Trying to think about what's going on with blockchain

[andrewducker]

I've not linked to a few things that have happened with Cryptocurrency/blockchain stuff recently. Mostly because every time I think about it, my brain slides off of the sheer stupidity and insists I think about something else instead.

The most recent idiocy is these people buying a book (for vastly more than it was valued at), with the intention of doing things with it that copyright law absolutely law will not let them do.

In discussion about this there was a mention of this presentation where *you* can pay large sums of money to live on an island with a bunch of Crypto enthusiasts. For those people who don't fancy watching 18 minutes of car-crash there's a writeup in this thread.

This also led me to "Web 3 is going great", a collection of the scams, bugs, and epic failures occurring in the wonderful world of blockchain.

I'm not as massive a sceptic about blockchain as some people are. I can see the idea of "A write-only database that isn't controlled by any one party" being one with plausible uses. But so far those uses aren't manifesting themselves beyond Bitcoin being plausibly useable to buy things when the transaction cost isn't ridiculously high (Currently about $1.67). And the idea that digital contracts enforced by "The Network" are going to work well doesn't fill me with confidence. Pretty much every non-trivial piece of software has a bug in it. Which is annoying when said software is used to write blog posts, or watch videos, but clearly hideously awful when that software is used to transfer money about.

Add on the fact that there's no legal liability most of the time, and no non-digital contract, and anyone who gets scammed is going to have a hell of a job ever getting their money back. You can quibble all you like about financial regulation, and whether there's too much, too little, and who it protects, but chances are that if someone hacks a piece of software and drains your bank account you'll be covered for it. So unless you're near-terminally naive you'll generally want an actual legal contract on top of the "digital ownership" that you have. But as very few people actually have an understanding of what that digital ownership actually entails, and what rights you actually have based on it, it's mostly ending up as a playground for scammers.

And this isn't even mentioning the scaling issues, or the environmental cost, or other issues which might be fixable by tweaking the technology. This is just thinking about the stuff which is baked in.

So, yeah, I'm not generally linking to the stupidity of the day. There's way too much of it, and I Just Can't Even.

Thank you to danieldwilliam for prompting this, and getting me to actually write down my thoughts on it.

Comments

[danieldwilliam]

I once saw someone remark that for many applications blockchain was perhaps the second or third best tool but that the best tool for each individual application was significantly better. I lack the technical know-how to tell if that's true or not but it seems to fit with the pattern of adoption of blockchain I've seen - which has been patchy.

[andrewducker]

Yeah. This is a pretty good flowchart, highlighting that unless you have a very specific set of needs that you really don't need blockchain:

[armiphlage]

I wish I had this when one of the engineering managers was trying to move our manufacturing instructions into blockchain.

[mellowtigger]

The shortest summary of blockchain's potential seems to be, "It's a useful tool when you distrust at least one of the actors within your system. In any other case, a specialized application is the better choice."

[cellio]

That sounds like a very good summary, thanks!

[rhythmaning]

I may have shared the promo video for CryptoLand, which sounds like my idea of hell. I'm hoping all the cryptonuts will go there and never, ever leave. Lord of the Files.

The book-buying, IP-ignorant fools deserve to get burnt.

My main objection to blockchain, though, is the environmental impact. It is bonkers. End-times capitalism, perhaps. And bitcoin just seems like a crazy pyramid scheme, waiting to collapse.

[andrewducker]

The environmental impact of Ethereum will be vastly improved by Proof Of Stake, which is supposed to happen in Q2 this year.

If that works successfully I'd expect others to follow, including Bitcoin. As the environmental impact is obviously a huge issue.

[fanf]

Isn’t proof-of-stake just a perpetual jam-tomorrow distraction that they use whenever anyone complains about proof-of-waste? It has been 6 months in the future for years, so it isn’t a credible response any more.

[andrewducker]

I didn't think it had been this close before. But I haven't been paying *that* much attention before. Certainly it seems to be taking a long time to get here!

[hilarita]

every time I think about it, my brain slides off of the sheer stupidity and insists I think about something else instead
Mine too. I have this persistent belief that people can't be that stupid, and my brain just refuses to retain the details that yes they bloody are.

A write-only database that isn't controlled by any one party
That also requires some careful design. IIRC, if someone has made more than 51% of the writes to the blockchain, they can control the blockchain, so...

And I, like fanf, am sceptical of proof-of-stake, because AFAICT there's just a white paper by Ethereum, and nothing concrete. That might reduce the environmental concerns, but not the regulatory concerns.

[problemsdog]

Obviously there's a lot of information that one doesn't want recorded indelibly in a publicly-accessible place (or at all): official secrets, private personal details, illegal images, copyrighted material, and so on.

I don't know much about blockchain but I don't see what prevents any of the above making its way into it. What would happen in such a case? Has it already happened?

[andrewducker]

Many times
https://www.schneier.com/blog/archives/2021/03/illegal-content-and-the-blockchain.html

[toothycat]

My standard response to any discussion of blockchain is - there is no real world problem that blockchain solves which:

• is legal to solve
• is moral to solve
• does not have an existing traditional solution which is better

[andrewducker]

The major problem, to me, is where Visa/Mastercard block access to services, because they're terribly prudish. I hope that changes.

(A more minor one is where there's something which is illegal, but I don't find immoral.)

[jducoeur]

IIRC, The Economist had a short piece a little while ago that boiled down to (paraphrasing -- they are rarely this snarky), "Of course 'crypto' is a ridiculous bubble. The only thing that isn't clear is whether it is recapitulating The Property Bubble (which would be Very Bad for the world economy) or the Dotcom Bubble (which would just result in a lot of dumb people losing a lot of money)."

Far as I can tell, it's a lot more like the Dotcom disaster. Much like that, some smart people came up with a clever piece of technology that is fairly useful -- which then got hijacked by a lot of con artists selling snake oil through breathless marketing pitches.

And much like the Dotcom Boom, there is a part of me that regrets that all of this foolishness is such obvious BS that I haven't been able to bring myself to invest in it on the way up (when there really was a lot of money to be made, as there always is in a pyramid scheme), because I know that it's all going to end in tears.

That said -- I suspect there is enough of a kernel of a good idea here that blockchain as a technological concept has legs in the long term. It is just most of the current applications of it that will be long gone in a decade or so.

(Really, my only regret in this mess is that AFAIK a lot of these blockchain companies are using Scala, and when they all crash and burn it may hurt the adoption of the language simply through the blowback.)

[andrewducker]

I shall hope that some day a use comes along that's not currency based!