Don't get caught up in blockchain hype

https://blog.apnic.net/2017/12/14/dont-get-caught-blockchain-hype/

by ggm • 9 years ago

123 151 9 years ago

blog.apnic.net

drcode3• 9 years ago

I think there's lots of solid advice in this article, but this last bullet point is an eye-roller:

Lack of government regulations for blockchain could impede growth.

i.e. "We're from the government, and we're here to help make your blockchain more efficient and grow faster!"

highd• 9 years ago

Not to mention: > Data on blockchains is by default, unencrypted, especially data that needs to be validated by the nodes.

Databases are unsecured by default -> databases are overhyped!

gaius• 9 years ago

Databases are unsecured by default

Only MongoDB and yes, it is all hype

eropple• 9 years ago

You have it backwards. "We don't know if a government who has the power to make our lives very difficult will have a problem with this, so we should be prudent and steer clear until that's settled."

drcode3• 9 years ago

That is fair.

mlamat• 9 years ago

Only in your narrow minded libertarian brain does that sound absurd.

Government regulation exists precisly for the purpose of making inter-personal relations more efficient.

anonymous5133• 9 years ago

Government regulation can also do the opposite in reality.

oleganza• 9 years ago

I don’t see how your insult adds any value to the conversation. I can equally argue about you narrow-mindedness while bluntly stating the opposite argument.

TaylorAlexander2• 9 years ago

It sounds absurd to me. Am I narrow minded?

dang• 9 years ago

Personal attacks break the site guidelines. So does using HN for ideological battle. The combo of the two is particularly ban-worthy. Please read https://news.ycombinator.com/newsguidelines.html and please don't post like this again, regardless of which ideology you favor or how wrong the other one is.

TaylorAlexander2• 9 years ago

Agreed. I keep seeing people say bitcoin “needs” regulation and to me the notion of Washington having any say over bitcoin sounds absurd. Sadly I think we may one day find that a majority may think it makes sense, and I worry for the consequences.

0xWilliam• 9 years ago

Here are some points to consider as to whether blockchain is appropriate for your application:

Data on blockchains is by default, unencrypted, especially data that needs to be validated by the nodes. Blockchains do not have inherent security against read access. You can control read access to some degree by encrypting certain elements on your blockchain but this can be compromised. Not all information on the blockchain is true; data still needs to be checked and uploaded correctly and as such is open to human error. No amount of time guarantees something will stay in the ledger. It is also difficult to remove data if required by law. It’s not secure because it depends on the assumption that the blockchain community has more compute than the rest of the world. It’s absurdly expensive to mine blocks to store data indefinitely. Lack of government regulations for blockchain could impede growth.

dorfsmay• 9 years ago

"It’s absurdly expensive to mine blocks to store data indefinitely."

Is this true of all block chains or specific to bitcoin?

TheDong3• 9 years ago

If you don't have mining, or a similar way to decide between various possible forks, what you have is a cryptographically secured append-only ledger (such as what the git data-format resembles).

That's not a blockchain and that idea has existed for decades already.

I think that idea is now being called a "blockchain" since in reality the trustless/proof-of-work nature of a true blockchain is largely wasted for specific companies.

ThrustVectoring• 9 years ago

It is also difficult to remove data if required by law.

How difficult is it to introduce illegal data into, say, Bitcoin's blockchain?

duskwuff• 9 years ago

The same as it'd cost to store any other data -- roughly 380 satoshis (~6.4 cents) per byte, plus various overheads to make it into a a valid transaction.

thisisit2• 9 years ago

In case people want some more insights look at my question I posted earlier:

https://news.ycombinator.com/item?id=15915520

There is a huge difference between the cryptocurrency blockchain and the enterprise-y blockchain. They are not the same thing which kinda confuses the whole message.

neuralzen• 9 years ago

It's worth noting that it is likely many private blockchains will still use and interact with public blockchains, such as to embed the hashes of private blockchain blocks, to ensure integrity of a chain with undoubtably fewer, and therefor more compromisable, nodes.

colorincorrect• 9 years ago

Don't get caught up in "catching up" hype

Don't get caught up in hype hype

colordrops• 9 years ago

From the article, about the supposed expert who is skeptical:

For all that she has learned, Radia is first to confess that she is by no means an expert in the technology — admitting that she cannot distinguish exactly what makes something blockchain technology

The article is right about one thing though - a lot of people are talking blockchains up without having any idea about what they are or how they work.

Conversely, a lot of people, like Radia in the article, are talking blockchains down, without understanding them.

cjhopman• 9 years ago

People who "understand blockchains" don't agree on what exactly distinguishes something as blockchain technology, and people (and companies) are claiming all kinds of things as using "blockchain technology".

QML• 9 years ago

Isn’t blockchain just a type of data structure?

knocte3• 9 years ago

People who "understand blockchains" don't agree on what exactly distinguishes something as blockchain technology,

Does this assertion come from a person who understands, or doesn't understand blockchain? :)

Because if you don't understand it, I would take your assertion with a grain of salt. And if you think you understand it, but you make this assertion, it means you disagree with many people that understand it... which hints that maybe you don't understand it after all ;)

thisisit2• 9 years ago

how do we find an expert who balances both perspectives?

danblick2• 9 years ago

Ya know, Radia Perlman has decades of experience working on networking protocols, I'm willing to bet she understands blockchain as well as anybody. The statement "I cannot distinguish exactly what makes something blockchain technology" should probably translate as "currently the term 'blockchain' is thrown about so loosely its meaning is obscure."

0xC0DECAFE2020• 9 years ago

I think it really pertains to using merkle trees. If you take a deep look into how bitcoin actually is implemented merkle trees are the base with which it is formed around.

alexasmyths2• 9 years ago

A lot of people know a lot about block-chains - but they know absolutely nothing about currency, finance or economics. I would say these people are scarier than IT managers who don't quite grasp crypto yet - because companies are not actually using crypto for much these days.

rosser• 9 years ago

How is this comment not an ad hominem?

Many-to-most "blockchain experts" are hazy on where, exactly, the line between blockchain and not-blockchain falls (or, at least, there's enough ambiguity that drawing a sharp line is difficult to impossible).

To use that uncertainty to call out someone who professes skepticism about the general concept, while explicitly confessing that same uncertainty, as a means of disqualifying her perspective is therefore literally a fallacy of irrelevance.

kaicianflone• 9 years ago

People need to take a crash course into the community before making accusations like this. Simply looking at the protocols of the largest blockchain shows that no one wants crazy, overbearing government regulation; we don't even know who created it. Also, it's very naive when they associate blockchain with data and monetary values when it could be used to track anything. If I had an iPad in the bathroom, when I use the toilet I can validate it by pressing a button and reward myself with a Number 2 Coin. If I wanted the blockchain to be more secure and trustworthy I could open the window and text the neighbors so they could validate that I am also in the bathroom.

rabidrat• 9 years ago

no one wants crazy, overbearing government regulation; we don't even know who created it.

As an aside, I think it is somewhat likely that Satoshi was a state-sponsored actor or organization.

shrimpx3• 9 years ago

Any proof?

UncleEntity8• 9 years ago

As an aside, I think it is somewhat likely that Satoshi was a state-sponsored actor or organization.

To what end?

States have a habit of going after anything that threatens their monopoly on the issuance of currency.

chrisco255• 9 years ago

Skeptic writer from Newsweek in 1995: "Why the Internet Will Fail" : https://thenextweb.com/shareables/2010/02/27/newsweek-1995-b...

mattnewton• 9 years ago

Wow what is going on with that site. Really nasty scam ads redirecting me to a site trying to look like Facebook and rewriting browser history so I can’t back out.

jacobush• 9 years ago

If only the browser history were a blockchain, then it couldn’t be rewritten

Gargoyle• 9 years ago

While I don't think it's completely relevant to this particular topic, here's a cleaner link to the original:

http://www.newsweek.com/clifford-stoll-why-web-wont-be-nirva...

doctorcroc• 9 years ago

This article actually makes a lot of good points about the issues we're seeing today around "fake news", and the general uncivilized discourse that dominates the internet. He wasn't entirely wrong, but maybe underestimated how pervasive the web would get before we took a step back and saw the warts.

krrrh• 9 years ago

We all remember the internet skeptics, but forget how equally wrong the people who were predicting that the internet would lead us to a global utopia by the year 2000. Extreme positions are usually wrong.

It's hard to take comparisons of an internet-based technology to the internet itself seriously. Blockchain more comparable to something like Push [1]. Mostly overhyped, some good ideas that will survive and re-emerge years later, and massive amounts of malinvestment in technologies that didn't ultimately pan out. [2]

[1] https://www.wired.com/1997/03/ff-push/

[2] https://www.wired.com/2004/05/the-return-of-push/

lostsock• 9 years ago

Here[0] is a great article about what a blockchain is and isn't good for for. The tldr is that blockchains make tradeoffs that are bad for most things.

In fact, on almost every dimension, decentralized services are worse than their centralized counterparts:

They are slower

They are more expensive

They are less scalable

They have worse user experiences

They have volatile and uncertain governance

And no, this isn’t just because they are new. This won’t fundamentally change with bigger blocks, lightning networks, sharding, forks, self-amending ledgers, or any other technical solutions.

That’s because there are structural trade-offs that result directly from the primary design goal of these services, beneath which all other goals must be subordinated in order for them to be relevant: decentralization.

[0]https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80

cloudwalking• 9 years ago

They also don't require trusting a single third party processor... which is sort of the whole point. Blockchains are a tool to solve certain classes of problems, not every financial problem, or even most financial problems.

plasma• 9 years ago

All of those points are temporary scaling and optimization issues that will be overcome.

nihonde2• 9 years ago

It’s ironic that the blog post is an earnest response to Jamie Dimon’s comments about cryptocurrencies. I always assumed Dimon himself was testing his ability to influence pricing of cryptos with those comments. It’s an old game played by Wall Street: talk a good play down in the press, buy on the downward pressure, and then make money on the correction. This happens during almost every AAPL earnings cycle, for example.

a_d• 9 years ago

So, umm, what is blockchain really useful for? The basic thing blockchain helps with is: it provides a way to verify the order in which entries are made to a ledger.

Genuine question: What applications/problems it is useful for? Have you seen a good application yet (other than currencies)?

Would love to learn about the positives, from this community.

garmaine5• 9 years ago

What are semaphores useful for? That’s the question you are asking really. Bitcoin is a global, non-trusted semaphore/mutex lock system.

A “smart contract” is basically an ordinary payment contract where execution steps are gated by separate semaphore controlled by sunsets of the participant set.

What can you do with that? It’s hard to answer without being so general as to be useless, or without getting too specific such that we lose the big picture.

“Block chain” is about replacing courts and arbitration with a computer network, and replacing contract lawyers with programmers. What makes this possible is the fair, untrusted, equal access semaphore a bitcoin spend provides.

retube4• 9 years ago

literally every time someone asks this really straightforward question the answer is vague tech waffle.

seriously, please: tell me one genuine use case for block chains that conventional database stack can't do?

flyGuyOnTheSly• 9 years ago

So, umm, what is blockchain really useful for?

At it's core, a blockchain is just a really efficient way of guaranteeing the integrity of any given ledger.

I am working on a giftcard purchasing and issuing system at the moment, for example.

I could use a chain of SHA256 hashes of each row hashed upon each previous row of data's SHA256 hash in our MySQL db to make sure that none of my employees were giving themselves an early Christmas bonus if you know what I mean.

Nobody could change any of the giftcard values without being noticed.

Blockchain technology is not only useful for cryptocurrencies.

kccqzy• 9 years ago

Why is APNIC writing about the blockchain? Isn’t APNIC’s job to regulate IP addresses in the Asia Pacific region?

jstewartmobile• 9 years ago

Radia Perlman, inventor of STP, "mother of the internet"[0], had something to say about blockchains, so why not?

[0] https://www.google.com/search?client=opera&q=mother+of+the+i...

Fezzik• 9 years ago

It may be too late for a lot of people. My mom called me today, she's a retired teacher in her early 70s, and the guy installing her new gutters in Mount Vernon, WA (USA)* just put a few grand towards Bitcoin and now my mom is thinking of making a significant financial investment in the same. She has not-a-single-clue what Bitcoin is, does, or could do. She only knows that it is all over the news and everyone, including the handyman installing her gutters, is throwing money at cryptocurrencies (though few call any by that name). Everyone is hoping to get rich quick.

* Not quite the middle of nowhere, but certainly not a tech hub

thkim9• 9 years ago

it's already posing a significant threat in smaller economies like South Korea. a lot of people (even here on hacker news) don't seem to understand the consequences of bitcoin & cryptocurrency. i am very concerned.

a lot of bitcoin followers seem to think that decentralization saves us from arbitrary value adjustments. decentralization completely exposes currency to volatility and does not self-stabilize nicely regardless how many people use it, because supply is broken. this false idea that decentralization is good for currency shows lack of understanding in how currency works. a central authority is required to protect the value of currency. that is why central bank prints money and does QE. it is not a conspiracy to enrich some cronies. without central authority, it cannot function as currency.

adammunich• 9 years ago

What is the best book on our current central bank currency paradigm you would recommend?

wsc981• 9 years ago

  ... a central authority is required to protect the value of currency. ...

I don't really see the need for a central authority and you'd have to make a really good case to convince me. I believe most currencies originated in a decentralised way. I think the central authorities have failed in a big way during the euro-crisis and I welcome a future where the value of money cannot be manipulated by some central authority in order to push some economic and politic agendas. It's clear to me that decentralised currencies provide many needs that cannot be met by centralised currencies.

joering22• 9 years ago

don't seem to understand the consequences of bitcoin & cryptocurrency

Everyone keep saying that but these words are empty. What are consequences of regular stock market? And what difference does it make for someone who bought bitcoin for $15,000 and sold for $50,000 ?

I fail to understand how frightening people helps? Its been acknowledged so many times yes its a bubble. Yes, a major correction is in works, but shorting or selling now is "catching falling knives" (term I learnt trading stocks in 80s). But when the bubble burst EVENTUALLY, you won't be able to buy bitcoin for 1 cent, as it will never go back to basics again. We need deep correction so that we can test major mining holders how much they withstand so 80% correction would be healthy for Bitcoin, if we want to (should!) look at it at any other trading stock.

The truth is - unless something else comes along, there is almost infinite number of dollars waiting to be convert to bitcoins. these traders will be passing a baton to each other for a very long time to come.

UncleEntity8• 9 years ago

...a central authority is required to protect the value of currency. that is why central bank prints money and does QE.

So, what you're saying is they protect the value of a currency by devaluing it?

it is not a conspiracy to enrich some cronies. without central authority, it cannot function as currency.

No, it's a conspiracy to tax the population without actually taxing them through devaluing the currency (aka inflation). Enriching some cronies is merely a side effect that keeps the bankers in line (and, more importantly, in the cartel) since they profit handsomely through fractional reserve banking and debt monetization -- neither of which is possible "without central authority".

blueprint5• 9 years ago

Are you specifically including Bitcoin's fixed coin emission cap in your reasoning? It is known to be problematic. One of the things it apparently prevents is a flexible blocksize because that apparently requires a tail emission instead of fixed cap. Tail emission yields an inflationary coin (see Monero's economics) whereas the fixed cap of Bitcoin causes it to be continuously and strongly deflationary. I'm not an expert in QE but you're comparing a centrally governed fiat system to a system which places governance in the hands of strong social/financial incentives. Such incentives eventually lead to asking the most qualified person for guidance (which becomes governance). I'll be very interested to read your reply in case this modifies your thinking at all. Thanks

dguest• 9 years ago

I think the real danger you're talking about is that people are conflating the value (or usefulness) of bitcoin _as a technology_ vs the value of _bitcoins_.

It's an awesome technology for what it does, and it will probably be more _useful_ than most people realize right now (if we ignore other cryptocurrencies on the market). But that doesn't mean that bitcoins themselves are going to be worth more.

subway2• 9 years ago

Even worse is the conflation of blockchain technology with its most widely known application (cryptocurrency).

blueprint5• 9 years ago

Think you're conflating price and value.

chx• 9 years ago

Show your mom https://prestonbyrne.com/2017/12/08/introducing-the-nakamoto...

shrimpx3• 9 years ago

The core innovation in the original paper by Satoshi Nakamoto is Proof of Work: A system where people secure the scarcity of a decentralized digital quantity by spending compute power in order to be rewarded units of the same digital quantity.

Proof of Work is ultimately a set of well-balanced design decisions employing well-known technology. Maybe that's why people have a hard time seeing the novelty in it: they just see a bag of individual technologies and miss the delicacy of the design.

roma1n• 9 years ago

I may be misinformed, but I see proof of work schemes as something that will inevitably lead to a tremendous waste of energy -- the last thing we should do if we still want to inhabit this planet in a few decades. If a centralized authority is needed to reduce this waste, then so be it.

shrimpx3• 9 years ago

It's true. Alternatives like Proof of Stake, Delegated Proof of Stake, Proof of Importance, etc., try to fix the energy waste problem. They follow similar reasoning to Proof of Work, using financial incentives to keep miners honest. They don't require centralized authorities. However it's early days for Proof of Stake, we'll see how it develops.

sAbakumoff2• 9 years ago

while bitcoin makes all the news and contributes to the gold rush insanity of averages Joes, Ethereum is seating quite, but it can make even bigger news, like the most recent one about a Swiss bank to build the EU regulation platform based on the Etherium smart contract implementation. I am thinking about contributing all my crypto money to ETH.

UncleEntity8• 9 years ago

You got me curious so I did a little digging.

While most articles infer they are building these things on top of the public Ethereum blockchain it is more likely they are basing it on top of R3CEV[0].

Either sloppy reporting or part of a grander pump-and-dump scheme, you decide...

[0]https://www.coindesk.com/r3cev-blockchain-test-11-banks/

sAbakumoff2• 9 years ago

Yeah, recently sloppy reporting contributed to the insane raise of IOTA cryptocurrency but after the clarification it flew down to earth. It totally looked like pump-and-dump! But Etherium is another story, I believe in its future.

lordnacho• 9 years ago

“Don’t say ‘Can we apply blockchain for this application?’ or ‘We have blockchain, what sort of things can we use it for’. Instead, start from the other end with the problem you’re trying to solve and consider the best ways to solve it,” said Radia.

Sound advice for all problem solving.

abrookewood• 9 years ago

Unless of course the problem you are trying to solve is how to raise money really quickly by cashing in on the latest fad.

hasa• 9 years ago

I see only the fundamental design flaw in the decentralization. Copying a infinitely growing dataset to increasing amount of processing nodes is just worst kind of design error I can imagine in any decentralized system.

thkim9• 9 years ago

yes, bitcoin is single linked list that's not even sharded. design is very flawed. can't believe these bitcoin followers think it's holy grail of technology. bitcoin can't even handle the current volume well. it requires massive computing power, bandwith, storage at every node.

DaiPlusPlus• 9 years ago

BTC is designed to evolve. If the problems you’ve described do turn out to be major issues then node software will be updated to address those concerns. While difficult, I’ll admit, it is not impossible to add sharding (for example) to the BTC Core network.

acjohnson552• 9 years ago

Bitcoin is designed to grow at a bounded rate, at the cost of capacity and latency. Another choice would be to eliminate those limitations, at the cost of practical verifiability by all stakeholders. There's not an easy answer for how to achieve all these goals at once.

cutler• 9 years ago

I have no sympathy for anyone who ends up screwed by "investing" in bitcoin or the like. There will always be a significant percentage of our flawed human race out to get something for nothing. So long as it's legal there can be no real progress. Making money out of money - be it bitcoin or any other currency - without contributing anything of real value is the root of all our economic problems.

wslh• 9 years ago

For a general audience this article is not clarifying enough where the hype is and where it isn’t.

There is a clear distinction between public/permissionless blockchains (e.g. Bitcoin) and distributed ledgers (misnamed as private blockchains). The article is referring mainly to the later.

Bitcoin is a theoretical and practical computer science innovation even if the Bitcoin price goes down to $ 0. The innovation covers a search for decades for a secure P2P and [central] bankless protocol solving the multiple spending problem. This innovation uses game theory and security, and we expect that there will be new innovations around this concept. Check “Blockchain Research Resources” [1]

Regarding distributed ledgers the signal to noise ratio is very low (lot of hype). To clarify this we must understand that distributed ledgers existed long before the blockchain and are not really connected to Bitcoin and other public blockchains beyond reusing some part of those implementations but without the core innovation. These are examples of previous initiatives:

The Bitcoin paper is from 2008 while Nick Szabo’s smart contracts concept is from 1994 [2]

if we go back in time we can find the AMIX project in 1988 [3]

Another concept used in a distributed ledger is the idea of immutability of data recorded there. Ideas of log immutability can be traced back to a 1995 Spanish article titled “VCR y PEO, dos protocolos criptográficos simples” [4] and then reviewed in 1998 in English as “VCR and PEO revised” [5]. Bruce Schneier also published similar works in 1997 with Automatic Event-Stream Notorization Using Digital Signatures and in 1998 as “Cryptographic Support for Secure Logs on Untrusted Machines” [6]. Also look at "Logcrypt: Forward Security and Public Verification for Secure Audit Logs" [7].

[1] https://docs.google.com/document/d/1J8hehbnZWzcIUMQcxMiGbjz8...

[2] https://en.wikipedia.org/wiki/Smart_contract#History

[3] http://erights.org/smart-contracts/index.html and http://erights.org/smart-contracts/history/index.html

[4] https://www.coresecurity.com/system/files/publications/2016/...

[5] https://www.coresecurity.com/system/files/publications/2016/...

[6] https://www.schneier.com/academic/paperfiles/paper-secure-lo...

[7] https://pdfs.semanticscholar.org/441c/447bf74b1b9e403d043fbd...

Don't get caught up in blockchain hype

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