Blockchain was invented to solve one particular problem: distributed consensus on a sequence of transactions, where the choice of which transaction to include from a set of conflicting transactions is irrelevant.
The latter property here is key to understanding where blockchain is useful. It was created to solve the "double spend problem", ie. two transitions that spend the same coin but send it to different recipients (and so they conflict and cannot both be included in the canonical list of transactions). A double spend is the result of the sender either (a) making a mistake, or (b) attempting fraud. In both cases the important property is that as long as only a single of these conflicting transactions is included, the systems works.
Only if your problem exhibits the above property (and it's a distributed system) does using a blockchain make sense.
I used to think this, but working with DeFi on Ethereum for a while I've realized the killer feature is actually permissionless composability. Which is why enterprise block chains make little sense.
Having one neutral platform, controlled by no one, with standardized API's and immutable open programs that anyone can permissionlessly build on - is amazing.
We've never had this before, and it's incredible how fast the DeFi space is moving because of it. I work for a platform (Balancer) that has had over 20 different companies (Aave, Element, CopperLaunch, Gyro, Aura, Hidden Hand) build financial applications on top of our tech stack in the last 2 years.
Then there are different wallets (Metamask, Rainbow, Ledger), aggregators (1inch, Matcha, 0x), portfolio management tools (Zapper, Zerion, DeFi Saver).
All of these work with each other mostly out of the box and without any formal partnerships between anyone. This is a radical new way of building finance and it's the fastest paced industry I've ever been a part of.
It's similar to AWS where it got exponentially more valuable as each new service was added - but the entire world can contribute to it. Like AWS people didn't understand the value initially, but over time they realized how big of a deal it was as more and more components were added.
> It's similar to AWS where it got exponentially more valuable as each new service was added
But... I have yet to see a service which really adds value. All I've seen so far are:
A) collection games, which are not different from collecting Pokémon for real money.
B) liquidity PvP, where users open leveraged bets to hunt other market participants' stops/liquidations, so the hunter can reduce their position for cheap, which the hunted takes a loss (this is not different from tradfi).
I am looking at Aave right now, and all I see is a speculation platform with tokens instead of currencies. So basically, you guys are re-inventing what tradfi had years ago, just with worthless(?) tokens instead of debt backed assets. I am assuming they are worthless because every project you have mentioned is optimized for USD cash inflow, as you have "buy crypto with fiat"-buttons on almost every project[1][2][3], but no way to cash out to fiat. Furthermore, the staking feature from AAVE seems to only artificially decrease supply, so prices rise. What's the value proposition here?
Anyway, I don't really think that this stuff is even remotely comparable to AWS.
[2] https://zerion.io/ (FAQ > "just tap the blue button in the center of your screen, select ‘Buy’, and you will be taken to the dialogue window where you can buy crypto with a credit or debit card.")
It is a neat property but lines like this trip me up: "it's incredible how fast the DeFi space is moving because of it".
The crypto/dapp/defi/etc spaces have supposedly been "moving incredibly fast" and "all the smartest people are working on it" for ~5 years now. That's a long time to be moving really fast without really getting anywhere. Where's the payoff?
To me this space feels like a solution without a real problem. The decentralized part is a neat trick, but on the margin a centralized authority to mediate financial platforms is more good than bad.
Controlled by no one, but suddenly standardized APIs exist. Who standardized them?
Controlled by no one, but suddenly everyone is going to use those standardized APIs that appeared by magic. And even those entities that never ever used open or standardized APIs will rush to use them because blockchain.
> We've never had this before, and it's incredible how fast the DeFi space is moving because of it
Theres nothing amazing about companies busy reinventing flash loans and currency speculation.
> This is a radical new way of building finance and it's the fastest paced industry I've ever been a part of.
It's only fast because it deals in fantasy tokens in a very limited scope with zero oversight or regulation. And this space is busy re-discovering why these regulations exist in the first place.
> Like AWS people didn't understand the value initially
Most people understood AWS value initially. 2-3 years after launch everyone understood AWS. Now everyone uses it.
AWS provided, and still provides, a multitude of services that are actually useful. Where as the "fast moving space" offers nothing outside the "buy low sell high flash loan" hamster wheel that is "defi"?
> I think a lot of HN doesn't get it because they don't work in finance, but everyone I've talked to who works in finance (or has to deal with their archaic systems) is really excited about the possibilities.
There are very very few people in finance who are excited about it. For many, many, many reasons.
Those who are excited are excited for all the wrong reasons: scams, speculations, unlimited investor money. The last one will probably go away soon. Speculations are only valuable as long as the fictional tokens are valuable for some definition of value. There's almost nothing else in the crypto space.
You're dead on. It's staggering in its power -- permissionless composability, even if most of the data is not on-chain, and the programs are very limited in size/complexity due to the expense of running them.
Now, imagine a system where all of the data is also on-chain, and the programs you can compose are full-complexity applications... All while maintaining every independent program's data invariant in a completely decentralized manner, with transaction rates that grow linearly with the DHT size.
Such a system is now in public beta. It could be world-changing (at least for programmers).
My best guess is that unless the rules around large-scale finance change, in the end permissionless composability will go away and the platforms will get controls of some sort, e.g, who can do what, reporting requirements, KYC, ... And that also does not have to come just from direct rules, but could come via capital requirements when touching such systems or users of such systems.
> Having one neutral platform, controlled by no one, with standardized API's and immutable open programs that anyone can permissionlessly build on - is amazing.
Good comment. While a lot of the complaints about blockchain are valid issues, the argument that it is useless and could be replaced with a database always makes me roll my eyes given the fundamental benefit is the open nature of the platform. Nonetheless, I think the key issue is scalability/performance.
See this is where HN has fallen off a cliff, the top commented Runeks supplies a highly theoretical and nonchalant answer to what blockchains _can_ be. That’s been the majority of HNs take on the technology. But the Internet was made for text communication and here we are decades later with social media and streaming video.
TimJRobinson at least states something which is rare on HN, a take on blockchain technology with experimental instead of theoretical knowledge on the subject matter.
> the killer feature is actually permissionless composability
This right here is it! Everyone is always focused on the main feature being decentralization, but decentralization isn't a feature, it's an implementation detail. Decentralization is certainly a requirement for these goals, but permissionlessness is the goal. I'll note that permisionless for users, in the ability to create accounts and send transactions is every bit as import as permisionless building.
This is why I think the term DeFi misses the mark a bit, because it's a nod to the implementation (decentralized) rather than the features (open and permissionless). But at the end of the day I think it's catchier than something like OpenFi, and the terminology is set at this point.
The main problem is when weighing these things is not blockchain advocate honestly asks the question: "why is this better than using a simple relational database, in a way that makes all the extra complexity worthwhile?"
> Hidden Hand is a marketplace for governance incentives, commonly referred to as "bribes".
Protocols can leverage Hidden Hand to enable more efficient governance processes and to engage their voters, while users can earn extra yield on their favorite vote escrowed governance tokens through bribes.
Governments will not protect something they have no control over. When they regulate it, that control will come in. Some of the things you speak about will disappear.
Kinda like if you have a wife and you care about her if she is loyal. But once she cheats you don't care anymore. Similar situation between unregulated financial systems and the government.
Thank you. I feel like the tide is finally turning on this. The Ethereum VM (and its derivatives) is one of the biggest innovations in recent history.
I've been yelling at the top of my lungs why NFTs have revolutionized digital art and happy to see the top comment nails it - a zero trust verification environment makes it possible to sell it on an open global market. This just wasn't there before.
Blockchains are useless takes are already out of date.
> Only if your problem exhibits the above property (and it's a distributed system) does using a blockchain make sense.
I think we also need to specify that it's also an extremely distinct and rare type of "distributed": When you must support unrestricted and unlimited creation of new participant nodes.
That's the fundamental requirement that drives an entire cascade of other blockchain design choices, such as proof-of-work to prevent a takeover by sockpuppet-nodes, and mining to incentivize regular consistent participation by a presumed-benign majority. Without that requirement and workarounds, we're left with a kind of regular distributed database, pre-hype technology that already featured hashes and linked-lists.
This requirement ("anybody can become part of the network anonymously") also makes for a great litmus-test for whether you need blockchain.
For example, in national elections we probably don't want/need literally any number of computers anywhere in the world to jump in and deciding what happens based on their CPU power. It would be dramatically faster/easier/safer to simply define a fixed list of nodes, where each state runs a couple plus the federal government, and then rely on the fact that evildoers would have to compromise too many different systems and agencies.
No, that its not the problem that bitcoin solves. You can do distributed consensus just fine without a block chain - if you have to make a choice between two options, everyone broadcasts a vote for one of the options and the option with the most votes is the accepted option.
The problem that bitcoin solves is that you can not prevent me from casting a million votes because the system is anonymous - or pseudonymous if you want - and therefore there is no list of participants that would prevent casting more than one vote. This is called a Sybil attack.
Bitcoin's solution - and similarly that of other block chains
- is to make casting a vote expensive, either in terms of computational resources or owned tokens or whatever.
Although I take slight issue with how you've worded it, I think I'm in agreement. I'll attempt to add clarification to the parts I find difficult to parse.
Blockchains only ensure that coins are never spent twice. They make no attempts to ensure that coins are sent to the correct recipients. At the end of the block, they only care that debits are equal to credits.
This can be confusing because the term "double spend" is also frequently used in cryptocurrency in the context of fraud prevention. In this context, you definitely do care that the coins get to the correct recipients but this concern is outside of the functional scope of the blockchain mechanism.
Instead, fraud prevention is typically satisfied through additional code, adjacent to the "blockchain stuff", which establishes signaling networks and transaction inclusion criteria.
They're very different mechanisms inside blockchain clients but, confusingly, they both make frequent use of the term "double spend".
> Blockchains only ensure that coins are never spent twice. They make no attempts to ensure that coins are sent to the correct recipients. At the end of the block, they only care that debits are equal to credits.
I know the origin is tightly linked to bitcoin, but I feel like even this muddies the definition.
Blockchains are not implicitly related to "coins", more facts? contracts? Maybe that's a useless nit to pick, or only useful in this thread where the GP was trying to layout where blockchains are useful (eg: distributed facts - that happen to often be wealth transfer).
Or do I have it all wrong? I admit to not having much experience with them, but from the few random (non-btc) meet up groups talks I saw a decade ago, it was all about consensus more than anything. Ironically before the current NFT craze, the talk I remember most was one about using NFTs to authenticate stuff like (non-programatically-generated) album/artwork ownership and allowing users to resell in a second hand digital market.
I assume you could build a mastodon like that distributes and "authenticates" posts via a blockchain - perhaps with terrible performance though.
What you are referring to is a distributed ledger, built on top of a blockchain data structure.
The word Blockchain is so overloaded, people forget you can build a "blockchain" in 50 lines of code if not less. "Mining" new blocks is added on top of that, it's not a hard requirement - you can just create new blocks and link them up. You can choose to "mine" on CPU (slow) or on the GPU, if you want "mining" at all. You can then choose to persist it (file or sql or whatever) or only run it in memory. After that you can get into the concept of ledgers and currencies, and after that into making it distributed via some gossip-y protocols.
So a cleaner definition of a block chain would be, a tamper-proof daisy-chained data structure, similar to a linked list. All the stuff about ledgers, currencies, mining and consensus are separate concerns, stacked on top of a blockchain.
Also checkout: Merkle trees, linked lists, Chain of Responsibility.
Yeah, basically everyone. "Blockchain" as commonly understood was brought into being by Bitcoin, and encapsulates far more than just a linked list with a cryptographic component.
If it doesn't contain a mechanism for trustless, distributed consensus, then it's not really a blockchain in the sense that HN or the wider industry understands it.
Your definition is wide enough to cover a lot of things that are well outside of normal discussion of blockchains. I'm not insinuating this is your goal, but it is a common argumentation tactic of people desperately trying to defend the sector, to widen the definition until they can include within it things like git, and then say "so of course blockchain tech is useful! You're using it!"
Git has nothing to do with blockchain and is essentially what you are describing.
There’s already a word for that: distributed version control. We don’t need to move the goal posts on what blockchain is to make it have an interesting use case.
Blockchain is more specific to the consensus part not really about the self proving data structure part.
Maybe I am a confused luddite, but it seems telling that this argument immediately launches into the solution space of a problem that is itself created by the presence of a blockchain.
Double-spend has been solved by the financial sector quite some time ago. The distributed system part - I guess this is the problem that I think the article is claiming is yet to be found.
Double spend was solved by the use of cash money, not the financial sector.
If I give you a coin (or paper money), then by definition I don't have it any more. I can't spend it twice.
Accounting with transactions netting to zero ("double entry") solved the problem of recording transactions in an immutable way on a ledger, assuming you control the ledger.
Clearing houses solved the problem of interparty risk when settling (by using an intermediary that controls the ledger of transactions between parties).
Title registries solved the problem of "ownership" by creating the concept of a "title" (ie a government backed identification of property that is recognized by law that the bearer "owns"). Title registries (like "Torrens titles" invented in Australia) solve the bearer problem by having a central ledger of title holding.
Blockchain can "solve" the ledger parts of these elements. But the ledger being immutable doesn't solve the problem of recognition of title (see NFTs). By adding the machinations of "mining" and "proof of stake/work", blockchains can be extended to include the "title" as part of the ledger itself. The mining transaction effectively creates something that is initially owned by the miner.
Ethereum adds to the "intelligence" of the transactions stored on the ledger, adding elements of computation to each one.
All the rest of it, all the invented coins etc, the "exchanges", etc etc ad infinitum are attempts to map these ledgers back to fiat currencies so that "actual" money can be made.
I think the confusion is the parent is talking about an implementation detail (blockchain), rather than the main problem cryptocurrency actually solves. Cryptocurrency solves for internet based financial sovereignty. Whether or not you think that's important to the world is a different discussion.
> Double-spend has been solved by the financial sector.
Traditional finance offers “at-most-one spend”while blockchain protocols offer “one spend up to 1/3 malicious nodes”.
The limit on the former is government, and Byzantine Fault Tolerance sets the limit on the latter.
Government can unilaterally seize “your” funds in traditional banking, while a substantial computational attack is required to cause a loss of confidence event (double spend) on a particular blockchain.
> What real life use case - that resonates with regular people - would this solve?
The problem that some people really, really hate authority, and frankly, really hate other people, and would like a magical machine to do away with all that messiness.
So they put a million barriers between themselves and that messiness and hope it all works out in the end.
It's like a sort of niche religion.
After the first believers announced their faith, a much, much larger group of grifters realized that they could shout: "FREEDOM! PROFIT! FREEDOM! PROFIT!" and make a ton of money.
Like a real religion, basically, just read up about incense and Christianity to see the real believer versus grifter dichotomy happen in another case.
When purchasing a property, there is a dance between the seller and the purchaser (and intermediaries) that effectively perform the necessary transactions to:
a) ensure the seller gets paid
b) ensure the purchaser gets the property
c) ensure that the record of ownership of the property is correctly updated.
This all has to be done simultaneously and atomically.
Moving the records of ownership (ie "title") to the blockchain and then having the appropriate contracts/transactions to ensure the points above solve the conveyancing problems.
But, given that for the most part, the title that declares ownership is essentially a legal document, and that legal documents only have power because of the laws that are enforced, there's no advantage to blockchain that can't be also solved by a central trust registry that maintains the records.
You can just solve this with locking or a (self referencing) unique foreign key constraint on any mainstream SQL db though. If we include programming langues as well, the possible amount of solutions multiplies.
This problem has been solved in numerous prior computer architecture most notably in the algorithms around leader selection in clusters or very wide distributed systems. The implementation varies from one use case to another but the point is the problem or solution is not new at all and blockchain is certainly not the earliest and most elegant solution for this.
I am sorry, but I think I am missing something here: isn't the "double spend problem" actually needing to be resolved by the choice of including one specific transaction (and no others), from a set of conflicting ones, truly relevant (vs. irrelevant)?
The point is that it does not matter which one is included, only that it's only one of the choices that all agree on. Which one that is is not relevant, there is no part of the algorithm that determines one transaction to be "more valid" than another one. There is no ranking of transactions, one of them has to be picked but which one it is can be random, as long as there is agreement.
Also see the response from and sub-thread from uncletammy.
Yes, a specific transaction needs to be chosen as the consensus transaction. But if there are multiple to choose from (e.g. in the case of an attempted double spend), the miner can choose either one.
The blockchain doesn’t guarantee, for example, that the transaction which appeared earlier will always be chosen (in practice, it’s likely the one with the highest transaction fee)
A reason I have been interested in blockchain is that it seems like a good way to make a decentralized application that could exist beyond the life of the company or person that creates it.
I work in a hobby industry where a lot of community run ledgers are suddenly lost forever due to the death of someone in the fandom (or rarely intentional sabotage or hacking).
Would this be a good use for blockchain or are there maybe other solutions I'm not considering or aware of?
A blockchain requires significant, persistent and consistent community effort.
If you can not have one guy taking up the mantle and doing the hosting, how can you get hundreds to do the same?
>A reason I have been interested in blockchain is that it seems like a good way to make a decentralized application that could exist beyond the life of the company or person that creates it.
Community run projects have existed for decades on the internet. They never needed a blockchain to persist. If they died, they died due to lack of interest and effort by their communities. A blockchain can not prevent that.
>maybe other solutions I'm not considering or aware of?
IPFS potentially.
There is one other case where a structure like a block chain can make sense. It’s an easy way to build an unalterable log. If you give me hash 200000 in the chain I know that log entries 0-200000 are all unaltered.
This is perhaps the simplest easiest use case for a hash based linked list. Of course this is not the complete picture of what cryptocurrencies are; the hash list is just part of the system.
That tech exists without blockchain in a distributed way. Look at Git or GitHub.
Saying that is a unique feature or reason to use blockchain is similar to saying blockchain can add two numbers together so we should use it to build a calculator.
This is such a narrow view on the problem because you also have to restrict the "make sense" part to the set of problems where it's ok to have the entire ledger in public view, not to mention that there are other mechanisms to accomplish the double spend issue
"Absolute power corrupts absolutely", and blockchain has activated absolute greed in most, hence blockchain not really being developed for anything that is not Ponzi-like.
reading this, it struck me how ironic crypto was built to "stop the doublespend" but here we have all these crypto exchanges doing things way worse than that.
company minting their own token and then using it as collateral, accounting it as if they had billions. the "stable coins" cannot produce basic accounting audits that a low level book-keeper could do on any normal business.
there has been so much fraud in crypto the past few years.
and the algorithm did not help to stop that.
Take a text editor, it would be improved if edits or saves which are just transactions are stores on a blockchain if the text is being stored and shared synchronously and live between devices.
Basically, people have more devices, want to collaborate and add redundancies to important systems which means changes to data (transaction) where the historical sequence of changes is important to someone can use blockchain, but of course it isn't neccesarily the best solution, especially if there is trust between nodes or out of sync nodes causing a mess can be solves by simpler solutions.
Blockchains wouldn't fix anything here, though. The last-connected device doesn't necessarily have the canonical file, and the blockchain doesn't have any way to resolve syncing conflicts. Git is a much better choice for transactional history, and it didn't need a blockchain to implement this concept.
The book How Innovation Works by Matt Ridley changed my perspective on this. Originally I thought all innovation was like the dotcom era. Ridley attempts to show that there are times when it is not always clear what the final innovation will be.
I had a real experience that perfectly reflects the research presented here (safer ledgers useful, blockchains are not).
I accidentally got wrapped up in a project to automate some HR functions, and the product manager demanded that it must be blockchain because blockchains are the future.
It turns out that append-only databases are well-suited for HR records, and (especially when dealing with things like background checks, immigration papers, etc.) it doesn't hurt to have a history with cryptographically-verifiable date stamps.
We used an existing database that did all of the above, told everyone it was blockchain, and released the product.
That was a great strategy for a few years until everyone realized blockchain was a boondoggle, and now you never need to work with anyone who still believes in it. You can just understand their mention of blockchain to be a sign that you need to avoid doing business with them.
Blockchains are great for one-thing... guarantee that data is being appended and never modified.
When you want to display a record, you can aggregate the data historically and allow people to see changes and attribute them to users and time but you can always see what was originally added.
However that's kinda risky for HR because anything committed to that DB will be there... forever!
That’s an event sourcing architecture, and something like Kafka will do it much better than a blockchain.
The forever problem can be, ironically, resolved with crypto. If you encrypt each employer record with an employee key then, if the employee data needs to be deleted you just delete the key and the data is gone.
>>It turns out that append-only databases are well-suited for HR records
It may seem so, bu then You find out what are Your governments limit's for storing workers data, and Your company lawyers forces You to make it possible to delete everything that past that limit to limit legal risk and be gdpr compliant.
And at this moment You find out that world is not constant and far from Your ideal model of spherical cow.
Can we design an append-only database that also allows for deletions if you replace those deletions with a direct reference to the hash that was once computed at that point in the chain?
Yes, I know this isn’t strictly “append only”, but it still gives the ability to prevent silent updates and silent deletes. Any record that’s deleted must be replaced with something that indicates that it was deleted.
It's not difficult: You simply dictate requirements that can be only solved by one engineering solution.
But that, in essence, is part of the challenge with blockchain. People treat it as a self-describing requirement. ("This must be on the blockchain") rather than a technical solution for a dubious set of problems most people don't have.
It was a small startup, so "product manager" wasn't a narrow role with clear boundaries. Their job was to bridge the clients and the software team, and they insisted that clients would jump at the chance to have a blockchain vendor.
> I accidentally got wrapped up in a project to automate some HR functions, and the product manager demanded that it must be blockchain because blockchains are the future.
> [Andy Jassey] said something like this: “All these leaders [CIOs and CTOs of huge enterprises] are asking me what our blockchain strategy is. They tell me that everyone’s saying it’s the future, the platform that’s going to obsolete everything else. I need to have a good answer for them. I’ll be honest, when they explain why it’s wonderful I just don’t get it. You guys got to go figure it out for us.”
To me the tell is not just that Andy didn't understand.
It's that all of these leaders said "everyone says it's the future", but not one of them said "I have this problem and here's how blockchain solves it for me."
I think one of the hardest parts of becoming an expert in a technical area is the transition from "I don't understand so I must be wrong" to "I don't understand so something must be wrong or I'm not seeing something".
When you're more junior you often make the mistake of wrongly dismissing ideas because you think you are very clever. I find that by the time you unlearn this, you typically should reverse direction.
Early in my career, every time something didn't make sense, it's because I had a misunderstanding of how things really worked.
Much later in my career I started to realize more and more often when I said "this doesn't make sense" I would start assuming I was the one missing something, only to time and time again uncover some one else had messed up or that something else was fundamentally wrong.
Obviously even the most expert in their field should reserve some probability that they are misunderstanding, but learning to recognize that you are an expert and that you not understanding something is in fact smoke is an important late career skill.
most of the problems blockchain attempts to solve are public coordination problems in adversarial environments rather than corporate problems the CTOs/CIOs are likely to have.
I recently attended a trade show, which mostly revolved around emerging ML/AI and other "hot" tech products in the market.
So it actually seems that in the logistics line of things like manufacturing / production / etc. there is a place for blockchain, mainly due to the immutability and decentralized distribution properties. What could take a whole week to track down using older methods, takes seconds if all the data is recorded on the blockchain...for example, food production. You want to find out exactly which animal your food comes from, and all the things involved (use of antibiotics? which factory? how did the product travel before ending up at your grocery store? etc.).
Some researchers working on these products repeated that they often get approached by directors and CxO level people regarding this - wondering if blockchain can "solve problems". And every time, they have to reply: Using the blockchain can solve some specialized problems, but there's no magic fairy dust involved, and it's not some general structure which will solve all their problems.
Unfortunately, it's kind of like AI. High-level directors dream of General AI, but you need to explain to them that it's all ML models which aid (replace if you're lucky) workers, and automate some tasks.
I think any CTO worth their salt should know these things, and manage the expectations of the other C-suite executives.
> So it actually seems that in the logistics line of things like manufacturing / production / etc. there is a place for blockchain, mainly due to the immutability and decentralized distribution properties. What could take a whole week to track down using older methods, takes seconds if all the data is recorded on the blockchain...for example, food production. You want to find out exactly which animal your food comes from, and all the things involved (use of antibiotics? which factory? how did the product travel before ending up at your grocery store? etc.).
Literally none of that should involve (let alone requires) a blockchain.
I'm still trying to wrap my head around how a blockchain would be helpful, even in your example. How is tracking say, a cow, from farm to lot to slaughterhouse, and knowing what all was done to said cow, not simply something that could be done easily and fast with a database?
Is the portability of the blockchain the thing? I could see maybe how that would help, if there wasn't a standard across the databases involved or something.
Published transparency records work without blockchains. Certificate Transparency is an example of a project that does this without all the mess of blockchains. And that also works well because it operates on purely digital things - once you start having to unify a physical object with a digital record all the usual supply-chain-management problems re-emerge.
>So it actually seems that in the logistics line of things like manufacturing / production / etc. there is a place for blockchain, mainly due to the immutability and decentralized distribution properties. What could take a whole week to track down using older methods, takes seconds if all the data is recorded on the blockchain...for example, food production. You want to find out exactly which animal your food comes from, and all the things involved (use of antibiotics? which factory? how did the product travel before ending up at your grocery store? etc.).
The usual shitty dismissive HN response to this would be something like "but that doesn't require a block chain it could just be a database".
To those people I would ask who is running that database? What are their incentives?
Forget about the currency uses of block chains for a moment. The fact that you have this distributed network, controlled by nobody in particular but with their incentives aligned to keep it running and keep it secure, means that you have a platform you can build other stuff on top of.
An Ethereum smart contract is a type of append only database, the code of which is strongly open source and very battle tested (basically everyone is using openzeppelin), where you do not have to care about where or by who it is being hosted, with an uptime that puts every hosting provider in existence today to shame.
In case anyone needs a thorough source to explain why you don't need a Blockchain, I found the NIST paper (esp the flowchart on page 42) quite helpful:
It worked wonderfully to cut the BS coming from a greedy manager, in a non confrontational way ("so, what do you actually need?" , "you say 'security', but which aspect do you need? immutability ? non-repudiability? confidentiality??"). I think NIST's clout helped, along that they'd have to fully understand a 65 page report. I'm sure the content of the report would have been quite eye-opening, but that wasn't needed. Greed is a feeling, not a rational process.
That's an excellent flowchart. BTW, there is a real example of meaningful blockchain use for auditing single source data (the "caveat" in the flowchart). It's the hypercore protocol https://hypercore-protocol.org/
That's very interesting. Would you mind coming up with a concrete and detailed business case? In this example you will provide, who are the entities with write access? How do they have a hard time deciding who should be control of the data store?
All those shiny skyscrapers that the banks build? It's for trust, along with a good deal of banking licensing requirements and regulation.
The example with the farmers' fields is quite valid. We forget in our relatively well-governed western nations that some governments really can't be trusted to simply keep records straight and not 'lose' vital documents, in cases where bribes abound.
Another example is foreign exchange trading settlements; I can't trust that if I send you $500mn in swiss francs, you'll actually send me the equivalent settlement in USD. You might go bankrupt half way through the transaction. And so there exists an expensive jointly owned escrow bank for exactly this purpose, CLS bank.
I'm sure there are many other examples, but the point is, trust is actually quite expensive.
Rather than saying trust is expensive, I would express it as trust is precious.
By analogy, sunlight and air are cheap, not expensive, even though we can't live without them. If either of these were in short supply they would become extremely expensive. But since they're abundant we don't normally dwell on their value.
In a civilized society with a stable government, we take trust for granted. That's how society is able to build skyscrapers and shipping terminals and air travel. If society collectively loses trust in itself, we will lose these nice things. Trust is a feature of living in a liberal democracy. Autocracies may manage it too, but their historical record is questionable.
So trust is precious, but I wouldn't express it as trust is expensive because it creates far more value than it costs.
Trust is expensive, lack of trust is even more so.
Say, how would you build a skyscraper without trust? Are you going to set up an on-premises laboratory to test the quality of the concrete and steel? Are you going to personally verify the entire building's plans? Check whether the geological study was accurate? Follow every worker around to make sure they don't cut corners anywhere?
The less you can trust that the many people involved did their job, the harder and more expensive it gets to actually get the work done, until it turns out it just can't be practically done.
A lack of trust gets you a place like Afghanistan -- where the moment you stop looking stuff starts disappearing.
"you going to set up an on-premises laboratory to test the quality of the concrete and steel?"
This isn't a good example because there are whole infrastructures to verify that buildings are being made "to code" and quality of materials is a part of that. E.g. this lab that tests steel: https://www.leica-microsystems.com/science-lab/steel-the-all...
Now what you're getting at is, OK, now you have to trust the lab. But that's OK because the incentives are better aligned. Trust is a thing with complex shapes. Maybe you develop trust in a single lab because being trusted is their whole business, and now you can easily switch between steel suppliers depending on who can sell the cheapest with peace of mind, so you've moved the trust problem around and reshaped it.
A lot of trust problems in the business world are like this. You can't eliminate it entirely everywhere, but reducing the amount you need and reshaping it/moving it around is still useful.
Trust is free. Trust plus verification plus enforcement is expensive.
If all we needed was trust, we could save ourselves trillions per year. When our machine overlords arrive, we'll be able to get buy on trust alone ;)
You actually know something about the finance industry, not sure this is the thread for you ;) You're absolutely right about the core problem.
I worked for several years on an 'enterprise blockchain' system. We often called it distributed ledger technology because our platform didn't actually use chains of blocks or proof of work, and it didn't have a token or anything like that. It was essentially a type of database but it had a lot of ideas from Bitcoin in it and was blockchainy enough that customers accepted it as such.
I have to admit, at the very start I was skeptical about why so many large companies seemed to want this stuff. Like Tim, I also spent a lot of time talking to staff at these large institutions to understand where they were coming from. Unlike him I didn't work for AWS which is pretty much the exemplar of centralised infrastructure, so maybe it was easier to pick up on some of the more subtle issues involved.
There are a few things to understand about businesses that decided they wanted blockchain:
1. They have complicated inter-firm communication and synchronization needs.
2. They solve those needs today via creating centralized trusted intermediaries (like CLS). This comes with a world of pain and problems like the obvious "too big to fail" issue that was exposed in 2008, but there's also a lot of less obvious problems, like these institutions immediately becoming stagnant rent seekers who don't innovate.
3. They exist in markets that lack obviously dominant players who can push things forward. Many people in the tech world don't understand this because we rely so heavily on a handful of ultra-profitable, ultra-huge tech firms that spend lots of treasure on giving out freebies and standards setting, but that's abnormal.
So they heard about how Bitcoin can synchronize different companies view of a real financial object like a ledger without a SWIFT-like organization sitting in the middle, and thought "yes that sounds like what we need". And they're kind of right, as long as you think in terms of business problems rather than technology!
"Blockchain" is a concept that works for them speaking in the purely abstract social sense because it acts as a neutral rallying point. If one company in a market observes that maybe having a giant specialized too-big-to-fail clearing house like CLS isn't the ideal way to solve atomic transactions, and they go to their partners saying "hey let's use this cool thing we designed" the answer will always be no because their partners will say, why should we empower our competitor? Blockchain as a concept is owned by nobody, and the core idea is that it empowers nobody, so it acted as an enabler for conversations that would otherwise never have happened. Whether the final result actually uses proof of work or even has blocks at all actually isn't so relevant except in the sense that business owners don't want to get ripped off by people lying to them about what they built.
Tim Bray should really understand this dynamic better than most people because he created XML, which crops up in the enterprise space all over the place, often in ways that aren't really appropriate. Something like protobufs would have been a far better fit but they use XML. Why is that? Well, XML went through a massive hype wave ~20 years ago thanks to the W3C relentlessly pushing this vapourware "semantic web" concept, so for a brief period XML was the future of everything. Again, this created a socially acceptable rallying point at which complex inter-firm business problems could be solved in a relatively decentralized way. The tech got used regardless of merit simply because it was something everyone could agree on and unlike ASN.1 the protocols/tooling was free.
Back to blockchain. The platform I designed for this use case (Corda) was a competitor of the DA platform used in ASX and has done relatively well in the market - it reached number 1 by number of projects using it and unlike the ASX case actually has real deployments that are actually decentralized. Over 90% of Italian banks are using it for inter-bank reconciliation! [1] There are other projects that use it too which seem to be working (I'm not involved in any of them directly and haven't worked on Corda for several years now). You never hear about them on HN because they're too Starship Enterprise to be interesting to the crowd here, but the idea that there are no working blockchain projects isn't actually true.
We managed this partly by walking the tightrope between what people said they wanted (blockchain!) and what they were telling us they actually wanted in customer interviews (what we came to call distributed ledger technology). There was definitely a fair bit of overlap but not enough to just throw Ethereum at a problem and call it solved. What they really needed was a combination of better inter-firm messaging, signing/cryptography, atomic financial transactions without a CLS-style intermediary that actually takes custody of the assets, a robust identity framework, good developer support and training materials etc. Some of this can be found in blockchain related research like BFT algos, others were somewhat solved already, but blending them together into a coherent platform was hard.
There's lots more that can be said about this - some customer projects failed, but the reasons ran the gamut from tech to social/political/business reasons. It wasn't as simple as "blockchain is a scam", which is what Bray seems trying to imply here. There actually is a there, there. It's just really, really hard to solve these problems without a hype wave to coordinate and synchronize intent.
> We often called it distributed ledger technology because our platform didn't actually use chains of blocks or proof of work, and it didn't have a token or anything like that. It was essentially a type of database but it had a lot of ideas from Bitcoin in it and was blockchainy enough that customers accepted it as such.
because it was actually how I selected Corda as the infrastructure for a project a few years ago. The customers and managers wanted Blockchain®, and I wanted to deliver something that actually added some kind of value, and I found Corda which - as I told my CEO - was "close enough to a blockchain that our marketing splash wasn't lying".
(Whereas to my fellow devs, I said more or less "look, it's Spring Boot with a replicated event-sourced database and a funny CLI admin panel")
Unfortunately the project never got past the test stage because - this is gonna shock you - the very first, extremely basic smart contract we encoded in Corda was immediately violated by the customer's processes, and they absolutely refused to change.
Still, I want to thank you because your platform enabled me to retain my dignity without pissing off my boss for a half year or so.
Hi everybody... Richard Brown, CTO of R3, the firm behind Corda, here.
As Mike says, we're somewhat unusual in that there are many live, successful Corda deployments around the world. Mike's comment about how Corda is blockchain-like but not, strictly speaking, a chain of blocks is at the heart of this I think. Here's what I mean:
How many 'introductory' presentations have you been to (or, worse, given) to semi-technical people, where Bitcoin and other public blockchains are 'explained' by describing the components? You probably know the sort of pitch I mean: they laboriously build up the concepts - transactions, signatures, hashes, blocks, chains of blocks, mining, etc, etc. Such presentation are usually correct. But they impart almost no intuition. It's little wonder that so many 'business people' come away from them thinking that a blockchain is some sort of mysterious and magical technology.
There's a presentation I like to give where I go the other way. I give a one-line description of the problem Bitcoin solves [1] and then I help the audience 'invent' Bitcoin for themselves from first principles. There's an old blog post of mine that gives the rough idea [2]. The point is that successful architectures solve well-stated problems. Cargo culting never works.
Where I think many corporate deployments of blockchain went wrong was that they saw the huge enthusiasm for 'blockchain tech', had a vague intuition that 'inter-firm' or 'market-level' problems were ripe to be solved, but they never fully internalised that Bitcoin's (or Ethereum's) architecture isn't some sort of inviolable, handed-down-from-high blueprint... it's merely a very elegant engineering solution to a well-stated 'business problem'.
Yet many 'enterprise blockchain' platforms seemed to begin with the architecture of a public blockchain, and then tweaked it to make it palatable to businesses (eg engineering cumbersome privacy solutions on top to work around the inherently broadcast nature of the public chains). This always felt a bit weird to me.
With Corda, we were fortunate to have been given the time and space by our backers to write down our equivalent of the Bitcoin problem statement, and then to engineer a solution to that problem. Yes - of course, we knew we were in the 'inter-firm business process' space, and we knew the problem we were trying to solve was in some way 'blockchainy' But we did try really quite hard to write down the problem statement [3] and then go forward from there, rather than starting with a pre-existing architecture and then modifying it.
Yes - as Mike says, architecturally it looks a lot like Bitcoin (eg it has an unspent-transaction output data model). But it also has a bunch of other things that, to this day, no other Blockchain has... eg the Flow Framework that allows decentralised inter-firm workflows to be modelled (think temporal.io but without any centralised infrastructure). And, like Mike says, Corda passes data point-to-point and confirms each transaction one at a time - no blocks, no broadcast.
You would not believe HOW MUCH GRIEF we got from the blockchain community for that design in the early days. Yet - several years on, it seems to be working.
[1] I claim that the 'requirement' for which Bitcoin is the solution is: "build me a system of un-censorable digital cash."
[3] Our problem statement? "Build me a platform that enables multiple firms to record and manage the lifecycle of the business contracts they have with each other, minimising the need for any new third parties." At least, that's what I thought I was building. Mike might disagree, however... I know he likes the "decentralised database" interpretation of Corda.
The events described here took place in 2016, over six years ago. That's a long time in technology!
Since then additional billions of investment dollars have flowed into the space (a "VC crypto spasm" as the author calls it). Yet zero meaningful products have emerged. But we've witnessed many giant scams and endless crypto startups that happily spun their wheels producing nothing, just minting tokens so that insiders and investors can dump them onto retail investors.
How long will this have to go on? There are real things to build in software. This nonsense is both an embarrassment to the profession as well as a giant distraction. Time spent thinking about cryptocurrency mindgames is time you'll never get back to use on something productive.
I think in any other space, if you had millions of people (some of them wicked smart) m looking for applications of a technology without results, you’d see the space dwindle into irrelevance quickly…
Crypto is very special in this sense. Despite massive failures and frauds at scale, people keep flocking to it. Is it the promise of unlimited riches, the romantic aspects of it (“decentralization”, etc.), something else altogether?
I don’t know, but to answer your question: I get the feeling that despite the FTX case crypto still has many years ahead of it, regardless of whether it ever produces positive outcomes.
I noticed crypto's quality of being special is in reverse proportion to the Fed's interest rates. Just an observation.
In all seriousness, the are two real drivers here: 1) speculation 2) money laundering and avoiding regulation in general. These are the things that keep crypto afloat and cryptomaniacs repeating promises of the next big thing that's gonna change everything tomorrow.
The real question is what's gonna happen sooner, Tesla's fool self-driving to Mars or blockchains taking over the world.
As long as money flows into it (which seems to be ending) and people accept that Bitcoin was the "killer app," as the kids say.
Everything else was just slower database apps jazzed up with buzzwords front-run by narcissists who realized they needed a new grift beyond Uber for Cats.
You could have a database at the government land authority. If markers in the field don't match up with records, the land authority will ask police to correct the issue.
If neither police nor land authority can be trusted to keep records and uphold the law, who is going to help you when a marker in the field doesn't match up to some distributed database?
Big land owner will say "I don't know anything about that record in the sky. But look at this land marker on the ground. That's reality!" and with no police, who is going to help you?
Imagine that the govt and the police actually treated the blockchain record as the infallible final source of truth, without any ifs and buts, without any traditional database on the side overriding what the blockchain says.
If an attacker came to your house, kicked your ass until you give your private key, and then transferred the land to themselves on the blockchain — the land would be fully legally theirs now! It's a valid transaction, and the courts can't reverse it — there's one source of truth, and it's cryptographically unchangeable without the private key. That's what the blockchain says, and the police will evict you from your own house.
(and then to prevent that you build enough off-chain trust systems, escrows, and side databases on top, and courts gain ability to dictate changes, and the actual blockchain becomes an irrelevant implementation detail).
Well suppose you nominally have the support of local government and police, but in practice they can bought cheaply, and suddenly the records match what the large landholder says instead of the markers you used to have. An immutable record would help solve this, but the point stands that it is not convincing that you need a blockchain or that it would solve the problem. How would you get local government to buy into it in the first place? If the national government is willing to force them, they could just manage a database with immutable records.
You don't even need a database with immutable records. You just need to make the contents of the database public, so that people can archive a copy and thus easily tell when the data has been altered.
I always wonder with these things: what is the deadline after which you are allowed to say "There is no value".
It has been almost 14 years since the inception of Bitcoin. There is nuance to this timeline that's why I usually use the launch of Ethereum as a starting point (~7 years If I recall correctly). Nevertheless so far nothing substantial running in production has come out of it Blockchain technology.
The typical response then is "well it takes time there is a lot of potential". I mean yeah but if you compare it to something like contactless payments or ride sharing apps these products have moved a lot faster and now have high user adoption.
So again: At what point can we just ignore all these Blockchain prophets that say "just wait the innovation is around the corner". 10 years, 20 years?
Technically 25 years since Hashcash was first proposed. I'd argue it could have had value sticking to that original application in preventing network spam, but instead it turns out people are more interested in storing the proof-of-work tokens on a blockchain and selling them, as if collecting and trading postage stamps had become more widespread than actually sending mail with them, to the extent that at least some people and a few entire countries proposed replacing currency with postage stamps.
Something arbitrary with no value went from a random Internet forum to $300b market cap and a legal currency for a nation-state. That’s something!
I don’t know what’s would be a better outcome.
Did you expect it to be world reserve currency in a decade? Replace the 5000 years gold? Upend the global banking system? Render the IMF obsolete? Make nation-states think twice about waging war without taxation?
I mean - surely you aren’t comparing these world-shattering outcomes to a mobile app that doesn’t make money after that long!
I should have said "Blockchain applications outside of cryptocurrency" but as you seem to equate the two let's talk about that.
A good metric is: "people are using it".
That is not the case for any cryptocurrency (yes and that includes El Salvador). I frequently wire money across borders and cryptocurrencies are still completely useless for it despite it being the number one use case that is shouted from the crypto rooftops.
So you're left with: "It made a ton of money for rich and a few lucky middle class people" and "some quasi dictator implemented it as an additional currency without a mandate".
Readit News
The latter property here is key to understanding where blockchain is useful. It was created to solve the "double spend problem", ie. two transitions that spend the same coin but send it to different recipients (and so they conflict and cannot both be included in the canonical list of transactions). A double spend is the result of the sender either (a) making a mistake, or (b) attempting fraud. In both cases the important property is that as long as only a single of these conflicting transactions is included, the systems works.
Only if your problem exhibits the above property (and it's a distributed system) does using a blockchain make sense.
Having one neutral platform, controlled by no one, with standardized API's and immutable open programs that anyone can permissionlessly build on - is amazing.
We've never had this before, and it's incredible how fast the DeFi space is moving because of it. I work for a platform (Balancer) that has had over 20 different companies (Aave, Element, CopperLaunch, Gyro, Aura, Hidden Hand) build financial applications on top of our tech stack in the last 2 years.
Then there are different wallets (Metamask, Rainbow, Ledger), aggregators (1inch, Matcha, 0x), portfolio management tools (Zapper, Zerion, DeFi Saver).
All of these work with each other mostly out of the box and without any formal partnerships between anyone. This is a radical new way of building finance and it's the fastest paced industry I've ever been a part of.
It's similar to AWS where it got exponentially more valuable as each new service was added - but the entire world can contribute to it. Like AWS people didn't understand the value initially, but over time they realized how big of a deal it was as more and more components were added.
But... I have yet to see a service which really adds value. All I've seen so far are:
A) collection games, which are not different from collecting Pokémon for real money.
B) liquidity PvP, where users open leveraged bets to hunt other market participants' stops/liquidations, so the hunter can reduce their position for cheap, which the hunted takes a loss (this is not different from tradfi).
I am looking at Aave right now, and all I see is a speculation platform with tokens instead of currencies. So basically, you guys are re-inventing what tradfi had years ago, just with worthless(?) tokens instead of debt backed assets. I am assuming they are worthless because every project you have mentioned is optimized for USD cash inflow, as you have "buy crypto with fiat"-buttons on almost every project[1][2][3], but no way to cash out to fiat. Furthermore, the staking feature from AAVE seems to only artificially decrease supply, so prices rise. What's the value proposition here?
Anyway, I don't really think that this stuff is even remotely comparable to AWS.
[1] https://app.aave.com/ (press "more" on the nav bar)
[2] https://zerion.io/ (FAQ > "just tap the blue button in the center of your screen, select ‘Buy’, and you will be taken to the dialogue window where you can buy crypto with a credit or debit card.")
[3] https://blog.1inch.io/transak-fiat-on-ramp-provider-is-integ...
The crypto/dapp/defi/etc spaces have supposedly been "moving incredibly fast" and "all the smartest people are working on it" for ~5 years now. That's a long time to be moving really fast without really getting anywhere. Where's the payoff?
To me this space feels like a solution without a real problem. The decentralized part is a neat trick, but on the margin a centralized authority to mediate financial platforms is more good than bad.
Controlled by no one, but suddenly standardized APIs exist. Who standardized them?
Controlled by no one, but suddenly everyone is going to use those standardized APIs that appeared by magic. And even those entities that never ever used open or standardized APIs will rush to use them because blockchain.
> We've never had this before, and it's incredible how fast the DeFi space is moving because of it
Theres nothing amazing about companies busy reinventing flash loans and currency speculation.
> This is a radical new way of building finance and it's the fastest paced industry I've ever been a part of.
It's only fast because it deals in fantasy tokens in a very limited scope with zero oversight or regulation. And this space is busy re-discovering why these regulations exist in the first place.
> Like AWS people didn't understand the value initially
Most people understood AWS value initially. 2-3 years after launch everyone understood AWS. Now everyone uses it.
AWS provided, and still provides, a multitude of services that are actually useful. Where as the "fast moving space" offers nothing outside the "buy low sell high flash loan" hamster wheel that is "defi"?
> I think a lot of HN doesn't get it because they don't work in finance, but everyone I've talked to who works in finance (or has to deal with their archaic systems) is really excited about the possibilities.
There are very very few people in finance who are excited about it. For many, many, many reasons.
Those who are excited are excited for all the wrong reasons: scams, speculations, unlimited investor money. The last one will probably go away soon. Speculations are only valuable as long as the fictional tokens are valuable for some definition of value. There's almost nothing else in the crypto space.
Now, imagine a system where all of the data is also on-chain, and the programs you can compose are full-complexity applications... All while maintaining every independent program's data invariant in a completely decentralized manner, with transaction rates that grow linearly with the DHT size.
Such a system is now in public beta. It could be world-changing (at least for programmers).
Isn't that also an open door to bad actors?
TimJRobinson at least states something which is rare on HN, a take on blockchain technology with experimental instead of theoretical knowledge on the subject matter.
This right here is it! Everyone is always focused on the main feature being decentralization, but decentralization isn't a feature, it's an implementation detail. Decentralization is certainly a requirement for these goals, but permissionlessness is the goal. I'll note that permisionless for users, in the ability to create accounts and send transactions is every bit as import as permisionless building.
This is why I think the term DeFi misses the mark a bit, because it's a nod to the implementation (decentralized) rather than the features (open and permissionless). But at the end of the day I think it's catchier than something like OpenFi, and the terminology is set at this point.
https://hiddenhand.finance/
I...i mean this just speaks for itself doesn't it?
Governments will not protect something they have no control over. When they regulate it, that control will come in. Some of the things you speak about will disappear.
Kinda like if you have a wife and you care about her if she is loyal. But once she cheats you don't care anymore. Similar situation between unregulated financial systems and the government.
Deleted Comment
I've been yelling at the top of my lungs why NFTs have revolutionized digital art and happy to see the top comment nails it - a zero trust verification environment makes it possible to sell it on an open global market. This just wasn't there before.
Blockchains are useless takes are already out of date.
I think we also need to specify that it's also an extremely distinct and rare type of "distributed": When you must support unrestricted and unlimited creation of new participant nodes.
That's the fundamental requirement that drives an entire cascade of other blockchain design choices, such as proof-of-work to prevent a takeover by sockpuppet-nodes, and mining to incentivize regular consistent participation by a presumed-benign majority. Without that requirement and workarounds, we're left with a kind of regular distributed database, pre-hype technology that already featured hashes and linked-lists.
This requirement ("anybody can become part of the network anonymously") also makes for a great litmus-test for whether you need blockchain.
For example, in national elections we probably don't want/need literally any number of computers anywhere in the world to jump in and deciding what happens based on their CPU power. It would be dramatically faster/easier/safer to simply define a fixed list of nodes, where each state runs a couple plus the federal government, and then rely on the fact that evildoers would have to compromise too many different systems and agencies.
The problem that bitcoin solves is that you can not prevent me from casting a million votes because the system is anonymous - or pseudonymous if you want - and therefore there is no list of participants that would prevent casting more than one vote. This is called a Sybil attack.
Bitcoin's solution - and similarly that of other block chains - is to make casting a vote expensive, either in terms of computational resources or owned tokens or whatever.
Blockchains only ensure that coins are never spent twice. They make no attempts to ensure that coins are sent to the correct recipients. At the end of the block, they only care that debits are equal to credits.
This can be confusing because the term "double spend" is also frequently used in cryptocurrency in the context of fraud prevention. In this context, you definitely do care that the coins get to the correct recipients but this concern is outside of the functional scope of the blockchain mechanism.
Instead, fraud prevention is typically satisfied through additional code, adjacent to the "blockchain stuff", which establishes signaling networks and transaction inclusion criteria.
They're very different mechanisms inside blockchain clients but, confusingly, they both make frequent use of the term "double spend".
I know the origin is tightly linked to bitcoin, but I feel like even this muddies the definition.
Blockchains are not implicitly related to "coins", more facts? contracts? Maybe that's a useless nit to pick, or only useful in this thread where the GP was trying to layout where blockchains are useful (eg: distributed facts - that happen to often be wealth transfer).
Or do I have it all wrong? I admit to not having much experience with them, but from the few random (non-btc) meet up groups talks I saw a decade ago, it was all about consensus more than anything. Ironically before the current NFT craze, the talk I remember most was one about using NFTs to authenticate stuff like (non-programatically-generated) album/artwork ownership and allowing users to resell in a second hand digital market.
I assume you could build a mastodon like that distributes and "authenticates" posts via a blockchain - perhaps with terrible performance though.
The word Blockchain is so overloaded, people forget you can build a "blockchain" in 50 lines of code if not less. "Mining" new blocks is added on top of that, it's not a hard requirement - you can just create new blocks and link them up. You can choose to "mine" on CPU (slow) or on the GPU, if you want "mining" at all. You can then choose to persist it (file or sql or whatever) or only run it in memory. After that you can get into the concept of ledgers and currencies, and after that into making it distributed via some gossip-y protocols.
So a cleaner definition of a block chain would be, a tamper-proof daisy-chained data structure, similar to a linked list. All the stuff about ledgers, currencies, mining and consensus are separate concerns, stacked on top of a blockchain.
Also checkout: Merkle trees, linked lists, Chain of Responsibility.
Anyone agree/disagree?
If it doesn't contain a mechanism for trustless, distributed consensus, then it's not really a blockchain in the sense that HN or the wider industry understands it.
Your definition is wide enough to cover a lot of things that are well outside of normal discussion of blockchains. I'm not insinuating this is your goal, but it is a common argumentation tactic of people desperately trying to defend the sector, to widen the definition until they can include within it things like git, and then say "so of course blockchain tech is useful! You're using it!"
There’s already a word for that: distributed version control. We don’t need to move the goal posts on what blockchain is to make it have an interesting use case.
Blockchain is more specific to the consensus part not really about the self proving data structure part.
Double-spend has been solved by the financial sector quite some time ago. The distributed system part - I guess this is the problem that I think the article is claiming is yet to be found.
If I give you a coin (or paper money), then by definition I don't have it any more. I can't spend it twice.
Accounting with transactions netting to zero ("double entry") solved the problem of recording transactions in an immutable way on a ledger, assuming you control the ledger.
Clearing houses solved the problem of interparty risk when settling (by using an intermediary that controls the ledger of transactions between parties).
Title registries solved the problem of "ownership" by creating the concept of a "title" (ie a government backed identification of property that is recognized by law that the bearer "owns"). Title registries (like "Torrens titles" invented in Australia) solve the bearer problem by having a central ledger of title holding.
Blockchain can "solve" the ledger parts of these elements. But the ledger being immutable doesn't solve the problem of recognition of title (see NFTs). By adding the machinations of "mining" and "proof of stake/work", blockchains can be extended to include the "title" as part of the ledger itself. The mining transaction effectively creates something that is initially owned by the miner.
Ethereum adds to the "intelligence" of the transactions stored on the ledger, adding elements of computation to each one.
All the rest of it, all the invented coins etc, the "exchanges", etc etc ad infinitum are attempts to map these ledgers back to fiat currencies so that "actual" money can be made.
Traditional finance offers “at-most-one spend”while blockchain protocols offer “one spend up to 1/3 malicious nodes”.
The limit on the former is government, and Byzantine Fault Tolerance sets the limit on the latter.
Government can unilaterally seize “your” funds in traditional banking, while a substantial computational attack is required to cause a loss of confidence event (double spend) on a particular blockchain.
Isn’t Blockchain just a convoluted solution to a problem nobody has?
(Which is the conclusion of the article)
The problem that some people really, really hate authority, and frankly, really hate other people, and would like a magical machine to do away with all that messiness.
So they put a million barriers between themselves and that messiness and hope it all works out in the end.
It's like a sort of niche religion.
After the first believers announced their faith, a much, much larger group of grifters realized that they could shout: "FREEDOM! PROFIT! FREEDOM! PROFIT!" and make a ton of money.
Like a real religion, basically, just read up about incense and Christianity to see the real believer versus grifter dichotomy happen in another case.
Anyway, so here we are now :-)
When purchasing a property, there is a dance between the seller and the purchaser (and intermediaries) that effectively perform the necessary transactions to: a) ensure the seller gets paid b) ensure the purchaser gets the property c) ensure that the record of ownership of the property is correctly updated.
This all has to be done simultaneously and atomically.
Moving the records of ownership (ie "title") to the blockchain and then having the appropriate contracts/transactions to ensure the points above solve the conveyancing problems.
But, given that for the most part, the title that declares ownership is essentially a legal document, and that legal documents only have power because of the laws that are enforced, there's no advantage to blockchain that can't be also solved by a central trust registry that maintains the records.
Crypto fully shifts this from the database operator to the software developer and is willing to accept significant trade offs to do so.
Most of the unique complexity and challenges in blockchain technology originates from this.
Also see the response from and sub-thread from uncletammy.
The blockchain doesn’t guarantee, for example, that the transaction which appeared earlier will always be chosen (in practice, it’s likely the one with the highest transaction fee)
I work in a hobby industry where a lot of community run ledgers are suddenly lost forever due to the death of someone in the fandom (or rarely intentional sabotage or hacking).
Would this be a good use for blockchain or are there maybe other solutions I'm not considering or aware of?
If you can not have one guy taking up the mantle and doing the hosting, how can you get hundreds to do the same?
>A reason I have been interested in blockchain is that it seems like a good way to make a decentralized application that could exist beyond the life of the company or person that creates it.
Community run projects have existed for decades on the internet. They never needed a blockchain to persist. If they died, they died due to lack of interest and effort by their communities. A blockchain can not prevent that.
>maybe other solutions I'm not considering or aware of? IPFS potentially.
This is perhaps the simplest easiest use case for a hash based linked list. Of course this is not the complete picture of what cryptocurrencies are; the hash list is just part of the system.
Saying that is a unique feature or reason to use blockchain is similar to saying blockchain can add two numbers together so we should use it to build a calculator.
company minting their own token and then using it as collateral, accounting it as if they had billions. the "stable coins" cannot produce basic accounting audits that a low level book-keeper could do on any normal business.
there has been so much fraud in crypto the past few years. and the algorithm did not help to stop that.
Take a text editor, it would be improved if edits or saves which are just transactions are stores on a blockchain if the text is being stored and shared synchronously and live between devices.
Basically, people have more devices, want to collaborate and add redundancies to important systems which means changes to data (transaction) where the historical sequence of changes is important to someone can use blockchain, but of course it isn't neccesarily the best solution, especially if there is trust between nodes or out of sync nodes causing a mess can be solves by simpler solutions.
I accidentally got wrapped up in a project to automate some HR functions, and the product manager demanded that it must be blockchain because blockchains are the future.
It turns out that append-only databases are well-suited for HR records, and (especially when dealing with things like background checks, immigration papers, etc.) it doesn't hurt to have a history with cryptographically-verifiable date stamps.
We used an existing database that did all of the above, told everyone it was blockchain, and released the product.
That was a great strategy for a few years until everyone realized blockchain was a boondoggle, and now you never need to work with anyone who still believes in it. You can just understand their mention of blockchain to be a sign that you need to avoid doing business with them.
Wow, that's next level PM cringe.
I'm glad you were able to jujitsu your way around it.
When you want to display a record, you can aggregate the data historically and allow people to see changes and attribute them to users and time but you can always see what was originally added.
However that's kinda risky for HR because anything committed to that DB will be there... forever!
The forever problem can be, ironically, resolved with crypto. If you encrypt each employer record with an employee key then, if the employee data needs to be deleted you just delete the key and the data is gone.
in a distributed, trustless fashion
If it's not distributed or trustless, you can do the same without the blockchain.
It may seem so, bu then You find out what are Your governments limit's for storing workers data, and Your company lawyers forces You to make it possible to delete everything that past that limit to limit legal risk and be gdpr compliant. And at this moment You find out that world is not constant and far from Your ideal model of spherical cow.
Yes, I know this isn’t strictly “append only”, but it still gives the ability to prevent silent updates and silent deletes. Any record that’s deleted must be replaced with something that indicates that it was deleted.
It's not difficult: You simply dictate requirements that can be only solved by one engineering solution.
But that, in essence, is part of the challenge with blockchain. People treat it as a self-describing requirement. ("This must be on the blockchain") rather than a technical solution for a dubious set of problems most people don't have.
Stomps on brake with both feet
To me the tell is not just that Andy didn't understand.
It's that all of these leaders said "everyone says it's the future", but not one of them said "I have this problem and here's how blockchain solves it for me."
When you're more junior you often make the mistake of wrongly dismissing ideas because you think you are very clever. I find that by the time you unlearn this, you typically should reverse direction.
Early in my career, every time something didn't make sense, it's because I had a misunderstanding of how things really worked.
Much later in my career I started to realize more and more often when I said "this doesn't make sense" I would start assuming I was the one missing something, only to time and time again uncover some one else had messed up or that something else was fundamentally wrong.
Obviously even the most expert in their field should reserve some probability that they are misunderstanding, but learning to recognize that you are an expert and that you not understanding something is in fact smoke is an important late career skill.
So it actually seems that in the logistics line of things like manufacturing / production / etc. there is a place for blockchain, mainly due to the immutability and decentralized distribution properties. What could take a whole week to track down using older methods, takes seconds if all the data is recorded on the blockchain...for example, food production. You want to find out exactly which animal your food comes from, and all the things involved (use of antibiotics? which factory? how did the product travel before ending up at your grocery store? etc.).
Some researchers working on these products repeated that they often get approached by directors and CxO level people regarding this - wondering if blockchain can "solve problems". And every time, they have to reply: Using the blockchain can solve some specialized problems, but there's no magic fairy dust involved, and it's not some general structure which will solve all their problems.
Unfortunately, it's kind of like AI. High-level directors dream of General AI, but you need to explain to them that it's all ML models which aid (replace if you're lucky) workers, and automate some tasks.
I think any CTO worth their salt should know these things, and manage the expectations of the other C-suite executives.
Literally none of that should involve (let alone requires) a blockchain.
Is the portability of the blockchain the thing? I could see maybe how that would help, if there wasn't a standard across the databases involved or something.
Honestly just trying to understand, thanks!
The usual shitty dismissive HN response to this would be something like "but that doesn't require a block chain it could just be a database".
To those people I would ask who is running that database? What are their incentives?
Forget about the currency uses of block chains for a moment. The fact that you have this distributed network, controlled by nobody in particular but with their incentives aligned to keep it running and keep it secure, means that you have a platform you can build other stuff on top of.
An Ethereum smart contract is a type of append only database, the code of which is strongly open source and very battle tested (basically everyone is using openzeppelin), where you do not have to care about where or by who it is being hosted, with an uptime that puts every hosting provider in existence today to shame.
https://nvlpubs.nist.gov/nistpubs/ir/2018/nist.ir.8202.pdf
It worked wonderfully to cut the BS coming from a greedy manager, in a non confrontational way ("so, what do you actually need?" , "you say 'security', but which aspect do you need? immutability ? non-repudiability? confidentiality??"). I think NIST's clout helped, along that they'd have to fully understand a 65 page report. I'm sure the content of the report would have been quite eye-opening, but that wasn't needed. Greed is a feeling, not a rational process.
All those shiny skyscrapers that the banks build? It's for trust, along with a good deal of banking licensing requirements and regulation.
The example with the farmers' fields is quite valid. We forget in our relatively well-governed western nations that some governments really can't be trusted to simply keep records straight and not 'lose' vital documents, in cases where bribes abound.
Another example is foreign exchange trading settlements; I can't trust that if I send you $500mn in swiss francs, you'll actually send me the equivalent settlement in USD. You might go bankrupt half way through the transaction. And so there exists an expensive jointly owned escrow bank for exactly this purpose, CLS bank.
I'm sure there are many other examples, but the point is, trust is actually quite expensive.
By analogy, sunlight and air are cheap, not expensive, even though we can't live without them. If either of these were in short supply they would become extremely expensive. But since they're abundant we don't normally dwell on their value.
In a civilized society with a stable government, we take trust for granted. That's how society is able to build skyscrapers and shipping terminals and air travel. If society collectively loses trust in itself, we will lose these nice things. Trust is a feature of living in a liberal democracy. Autocracies may manage it too, but their historical record is questionable.
So trust is precious, but I wouldn't express it as trust is expensive because it creates far more value than it costs.
Say, how would you build a skyscraper without trust? Are you going to set up an on-premises laboratory to test the quality of the concrete and steel? Are you going to personally verify the entire building's plans? Check whether the geological study was accurate? Follow every worker around to make sure they don't cut corners anywhere?
The less you can trust that the many people involved did their job, the harder and more expensive it gets to actually get the work done, until it turns out it just can't be practically done.
A lack of trust gets you a place like Afghanistan -- where the moment you stop looking stuff starts disappearing.
This isn't a good example because there are whole infrastructures to verify that buildings are being made "to code" and quality of materials is a part of that. E.g. this lab that tests steel: https://www.leica-microsystems.com/science-lab/steel-the-all...
Now what you're getting at is, OK, now you have to trust the lab. But that's OK because the incentives are better aligned. Trust is a thing with complex shapes. Maybe you develop trust in a single lab because being trusted is their whole business, and now you can easily switch between steel suppliers depending on who can sell the cheapest with peace of mind, so you've moved the trust problem around and reshaped it.
A lot of trust problems in the business world are like this. You can't eliminate it entirely everywhere, but reducing the amount you need and reshaping it/moving it around is still useful.
Trust is free. Trust plus verification plus enforcement is expensive. If all we needed was trust, we could save ourselves trillions per year. When our machine overlords arrive, we'll be able to get buy on trust alone ;)
Materials standards, building codes, fair contract law, etc, etc, etc, and the courts and police to back it all up.
I worked for several years on an 'enterprise blockchain' system. We often called it distributed ledger technology because our platform didn't actually use chains of blocks or proof of work, and it didn't have a token or anything like that. It was essentially a type of database but it had a lot of ideas from Bitcoin in it and was blockchainy enough that customers accepted it as such.
I have to admit, at the very start I was skeptical about why so many large companies seemed to want this stuff. Like Tim, I also spent a lot of time talking to staff at these large institutions to understand where they were coming from. Unlike him I didn't work for AWS which is pretty much the exemplar of centralised infrastructure, so maybe it was easier to pick up on some of the more subtle issues involved.
There are a few things to understand about businesses that decided they wanted blockchain:
1. They have complicated inter-firm communication and synchronization needs.
2. They solve those needs today via creating centralized trusted intermediaries (like CLS). This comes with a world of pain and problems like the obvious "too big to fail" issue that was exposed in 2008, but there's also a lot of less obvious problems, like these institutions immediately becoming stagnant rent seekers who don't innovate.
3. They exist in markets that lack obviously dominant players who can push things forward. Many people in the tech world don't understand this because we rely so heavily on a handful of ultra-profitable, ultra-huge tech firms that spend lots of treasure on giving out freebies and standards setting, but that's abnormal.
So they heard about how Bitcoin can synchronize different companies view of a real financial object like a ledger without a SWIFT-like organization sitting in the middle, and thought "yes that sounds like what we need". And they're kind of right, as long as you think in terms of business problems rather than technology!
"Blockchain" is a concept that works for them speaking in the purely abstract social sense because it acts as a neutral rallying point. If one company in a market observes that maybe having a giant specialized too-big-to-fail clearing house like CLS isn't the ideal way to solve atomic transactions, and they go to their partners saying "hey let's use this cool thing we designed" the answer will always be no because their partners will say, why should we empower our competitor? Blockchain as a concept is owned by nobody, and the core idea is that it empowers nobody, so it acted as an enabler for conversations that would otherwise never have happened. Whether the final result actually uses proof of work or even has blocks at all actually isn't so relevant except in the sense that business owners don't want to get ripped off by people lying to them about what they built.
Tim Bray should really understand this dynamic better than most people because he created XML, which crops up in the enterprise space all over the place, often in ways that aren't really appropriate. Something like protobufs would have been a far better fit but they use XML. Why is that? Well, XML went through a massive hype wave ~20 years ago thanks to the W3C relentlessly pushing this vapourware "semantic web" concept, so for a brief period XML was the future of everything. Again, this created a socially acceptable rallying point at which complex inter-firm business problems could be solved in a relatively decentralized way. The tech got used regardless of merit simply because it was something everyone could agree on and unlike ASN.1 the protocols/tooling was free.
Back to blockchain. The platform I designed for this use case (Corda) was a competitor of the DA platform used in ASX and has done relatively well in the market - it reached number 1 by number of projects using it and unlike the ASX case actually has real deployments that are actually decentralized. Over 90% of Italian banks are using it for inter-bank reconciliation! [1] There are other projects that use it too which seem to be working (I'm not involved in any of them directly and haven't worked on Corda for several years now). You never hear about them on HN because they're too Starship Enterprise to be interesting to the crowd here, but the idea that there are no working blockchain projects isn't actually true.
We managed this partly by walking the tightrope between what people said they wanted (blockchain!) and what they were telling us they actually wanted in customer interviews (what we came to call distributed ledger technology). There was definitely a fair bit of overlap but not enough to just throw Ethereum at a problem and call it solved. What they really needed was a combination of better inter-firm messaging, signing/cryptography, atomic financial transactions without a CLS-style intermediary that actually takes custody of the assets, a robust identity framework, good developer support and training materials etc. Some of this can be found in blockchain related research like BFT algos, others were somewhat solved already, but blending them together into a coherent platform was hard.
There's lots more that can be said about this - some customer projects failed, but the reasons ran the gamut from tech to social/political/business reasons. It wasn't as simple as "blockchain is a scam", which is what Bray seems trying to imply here. There actually is a there, there. It's just really, really hard to solve these problems without a hype wave to coordinate and synchronize intent.
[1] https://www.r3.com/case-studies/spunta/
> We often called it distributed ledger technology because our platform didn't actually use chains of blocks or proof of work, and it didn't have a token or anything like that. It was essentially a type of database but it had a lot of ideas from Bitcoin in it and was blockchainy enough that customers accepted it as such.
because it was actually how I selected Corda as the infrastructure for a project a few years ago. The customers and managers wanted Blockchain®, and I wanted to deliver something that actually added some kind of value, and I found Corda which - as I told my CEO - was "close enough to a blockchain that our marketing splash wasn't lying".
(Whereas to my fellow devs, I said more or less "look, it's Spring Boot with a replicated event-sourced database and a funny CLI admin panel")
Unfortunately the project never got past the test stage because - this is gonna shock you - the very first, extremely basic smart contract we encoded in Corda was immediately violated by the customer's processes, and they absolutely refused to change.
Still, I want to thank you because your platform enabled me to retain my dignity without pissing off my boss for a half year or so.
As Mike says, we're somewhat unusual in that there are many live, successful Corda deployments around the world. Mike's comment about how Corda is blockchain-like but not, strictly speaking, a chain of blocks is at the heart of this I think. Here's what I mean:
How many 'introductory' presentations have you been to (or, worse, given) to semi-technical people, where Bitcoin and other public blockchains are 'explained' by describing the components? You probably know the sort of pitch I mean: they laboriously build up the concepts - transactions, signatures, hashes, blocks, chains of blocks, mining, etc, etc. Such presentation are usually correct. But they impart almost no intuition. It's little wonder that so many 'business people' come away from them thinking that a blockchain is some sort of mysterious and magical technology.
There's a presentation I like to give where I go the other way. I give a one-line description of the problem Bitcoin solves [1] and then I help the audience 'invent' Bitcoin for themselves from first principles. There's an old blog post of mine that gives the rough idea [2]. The point is that successful architectures solve well-stated problems. Cargo culting never works.
Where I think many corporate deployments of blockchain went wrong was that they saw the huge enthusiasm for 'blockchain tech', had a vague intuition that 'inter-firm' or 'market-level' problems were ripe to be solved, but they never fully internalised that Bitcoin's (or Ethereum's) architecture isn't some sort of inviolable, handed-down-from-high blueprint... it's merely a very elegant engineering solution to a well-stated 'business problem'.
Yet many 'enterprise blockchain' platforms seemed to begin with the architecture of a public blockchain, and then tweaked it to make it palatable to businesses (eg engineering cumbersome privacy solutions on top to work around the inherently broadcast nature of the public chains). This always felt a bit weird to me.
With Corda, we were fortunate to have been given the time and space by our backers to write down our equivalent of the Bitcoin problem statement, and then to engineer a solution to that problem. Yes - of course, we knew we were in the 'inter-firm business process' space, and we knew the problem we were trying to solve was in some way 'blockchainy' But we did try really quite hard to write down the problem statement [3] and then go forward from there, rather than starting with a pre-existing architecture and then modifying it.
Yes - as Mike says, architecturally it looks a lot like Bitcoin (eg it has an unspent-transaction output data model). But it also has a bunch of other things that, to this day, no other Blockchain has... eg the Flow Framework that allows decentralised inter-firm workflows to be modelled (think temporal.io but without any centralised infrastructure). And, like Mike says, Corda passes data point-to-point and confirms each transaction one at a time - no blocks, no broadcast.
You would not believe HOW MUCH GRIEF we got from the blockchain community for that design in the early days. Yet - several years on, it seems to be working.
[1] I claim that the 'requirement' for which Bitcoin is the solution is: "build me a system of un-censorable digital cash."
[2] https://gendal.me/2014/05/21/bitcoin-mining-the-first-techno...
[3] Our problem statement? "Build me a platform that enables multiple firms to record and manage the lifecycle of the business contracts they have with each other, minimising the need for any new third parties." At least, that's what I thought I was building. Mike might disagree, however... I know he likes the "decentralised database" interpretation of Corda.
For those looking for a fun read about trust read some Francis Fukuyama.
Since then additional billions of investment dollars have flowed into the space (a "VC crypto spasm" as the author calls it). Yet zero meaningful products have emerged. But we've witnessed many giant scams and endless crypto startups that happily spun their wheels producing nothing, just minting tokens so that insiders and investors can dump them onto retail investors.
How long will this have to go on? There are real things to build in software. This nonsense is both an embarrassment to the profession as well as a giant distraction. Time spent thinking about cryptocurrency mindgames is time you'll never get back to use on something productive.
I think in any other space, if you had millions of people (some of them wicked smart) m looking for applications of a technology without results, you’d see the space dwindle into irrelevance quickly…
Crypto is very special in this sense. Despite massive failures and frauds at scale, people keep flocking to it. Is it the promise of unlimited riches, the romantic aspects of it (“decentralization”, etc.), something else altogether?
I don’t know, but to answer your question: I get the feeling that despite the FTX case crypto still has many years ahead of it, regardless of whether it ever produces positive outcomes.
I noticed crypto's quality of being special is in reverse proportion to the Fed's interest rates. Just an observation.
In all seriousness, the are two real drivers here: 1) speculation 2) money laundering and avoiding regulation in general. These are the things that keep crypto afloat and cryptomaniacs repeating promises of the next big thing that's gonna change everything tomorrow. The real question is what's gonna happen sooner, Tesla's fool self-driving to Mars or blockchains taking over the world.
As long as money flows into it (which seems to be ending) and people accept that Bitcoin was the "killer app," as the kids say.
Everything else was just slower database apps jazzed up with buzzwords front-run by narcissists who realized they needed a new grift beyond Uber for Cats.
You could have a database at the government land authority. If markers in the field don't match up with records, the land authority will ask police to correct the issue.
If neither police nor land authority can be trusted to keep records and uphold the law, who is going to help you when a marker in the field doesn't match up to some distributed database?
Big land owner will say "I don't know anything about that record in the sky. But look at this land marker on the ground. That's reality!" and with no police, who is going to help you?
If an attacker came to your house, kicked your ass until you give your private key, and then transferred the land to themselves on the blockchain — the land would be fully legally theirs now! It's a valid transaction, and the courts can't reverse it — there's one source of truth, and it's cryptographically unchangeable without the private key. That's what the blockchain says, and the police will evict you from your own house.
(and then to prevent that you build enough off-chain trust systems, escrows, and side databases on top, and courts gain ability to dictate changes, and the actual blockchain becomes an irrelevant implementation detail).
What do you do when a river moves? https://en.wikipedia.org/wiki/Croatia%E2%80%93Serbia_border_...
Who owns new land in Hawaii when the volcano meets the sea? https://bigthink.com/strange-maps/who-owns-the-land-created-...
What happens when someone makes a surveying mistake and enters that permanently into the blockchain?
Dead Comment
It has been almost 14 years since the inception of Bitcoin. There is nuance to this timeline that's why I usually use the launch of Ethereum as a starting point (~7 years If I recall correctly). Nevertheless so far nothing substantial running in production has come out of it Blockchain technology.
The typical response then is "well it takes time there is a lot of potential". I mean yeah but if you compare it to something like contactless payments or ride sharing apps these products have moved a lot faster and now have high user adoption.
So again: At what point can we just ignore all these Blockchain prophets that say "just wait the innovation is around the corner". 10 years, 20 years?
I don’t know what’s would be a better outcome.
Did you expect it to be world reserve currency in a decade? Replace the 5000 years gold? Upend the global banking system? Render the IMF obsolete? Make nation-states think twice about waging war without taxation?
I mean - surely you aren’t comparing these world-shattering outcomes to a mobile app that doesn’t make money after that long!
A good metric is: "people are using it".
That is not the case for any cryptocurrency (yes and that includes El Salvador). I frequently wire money across borders and cryptocurrencies are still completely useless for it despite it being the number one use case that is shouted from the crypto rooftops.
So you're left with: "It made a ton of money for rich and a few lucky middle class people" and "some quasi dictator implemented it as an additional currency without a mandate".