the author listening to other 'believers:' most people bullish on crypto share the same valid complaints the skeptics make (this author makes all the cliche mistakes on top of the valid ones).
Not only that, but those serious in the space welcome critiques of the technology. Blog posts like this which are largely fueled by emotion and ignorance are denounced by dogmatic believers and scammers for bad reasons, but they are also ignored by honest believers for good reasons. Honest believers are receptive to competent feedback but this blog post is more of the same ignorance.
Bitcoin works, in the real world. It has worked flawlessly for over 10 years. Whether people speculate on its value, whether there are unrelated scams that use the word 'blockchain', whether people mistakenly write the address and lose money, or whether transactions have 'no refunds', that doesn't take any of the value. It was a known danger from the very beginning.
This article, on the other hand, is complete nonsense. Same as most takes that conflate Bitcoin with blockchain with NFTs with pyramid schemes and throwing them all into one big bag.
PS: I can only speak for the Bitcoin (proof of work) blockchain. It's innovative, it passed the test of time, and it's secure due to how strengthened it is.
An immutable ledger sounds like something that could be useful. Myself I can't think of any uses besides crypto, but the fact that I can't find any use for a technology myself doesn't turn it into "dangerous nonsense"
That being said, I'm sure there are other cases where the blockchain can be used. The problem is that it's currently used as the proverbial hammer, making every problem look like a nail.
Why do people keep repeating this obviously false idea? Fraud happens with bank transfers all the time and banks don't reverse them. There are humans reviewing it, and they say "hmm, looks like the money's gone, sorry."
However, that's NOT true with blockchains.
For public blockchains, the trust is still with humans. The only difference is that there are many more humans who are looking after the open-sourced code, verifying the databases, checking the transactions. Participation is opt-in, and anyone can look in, and since there are many humans participating in it, it is very hard to change something.
Therefore, we do not simply trust the code. We put trust in decentralization, and make sure that power is not concentrated by just a few humans.
In contrast, our legacy financial system is mostly digital now, and it's a giant back box. All of the code is closed source, we can never review it, yet we are forced to participate in it. The data of our legacy financial system is stored in centralized databases that only a few unelected officials control and gate-keep.
Decentralization is the main feature.
Nirvana fallacy. Bitcoin allows people to control their own money, if they decide to give it to scammers, it's not Bitcoins fault.
> The absolutely perverted energy usage in times of climate change is only one of those (this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency). [8]
Bitcoin provides truly self-custodial, borderless money to the world and only causes <0.1% of CO2. Crypto donations to Ukraine worked flawlessly in the current time of war in which national banks are not fully operational. Refugees are able to travel with their funds simply by remembering a few words.
I would not call that "perverted energy usage".
Video streaming, video games, porn, dryers are causing similar or higher CO2 emissions. Wasted foods alone cause 6% of CO2. Calling these emissions useful but at the same time denying unbanked people access to financial services reeks of financial privilege.
Also the cited source [8] is an employee of the dutch central bank which is probably as opposed to Bitcoin and cryptocurrency as you can possibly get.
The rest of the article cites several projects which use the blockchain label to generate publicity. While this criticism is warranted, it should be directed at the projects, not at blockchain tech in general.
"Decide" is an interesting choice of word.