Why the Block-Chain is Bullshit
The blockchain is bullshit!
Having that out of the way, I’ll nuance my opinion on exactly why it is bullshit, or at least, in the authors opinion, not really ready for prime time as much as it’s proponents seem to think.
Update: My reasons for thinking the Block-Chain (mainly Bitcoin and other crypto-currency) is bullshit have changed a bit. My main beef right now, far beside all these other points, is that it just doesn’t have anything in reality backing up it’s value. The only value it has is based on speculation about it’s future value. Even if it were technically solid, this would make it bullshit.
The block chain as a programming construct is probably fine (and pretty good even).
This is as much a response to http://recode.net/2015/07/05/forget-bitcoin-what-is-the-blockchain-and-why-should-you-care/ as it is to the blockchain in general. And the only reason this is written is because I’ve gotten a link to this article in particular.
Controversial, to say the least. For non-experts, wading into this kind of debate seems daunting.
That’s the truth if anyone ever told it, and it’s why so many people are ruined and taken in by it.
Some people think bitcoin is a silly fad, destined to die and burn a lot of people’s money on the way. Others believe it will soon overthrow the world currency systems
And as can be expected. Both are silly fools high on conspiracy or delusion! I guess I’m more the former than the latter.
Imagine that you’re walking down a crowded city street, and a piano falls from the sky. As dozens of people turn to watch, the piano crashes down right in the middle of the street.
Then, without a second to lose, every person who witnessed the event is strapped to a lie detector and recounts exactly what they saw. They all tell precisely the same story, down to the letter.
Which is an amazing analogy, except that is doesn’t hold up in reality. Imagine for a moment, a group of people that know when the piano is going to fall, in what place, and a billion dollars depending on that? Or rather, just imagine a billion dollars depending on that, they’ll figure the rest out.
Can you imagine what would happen? I can. Given a location, it’s likely there’s going to be at least 100 people there, but 101 people there with the same story can reach a majority consensus. 1 billion divided by 101 people is still some 10 million a piece, which seems pretty generous for one testimony. Everyone would jump at this chance.
Did I mention that lying carries no chance of legal penalties?
The blockchain could change all of that. It sounds incredible, but by enabling this distributed consensus, it can actually create a true record of events, past and present, in the digital world.
It can indeed. If you assume that the creators of that consensus are always separate actors. without financial incentives to fuck the system. If more than 50% of your consensus group collides, then the chances of it working that way decline dramatically.
But ultimately, the good here far outweighs the bad.
I strongly disagree. Actors which you trust absolutely can do much more harm than actors which you distrust because they might be lying.
The financial world has finally started to move beyond the bitcoin hype
I haven’t heard anything about the financial world indeed figuring out the advantages of the bitcoin/blockchain hype. And that was some 8 months ago. Maybe because they figured out that it was indeed all hype, or that it would damage their interests?…
The country of Estonia, which secures much of its banking infrastructure with a blockchain, boasts the lowest rate of credit card fraud in the euro zone.
Source please? I’m perfectly willing to believe Estonia has the lowest rate of fraud in the euro zone now, but I’m still slightly sceptical about it actually being because of the blockchain, given that there’s plenty of alternative reasons in the article that was linked (3D secure being the one I see as the main reason, which pretty much prevents any transaction without actually having the card).
And startups like Bitreserve are enabling completely free online-money transactions, without the volatility and risk associated with bitcoin.
Super fancy background image, but it detracts from your message, which is…?
Your Money. Secure In the Cloud.
Jesus fuck. LOL! Well, I won’t deny that things CAN be secure in the cloud, but using it as a way of saying more secure than your current payment method...?
Transparent
You know what’s transparent? The money I’m holding in my hand! (to be fair, if what they’re posting on their website is true, they’re kind of transparent, but it’s really difficult to verify that.)
Global
Can’t exactly shit on this. The money in my hand isn’t quite global without me literally going there and paying more money in the process.
Welcome to the world’s first and only transparent reserve. We keep a real-time public record of our solvency, independently audited, so you can rest assured that your funds are safe and can be withdrawn, at any time, regardless of the global economy. The way it should be.
Certainly sounds good no? But the source for this is their website, which isn’t exactly the most unbiased in the world.
At Uphold we put our money where our mouth is. We give 5% of our annual profits to charitable endeavors
Looks good, but do you actually? I didn’t see this mentioned in your transparency report a paragraph above here.
Then in addition, please take a look at the transparency report here: https://uphold.com/en/transparency it looks like most of their holdings is actually in the Voxel or Bitcoin currency, which is nice, but ultimately (as we’ve seen proven in the past) excessively volatile.
It appears the Voxel is also an as of yet completely unproven and unknown currency based on a digital marketplace for games? Seriously, WTF? Most of their holdings are based on a marketplace which isn’t even released? Unsurprisingly, the companies are in league with each-other.
We can think even bigger — let’s put health records, voting, ownership documents, marriage licenses and lawsuits in the blockchain.
Or even better, put it all on Facebook! We know they are trustworthy! After all, they already have everything about our private life, and they haven’t done anything bad with it yet, right?
It isn’t quite this bad with the blockchain since nobody has a clue what’s being verified, but then, there’s very little point in verifying health records if your doctor can’t fucking read them. And you still have to trust that majority.
Its promise involves a future in which no one has absolute power online, and no one can lie about past or current events. This future has yet to be realized, but every day more of the smartest people in technology are jumping on the bandwagon, and believing that one day, it will be possible.
I’m glad we agree it’s currently a bandwagon. I really don’t disagree we can do amazing things with a blockchain in the future, but you HAVE to solve the problem with a majority of actors colluding, or it’s no different from trusting a single institution.
Arguably it’s worse, since if your trust in one institution is betrayed, you know who to blame, but if the blockchain betrays you, it can be any number of the thousands of actors, and figuring out who is colluding can be a hell of a problem.
Arguably much more than the problem of our trust being betrayed by major actors right now. When was the last time your bank betrayed you?
Note: I’m very happy for anyone to change my opinion on these points, I just never heard any argument that made sense.
