[leishman]

"We do have a lot of interest in blockchain, the technology behind cryptocurrencies. We believe its application to a number of other uses besides crypto will make capital markets more efficient, and we’ve been actively involved in research to use blockchain technology."

The exact opposite is true. Blockchain "technology" is useless beyond its ability to enable Bitcoin - a monetary innovation. Using it for anything other than that is simply trying to find a problem for a solution. Crypto beyond Bitcoin is also largely useless beyond serving as a democratized casino.

[oellegaard]

While I personally don’t believe in Bitcoin or any other crypto currency, I couldn’t stop laughing about your comment on the blockchain.

I have met so many people obsessed with building things on top of the blockchain and when you ask them what it is they need it is essentially a database and they don’t want it to be public. Fortunately the recent years this has been a decreasing trend. Only now a days the requests are to replace developers with 10x AI agents.

[matwood]

Yeah. The reality is that we enter into very few zero trust transactions. I don’t need a blockchain to guarantee things when the law and contracts have handled that fine for a very long time.

[everfree]

Possession is 9/10 of the law. A guarantee of possession gives you that 9/10. A legal contract leaves you calling a lawyer to grasp at the other 1/10, if it's even worth it for the financial value of your contract.

In short, the legal system is pretty useless in enforcing any broken contract that's worth less than a few thousand dollars, especially one of any complexity.

And as an aside, I feel like I enter into low-trust transactions all the time. Don't you?

* I don't trust people who sell products to me online. I've gotten bad product many times. But I need to be able to buy from independent sellers online.

* On a related note, I don't trust half the websites I put my credit card info into. But it's an important part of sending money over the internet.

* I don't trust my ride share drivers or short-term-rental hosts. I could do without short-term-rentals by only staying at trusted hotels, but I can't really do without ride shares.

* When I trade a stock with some random counterparty, I don't trust them to actually deliver the stock to me at T+1. But I need to be able to trade stocks with whoever else can give me the best price.

The typical solution is to have a corporation step in to act as judge and jury for contract breaches that are too small to be worth bringing to court (brokerages, credit card companies, Amazon, PayPal, AirBnB, Uber). In fact, these companies' main value creation has come from adding a layer of trust to traditionally zero-trust transactions. Thus, these zero-trust transactions have been able to thrive while the dispute resolution corporation charges fees for their value-added trust.

The only reason these roles traditionally have to be performed by companies is that autonomous money-custodying software did not exist. But programmable blockchains now allow for this. You could easily imagine a dispute-resolution alternative to PayPal where the organizational structure is a piece of autonomous software directly employing people/AI, rather than a traditional corporate entity.

[cryptoegorophy]

No, the idea is anonymity. How can you trust the contract between you and some user across the world? Yes, crypto solves it. Law won’t help when someone tries to scam you across the world, at least in majority of cases.

[JTyQZSnP3cQGa8B]

> between you and some user across the world? Yes, crypto solves it

Crypto solves a problem that less than 0.1% of the world have. It's not very useful. Local laws and regulations are way more effective for me.

[2OEH8eoCRo0]

A friend who in cybercrime talks weekly about scammers using Bitcoin ATMs and there being no way to get it back compared to traditional banking where he regularly gets victims their money back.

[matwood]

> Yes, crypto solves it.

The vast majority of scams are run through crypto now. In fact, crypto is a step backwards and makes it easier to scam people.

[everfree]

Crypto lets you engage in any contract you and your counterparty can codify. The reason that so many scams are run through crypto is because the vast majority of people either don't use smart contracts (in which case you're just sending your money to someone and praying), or if they do, they don't read or understand the smart contracts they're using.

The solution to this is maturity. The endgame is to be able to create smart contracts that are as readable to a layperson, if not more readable, than legal contracts. And to come up with a set of standard smart contract templates vetted by programmers, just as today we have a set of standard legal contract templates vetted by lawyers.

That, and encouraging people to actually read what they sign, whether it's a pen-and-paper signature or a cryptographic signature.

[JTyQZSnP3cQGa8B]

> they don't read or understand the smart contracts they're using

I'll tell my parents to learn JavaScript or Rust to make sure that there is no bug in the smart contracts they are signing.

[robjeiter]

Fully disagree. Tokenization enables better financial markets. Bitcoin is the useless asset since it's proven that productive assets (think stocks) are better store of values than unproductive ones (think gold). Ethereum in that sense is productive because you can stake it for a yield and collaterize it natively to borrow against it and you can tokenize anything on top of it.

[leishman]

If tokenization requires a trusted party to issue the tokens (think stocks) then no blockchain is needed

[wslh]

There's an intermediary scenario to consider: when multiple trusted parties are involved. This is basic computer science, and software engineering: crash and byzantine fault-tolerant systems.

On a related note, blockchains often obscure the true consensus mechanism behind layers of complex jargon. Upon closer inspection, consensus is still built on trusted parties, just not the same ones typically found in the traditional economy. In Bitcoin, for example, you not only have the relatively few powerful miners but also the Bitcoin Core developers, who wield significant influence over which changes are incorporated into the Bitcoin node. For example, enabling the OP_CAT opcode again [1][2].

[1] https://www.reddit.com/r/CryptoTechnology/comments/19bik6z/u...

[2] https://www.reddit.com/r/Bitcoin/comments/19adyi0/should_op_...

[kinakomochidayo]

There’s also ASIC manufacturing monopoly

[kinakomochidayo]

Then that means stablecoins aren’t needed.

And yet, reality disagrees with your logic and stablecoins are on track to be used even more.

Tokenization on Ethereum will end up being way more important and useful than pet rock Bitcoin.

[hocuspocus]

The most popular stablecoins aren't trustless, proving the parent's point.

[kinakomochidayo]

Parent's point is weak - it's not possible right now for people around the world to hold fiat/stocks in their own centralized, custodial wallets due to stringent KYC/AML, and blockchains currently fill that need for stablecoins, and will fill that need for tokenized stocks, treasuries, etc.

[hocuspocus]

And again, nobody needs blockchains to tokenize centrally issued securities.

[hocuspocus]

Why would you need a blockchain for tokenization?

[oa335]

> Bitcoin is the useless asset since it's proven that productive assets (think stocks) are better store of values than unproductive ones (think gold).

This has hardly been proven. Gold has been recognized as source of value across several millennia and multiple cultures. I would bet that 1000 years from now gold will still have value, whereas stocks are only valuable in as much as the rights that they represent can be enforced by a court and implicitly the state backing it.

[EVa5I7bHFq9mnYK]

We are <one mile-sized asteroid made of gold> away from gold losing all its value. One such asteroid has been discovered already. It's called 16 Psyche, 140 miles in diameter and made largely of gold and other precious metals. To compare, all gold ever mined on Earth fits into a 22-meter cube.

[oa335]

We are one government/imperial collapse from US stocks losing all value. Historically which is more likely to happen?

[EVa5I7bHFq9mnYK]

Both are more likely to happen than Bitcoin being cracked.

[lolc]

How are you so certain about the composition of 16 Psyche?

[EVa5I7bHFq9mnYK]

NASA was confident enough to send a rocket towards it, it is scheduled to reach 16 Psyche in 2029.

[ghoshbishakh]

I would not say useless. But blockchain has very limited use outside cryptocurrencies. Although, some of the innovations that happened around blockchains are useful in many other scenarios.

P.S. I do have a Ph.D. in trying to fit blockchain for other use cases.

[Calavar]

What are some good noncrypto uses of blockchains that you've seen?

[latchkey]

Timestamping (which is actually what bitcoin is). For better or worse, this is one commercial application of it: https://guardtime.com/platform

[cypherpunks01]

Guatemalan dev Rafael Cordon made a project called Simple Proof that leverages OpenTimestamps for election security.

It was used in the Guatemalan 2023 elections to timestamp tally sheets in different election districts around the country, so they can't be manipulated at a later time.

[latchkey]

Timestamp.com is owned by a buddy of mine. Long before blockchain, we tried to build a company around being an SMTP relay and a special HP PCIe card that took the GPS signal as its source. The card was special because it was encased in glass and an inert gas, which could sense if it was tampered with. Ahh... the good old days.

[delfinom]

....or, you just use the same timestamp mechanism available for code signing. Aka you ask a CA to issue a signed timestamp against a content hash and while you are at it, you can get multiple CAs in it.

[joshlemer]

The fact that there are other ways to work around previous limitations to accomplish something doesn't render the use-case invalid. The GP was asking for a usecase outside of currency and one was provided. If a valid use-case for electricity was asked, and someone described a lightbulb, you could just as well say "...or, you could just use an oil lamp"

[halfcat]

The problem with any privately run, or centrally controlled blockchain, is that it’s difficult as the operator of the blockchain to demonstrate to a third party that the blockchain hasn’t been tampered with.

If I run a blockchain that I, or my business, has full control of, and I show you as a form of “proof”, you shouldn’t believe me. A time stamped Twitter post would hold more weight.

The power of, say, the bitcoin blockchain, is in the fact that it’s widely distributed and publicly verifiable by anyone, and due to the size of the network it is prohibitively expensive to tamper with.

[everfree]

My favorite example is Ethereum Name Service (ENS).

Instead of a patchwork of DNS servers that can go down, registrars that go through enshittification cycles, and complicated ownership/transfer rules that vary based on country and TLD, ENS presents a single unified database that runs on signed message broadcasts.

To change an ENS entry, you just sign a message and broadcast it anywhere. No need to interface with a registrar. The global resolver gets updated seconds later.

It reduces an incredibly complex system of registries and registrars, authoritative and recursive resolvers, domain transfers - it distills it down to a system of just sending signed messages to update a single global name database that gets replicated to everyone who cares to have a copy.

[hocuspocus]

Clearly, digital ownership for something that truly lives on the blockchain and not outside is an obvious use case. But it also illustrates that blockchains are pretty useless beyond that.

I also wonder how the long-term monetary incentives work for a truly trustless domain name scheme. Having a quick look at https://app.ens.domains this doesn't seem terribly cheaper than a traditional registrar.

[cyberax]

> To change an ENS entry, you just sign a message and broadcast it anywhere. No need to interface with a registrar. The global resolver gets updated seconds later.

Yeah. And if your domain name keys are stolen or lost, they're gone. Forever. Or held for ransom. That's a huge reason why people are not rushing to use blockchain-based DNS.

[everfree]

Have you ever had a domain name stolen? They're also gone forever in most cases. There is no standard recovery path once a domain leaves the hands of your registrar. You might as well be trying to reverse an international wire transfer.

ENS is not worse in this respect than DNS. The DNS solution is for your registrar to require 2FA to protect your name from being transferred out in the first place. The ENS solution is for your custodian to... require 2FA to protect your name from being transferred out in the first place.

The difference is that anyone has the option to custody their own domain name if they want to - entrusting a third party is not a necessity.

Edit: Additionally, ENS gives you the equivalent of DNSSEC for free. So no need for certificate authorities, which represent DNS' reliance on cryptographic keys that would be catstrophic if stolen anyways.

[cyberax]

> Have you ever had a domain name stolen? They're also gone forever in most cases.

If it's a high-value domain, you call the registrar and get it back. Worst case, you can sue the thief if you hold a trademark for the name.

> There is no standard recovery path once a domain leaves the hands of your registrar.

There is. It's called "a lawsuit".

[scyclow]

You can always hold the ENS in a multisig wallet, or hold it in a smart contract with whatever arbitrary custom logic you want.

[losteric]

This comment is peculiar - among technologists, for years the common refrain I’ve heard is “Bitcoin makes no sense but the underlying block chain ideas are very useful”.

Of course the combination of signed transactions, common visible ledgers, introducing computational challenges to forgery, resiliency through consensus (kinda)… all the bits and pieces can be remixed into really interesting ideas.

Bitcoin, I still don’t get. More public, slower, more expensive, no fundamental utility, and still subject to nation-state interference?

[leishman]

> This comment is peculiar - among technologists, for years the common refrain I’ve heard is “Bitcoin makes no sense but the underlying block chain ideas are very useful”.

That's because they have no idea what they're talking about. At a certain point you have to ask yourself why Bitcoin is worth $2T and no enterprise blockchain has ever taken off. How many years more of this trend is required to prove the "technologists" are wrong? It's already been 16 years.

And while I don't believe in appeal to authority, it's worth mentioning that I have been working in this field for pretty much my entire career and TA'd the first Stanford CS course on blockchains and crypto currencies in 2015. I very much know what I'm talking about and the people at Vanguard are blindly parroting what Deloitte and McKinsey are telling them about "blockchain".

[npoc]

It's all down to how money is issued. The tokens we have to work for are created effortless by bankers from nothing whenever they issue a loan, and then they charge interest on them. This value of the new tokens they create is sucked out of the ones in your bank account, pension etc. It's theft and it's about 7% year.

Gold didn't have this problem because it's issued through proof of work - you have to put in N kgs of gold worth of work to mine N kgs of gold. But it's a rock and in today's world we need a digital form.

[SteveNuts]

I’ve always wondered why there isn’t a general purpose blockchain ledger for businesses. It seems like it would make auditing simple since all of the entries would be cryptographically guaranteed to not be manipulated.

[leishman]

There is a general purpose ledger for business. It's called a SQL database

[andirk]

SQL database is mutable, right? One of the biggest features of blockchain tech is that it's almost completely immutable. Something happens and it happens forever and ever.

[dragontamer]

And legally backed by WORM media: write once read many.

[everfree]

The major problem is that private solutions (like consortium chains) offer privacy but no standardized interoperability or neutral root of trust, and public solutions (like Ethereum blobs) offer interoperability and neutrality but no inbuilt privacy.

I believe this will change either when consortium chains figure out the interoperability problem (so they can bridge seamlessly with public chains) or public chains figure out the privacy problem (allowing consensus over entirely private transaction zones).

To me it seems like the latter is more likely than the former. We've finally got both featureful/performant Ethereum roll-ups and private Ethereum roll-ups. Now the trick is to combine all those properties and bundle them into a business ledger that's high-performance, with customizable privacy zones, with consensus and data availability provided by a credibly neutral setup such as the Ethereum validator set.

This seems to be the direction some firms are going, for example Ernst & Young with their Nightfall product, and more recently their OpsChain Contract Manager to try to bring it to enterprise customers.

[Zanfa]

It would only ensure entries haven't been manipulated after the fact, but not whether they were valid in the first place or if they reflect reality.

[duskwuff]

Bingo. If the human principals of a business are committed to cooking the books, no amount of technology can force them to be honest.

[everfree]

Auditing isn't typically about forcing people to be honest, it's about discovering when people haven't been honest and being able to attribute the fault to a specific bad actor.

[hocuspocus]

Append only, immutable and signed ledgers do exist actually.

[Analemma_]

Actual businesses don’t need any trustless, decentralized storage solution, because they already heavily rely on the state monopoly on violence and state recognization of the “business” as an entity in order to function. They gain nothing from using a blockchain ledger instead of a trusted source enforced by laws and contracts.

[rvnx]

By using a blockchain ledger, you move source of truth to a private group of people who are the best at leveraging money to buy ASICs/GPUs and run the technical infrastructure.

Ironically, where you had 1 person = 1 vote (democracy), now this system favors the ultra-rich.

And it is presented as decentralized / free, but in reality, control is in the handful of very rich people.

No surprise that Trump, Musk and others are promoting it.

[everfree]

Of all blockchains that have any current relevance, only Bitcoin runs on ASIC/GPU - all the rest are staked rather than mined.

[Almondsetat]

Guaranteed by what mechanism? This is the fundamental problem.

[plsbenice34]

>"cryptographically guaranteed to not be manipulated."

That is only achieved with bitcoin because of a security model that has financial value to the blocks, and a distributed system of nodes and financially-invested miners. As soon as you remove the valuable digital token from the system it all falls apart; people could just rewrite the blocks and back-date the timestamps. It's like a machine that needs all of the parts to make sense.

[zdw]

This assumes ideal, perfect data entry before reaching the ledger, and having immutable history doesn't prevent historical errors.

[greggyb]

It really doesn't traditional accounting is built around the use of an immutable ledger. Historical errors are fixed with correction entries. There is also a multidimensional conception of time to support this. We capture both the date the entry is made in the ledger and also the real world date it is meant to apply to.

So if you overstate something in December 2024, you can enter a correcting transaction today for that.

The first, erroneous entry has both it's accounting and business dates in December 2024.

The second entry, correcting the first is made today and so has an accounting date of today and a business date of December 2024.

[tim333]

>seems like it would make auditing simple since all of the entries would be cryptographically guaranteed to not be manipulated

Just because you write that you own 5 million litres of olive oil or what have you on a chain doesn't prove you actually have it.

[miohtama]

There was BigChainDB that tried to combine blockchains with SQL database, but it failed as it was too early.

The trick is that it must be triple accounting and the counterparty needs to share the ledger, which cannot be done without PK.

[mutatio]

I've worked on such a platform: Hyperledger from IBM et al. It was generic enough we could deploy our own "smart contract" / business logic layer via a Lisp dialect built in Go.

[nradov]

How would it make auditing simple? Auditors would still have to go out and count things to verify that the blockchain contents match assets and liabilities in the real world.

[pintxo]

It’s just not an actual problem for most businesses.

[quercusa]

Wasn't that AWS Quantum Ledger, which is closing down at the end of July?

[dboreham]

Thought experiment: if you were tasked with creating an eventually consistent distributed database where the nodes were to be run by different organizations that didn't trust each other, with predefined validity constraints on the data of some sort, and a scheme for incentivizing the operators of said database to keep operating it long term, how would you propose doing that?

Hint: if you look at similar systems such as those used for certificate transparency logs, they look quite like...a blockchain.

[axlee]

Thus, a problem in search of a solution. Who has asked for that exactly ?`It's been more than a decade and still no one has found an actually useful real-world application for blockchain besides gambling and money laundering.

[agumonkey]

I'm just a newb passing, but a self sustained decentralized 24/7 logic+network layer could be nice for stupid computational tasks like tracking physical items or updating multi-source (different services, different companies) data easily, which are often done at the human level today (even if 99% of the time it's not necessary and very wasteful). Again i'm not knowledgeable but when thinking of blockchains, I always have this in mind.

[Jasper_]

It can't track physical items, because you can always just lie about the data. Company A says "I put the jewels in box 1352", and Company B opens the box to receive a bunch of dish towels. Just because it's cryptographically verified, doesn't mean it has any semantic value.

If Company A and B already trust each other not to put bad data on the chain, then they also trust each other to just send emails back and forth, and you don't need a cryptographically verified blockchain. It secures the least important part of the process.

[agumonkey]

But how would you do that with ~all companies ? it would be standardization and heterogeneity hell.

[Jasper_]

Why would the addition of blockchains help standardize things?

[cyberax]

IBM tried to do that (asset tracking for marine shipping) with some rather neat technology.

It sank like Titanic. Nobody was interested in it, turns out that companies are fine with emailing each other Excel sheets.

[agumonkey]

Yeah I think i remember stories about that, that said, a failed attempt doesn't mean future will not be different (nobody seeing programming languages evolution as comparison point). Neither will it means that a decentralized event chain store is the solution.. just saying it kinda felt like an interesting "small logic global network application layer" .. which felt way more efficient than the litany of different b2b apps.

[oellegaard]

Now that’s the 1m dollar question. Virtually no one

[Analemma_]

Sure, but that’s not a thing any actual business needs, except in rare, esoteric situations. For all actual business purposes, a centralized database is better fit for purpose (note that pretty much all finance runs, eventually, on centralized databases like the Fed’s ACH system and the Depository Trust Company. It’s fine.)

[Almondsetat]

You cannot reply with a thought experiment to someone asking what real purpose a technology has. Provide a real example where this is needed/done

[c0redump]

Tasked by whom? In pursuit of what goal?

[irln]

So interesting how your conclusion (which I strongly agree) is a bit of knowledge that can be obtained with diligence and research, however, it's a limitation of Bitcoin that it requires that level of diligence and research to understand.

[npoc]

Not really. I just means that it doesn't grow too fast for itself and gives people chance to accumulate it - its kind of poetic.

Ultimately it will just keep going up in price relative to everything else and people will invest simply based on that without understanding why - similar to the real estate investment market.

[lawn]

Typical Bitcoin maximalistic bullshit that pretends that the only worthwhile cryptocurrency will ever be Bitcoin, ignoring the fact that for example Monero is a superior currency (being actually fungible, a requirement for a currency).

I do agree that cryptocurrencies are the killer feature of the blockchain but other use cases do exist (like trustless timestamping).

[unboxingelf]

The rare, correct Bitcoin take on HN.

[MuffinFlavored]

What about ETH/SOL stablecoin USDC and the whole "the blockchain validators/stakers can run programs/smart contracts/instructions"?

[tyre]

None of the smart contracts have done anything materially useful without huge risk of scams, rug pulls, or enabling criminal activity (e.g. mixers for money laundering.) After a decade, there are no examples of widely used smart contracts or even long-running projects that haven't been fueled by boom and bust speculation cycles (e.g. NFTs.)

Every time there is a "code is law" gone wrong with large $ at stake, people immediately fall back to real life police. Because "code is law" is either a bad idea or immediately has to compromise to meet real human uses (for example, people forget their passwords all the time and not supporting password resets—which right now requires a centralized key store—is a non-starter.)

There is both a ton of money in crypto and it has completely failed to reach its promised potential.

The largest uses in the next half decade will continue to be scams, pump-and-dumps, speculative frenzies, and money laundering. We'll see shockingly open corruption with the president of the United States having a coin for on-chain bribery.

[everfree]

> After a decade, there are no examples of widely used smart contracts or even long-running projects that haven't been fueled by boom and bust speculation cycles

MakerDAO, Aave, Uniswap, Ethereum Name Service, and OpenSea are all long-running smart contract projects that have weathered multiple speculation cycles chugging along all the same.

> Every time there is a "code is law" gone wrong with large $ at stake, people immediately fall back to real life police.

It's one potential recourse. As opposed to legal contracts, where falling back to real life police is the only recourse.

Code is not law, but it does solve the "possession is 9/10 of the law" issue by aligning possession with legal ownership more closely than legal contracts do, so that the law has to get involved a lower percentage of the time. This is especially helpful for low-value contracts in the hundreds of dollars or less where it's not economical to involve a lawyer. Same for cross-border contracts where international litigation is infeasible.

> There is both a ton of money in crypto and it has completely failed to reach its promised potential.

Smart contract tooling has only been mature since about 2018 or so. Blockchains have only started scaling since about 2021. Coinbase, the largest cryptocurrency-related company, didn't launch their chain until 2023. Sharded data availability won't even be in production on a major blockchain until next year, with Ethereum's PeerDAS. Zero knowledge proof technology is both in its infancy and developing extremely rapidly. In other words a text-based browser isn't going to host a video stream over a dial-up connection. These roadmaps are long, and it takes time for new breakthroughs in math and computer science to mature, standardize and reach production.

> The largest uses in the next half decade will continue to be scams, pump-and-dumps, speculative frenzies, and money laundering.

The "largest" uses aren't really relevant unless you're trying to make an overarching moral judgement and say "blockchains are bad", which whether true or not, I think is an observation about as useless as "knives can be used to hurt people".

If you're trying to determine whether a tool has any legitimate helpful uses, look for an increase in its legitimate helpful uses.

[leishman]

stablecoins are useful but you don't really need a blockchain. you just need enough of a rube-goldberg machine to claim it's "decentralized". The most popular "blockchain" for stablecoins is Tron, if that tells you anything about why the technology itself doesn't matter

[Jasper_]

The blockchain can't do anything with stablecoins, because that's interfacing with a financial system that's out of the reach of smart contracts. Even if we assume that a stablecoin is backed by real USD sitting in a bank account, there's nothing stopping anyone from just taking money out of the bank account, and the smart contract is none the wiser. You still have to trust someone at the end of the day.

[Ekaros]

Problem with stablecoins is that in reality they are just extremely fancy IOUs or namely debt. Issuer promises to give money back. And if they don't well best you can do is to sue them.