Blockchain is a solution in search of a problem. A way to establish trust while not trusting any party is a cool concept, but in the real world it’s far easier to establish a source of trust.
It is a bad solution though, because it revolves around wasting tons of energy in solving made up problems no one actually needs the solution to. I know there’s alternative cryptocurrency that use better methods or solve actual problems but 90% of it is bitcoin.
I have a friend who works at a major bank and they use Blockchain technology to keep track of something or other internally, though I don’t remember exactly what. In this case at keast we can bet that it has found a problem wirth using it to sokve. Banks are nothing if not efficient.
I find it funny that it was touted as an alternative to the current banking system and ended up being absorved into it though
If it’s used internally, then I question whether it made sense to use blockchain. At the end of the day, it’s probably the trust in the bank that matters and not blockchain.
Banks are businesses made up of people. If a manager thought he could get a promotion by supporting a blockchain project at the height of blockchain mania, that’s what he would do. Whether if fails or not is of no consequence, the manager is already on another project.
Congratulations, now your trust relies on your subject never becoming important enough that someone bothers to run 50%+1 of the nodes in your network which means only very, very large subjects (or ones where trust wasn’t very important in the first place) ever even have a chance of that not happening. What do you say? Your technology doesn’t scale to very, very large subjects because of abysmal transaction rates?
Idk I think centralised trust is a problem in and of itself but you can just look to history and world events that created bank runs and financial crashes like y’know - 2008, a year later the bitcoin ledger began.
it’s far easier to establish a source of trust.
Yes but it also comes with problems as mentioned above. Blockchain tech being used for scams if anything is evidence of it being a mature and functional technology for finance because under capitalism it’s all inherently a scam of some sort.
That said we shouldn’t let perfect be the enemy of good, I’m glad the technology exists even if I don’t think it achieved what it set out to do quite as well as one would’ve hoped, if for no other reason than the fact we can all just buy any drugs online now with one day delivery instead of being stabbed on the street after calling some number like barbarians in the olden days.
The blockchain doesn’t prevent a run on the “banks.” If everyone decides to cash out at the same time out of fear of a crash then the currency crashes and there isn’t enough money to liquidate everything (until it has no value). It isn’t an improvement for that. If anything, it’s a negative. Banks can implement policies to prevent it, but you can’t really do so with crypto.
It would be useful for things like deeds and contracts. Instead of having a bank hold it and provide proof you could store it on the blockchain. There are a handful of good uses for it, but it’s generally not useful for the stuff most people think it would be.
Well, you can’t do fractional-reserve banking with bitcoin (or any other coin I know of), so in that way, a “run” on a bitcoin can only ever exhaust the supply. lending out more than you have requires trust, and that’s not available in a blockchain structure.
On the other hand, fractional reserve banking is the foundation of all modern financial systems, so it’s not really a thing we’re going to scrap.
It would be useful for things like deeds and contracts. Instead of having a bank hold it and provide proof you could store it on the blockchain. There are a handful of good uses for it, but it’s generally not useful for the stuff most people think it would be.
Well, yes but no.
There’s a lot of problems with blockchain deeds, and one of the big ones is confirming the first owner. What’s to prevent me from minting a smart-contract that says I own your house? Or that I own a house that doesn’t even exist? In the real world, we’ve solved those problems (and MANY more) with notaries and central registration systems. At the interchange of digital-ownership and real-world, physical assets, you’re always going to need a trusted party to verify that the two match. And at that point, you don’t need the blockchain at all.
Sure the currency itself isn’t resistant to a run on itself but having some wealth in the currency will cushion a run on the real IRL banks for fiat currency.
Except that it’s so incredibly volatile that from one months to the next you literally don’t know if your crypto wealth will be worth twice as much or half as much.
If what you’re trying to protect yourself from is runs on banks, you’de be better of with gold, works of art, even stocks (which are less volatile than crypto) or, even simpler, spread your money over several banks, ideally in more than one country.
Blockchain wouldn’t have mattered for 2008, at least not the crash parts. Blockchain would help with who owned which loans which was also an issue. It wouldn’t do anything for the crash parts as that was bad lending fundamentals of no verified income or unrealistic appraisal.
Blockchain scams are evidence of it’s unreadiness and naivety. Crypto has speed ran the last 200-300 years of financial fraud. Pump and dumps, ponzi schemes, front running, market manipulation, rug pulls, and more.the fact the only viable use case is crime is also pretty telling, anyone that can safely involve a government entity would rather do that.
No it would not prevent the 2008 crash however if you had some money in a cryptocurrency you would be cushioned from some effects of the fallout. Not a replacement, just an addition. Having an alternative is the draw.
Blockchain scams are evidence of it’s unreadiness and naivety.
Hard disagree, it’s evidence of its effectiveness and maturity. No primitive financial system would be capable of being used for:
Pump and dumps, ponzi schemes, front running, market manipulation, rug pulls, and more
Financial systems are primarily tools for fraud and zero-sum transactions, there’s a line there for what is and isn’t legal which is decided by the government, but it’s ultimately all just taking money from one place to another and someone loses.
I had my money - which at the time include the proceedings of working a few years in Finance - spread over 3 bank accounts in 3 countries back then and came through it all with no loss whatsoever.
Further, crypto is so stupidly volatile that even stocks are better at protecting your wealth because you’re actually less likely to see half its value gone in a week with stocks (incredibly unlikely, even, if you get a tracker fund on a major index).
And don’t get me started on the ultimate most conservative (literally capable of surviving the collapse of modern civilization) wealth protection thing around - gold.
The point being that unless you expect the collapse of modern civilization (in which case you might try gold or, even better, tradeable essential needs like the kind of food that doesn’t spoil easily such as dried pulses), the best way to safekeep your wealth is as usual Diversification, with a focus on things with a stable value, which crypto is definitely not.
There’s scams with fiat currency, but you don’t show that as evidence that dollars aren’t ready for mainstream. When people get scammed out of their crypto it’s not blockhain’s naivety, it’s the victim.
Edit: you all are comparing money, banking, AND government regulation to crypto. They are not comparable and that’s not a fair comparison. Crypto is a ledger, like QuickBooks or bank accounts. I’m not even arguing that it should have a great value, but technically it does have value and it serves its purpose. Crypto is only like 15 years old.
That is also possible with blockchain, its partly enforced with KYC (know your customer) laws. Granted there isn’t currently a great example that I know of where auditing and reversal is possible but that doesn’t mean it’s not technically possible.
When people get scammed in traditional currency, you can revert the transaction. You cannot revert anything with blockchain, and that’s a feature, which means if you get scammed out of your bitcoin, there’s nothing you can do. That money is lost, and the scammer keeps it.
And if you get scammed out of cash by another person how will the government step in to revert it? Theft happens every day. You are talking about banking, you are not talking about money. They are not the same thing.
Blockchain isn’t inherently a scam, Bitcoin, Litecoin, etherium, monero and others are valid ledgers. They serve their intended purpose technically. You are specifically pointing out that there are investment scans in new shitcoins that are pumped up and dumped, or that never even really exist. You are correct that this doesn’t exactly happen with fiat currencies but there are still nearly identical scams, like pyramid scams where people “invest” and they see their account value go up in USD or other fiat, and every month their account balance is inflated. Some people may be able to withdraw their money at first, or maybe nobody can ever withdraw anything.
Blockchain isn’t inherently a scam, pretending to launch a coin or launching a coin and abandoning it is hardly different from existing scams that are settled in USD that sell land that doesn’t exist or scammers that try to get you to invest in their business and then disappear with your money. You’re characterizing all Blockchain currencies as scams, it’s just not true. I spent my career working in IT, I look at Blockchain as a technical invention. There are ways to transact securely on Blockchain.
Nah. the commenter above is just wrong. It’s just that anyone who isn’t selling bullshit uses their real name- Merkel trees
- which are fundamental to modern software development (git, zfs, nix, nosql).
We define “blockchain” and “blockchain network”, and then discuss two very different, well known classes of blockchain networks: cryptocurrencies and Git repositories.
That’s a similar but different concept. Blockchain adds a way to determine consensus of the correct tree. While git is distributed, it’s generally not trustless, there’s generally a trusted version of the repository.
what? Git is very much distributed and while you can have a main branch, you can set as many up streams as you want and merge things sideways.
It’s trust less in the sense that commits can’t be easily forged and are signed with cryptographic keys and identities-- as in, I don’t have to trust that the source code is genuine since I can verify the commit history myself.
Consensus is just a pull request.
That wiki article literally lists Bitcoin and Ethereum as implementations of Merkel trees.
How is it any different than verifying that a transaction occurred?
With a centralized trust source (bank), you ask for the records.
How is a trusted repository different from a hard fork?
Because you check who owns and maintains it. A notable example was with Simple Apps for Android, earlier this year the main repo was sold to a company. Trust was lost, thus a fork was created to keep the original stuff.
Is it easier to establish a source of trust?
With blockchain trust lies in the protocol and in the node operators who make decisions about how to operate their nodes. Running a node isn’t extremely difficult. Running a financial institution is difficult.
Well, sure, now you have a currency that doesn’t rely on trust
…now what? How are you going to spend that currency if you don’t trust anyone? How will you ensure you get what you bought? How will your property get protected? Hell, how do you get others to agree that your crypto is the one they should use?
It’s trust all the way down. Removing it from one small part of the chain isn’t going to fundamentally change things
Blockchain is a solution in search of a problem. A way to establish trust while not trusting any party is a cool concept, but in the real world it’s far easier to establish a source of trust.
It is a bad solution though, because it revolves around wasting tons of energy in solving made up problems no one actually needs the solution to. I know there’s alternative cryptocurrency that use better methods or solve actual problems but 90% of it is bitcoin.
I have a friend who works at a major bank and they use Blockchain technology to keep track of something or other internally, though I don’t remember exactly what. In this case at keast we can bet that it has found a problem wirth using it to sokve. Banks are nothing if not efficient.
I find it funny that it was touted as an alternative to the current banking system and ended up being absorved into it though
If it’s used internally, then I question whether it made sense to use blockchain. At the end of the day, it’s probably the trust in the bank that matters and not blockchain.
Banks are businesses made up of people. If a manager thought he could get a promotion by supporting a blockchain project at the height of blockchain mania, that’s what he would do. Whether if fails or not is of no consequence, the manager is already on another project.
I envy your trust in the efficiency of banks
Congratulations, now your trust relies on your subject never becoming important enough that someone bothers to run 50%+1 of the nodes in your network which means only very, very large subjects (or ones where trust wasn’t very important in the first place) ever even have a chance of that not happening. What do you say? Your technology doesn’t scale to very, very large subjects because of abysmal transaction rates?
Idk I think centralised trust is a problem in and of itself but you can just look to history and world events that created bank runs and financial crashes like y’know - 2008, a year later the bitcoin ledger began.
Yes but it also comes with problems as mentioned above. Blockchain tech being used for scams if anything is evidence of it being a mature and functional technology for finance because under capitalism it’s all inherently a scam of some sort.
That said we shouldn’t let perfect be the enemy of good, I’m glad the technology exists even if I don’t think it achieved what it set out to do quite as well as one would’ve hoped, if for no other reason than the fact we can all just buy any drugs online now with one day delivery instead of being stabbed on the street after calling some number like barbarians in the olden days.
The blockchain doesn’t prevent a run on the “banks.” If everyone decides to cash out at the same time out of fear of a crash then the currency crashes and there isn’t enough money to liquidate everything (until it has no value). It isn’t an improvement for that. If anything, it’s a negative. Banks can implement policies to prevent it, but you can’t really do so with crypto.
It would be useful for things like deeds and contracts. Instead of having a bank hold it and provide proof you could store it on the blockchain. There are a handful of good uses for it, but it’s generally not useful for the stuff most people think it would be.
Well, you can’t do fractional-reserve banking with bitcoin (or any other coin I know of), so in that way, a “run” on a bitcoin can only ever exhaust the supply. lending out more than you have requires trust, and that’s not available in a blockchain structure.
On the other hand, fractional reserve banking is the foundation of all modern financial systems, so it’s not really a thing we’re going to scrap.
Well, yes but no.
There’s a lot of problems with blockchain deeds, and one of the big ones is confirming the first owner. What’s to prevent me from minting a smart-contract that says I own your house? Or that I own a house that doesn’t even exist? In the real world, we’ve solved those problems (and MANY more) with notaries and central registration systems. At the interchange of digital-ownership and real-world, physical assets, you’re always going to need a trusted party to verify that the two match. And at that point, you don’t need the blockchain at all.
Sure the currency itself isn’t resistant to a run on itself but having some wealth in the currency will cushion a run on the real IRL banks for fiat currency.
Except that it’s so incredibly volatile that from one months to the next you literally don’t know if your crypto wealth will be worth twice as much or half as much.
If what you’re trying to protect yourself from is runs on banks, you’de be better of with gold, works of art, even stocks (which are less volatile than crypto) or, even simpler, spread your money over several banks, ideally in more than one country.
Blockchain wouldn’t have mattered for 2008, at least not the crash parts. Blockchain would help with who owned which loans which was also an issue. It wouldn’t do anything for the crash parts as that was bad lending fundamentals of no verified income or unrealistic appraisal.
Blockchain scams are evidence of it’s unreadiness and naivety. Crypto has speed ran the last 200-300 years of financial fraud. Pump and dumps, ponzi schemes, front running, market manipulation, rug pulls, and more.the fact the only viable use case is crime is also pretty telling, anyone that can safely involve a government entity would rather do that.
No it would not prevent the 2008 crash however if you had some money in a cryptocurrency you would be cushioned from some effects of the fallout. Not a replacement, just an addition. Having an alternative is the draw.
Hard disagree, it’s evidence of its effectiveness and maturity. No primitive financial system would be capable of being used for:
Financial systems are primarily tools for fraud and zero-sum transactions, there’s a line there for what is and isn’t legal which is decided by the government, but it’s ultimately all just taking money from one place to another and someone loses.
I had my money - which at the time include the proceedings of working a few years in Finance - spread over 3 bank accounts in 3 countries back then and came through it all with no loss whatsoever.
Further, crypto is so stupidly volatile that even stocks are better at protecting your wealth because you’re actually less likely to see half its value gone in a week with stocks (incredibly unlikely, even, if you get a tracker fund on a major index).
And don’t get me started on the ultimate most conservative (literally capable of surviving the collapse of modern civilization) wealth protection thing around - gold.
The point being that unless you expect the collapse of modern civilization (in which case you might try gold or, even better, tradeable essential needs like the kind of food that doesn’t spoil easily such as dried pulses), the best way to safekeep your wealth is as usual Diversification, with a focus on things with a stable value, which crypto is definitely not.
There’s scams with fiat currency, but you don’t show that as evidence that dollars aren’t ready for mainstream. When people get scammed out of their crypto it’s not blockhain’s naivety, it’s the victim.
Edit: you all are comparing money, banking, AND government regulation to crypto. They are not comparable and that’s not a fair comparison. Crypto is a ledger, like QuickBooks or bank accounts. I’m not even arguing that it should have a great value, but technically it does have value and it serves its purpose. Crypto is only like 15 years old.
The difference is the government exists to step in and punish scammers, and regulates markets to prevent many scams for being possible.
That is also possible with blockchain, its partly enforced with KYC (know your customer) laws. Granted there isn’t currently a great example that I know of where auditing and reversal is possible but that doesn’t mean it’s not technically possible.
When people get scammed in traditional currency, you can revert the transaction. You cannot revert anything with blockchain, and that’s a feature, which means if you get scammed out of your bitcoin, there’s nothing you can do. That money is lost, and the scammer keeps it.
And if you get scammed out of cash by another person how will the government step in to revert it? Theft happens every day. You are talking about banking, you are not talking about money. They are not the same thing.
Also, when I try to scam someone using my bankaccount, my bank goes “Uhhh, please show us that this isn’t a scam”. My bitcoin wallet doesn’t care.
What schemes exactly? I know there are schemes using fiat currency, but that’s quite different from the currency itself being a scam.
Blockchain isn’t inherently a scam, Bitcoin, Litecoin, etherium, monero and others are valid ledgers. They serve their intended purpose technically. You are specifically pointing out that there are investment scans in new shitcoins that are pumped up and dumped, or that never even really exist. You are correct that this doesn’t exactly happen with fiat currencies but there are still nearly identical scams, like pyramid scams where people “invest” and they see their account value go up in USD or other fiat, and every month their account balance is inflated. Some people may be able to withdraw their money at first, or maybe nobody can ever withdraw anything.
Blockchain isn’t inherently a scam, pretending to launch a coin or launching a coin and abandoning it is hardly different from existing scams that are settled in USD that sell land that doesn’t exist or scammers that try to get you to invest in their business and then disappear with your money. You’re characterizing all Blockchain currencies as scams, it’s just not true. I spent my career working in IT, I look at Blockchain as a technical invention. There are ways to transact securely on Blockchain.
Interesting. Good to know. Thanks!
Blockchain is effectively a distributed database. Almost always a good centralized database functions better.
Nah. the commenter above is just wrong. It’s just that anyone who isn’t selling bullshit uses their real name- Merkel trees - which are fundamental to modern software development (git, zfs, nix, nosql).
https://arxiv.org/abs/1803.00892
That’s a similar but different concept. Blockchain adds a way to determine consensus of the correct tree. While git is distributed, it’s generally not trustless, there’s generally a trusted version of the repository.
what? Git is very much distributed and while you can have a main branch, you can set as many up streams as you want and merge things sideways.
It’s trust less in the sense that commits can’t be easily forged and are signed with cryptographic keys and identities-- as in, I don’t have to trust that the source code is genuine since I can verify the commit history myself.
Consensus is just a pull request.
That wiki article literally lists Bitcoin and Ethereum as implementations of Merkel trees.
I’m pretty sure being able to verify that the person responsible for a push is an actual maintainer is the opposite of trustless.
How is it any different than verifying that a transaction occurred?
How is a trusted repository different from a hard fork?
Isn’t “proving someone is a maintainer” just an IRL proof of stake?
With a centralized trust source (bank), you ask for the records.
Because you check who owns and maintains it. A notable example was with Simple Apps for Android, earlier this year the main repo was sold to a company. Trust was lost, thus a fork was created to keep the original stuff.
Right, but isn’t the “main chain” of Ethereum based on a similar principle wherein it’s the main chain because it’s the one the devs use?
What about BTC vs BTC lightning.
I’m genuinely failing to see a distinction here, and, again, the wiki article says that blockchains are special cases of Merkle trees.
Is it easier to establish a source of trust? With blockchain trust lies in the protocol and in the node operators who make decisions about how to operate their nodes. Running a node isn’t extremely difficult. Running a financial institution is difficult.
Well, sure, now you have a currency that doesn’t rely on trust
…now what? How are you going to spend that currency if you don’t trust anyone? How will you ensure you get what you bought? How will your property get protected? Hell, how do you get others to agree that your crypto is the one they should use?
It’s trust all the way down. Removing it from one small part of the chain isn’t going to fundamentally change things