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Comment by mlyle | Hacker News Reader

Non-repudiation is an important problem. Some things we can rely upon trusted third parties, but all kinds of things we rely on imperfect systems with notaries and trusted third parties can be more effectively solved with ledgers.

A whole lot of the interesting applications are non-monetary-- proving that a record was produced and made available before a certain time and has not been tampered with since.

As a world economy, we spend like $100B/year on notarizing things and related kinds of non-repudiation record keeping. If it was really cheap, we'd do much more. And a big fraction of this could be done cheaper and with a higher agree of assurance by distributed ledgers than notaries.

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> big fraction of this could be done cheaper and with a higher agree of assurance by distributed ledgers than notaries

These theoretical benefits have been around for 10+ years with little to show for it. Ledger-based solutions tend to focus on a tiny technical step of a big process without considering whether that's a bottleneck or even a non-negligible part and whether improving it actually results in a better solution.

I used to sympathize and engage with the theoretical arguments; but at this point a more productive approach is: if the advantages are such and such, where are the companies benefiting from this competitive advantage? Maybe this competitive advantage doesn't exist at all?

> These theoretical benefits have been around for 10+ years with little to show for it.

The closest analog to crypto distributed ledgers is, well, ledgers. If you look around you, there probably isn't a single product that could have been produced without the adoption of double entry accounting. And yet that adoption process took around 300 years.

Crypto is on the exact same trajectory. When people look around them in 300 years, there probably won't be a single product that could have been created without distributed ledger technology. But obviously this isn't going to happen in any of our lifetimes.

The IQ test is being able to see the trend even though crypto is currently at literally 0.00% adoption (on the basis of total financial transactions). Sooner or later, reality always goes to par with the math.

> math

I do not think that word means what you think it means.

> And yet that adoption process took around 300 years.

People used ledgers right after they were created, by definition, and long enough to go through all these years without that practice disappearing and without speculation to prop them up. So they brought value from the very beginning. Speculation prevents this logic from applying to blockchains (the value is making money by extracting it from gullible users).

> the trend

Which trend? If anything it's stagnant with just more scams, I still don't know anyone who uses cryptocurrencies for anything other than speculation.

>>Which trend?

1. Uniswap now has deeper liquidity on several major trading pairs than the leading centralized crypto exchanges, including Coinbase and Binance:

https://uniswap.org/blog/uniswap-v3-dominance

2. The volume of stablecoins on the blockchain is growing rapidly, notwithstanding the recent collapse of LUNA/UST:

https://www.statista.com/statistics/1255835/stablecoin-marke...

> notwithstanding the recent collapse of LUNA/UST

If anything, that's an invitation to wait the next financial crisis to see what really is left of the "trend".

> I used to sympathize and engage with the theoretical arguments; but at this point a more productive approach is: if the advantages are such and such,

Distributed ledgers are being used for real business cases in banking. Realizing these full benefits will take a very slow process of societal adoption and legal/evidentiary recognition.

I said "not going away". These use cases are going to slowly grow and become ubiquitous, but it will be a very slow process. It isn't some overnight disruption where notaries vanish and banking is dis-intermediated in the next 5 years.

> where are the companies benefiting from this competitive advantage

E.g. JP Morgan and Liink are quietly connecting hundreds of banks and using it to more robustly and quickly move payment-related information between banks.

> Distributed ledgers are being used for real business cases in banking. Realizing these full benefits will take a very slow process of societal adoption and legal/evidentiary recognition.

Looking at JPMorgan's Liink, there is no proof that this is anything more than a cynical publicity stunt to try to capture some of the money sloshing around in the crypto hype. Most of its touted features are things that could have been done without blockchain and should have been done decades ago if they were willing to invest in modernizing things.

> cynical publicity stunt to try to capture some of the money sloshing around in the crypto hype

It's not being sold to end-user rubes. It's a way to try and suck banks into JPMorgan's technology ecosystem (promising to settle repurchase agreements faster and save lots of interest intraday).

It's not huge yet-- only about $1 billion per day flows through it.

> JP Morgan and Liink are quietly connecting hundreds of banks and using it to more robustly and quickly move payment-related information between banks.

At this point you're trusting JP Morgan and link to run the ledger. What if I disagree with a transaction and fork the ledger? How is this any different to JP Morgan running a SQL database and speaking a common protocol?

> At this point you're trusting JP Morgan and link to run the ledger.

Liink is ETH derived, so it's hybrid proof-of-stake and proof-of-work.

(Of course, JP Morgan likely dominates both at this point, but they don't have to).

> (Of course, JP Morgan likely dominates both at this point, but they don't have to).

So what happens if someone comes along and stakes $X Billion and becomes the majority stakeholder? Do you _really_ think that JP Morgan will just sit and let that happen? That they won't fork? That Deutsche Bank will continue to stand by the ledger if a group of anonymous traders from China become the majority stake?

It's a technical solution to a political problem.

To quote Bruce Schneier:

> Private blockchains are completely uninteresting. (By this, I mean systems that use the blockchain data structure but don’t have the above three elements.) In general, they have some external limitation on who can interact with the blockchain and its features. These are not anything new; they’re distributed append-only data structures with a list of individuals authorized to add to it. Consensus protocols have been studied in distributed systems for more than 60 years. Append-only data structures have been similarly well covered. They’re blockchains in name only, and—as far as I can tell—the only reason to operate one is to ride on the blockchain hype.

https://www.schneier.com/blog/archives/2019/02/blockchain_an...

> (By this, I mean systems that use the blockchain data structure but don’t have the above three elements.)

Liink appears to have all three elements Schneier describes-- an immutable ledger distributed over many participants that any of the participants can read; the ETH consensus algorithm; and the third is a US-dollar backed stablecoin.

> In general, they have some external limitation on who can interact with the blockchain and its features.

Yes, there's a limited number of participants with varying degrees of mutual trust. So this criticism is accurate, but I don't find the actual mechanism you get worthless.

In any case, note that what I said was not that blockchain was here to stay, but distributed ledgers. So even if one got rid of the specific consensus algorithm and the value token, you'd still have a distributed ledger.

As the other commenters have pointed out already, it seems to be a permissioned blockchain if anything, exactly what Schneier describes as already having existed for decades, nothing new, just marketing.

In particular it's not about having many trusted participants, it's about being public without any trust (from the blog post: "This ledger is public, meaning that anyone can read it").

Again, I never said "blockchain is here to stay"-- just distributed ledgers. And, yes, distributed ledgers have existed forever, but their use by market participants at arm's length is new, as are many new tools we can use to build useful distributed ledgers (including blockchains!).

Dude I knew someone who work on that, it's not actually used for anything, just exist so that Jamie can check off "blockchain" in the next shareholders meeting. Private blockchain makes 0 sense.

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