[p4bl0]

The only thing a blockchain can do is a cryptocurrency.

The cryptocurrency is the only application that works because transactions are performative writings on the blockchain: they define truth. Once it is written on a blockchain that Alice has transferred X tokens to Bob, it instantly becomes a fact by definition, so you can trust what is written on the blockchain.

In any other application, what's written on the blockchain concerns stuff that are external to it. And what's written can thus only be valid if an external (and necessarily trusted, whether you want it or not) third-party can enforce or make what's written on the blockchain to be true. This means that any other application cannot actually exists in the decentralized and fully adversarial setting that would require the use of a blockchain: there is always another, more simple, more elegant, more efficient solution that can be built on top of the trust that must exists somewhere to make things work.

Also, a blockchain needs its cryptocurrency to actually work because there has to be an incentive to participate in the consensus mechanism whether it is PoW ou PoS or other variants, and the incentive cannot be external to the blockchain otherwise you need to trust the third-party which controls it.

Blockchains and cryptocurrencies are basically the solution to their own problem, and to nothing else.

[tornato7]

Let’s forget any bridges to physical assets for a minute; cryptocurrencies, or more broadly scarce digital assets, have an unfathomably large TAM. More and more of our lives are being spent online instead of dealing with real world assets, giving increasing value to the GDP of digital assets over time. First, the entire financial system can and will be made digital, making every dollar you deal with every day a digital asset that can falls under blockchain TAM. Then, you have all online goods: virtual game items, ad space, Twitter handles, memberships, subscriptions, metaverse property, virtual conference tickets, certificates, domain names, hell it turns out people even want to trade JPEGs as scarce digital assets. There are probably things that I can’t even imagine today that will one day be tokenized digital assets that can be traded on blockchains.

Sure, plenty of the mentioned items can run more efficiently on a centralized database but the question then becomes, “whose centralized database?” Blockchain is the only solution that provides credibly neutral and publicly interoperable accounting of digital assets, which could one day be 50% of the world economy.

[p4bl0]

TAM? Maybe define uncommon acronym before using them. I cannot even find its expansion using Google.

> First, the entire financial system can and will be made digital

It already is.

> making every dollar you deal with every day a digital asset that can falls under blockchain

That is a very bold statement.

> Then, you have all online goods: (…)

Those all suffer from the exact same problem than physical assets, they exist and have a purpose outside the blockchain. You already have the oracle problem.

> credibly neutral and publicly interoperable accounting

This is again a very bold statement and facts disagree with you. Blockchains are not interoperable with one another and cannot be, for starters.

> which could one day be 50% of the world economy

This is pure wishful speculation on your part and is based on absolutely nothing.

-----

EDIT: I found "TAM"'s expansion: total addressable market.

[tornato7]

I'm not saying that all digital goods will be traded on blockchains, just that they could be, so they fall under the Total Addressable Market (not an uncommon acronym among yc folk at least).

Likewise, in-game items and other digital assets can exist in or outside of a blockchain. They can serve their original purpose when on-chain as well. I can expand on my point about interoperability:

Blockchains are not typically natively interoperable between them (exception might be rollups), but all assets on a blockchain are. If I create a video game and tokenize my items + currency, I suddenly open up a world of possibilities for users and developers to expand on whatever in-game functionality I can make with my limited team, like:

- Making items tradable on DEXs - Borrowing and lending services - New UIs and tracking tools - Clubs and clans that verify ownership - Derivatives and staking

In a world with tokenized assets, I could easily make a deal with a guy on the internet to let him stay in my decentraland property for 3 weeks in exchange for a ticket to a digital Marshmello concert - completely trustlessly and transactionally.

[nprateem]

Particl has created a decentralised anonymous marketplace that uses a smart contract to provide escrow between two untrusted parties.

There are bound to be other possible applications. Writing off an entire new tech because you can't think of them is just narrow minded and silly.

[Wertigoyr]

But that's the point he made. It's not Blockchain it's Blockchain + escrow.

Escrow needs a third party. It destroys all your Blockchain advantage.

[nprateem]

Escrow is handled on the blockchain with a smart contract. There are no trusted third parties.

https://academy.particl.io/en/latest/in-depth/indepth_escrow...

[Wertigoyr]

Sooo I write a smart contract and say you pay 10€ when you buy ice cream?

Who proofs that the smart contract is fulfilled?

Or let's asked different: how does a smart contract solves the trust issue from items not on the Blockchain?

[nprateem]

You obviously didn't bother reading the link. Both parties add collateral ideally equal to the item price: so the buyer pays 2x the price and the seller pays the list price and sends the item. If the buyer is happy they've received the right item without issue both click a button to release their collateral back to themselves and the buyer's money to the seller. If not they have to agree how much to release to each other since they both have skin in the game.

So in your example you can sell an ice cream for £10. When I buy it for that I pay £20 and you pay £10 and send the item. I eat it and we're both £20 down. So I want my £10 back and click a button. It then releases £20 back to you - the item price and your collateral, and my £10 collateral back to me.

[Wertigoyr]

I did read it but you are right my comment doesn't reflect it.

I always thought that this part of a smart contract is ridiculous as it binds the same amount of capital as the transaction is worth on both sides.

It also doesn't fix the issue if someone with much more money than you wants to f** you over.

It also does assume you would find a good solution together just because of the capital invested but you know there are plenty of people who are not able to negotiate proper.

It just doesn't solve the issue and it doesn't solve issues like if the shipment is lost on sea. Or it's getting stolen.

A independent 3th party actually helps solving those issues.

[paulryanrogers]

Aren't the authors of the smart contact a third party? Unless they're so simple a layperson can inspect, read, and understand them.

[nprateem]

It's like any open source project that can be inspected, and it's not in the interests of the project or stakers to screw users. There's testing on testnet to catch bugs

[FabHK]

aka the oracle problem. Indeed.