I often hear these things touted by blockchain advocates: data ownership, supply chain, and "cutting out the middleman"<p>I want to debunk these statements once and for all.<p>Myth #1 Blockchain changes data ownership, giving power back to the consumer<p>Anyone who becomes privy to some data has some ownership of it. Blockchain doesn't change that. If you want to share something with only a few select people you need inherent trust or an NDA.<p>Myth #2 Blockchain can revolutionize supply chain<p>Its a datastore with some cryptographic identity checks and tamper proof guarantees. It can't prove that a package made it from A to B or that it stayed at some ambient temperature IRL. It only records that someone attested to that, not whether its true.
An ordinary database will do for an audit trail.<p>Myth #3 It cuts out the Middleman<p>You dont need blockchain to cut the middleman out of indusrty X. Any service trying to do this wants to be the new middleman with lower service fees cos' blockchain!<p>Here are some axioms which I think will drive future blockchain use cases<p>1. The transfer of value must occur on the chain<p>This is why digital currency is the #1 use case. We're already accustomed to digital value transfers when we use modern banking, the transfer of value is a few digits on our screens.<p>2. If you can't do 1) then it must be enforcable off-chain<p>Take for example buying a house. I sign some papers at the bank and some more with an agent and then we all agree I own a house and owe the bank some money.
We sign the papers because then its enforcable by law. Keyword "enforcable". If the legal system agrees a cryptographic signature on a digital record achieves this purpose then its as good as the paperwork.<p>We're a few years away from proper legal recognition of smart contracts. Ricardian contracts seem to be a step in the right direction.<p>Thanks for reading and hope it clears things up.
As to #3 cutting out the middle man...how about in the case of corporate stock ledgers and how the market currently works with brokers, stock trusts and stock custodians?<p>For example in the Dole case which showed even a publicly traded company when scruntized has issued nearly 30% more shares than there was outstanding. If instead of the current system with brokers, stock trusts, stock custodians a corporation used Blockchain for issuance of stock, such an error could never happen right?<p>Just in case you aren’t familiar with the Dole case it’s pretty famous, even the Delaware Court of Chancery Judge said Blockchain would have prevented this issue, which is likely wide spread in all publicly traded companies.<a href="https://www.google.com/amp/s/www.nytimes.com/2017/03/21/business/dealbook/dole-case-illustrates-problems-in-shareholder-system.amp.html" rel="nofollow">https://www.google.com/amp/s/www.nytimes.com/2017/03/21/busi...</a>
Digital currency can only be the #1 use case if we find a generic, uniform way to pull in real-time real-world data of which we can verify its confidentiality, integrity and availability.<p>There are several known solutions which attempt to solve this problem; oraclize, bluzelle, chainlink, ...<p>How do you see this? Do you think the #1 use case can be achieved without having a secure, high available oracle?<p>Another topic I find interesting is the recent discussion on XRP: "Banks won't want to shift around hundreds of millions of dollars on a public available ledger."<p>How do you see this? Do you think fintech/banks can work use public ledgers?<p>Kind regards,
Thanks for your thoughts! It appears some states are already legally recognizing smart contracts. Contract legality is determined at a state level because there is no federal contract law: <a href="https://www.technologyreview.com/s/610718/states-that-are-passing-laws-to-govern-smart-contracts-have-no-idea-what-theyre-doing/" rel="nofollow">https://www.technologyreview.com/s/610718/states-that-are-pa...</a><p>Good further reading to understand smart contracts from a US legal perspective:
<a href="https://corpgov.law.harvard.edu/2018/05/26/an-introduction-to-smart-contracts-and-their-potential-and-inherent-limitations/" rel="nofollow">https://corpgov.law.harvard.edu/2018/05/26/an-introduction-t...</a><p>Also Ricardian contracts if anyone is interested: <a href="https://en.m.wikipedia.org/wiki/Ricardian_contract" rel="nofollow">https://en.m.wikipedia.org/wiki/Ricardian_contract</a>
<i>You dont need blockchain to cut the middleman out of indusrty X.</i><p>Counterexample: electronic peer-to-peer money transfer. You simply couldn't do it without a middleman before Bitcoin. Now you can. What value you place on the ability depends a lot on the privileges you currently enjoy.<p>However, this only works given another property that you didn't mention: censorship-resistance. This requirement disqualifies most other "blockchain" project. This is what most "cryptocurrency investors" still don't get.
Blockchains are really unimpressive technologically. I think this is why so many in tech are pretty negative towards them. It's a crappy database, it's an inefficient payment system and so on...<p>However the few interesting properties that they do have make for a big difference at scale if you look at it in a broader context.<p>> Its a datastore with some cryptographic identity checks and tamper proof guarantees. It can't prove that a package made it from A to B or that it stayed at some ambient temperature IRL. It only records that someone attested to that, not whether its true. An ordinary database will do for an audit trail.<p>Sure, there are no inherent features which directly enable that. However with a regular database can you give access to absolutely everybody (even if you have complex access control rules)? Can you incentivize people to interact with this database in a given way? Will people trust the data? Can you make people believe that your system is going to be around for long enough? Can your system be safe from regulatory risk?<p>The answer to all these question is a very qualified yes. However when you think about them it's pretty obvious it's going to be hard. Say incentivizing people. You can surely assign rewards to people, have a little virtual currency/credit system. But you can see how the more sophisticated it gets the more you're creating something blockchain like. Which is also why private, hybrid blockchains or non-blockchain decentralized shared database systems are interesting btw.<p>The point is - none of these features or problems are inherently technical. They're more social than they are technical. The questions I posed are just food for thought, there are so many more aspects one could consider.
> We sign the papers because then its enforcable by law. Keyword "enforcable". If the legal system agrees a cryptographic signature on a digital record achieves this purpose then its as good as the paperwork.<p>I'm a big Bitcoin fan. I think some other cryptocurrencies are great too. But real estate is the most misguided use case for tokens/blockchain. Courts must be able to override a ledger when necessary because the real world is a messy place. Courts cannot just shrug and say "oh gee I guess it is too bad that the defendant has decided not to comply with the court order and execute a blockchain transaction. We will just be angry and impose penalties but the blockchain will remain the true authority that supercedes ours."<p>The legal system cannot/must not "agrees a cryptographic signature on a digital record achieves this purpose then its as good as the paperwork" -- or, rather, if it does, then it must still remain centralized and operated by a trusted authority. If it's trusted, then you don't want or need a blockchain.
> Myth #1 Blockchain changes data ownership, giving power back to the consumer. Anyone who becomes privy to some data has some ownership of it. Blockchain doesn't change that. If you want to share something with only a few select people you need inherent trust or an NDA.<p>I disagree with this. It's clear in cases such as Facebook that data privacy is abused. Not only that, but users don't have much of an idea of exactly how their data is being used. In a P2P system powered by blockchain, I can set permissions for certain data my on-chain information to be accessible between different parties, whether that's a doctor or a friend on a social media platform. They can receive a hash an decode it locally to view whatever information I am granting them permission to view.<p>> Myth #2 Blockchain can revolutionize supply chain. Its a datastore with some cryptographic identity checks and tamper proof guarantees. It can't prove that a package made it from A to B or that it stayed at some ambient temperature IRL. It only records that someone attested to that, not whether its true. An ordinary database will do for an audit trail.<p>Again, I disagree. Custom devices are being designed to record information in a tamper-proof way and submit to chain.<p>> Myth #3 It cuts out the Middleman. You dont need blockchain to cut the middleman out of indusrty X. Any service trying to do this wants to be the new middleman with lower service fees cos' blockchain!<p>I disagree with this as well, in certain context. Yes, many of the newer projects are trying to run blockchains they're developing as businesses. In that sense I would agree. Where I disagree is where blockchains aren't services, but protocols. A marketplace protocol can cut out Ebay, a stack of supply chain protocols can cut out SAP, loaning protocols can cut out current loan services, etc.<p>For somebody calling themselves a 'blockchain engineer', it sounds like you don't have a great grasp on what the technology enables. Is this all doable today? No, but some of it is. We're still in the early stages where infrastructure and tools are being built out.
From a supply chain perspective I feel it will be revolutionary from the decentralized nature and all parties sharing a unified data set for let's say a shipment. Right now a shipment transfers from party to party to party all in their proprietary databases. Working off a shipment from one central point will drastically alter the way things work. As well with the coming wave of IoT, robotics and automation in/on everything automatically fulfilling and queuing the next party/parties in the chain will be a radical improvement. It is mind boggling how much manual, paper based work goes into putting that t-shirt on your back today. :)