[acdha]

> I'm on the hype train

That’s the intellectual blind spot which is making this so hard to understand: you’re invested in the technology and want to see it succeed, which means you’re inclined to minimize every downside and boost every possible use without asking whether something is better in addition to being possible.

Being old enough to remember when the internet was starting to go mainstream, there were op-eds like that but they got plenty of pushback because there were so many new things which you could do on the internet which were either impossible, unaffordable, or too cumbersome before. Yes, a modem connection was too slow to play a movie but you could read newspapers around the world, send email to anyone and have it arrive in seconds, download software or photos instead of having to drive to the store, research and trade stocks, chat, etc. and there was a clear path for technological improvements making that experience better over time. The average person could easily see things they’d like to do and the costs were getting more approachable every year.

In contrast, we have a ton of blockchain hype without a single legal use which solves a problem normal people care about better than existing, well-tested technology. There’s a lot of “that’ll change once these fundamental design flaws are solved in a way we don’t yet know how to do” hype being peddled by people who stand to profit if everyone buys in but, as during the dotcom bubble, that should inspire more rather than less skepticism.

[notahacker]

I think the key thing is that even without understanding the technology most consumers could see "before I couldn't get access to this information/correspondence/map/ticket/catalogue/advice/news/opinion/porn and now I can" as an obvious life enhancement in a way which having anonymous miners as counterparties rather than the company providing the service and their bank isn't (not even if expressed in terms of a 3% fee reduction). Whereas with blockchain it seems like it's often the evangelists not understanding the consumers: to use examples from the article, I really care that flight delay information is easily available which is why the internet was much better than call centres but I really don't care whether it uses a distributed database or not and wouldn't fly with anyone I worried wouldn't honour the terms of my ticket. I care that ridesharing services have good availability, routing and safety, I really don't want them to be transparent about my location and payments to any interested party.

Now, there are many technologies which are very useful for certain use cases despite the consumer failing to grasp what's going on behind the scenes, from Java VMs to graph databases to torrents, but certain things tend to be true of them (i) they weren't as exciting opportunities as the internet even if billion dollar businesses were built on them (ii) the developers explaining why existing solutions were good enough if not more optimal in many respects were often right.

[acdha]

Exactly – during the 90s I heard from a ton of companies looking to get on the web. They needed help understanding the technology but in most cases there were clear benefits from making things easier to find, customize, etc.

I’ve seen the same trend for blockchain evangelists to have gone deep into that technology but have only a cursory understanding of the businesses they’re trying to enter. A great example is the retail purchase model which always comes up in Bitcoin discussions, which ignores the fact that most people think credit cards are just fine and like things such as fraud protection more than the hypothetical chance of a fractional overhead reduction. There might be room there but it’s an uphill fight and the value is capped at the lowest Visa, et al. are willing to drop their merchant fees to.

I think your comment about selling tech is also important because the model puts some unusual constraints on it: you can sell to developers by focusing on tech details but how many developers are paid to work on problems which require trustless distributed systems and low transaction volumes? Most big systems require the opposite.

[CryptoPunk]

>>In contrast, we have a ton of blockchain hype without a single legal use which solves a problem normal people care about better than existing, well-tested technology.

Maybe this is your blind spot? You assume it has to be legal to be useful.

But in any case, there are legal use cases that work today: sending money with very little friction, including no need to provide a trusted third party or the payee your personally identifiable information.

With Ethereum, we'll soon have social networks and markets that participants can trust will not have fees increased and terms changed once the platform has become dominant. So you can have monopolies without monopolists.

[acdha]

> Maybe this is your blind spot? You assume it has to be legal to be useful.

I'm looking at what it takes to go mainstream — if it's predominately used for illegal activity, that'll deter normal people and legitimate businesses from adopting it and increases the likelihood of government regulation. As a simple example, how many people would use a tumbler if that started being seen as probable cause for a money laundering investigation?

> But in any case, there are legal use cases that work today: sending money with very little friction and with no need to provide a trusted third party or the payee your personally identifiable information.

How many people care enough about removing the trusted third party that they will use this instead of Google Wallet, Square, Venmo, etc. (and, soon, Apple Pay)? Some people value that but it seems unlikely that it's enough to make up for the smaller network, processing delays, and exchange fees.

[lazerpants]

You're overlooking the millions (perhaps billions) of people on the planet who do not currently have access to Western banking infrastructure.

[davidgerard]

This is a common Bitcoin talking point, but it's not a good one.

There are over two billion people in the world who have no bank account or access to even basic financial services; “banking the unbanked” is much discussed in international development circles. Around 2013, Bitcoin advocates started claiming that Bitcoin could help with this problem.

Unfortunately:

* The actual problems that leave people unbanked are the bank being too far away, or bureaucratic barriers to setting up an account when you get there.

* Unless they use an exchange (which would functionally be a bank), they’d need an expensive computer and a reliable Internet connection to hold and update 120 gigabytes of blockchain.

* Bitcoin is way too volatile to be a reliable store of value.

* How do they convert it into local money they can spend?

* 7 transactions per second worldwide total means Bitcoin couldn’t cope with just the banked, let alone the unbanked as well.

* A centralised service similar to M-Pesa (a very popular Kenyan money transfer and finance service for mobile phones) might work, but M-Pesa exists, works and is trusted by its users – and goes a long way toward solving the problems with access to banking that Bitcoin claims to.

Advocates will nevertheless say “but what about the unbanked?” as if Bitcoin is an obvious slam-dunk answer to the problem and nothing else needs to be said. But no viable mechanism to achieve this has ever been put forward.

[acdha]

What subset of those people aren’t using a mobile-based banking system like Mpresa but do have the IT infrastructure to operate a cryptocurrency?

I’m all for helping spread modern infrastructure around but it seems like the current cryptocurrencies are taking on significant overhead to solve problems which aren’t pressing for very many people.

[prostoalex]

Those millions also need to be well-versed with modern security protocols to keep their cryptosavings from being stolen, and accept the fact that not only the transactions are irreversible (which I guess is okay, considering that neither are Western Union's or Moneygram's), but sending to non-existing null addresses does not return an error, so any typo, a garbled message or a man-in-the-middle attack is also irreversible.

[root_axis]

Those people often don't have access to reliable internet or electricity, bitcoin does not solve any of their problems. Further, bitcoin is not spendable money for 95% of human needs, especially in the aforementioned regions. Exchanging bitcoin for spendable money in person is risky, inconvenient and expensive. Bitcoin is a terrible option for this population.

[CryptoPunk]

>>As a simple example, how many people would use a tumbler if that started being seen as probable cause for a money laundering investigation?

Filesharing is arguably in this category and maybe shows that it's possible that something not generally used for legal purposes and not in the mainstream can nonetheless become widely used. But yes there is certainly a risk.

>Some people value that but it seems unlikely that it's enough to make up for the smaller network, processing delays, and exchange fees.

Right now cryptocurrency is in its infancy, so it has a lot of drawbacks, but it has obvious advantages that anyone can see, like being able to send money from your computer, without first registering with Google Wallet, Square, Venmo, etc, to anyone, anywhere in the world who also has the software installed on an internet connected device. This is a fundamental innovation in money transfer. You're right that it may not be enough to overcome the advantages that large trusted third parties can bring to make it go mainstream, but the advantages it has are obvious enough that people can see it potentially doing so.

[spookthesunset]

> Right now cryptocurrency is in its infancy.

Bitcoin is, what, ten years old. It predates the iPhone. I’d hardly call it still in its “infancy”

[CryptoPunk]

Distributed consensus through proof of work was new in many more ways than the iPhone was in 2007.

[acdha]

These things are always hard to judge but there's certainly plenty of prior art: there's a ton of CS history for distributed consensus, distributed attestation, etc. prior to 2007 and the proof of work concept goes back to at least the 90s – see e.g. http://www.hashcash.org or http://www.hashcash.org/papers/bread-pudding.pdf.

Anyone who spent time on cypherpunks-l in the 90s would also be familiar with the discussions of e-currencies like David Chaum's 1989 digicash (https://en.wikipedia.org/wiki/DigiCash) which did not use proof-of-work but did cover a lot of the same ground for anonymity, etc.