A centralized database can handle the escrow too, and far more efficiently. The only reason decentralized crypto solutions have a head start is that people who work in crypto tend not to care about what is legal.
Yet there is a key difference in trust - that a centralized actor (say, Kickstarter) will not mutate their private database, will not go under, and will not fail to meet its promises in how the funds are managed.
There is also an ease of use (for developers building these applications), particularly in terms of finances: say, an escrow that holds $1M worth of value and may need to return those funds to 100K donors across the globe should the fundraiser not meet its goals before a set deadline.
Trust works because of legal frameworks. You have to have the same trust that Ethereum won't do another fork, and you have to trust that the smart contract isn't fraudulent. In exactly the same way, the law is what keeps the average person from being fleeced.
A central database has far better ease of use for developers than a distributed ledger.
To some users and developers, the chain/contract is easier, less expensive, and simpler to trust and build upon than the equivalent legal and traditional financial structures on a global scale.
It is already disrupting the internet as we know it… NFTs, DAOs, trustless contracts, peer-to-peer payments w/o reliance on a central payment processors — these are all new concepts that the web hasn’t seen operating at a global scale, accessible with little more than a thin layer of JS and a browser extension.
Perhaps this disruption won’t last, or won’t succeed in replacing traditional systems, but obviously in 2021 it has succeeded in capturing a lot of interest & discussion (and a lot of $ value, too).
Hey Matt, I'm making my way through understanding this space and am struggling with the morality of it all, so I have a question for you: would you say that the trustless peer-to-peer world is a better future than today?
I'm asking given the realities of decentralized networks: it's currently slower, more expensive and harder to do transactions using peer to peer systems (and it's a bit tough to imagine it'll ever be as fast/simple/reliable as a centralized one because of the requirement to have consensus of nodes). And also given the realities of ETH contracts: they are agreements written in code (certainly mostly by people who don't have any background or formal education in writing laws or agreements, in comparison with lawyers)
Seems like we have very different interpretations and standards for “disruption”.
I don’t consider “everyone is talking about it” disruption. I want to see real world implementation that goes beyond “virtual asset value goes to the moon” to be convinced.
As I said in an earlier comment: It’s been almost 13 years since the first block has been mined on the Bitcoin blockchain and the positive impact on society/economy is pretty disappointing.
There is also an ease of use (for developers building these applications), particularly in terms of finances: say, an escrow that holds $1M worth of value and may need to return those funds to 100K donors across the globe should the fundraiser not meet its goals before a set deadline.