My guess is that we're having our geeky dreams without thinking what's the reality happening around us. It's very comfortable to be utopist when thinking of bitcoin, instead of seeing that it's still the same winner-takes-it-all scheme.
People will ALWAYS put convenience first. Even those that say they won’t, it’s typically an isolated action (like, email is harder when not using google apps, but it’s worth not being spied on. Walk in their house, Echos and smart devices everywhere).
The hope for Blockchain is we can now, finally, begin building true decentralized things without sacrificing this innate human want for convenience. It’s technology advancing towards multiple mutual goals (a technical one and a human one).
Be prepared to rebel and re-re-decentralize in 20 years.
Where before you had to trust one server, now you can have many. Multiple writers, multiple readers. That's all.
They are a drop-in replacement for having to trust admins.
On the other hand, backups and replicas could prevent other things, such as: https://www.youtube.com/watch?v=E1d5VvCa8Fo
Those multiple writers, multiple readers are not free. They waste billions in server/electricity costs over traditional architecture designs. The most prominent blockchain bitcoin costs 2.5 billion dollars a year [0] to process a miniscule fraction of what Visa can handle.
Now, with Bitcoin and Cryptocurrencies: Programmers are creating money itself.
This article makes a bull-case very articulately, with sprinklings of realism. I am looking forward to this series. Being a blockchain cynic is the norm these days, and I appreciate when someone takes the trouble to lay down a well-reasoned and well-researched argument - great job rrecuero.
Clearly, there is irrational optimism/scams abound, but we can often forget that the mass-irrationality can be decoupled with the 'actual' promise of the idea. And the fundamental promise of the idea (Bitcoin, Cryptocurrencies, Blockchain etc) is for us to rethink 'how things work the way they work and why' and attempt to improve it. The Bitcoin paper should atleast get us to think about what is money. It matters less whether these "blockchain things" ultimately succeed or fail -- the fact that something NEW is being attempted, has to be applauded (Ofcourse, it would be great to figure out a way to do this without harming people using their credit cards to buy shit coins).
I love reading about blockchain ideas/projects. Like many, I too am jaded by the scams - but I think it is worth maintaining some optimism through this.
This article doesn't even touch upon some very important use-cases like: moving money across borders and money being seizure resistant etc. I think there is was, and has always been a market for a product that allows us to store value in a way that is cross-border, govt resistant and anonymous (whether it is a $500B market or $5B market is less interesting than appreciating that a product was invented to fulfil this use case). There are plenty of interesting use-cases to explore here.
In the section on Tokens, the article says: "contributors can transfer their assets instantly and easily to other people (pending regulation)" while referring to securities. IF this becomes a reality, it would be huge.
I see a lot of upside if even a fraction of the promise of this tech is realized.
As you mentioned, asset tokenization (securitization) is one of the biggest markets. If companies like Harbor achieve their vision, it would be huge.
I can confirm from my own experience that reading pop-sci books about blockchains--although they sound really cool and do provide motivation to look further into the tech--doesn't give you any confidence about the technology itself.
There's no shortcut, if you want to be more "enlightened", you should stop reading medium blog posts or pop-sci books and start looking into the protocol itself, run a node yourself, and try stuff out. When you do so, you'll get the "enlightment" you were looking for.
Which is what? That the blockchain is a solution in search of a problem? There is very, very little reason to use a cumbersome data structure when better ones exist (eg: just a regular database, or something like git). Worse, the only way the blockchain gets all it's supposed valuable attributes is when you provide a financial incentive to mine. Aka -- bolt a "currency" on top of it and then go market it to tons of rubes so you can convert all of the generated tokens into cold, hard fiat to pay your bills. Without the "currency", who will pay miners to trustlessly verify all the transactions? The parties running the service? If so... since you seem to trust all them to pay the bills.... why not just use a database instead and save some substantial fiat?
The whole bitcoin/blockchain "movement" is just pure hype. It's people at the top of the pyramid hyping a worthless technology in order to cash out their tokens before the whole thing collapses in on itself...
I understand the technology perfectly well. I read the Cryptoassets book to try and undsetand exactly that: the value of them as 'assets'. I came away exceedingly underwhelmed.
The biggest problems with Bitcoin (specifically) are: 1) it is not necessarily a store of value and 2) it fluctuates too much.
If someone can solve these two problems then we will have an extremely powerful cryptocurrency.
Venmo. Zelle. During banking hours: e-mail my banker, wire transferred within minutes.
"Blockchain" is probably fine. I suspect that it will eventually get some nice implementations where you want to be able to attest to integrity over time/space where multiple trusted parties evolve and change. A "distributed digital notary" if you will.
Cryptocurrencies as currently implemented (bitcoin and ilk) are eventually going to die for lack of a use case.
Problem 1: Most people like centralized authority of money. Most people like being able to get back their money when things get "stolen", for example. And people like reputation systems so that they don't get scammed (ie. illegal drug market).
Problem 2: Fees suck, but they're invisible to most people. Merchants hate fees, but you need users before that gets moving. We're also seeing that cryptocurrencies have non-trivial fees, as well. Funny that.
To be fair, traditional fees keep falling and some of that is probably due to cryptocurrencies. But some of that is simply trying to ward off the rise of a single digital purchase standard which would disrupt all of the incumbents. The payments space is a no-holds barred fight to the death and the incumbents would rather die than let anybody else get a foothold.
Problem 3: Cryptocurrencies aren't sufficiently anonymous. There is a use case for genuine anonymity. However, the current cryptocurrencies fail to be truly anonymous at blockchain as well as reality. Keeping your operational security sufficient to stay truly anonymous is damn difficult and having to go through an exchange doesn't help. Cryptocurrencies really need a decentralized exchange, but I'm not sure how that would even work. And, even if it did, since nobody could charge fees, nobody would have any incentive.
So, cryptocurrencies are mostly useful for people who fear central authority, are possibly concerned about fees, and only need to remain "semi"-anonymous. That pretty much describes petty criminals and mid-tier corrupt party bosses and ... not much else.
Monero is the go-to privacy coin. Unfortunately, I am not as experienced with privacy/security, but it appears to be good enough for many. Perhaps someone else can speak to its efficacy?
Finally, there are decentralized crypto exchanges. None that take fiat in (AFAIK) but there are definitely decentralized exchanges. Don't know of any off the top of my head, but I'm sure they're just a quick google search away.
Those are the things that stuck out to me about your post.
I think it's good to take a look at both sides of the story but the only way to find the truth is going deeper and learning the protocol yourself and form your own "sovereign" opinion, which is what I did after getting frustrated with tons of conflicting opinions online, which by the way turned out to be mostly propaganda to preserve their own crypto-wealth as I started learning more about the landscape.
Based on my somewhat brief experience as a crypto investor it hasn’t given me great hope of it solving corruption...
But do we really have a new era here? I'm not sure if with 32 years of age I'm already too old to recognize the New and grog it. I don't feel it. I feel there's a lot of buzz around blockchain, sure. But it looks like it would be all. Bitcoin is just as centralized as banks are, for instance.
And here is where the other stuff starts. When single things start systems these systems tend to be quite centralized. That is the natural order of systems. E.g., people could manage their own bitcoins on their laptop, but they choose to have an Exchange take that effort of their hands.
Seeing centralization take a foothold and not seeing anything real besides buzz, I'd argue the bet is still against.
On the other hand I'm seeing Amazong completely automating logistics in more and more areas of life. Shouldn't that be something to look into?
Blockchain takes it further and conceptually adds history to the TCP/IP protocol. This has extreme value as it allow data to behave like physical properties.
That's a rather odd statement. Can you justify that?
You see the same history repeating, just a lot quicker. Therefore I assume whatever you do with blockchains will become a centralized system as well.
PS: If you think about it, as technology cash is even more decentralized as bitcoin. Yet banks happened.
- https://www.reddit.com/r/btc/comments/7dl4r3/miner_centraliz...
- https://medium.com/@cloudycalvin/potential-threats-to-bitcoi...
A handful of actors with a controlling stake isn't exactly the same thing as "centralized" but it's close.
Bitcoin and the rest are coming for New York/Silicon Valley money managers, which only exist for gatekeeping and rent seeking. The finance industry will be eliminated by new exchanges and equity crowdfunding.
But not even that: If you're in China and the original blockchain is censored and all your node will ever see is the StateChain, you have misplaced your trust.
However, as long as you have any source for the most recent block that the MITM does not control, they cannot trick you into following a shorter chain. In other words, as long as any side-channel (malicious or otherwise) posts blocks, you can always follow the longest chain. The Blockstream Satellite [2] was created for this reason -- so that nodes always have a reliable side-channel separate from the bitcoin protocol to verify blocks coming from the bitcoin network. Alternatively, some nodes check Tor mirrors, which should be difficult for adversaries to control.
[1] https://eprint.iacr.org/2015/263.pdf [2] https://blockstream.com/satellite/
This is not true, you can already build (and people are) dApps that run in the browser (no extension) using the latest native Web Crypto API that we've made easy to use:
https://hackernoon.com/so-you-want-to-build-a-p2p-twitter-wi...
Dominic Tarr and the Beaker Browser guys with SSB also have even webasembly-ified libsodium which is highly rated ( #4 ranked on GitHub https://github.com/topics/cryptography ).
It is just that a lot of investors are caught up in hyped-up vaporware scams, rather than real technology that already exists and works and is available for developers to use today.
Only in the USA. And that is hopefully changing in the next month or two with the upgrade in the ACH system.
Really? I use it often and it always takes a few days end-to-end
I mean, look at the video right here: https://intercoin.org/
It even uses the same terms, such as "Power to the People". https://qbix.com/blog/index.php/2017/12/power-to-the-people/
I am glad that these challenges in crypto are finally being recognized and publicly written about at YC. Perhaps we should apply!
The DJIA and Bitcoin charts seem well correlated, at least over the past month: DJIA: https://www.marketwatch.com/investing/index/djia Bitcoin:https://bitcoincharts.com/charts/bitstampUSD#rg30ztgCzm1g10z...
In my opinion people treat it as they would any speculative asset.
If the coiners (what do you call this tribe?) accomplish "Permissionless Innovation" though, they will have did something great.
Bringing financial inclusion to the billions of unbaked it's the biggest unfulfilled promise of cryptocurrencies.
For it to work it must be engineered on the protocol level for this use case, I think Cardano is trying to solve this problem.
The store of value and savings part it's more or less easy to solve, the big problem is the lending without a stable coin it will be very difficult to implement, big Fiat currencies like the Dollar and the Euro have the powerful backing of a central bank and ultimately the collateralization of all the taxpayers as a protection against high volatility and black swan events, this will be very difficult to implement in crypto, MakerDAO is tring to do it but I don't see it working on a big scale.
Is there any evidence for this? Perhaps a statement from Satoshi that they were motivated to publish by the crisis?
On the scalability issue if you sacrifice the decentralization is theoretically possible for Bitcoin to process on-chain, Visa level of transactions and with current energy consumption levels or even less.
You would probably get 3 to 6 physical data center locations probably on the same continent connected with high-speed links with 1 Terabyte 10min blocks.
Here is their founder giving a presentation about it at the Decentralized AI Summit: https://www.youtube.com/watch?v=9QMgVsbHu98
It ties together things like the "Who owns the future" book by Jaron Lanier and AI/Bots/APIs for new economies.
I also recommend this article from Fred Ehrsam https://medium.com/@FEhrsam/blockchain-governance-programmin...
I've skimmed the SEC documents Reg A, Reg S, Reg D, Reg CF they are all nonsensical when it comes to raising capital with crypto.
Not surprising that an investor is seeing it as the future. Investing is regulated and libertarians often see bitcoin as a good thing.
The reality is that bitcoin is volatile, and nobody wants an economy that is built on instability.
"Easily" here seems like major exaggeration. If that were true, projects like Lightning wouldn't exist.
"keeping your investment safe is not simple"
Hmm...
- nobody can destroy or seize your coins unless they have your private keys
- keeping your private keys safe is not simple
"People are making a fortune buying government-seized bitcoins" http://www.businessinsider.com/bitcoin-price-government-auct...
The first and second point are inherently at odds with each other.
The first point concludes that we need simpler gatekeepers/service providers to make it easier for normal people to use the Asset class
The second point concludes that bitcoin makes it easier to be decentralized.
But I think these sections are the light weight part of the article. I think the other points raised are more material and impactful.
https://www.barrons.com/articles/the-bitcoin-consensus-yes-i...
This is not a good argument for cryptocurrency.
Just like a regular wallet attracts pickpockets, a Bitcoin wallet is a natural honeypot for hackers.
Just like a bank attracts bank robbers, a crypto exchange is a natural honeypot for hackers.
Really, the issue here is money. Money attracts thieves. The money is the honey, and the computer is the pot.
So far there's no evidence that cryptocurrency reduces theft, and quite a lot of evidence that it encourages theft.
On the other hand, plenty of crypto exchanges have been hacked.
How do we know Satoshi is a he?
