I am absolutely baffled by how much negative criticism the whole blockchain industry gets here and I would like to understand the reasoning behind it. Most of the arguments fall into these following buckets concluding to "IT MUST DIE"
1. The whole crypto is a get rich quick scheme with predatory practices everywhere. It's a wild wild west with no sort of regulations. Well, guess what, regulated industry is no different either. If people wants to commit crime, they will commit crime. The whole pyramid and MLM schemes have originated from traditional routes. it's nothing new. And regarding fraud, Did everyone actually forgot about Enron, Bernie Madoff and of course 2008 financial crisis where the almight SEC played a key role handing over billions and billions to these investment banks who knowingly committed fraud and pushed some of the pension funds into bankruptcy and pushed the whole world into recession. What's this fascination towards the old methods even though they repeatedly showed us that they are inadequate
2. I haven't seen a single use case of blockchain in the world yet. This is a valid critic and I do understand. Any decent distributed system engineer will understand that decentralisation is hard. consensus is hard. You know what was hard for almost 25 - 30 years and everyone's losing their shit right now and drinking the cool-aid? The good old AI. No one cared about neural networks until the compute caught upto speed.
Like it or not, we are entering a new phase in the technology where two things will definitely rise to prominence
1. Data is / will become the most essential commodity and I am terrified by the idea that few monopolies with their "don't be evil" facade will control them and become trillion dollar firms. We need to switch the model and reimagine how the internet should work. If anyone calls this paranoid,I am happy to place a bet that in ten years, if nothing is done, we will be living through orwellian future
2. A massive decoupling from US economy. I wonder what people call US economy if they call crypto pyramid scheme. Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy
When you think hard about 1&2 and come up with solutions, congratulations, you just reinvented the blockchain. If not, I am happy to hear how would you solve. In a nutshell, for god's sake , try to understand the reasoning and motivation behind why new ideas originate, gather a community and attract smart people to work on them
Blockchains are unnecessary in a world with trusted entities and functional legal frameworks. In places that require a blockchain, you're still going to be at the whim of whomever has a monopoly on force. Sure, your key passphrase may be in your head. You'll end up getting beat with a rubber hose. It was never your crypto so long as someone has the guns (wrt "Not your keys, not your crypto").
> A massive decoupling from US economy. I wonder what people call US economy if they call crypto pyramid scheme. Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy
US Treasuries would like a word (they are the safest financial asset in the world, "full faith and credit"). There is no safer capital market than the US. Sure, there will be some de-dollarization, but that won't fix a rapidly aging China, a "teetering near the cliff" Russia, a Central and South America that is slow steady state, etc. And Africa? Very young still but a hard sell for investing.
> Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy
Debt backed by future productivity, but also debt that can also always take a haircut during legal proceedings. Laws and courts > smart contracts, broadly speaking.
> Blockchains are unnecessary in a world with trusted entities and functional legal frameworks.
This is also an argument against end-to-end encryption and against federated protocols. The reality is that we, in fact, do not have and have never managed to maintain trusted entities and functional legal frameworks for much else... why do you think this is so different?
> Blockchains are unnecessary in a world with trusted entities and functional legal frameworks.
This is such bullshit. In practice the banking system is a messed up piece of old crap.
Let me illustrate my point from my experience a few weeks ago: Had to transfer 20 euro's from my account to my sons account, same European bank. In fact, my sons account is also under my supervision. It was on a Saturday, so guess what: no transfers in the weekend! Had to wait until Monday for the money to go through. Yeah, if Monday was a Holiday, we had to wait until Tuesday.
Is that the efficiency your "trusted entities" can come up with? Don't get me started on "instant cross border transfers". If a well known bank can't handle 20 euro's from one account to another, then what do you expect cross-bank, cross-border does?
In contrast, look at the Nano cryptocurrency: 0 fees, sub second transfers, any amount, anywhere in the world.
Your theory of "trusted entities" all sounds nice, but in practice it's old bureaucratic bullshit. Thanks to blockchain the technology has a solution. Only now is still proper adoption.
Filecoin is probably one of the best examples of a decentralized storage rewarded via crypto. There's also several Defi lending platforms that have helped students paying off debt, although I don't know enough about which networks are the best there.
No. If people are seeding a file that you care about on bittorent today, there's really no mechanism to ensure that it will be available tomorrow besides seeding it yourself.
> 1. ... Well, guess what, regulated industry is no different either.
I disagree, I think the systematic failures and fraud in the crypto industry is much more common than the regulated industry. Madoff is an outlier, not an expectation, and the majority of funds were retrieved. How's that looking for crypto?
As for 2008, my bet is that if crypto was being widely used for mortgage lending at that time, it would have been just as bad as banks. I don't see anything about crypto that would be making safer mortgage loan. In fact, what I see in crypto is very risky loans.
> 2. ... Use case..
I still don't see a convincing use case there.
> 1. Data ... essential commodity ... We need to switch the model and reimagine how the internet should work... bet that in ten years, if nothing is done, we will be living through orwellian future
I don't think banks/brokers are big controllers of data. I am more optimistic and would prefer to use Fidelity or Schwab than defi.
> 2. I wonder what people call US economy if they call crypto pyramid scheme.
I'm not really going to address this deeply, this is really a political view -- that I don't agree with. For decades folks have said the US will implode. When I look around, the US is where I want to put my investments.
Crypto solves a very specific problem; how to have a public ledger when none of the participants can trust each other and dishonest behavior is naturally incentivized.
But every defense is about how crypto will purchase this moral good of decentralization or freedom from the US economy, in some unclear and unspecified fashion.
There also seems to be an unresolve-able tension between the premise of an immutable ledger and human nature as seen through the various mechanisms to undo mistakes (ie regaining access to an account, reversing charges for a variety of reasona). That capability sort of requires trust and centralization.
> When you think hard about 1&2 and come up with solutions, congratulations, you just reinvented the blockchain. If not, I am happy to hear how would you solve.
Well, I've been thinking about it some, and I don't see how blockchain is even a solution to #1 in the first place, much less presumably the only solution. For data collection concerns, the most natural solution is of course to simply see that data is never collected in the first place, and this can happen via legal means (e.g., GDPR) or technological means (don't include unnecessary sensors).
For those that haven't looked at crypto lately and still think there are few uses, take a look at this: https://thevalueprop.io/
Cryptocurrency is a bad term, they actually make for terrible currencies, but many think they only have value when you can buy coffee with them because of the name.
What they are good at is making finance, ownership, and coordination, especially internationally, much more efficient. Which is far more niche and why the actual usage is rarely covered in mainstream media.
1. The whole crypto is a get rich quick scheme with predatory practices everywhere. It's a wild wild west with no sort of regulations. Well, guess what, regulated industry is no different either. If people wants to commit crime, they will commit crime. The whole pyramid and MLM schemes have originated from traditional routes. it's nothing new. And regarding fraud, Did everyone actually forgot about Enron, Bernie Madoff and of course 2008 financial crisis where the almight SEC played a key role handing over billions and billions to these investment banks who knowingly committed fraud and pushed some of the pension funds into bankruptcy and pushed the whole world into recession. What's this fascination towards the old methods even though they repeatedly showed us that they are inadequate
2. I haven't seen a single use case of blockchain in the world yet. This is a valid critic and I do understand. Any decent distributed system engineer will understand that decentralisation is hard. consensus is hard. You know what was hard for almost 25 - 30 years and everyone's losing their shit right now and drinking the cool-aid? The good old AI. No one cared about neural networks until the compute caught upto speed.
Like it or not, we are entering a new phase in the technology where two things will definitely rise to prominence
1. Data is / will become the most essential commodity and I am terrified by the idea that few monopolies with their "don't be evil" facade will control them and become trillion dollar firms. We need to switch the model and reimagine how the internet should work. If anyone calls this paranoid,I am happy to place a bet that in ten years, if nothing is done, we will be living through orwellian future
2. A massive decoupling from US economy. I wonder what people call US economy if they call crypto pyramid scheme. Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy
When you think hard about 1&2 and come up with solutions, congratulations, you just reinvented the blockchain. If not, I am happy to hear how would you solve. In a nutshell, for god's sake , try to understand the reasoning and motivation behind why new ideas originate, gather a community and attract smart people to work on them