Please don’t auto downvote before reading.
A little bit ago some asked a question about why the hate of the blockchain, and that got me thinking if there even was a legitimate use case where the blockchain would be beneficial, but I couldn’t think of one outside maybe some sort of decentralized bank, but before I knew I was thinking it would instantly turn into some crypto scheme and strapped it, because crypto currencies are a scam on every level – and no they aren’t private or secret as some think either.
So I wanted to ask the community. Instead of using the blockchain for crypto, is there a better use where the blockchain could benefit society?
Let’s first state what the blockchain states it is:
Let’s say that you’re a user who wants to use the blockchain to manage something outside of the digital world with it. You create your product, and begin advertising it. No matter what this product is, it cannot affect the physical world. This means that immutability is a problem. The real world has mistakes. If a person sells their car, they need to hand over cash in the real world. How does that knowledge make it onto the chain? Same for a house, etc. Any object that has a transaction in the real world has to have an authority that manages whether that object has actually changed hands. So for the simplest use case, the chain has already failed.
Let’s talk about the next one: public. Nobody wants their transactions public. You don’t want votes to be public. The blockchain is not anonymous, no matter what anyone claims, because every record is tracked you can eventually deanonymize anyone if you wanted to. So this one is just a bald-faced lie and something not to be desired in any situation. The point here was to make it so that you can be decentralized and the public can be the ones to police others users of the chain, so let’s talk about how it’s fundamentally impossible for a chain to actually result in a decentralized world.
The blockchain is not actually decentralized. If you want to handle money in most countries on earth, you have regulatory bodies that govern everything about your operations. That means if you want to write an app like Shopify that someone can use to pay with bitcoin on a website, even if you are not selling something physical, you are still governed by a central body. Not only this, but once you want to sell something physical, you have to extract your money through a physical bank in the real world, which is also governed by the same regulatory bodies. This was immediately known as a problem in the early days of bitcoin and other cryptocurrencies, and it is still a problem today. This problem is not solvable as long as governments exist.
Funnily enough, each one of these elements does have use by itself! For example, distributed databases have been around for decades, and are the basis for much of the tech you use today. There are even immutable databases that are in use in many industries to keep an immutable record of what happened. AWS is sunsetting it now, but their QLDB was exactly that. CQRS with Event Sourcing is another implementation of the same idea. Finally, any government service or company could make records public if they want to. In fact many already do, for example home ownership records. If you own a house, that information is not private.
Putting something on the blockchain is no more than a move to make sure whomever owns that crypto gets more money out than they put in. If an actual use case existed for this tech, it would have been used decades ago when it was first invented (the blockchain was actually invented in the 80s by cryptographer David Chaum, decades before Satoshi invented Bitcoin and it was even discussed in Satoshi’s whitepaper).
I can talk for hours about how each element of the blockchain is just either a grift to extract money from others OR a cynical, incorrect outtake on how the real world functions. If you want that, let me know.
Nice explanation, thanks. I would read more.
Do you also have brief, pointed argument against crypto/blockchain that you use in casual conversation? The subject comes up fairly frequently and I know it’s all bullshit but I usually struggle to explain why. What key points would you make to people who might be starting to get seduced by the hype or who are already sucked in?
Not OP, but in my circles the simplest, strongest point I’ve found is that no cryptocurrency has a built-in mechanism for handling mistakes. People are using these systems, and people make mistakes. Without built in accommodations, you’re either
Either way, crypto is just more costly to use than traditional systems when you properly factor those risks. So the only people left using it are those who expect greater rewards to offset all that additional risk, which are just speculators and grifters.
This is a broad generalization that is easily refutable. Examples:
Frankly, you say you can talk for hours on the subject, but I don’t think that hours of thought has been given to the subject.