Lets begin with the summary conclusion.

A blockchain token* serving no technical purpose can enhance social welfare by serving as a low cost, unrestricted, always open, international and regulatorily compliant casino for funding investment in public goods.

The goal of this piece is to rebut the following seemingly reasonable claim

A project which does not require a token to operate should never introduce one.

This rebuttal will attempt to offer a plausible counterexample, in the very specific sense that the option to introduce a token enhances social welfare. …

What people think its its like to run your Bitcoin scripts?

Fred Ehrsam, Vitalik Buterin and Chris Dixon recently discussed Ethereum on an episode of the a16z podcast.

They covered a few different topics, primary among which was the relative easy of building Ethereum apps as compared to Bitcoin apps. They lamented at the dearth of compelling Bitcoin apps currently deployed, and identified the primary culprit to be the limited Bitcoin scripting language.

To be specific, the apps in question were decentralized Bitcoin apps. That is apps which do not depend on a trusted third party to function [1]. …

Just because its possible, doesn’t mean it makes sense.

Any non-trivial project, be it a startup, a political organization or a civil society initiative, will most likely fail.

Whatever idea you have for how the world can be improved has to stand up to the fact that its feasibility and/or desirability has been continually refuted up to this point.

Most founders cannot address this fact, and this is why the primary cause of startup failure is: no one needed what you made. One can offer a plausible rebuttal to this fact on behalf of an Ethereum project: the platform did not exist until very recently. However

Most proposed projects on Ethereum cannot point to a plausible end user benefit which is primarily enabled by being on the platform.

Things like “no middlemen” and “decentralization” are not actual end user benefits, they only potentially generate benefits indirectly. …

The InterPlanetary File System, or IPFS, is a new peer-to-peer protocol which has a lot of people excited these days. It is a content addressed distribution system which aims to replace HTTP and CDNs. However, I currently haven’t been able to join the bandwagon due to the following unresolved question:

What is the protocol level benefit of IPFS over the BitTorrent stack?

BitTorrent, which is also a peer-to-peer content addressed distribution system, is used by over 600M users annually, and is extremely successful. It achieves a lot of what IPFS aims to do. For example, there are already two major projects which have reimplemented the web over BitTorrent, Zeronet and Maelstrom.


Robin Hanson, Professor of Economics, George Mason University

A prediction market enables betting on the probabilities of real world outcomes, e.g. who will win the next US presidential election. When such markets function well, the prices associated with outcomes will represent the most reliable estimate of how likely the given outcome is.

A number of projects are trying to build decentralized versions of such markets — using blockchain technology, namely: Augur, Truthcoin and Gnosis. I’m unclear on whether any of these systems will actually work, and what size bets they could safely support, but that is not my main problem with them. …

Let me preface this by saying, no one would be more happy if decentralized storage projects were very successful, I’m just skeptical that they will.

There are a number of projects which are working, either entirely or in part, on decentralized storage: Storj, MaidSafe, Filecoin, Sia. This means that data is stored on an open group of computers which are incentivized to perform this service. There are many obvious technical hurdles to overcome in making such systems work, but this is not why I am skeptical.

The key value proposition of such systems over traditional cloud storage is that by…

Over the past year, interest among major financial institutions has shifted away from Bitcoin and towards trusted blockchains more generally. This typically involves some sort of state history encoded as a secure hash chain, which is extended by the agreement of a trusted set of signers. Both banks and startups seem to think that this way of organizing and updating information will have huge gains in a variety of business processes.

I have been in a good number meetings with clever people, and when I ask them what the value of this system is, I typically hear two types of…

Bedeho Mender

Founder of JoyStream, Comp. Neuro. PhD

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store