Blockchain was invented to solve one particular problem: distributed consensus on a sequence of transactions, where the choice of which transaction to include from a set of conflicting transactions is irrelevant.<p>The latter property here is key to understanding where blockchain is useful. It was created to solve the "double spend problem", ie. two transitions that spend the same coin but send it to different recipients (and so they conflict and cannot both be included in the canonical list of transactions). A double spend is the result of the sender either (a) making a mistake, or (b) attempting fraud. In both cases the important property is that as long as only a single of these conflicting transactions is included, the systems works.<p>Only if your problem exhibits the above property (<i>and</i> it's a distributed system) does using a blockchain make sense.
I had a real experience that perfectly reflects the research presented here (safer ledgers useful, blockchains are not).<p>I accidentally got wrapped up in a project to automate some HR functions, and the product manager demanded that it must be blockchain because blockchains are the future.<p>It turns out that append-only databases are well-suited for HR records, and (especially when dealing with things like background checks, immigration papers, etc.) it doesn't hurt to have a history with cryptographically-verifiable date stamps.<p>We used an existing database that did all of the above, told everyone it was blockchain, and released the product.<p>That was a great strategy for a few years until everyone realized blockchain was a boondoggle, and now you never need to work with anyone who still believes in it. You can just understand their mention of blockchain to be a sign that you need to avoid doing business with them.
> [Andy Jassey] said something like this: “All these leaders [CIOs and CTOs of huge enterprises] are asking me what our blockchain strategy is. They tell me that everyone’s saying it’s the future, the platform that’s going to obsolete everything else. I need to have a good answer for them. I’ll be honest, when they explain why it’s wonderful I just don’t get it. You guys got to go figure it out for us.”<p>To me the tell is not just that Andy didn't understand.<p>It's that all of these leaders said "everyone says it's the future", but not one of them said "I have this problem and here's how blockchain solves it for me."
In case anyone needs a thorough source to explain why you don't need a Blockchain, I found the NIST paper (esp the flowchart on page 42) quite helpful:<p><a href="https://nvlpubs.nist.gov/nistpubs/ir/2018/nist.ir.8202.pdf" rel="nofollow">https://nvlpubs.nist.gov/nistpubs/ir/2018/nist.ir.8202.pdf</a><p>It worked wonderfully to cut the BS coming from a greedy manager, in a non confrontational way ("so, what do you actually need?" , "you say 'security', but which aspect do you need? immutability ? non-repudiability? confidentiality??"). I think NIST's clout helped, along that they'd have to fully understand a 65 page report. I'm sure the content of the report would have been quite eye-opening, but that wasn't needed. Greed is a feeling, not a rational process.
I think the cost of trust is underestimated.<p>All those shiny skyscrapers that the banks build? It's for trust, along with a good deal of banking licensing requirements and regulation.<p>The example with the farmers' fields is quite valid. We forget in our relatively well-governed western nations that some governments really can't be trusted to simply keep records straight and not 'lose' vital documents, in cases where bribes abound.<p>Another example is foreign exchange trading settlements; I can't trust that if I send you $500mn in swiss francs, you'll actually send me the equivalent settlement in USD. You might go bankrupt half way through the transaction. And so there exists an expensive jointly owned escrow bank for exactly this purpose, CLS bank.<p>I'm sure there are many other examples, but the point is, trust is actually quite expensive.
The events described here took place in 2016, over six years ago. That's a long time in technology!<p>Since then additional billions of investment dollars have flowed into the space (a "VC crypto spasm" as the author calls it). Yet zero meaningful products have emerged. But we've witnessed many giant scams and endless crypto startups that happily spun their wheels producing nothing, just minting tokens so that insiders and investors can dump them onto retail investors.<p>How long will this have to go on? There are real things to build in software. This nonsense is both an embarrassment to the profession as well as a giant distraction. Time spent thinking about cryptocurrency mindgames is time you'll never get back to use on something productive.
With regards to the land markers.<p>You could have a database at the government land authority. If markers in the field don't match up with records, the land authority will ask police to correct the issue.<p>If neither police nor land authority can be trusted to keep records and uphold the law, who is going to help you when a marker in the field doesn't match up to some distributed database?<p>Big land owner will say "I don't know anything about that record in the sky. But look at this land marker on the ground. That's reality!" and with no police, who is going to help you?
I always wonder with these things: what is the deadline after which you are allowed to say "There is no value".<p>It has been almost 14 years since the inception of Bitcoin. There is nuance to this timeline that's why I usually use the launch of Ethereum as a starting point (~7 years If I recall correctly). Nevertheless so far nothing substantial running in production has come out of it Blockchain technology.<p>The typical response then is "well it takes time there is a lot of potential". I mean yeah but if you compare it to something like contactless payments or ride sharing apps these products have moved a lot faster and now have high user adoption.<p>So again: At what point can we just ignore all these Blockchain prophets that say "just wait the innovation is around the corner". 10 years, 20 years?
Tim didn't mention a contemporary sibling tech at AWS which should not be thrown out with the bathwater: private (centralized), immutable, signed ledgers. Their version is called QLDB and does have concrete applications where you need an provable audit trail of a stream of transactions with search and index on top. I was on a team at a fintech closely engaged with AWS to prototype a money movement system using that as a central ledger. There's an open source one with similar properties on GH somewhere, also.<p>It's not sexy like blockchain so it seems marketing had to slip in some Quantum to bump the buzzword sex count.<p>If financial industry regulators were serious about catching laundering or book cooking, they would demand this kind of tech as a foundation of compliance reporting.
The new thing with blockchain tech is that we can now enforce invariants on state transitions in a decentralized manner. Paired with non-interactive zero-knowledge cryptography, we can also enforce those invariants while keeping the confidentiality of transactions.<p>The tech is rapidly improving and it’s pretty easy to see where things are going from here: soon we’ll have general purpose decentralized databases where data is open as open source code is open. In fact, state-of-the-art smart chains can be viewed as special (financial) purpose decentralized databases.<p>As to why decentralized databases are desirable: imagine if you could fork databases like you can fork code in a completely permission-less manner. This is how web development would look like:<p>You, the programmer, take a look at a public data schema (eg. a smart contract that implements the ERC-721 interface) and decide to build on top of it. Then, a user, who has already interacted with what you built on, decides that they like what you built and lets your app use their data. You, the programmer, can be sure that the data you built on remains available, and the user can be sure that they'll be able to port the data produced by your app into new apps.
> He named a region in Asia and explained that the small farmers there mark their landholdings carefully, but then the annual floods sometimes wash the markers away. Then unscrupulous larger landowners use the absence of markers to cut away at the smallholdings of the poorest. “But if the boundary markers were on the blockchain,” he said, “they wouldn’t be able to do that, would they?”<p>The developed world is distinguished from the developing world often by the strength of its institutions, by the general accessibility of legal recourse, by the prevalence of trust within the society at large.<p>Many places in the world have none of those things. Weak institutions, corrupt legal systems, and low levels of trust undermine development and prevent people from building and maintaining wealth for themselves and their families.<p>For me, the promise of the blockchain is that it can provide a technological framework upon which to build new kinds of institutions—institutions that function as alternatives to the institutions that we all take for granted here in the first world.<p>Is a smart contract better than a written contract? Maybe it is, if there is no well-functioning judiciary to adjudicate contractual disputes. Is a cryptocurrency better than a national currency? Perhaps, if your national currency is subject to hyperinflation. Is an NFT representing property ownership better than property title registered with a state agency? Yes it is, if the state agency can be bribed to alter or lose records that are inconvenient to large land owners.<p>It's important to remember that what might seem redundant or useless to those of us who reside in the first world may not be redundant or useless to those who live elsewhere.
Very nice article. As others have alluded to, I think Tim does miss an important point about trust. He writes:<p><i>> we just couldn’t convince ourselves that the real world wanted zero-trust; so there was a transaction manager you had to trust.</i><p>And then later:<p><i>> It seems a good idea to have a land-registry database but, blockchain or no, I wonder if the large landowners might be able to find another way to fiddle the records and still steal the land? Perhaps this is more about power than boundary markers?</i><p>Yes. Blockchain is about decentralization of power. It's exactly the most interesting in situations with no trusted third party (i.e. weak rule of law) and an imbalance of power. I think Tim missed that aspect of this discussion (which is no knock on him in 2016, but should be reevaluated now). The rest I found insightful and very interesting.
The utility of decentralized blockchains is that they facilitate permissionless financial innovation. Yes, that means "regulatory arbitrage". But not just circumventing the law, more importantly, circumventing the <i>de facto law</i> of corporate gatekeepers.<p>A substantial amount of de facto financial regulation comes not from democratically elected governments, but from companies that gate-keep access to the databases where financial truth resides. A great example of this is Visa and Mastercard dropping PornHub as a client. But there are many others. Building software that interfaces with money is extremely difficult, what you can and cannot do is extremely limited, and you may only do so at the pleasure of the major financial institutions that sit between your code and the traditional financial system.<p>Right now, if you want to write code that manipulate's someone's money, you have to ask the permission of both the owner of the funds, and several intermediaries along the way. What those intermediaries choose to allow you to do can be arbitrary, capricious, and certainly is not democratic.<p>It is true that decentralized blockchains <i>also</i> facilitate the flouting of the law, and that can be good or bad, depending on your point of view. But fundamentally, having an open fabric for finance, in which anyone can build any kind of application they wish, seems like a pretty cool thing to me.
From an Indian pov my take is the boundary markers use-case sounds pretty good. I don't expect an American flying around from EWR to Seattle to ever understand this intuitively without being exposed to the realities in this part of the world, but having thought about it for all of 20 seconds it sounds like a very good idea.<p>Yes - it is a solution to the problem of power and corruption. In India there is corruption at all levels of government. The wealthy and powerful could absolutely influence some levels and steal land. Even petty regional criminals are able to do it. It has happened to my own family - imagine the odds. 1 billion people here, and I read this article and even I can personally relate to the issue of stolen land.<p>A blockchain that stored GPS coordinates and could realistically withstand a 51% attack, would solve the problem in my view. Are there other architectures that can also solve this problem? No doubt. Is the blockchain solution perfect? No it isn't.
I used to follow the conventional wisdom (there won’t be wide base adoption of cryptocurrencies, but blockchain tech will be useful in a variety of other technologies). I never really looked to hard into blockchain or the work being done in the industry. But based on the various crypto firms collapsing and the fact that there is no place that is making any meaningful progress with blockchain at this point, I’m at the point where I’ll dismiss any crypto / blockchain project reflexively. Seems like it’s been a great way to get funding for those clued in and taking advantage of the hype.
This situation could be contrasted with the other (successful) distributed consensus policy - democratic governance.<p>- No applications in commercial environments.<p>- I've seen 10-20 people in my life who can explain the details of why Democracy is a good choice. Most people, for example, fail to identify that the typical democracy is much better at fighting then winning wars than any alternative.<p>Blockchains could turn out to be similar technology. It is still too early to write them off. There just needs to be one big application, and it'll be something simple but also something that hasn't been done before because it was impossible to organise.
> Dear Reader: I think that at some point, in a civilization, there has to be trust. I think that’s maybe the main reason we have civilizations. Call me crazy.<p>Dead on
_Well known tech guy thinks blockchain is dumb because he can’t see its value for a private company._<p>There’s nothing new here. No, a blockchain isn’t a good replacement for a traditional database. It’s a distributed append only database built on zero trust. It’s extremely inefficient. Very few problems require that solution, especially one where a single party would be running all the nodes.
The notion of smart contracts might have a perfect use-case when it comes to setting up and maintaining infrastructure on AWS. E.g. something like "I want an Amazon RDS PostgreSQL instance with such and such specs. full daily backups and 99.999% uptime and I'm will to pay $xxxx for it". From there solution providers "bid" on the contract and are paid automatically on the basis of meeting the requirements of the contract, the determination of whether requirements were met also being automated.<p>The idea is something that grew out of blockchain platforms - Decentralized autonomous organizations - <a href="https://en.wikipedia.org/wiki/Decentralized_autonomous_organization" rel="nofollow">https://en.wikipedia.org/wiki/Decentralized_autonomous_organ...</a> - this doesn't actually require a crypto currency backing it but some kind of smart contract would be required.
You guys have issues with elections and vote couting. I think Blockchain would solve this problem once and for all, but I'm afraid it is not a problem anyone wants to solve...
It's interesting to read how much research tbray did on crypto back then. Definitely doesn't seem like new entrants today were doing the same level of diligence, on average.
Blockchain skeptics are all defending the tech of the current financial system, and implicitly arguing it can’t be improved. They are wrong. The tech underlying the current system is really bad. For example:<p>(1) How can I perform an atomic transaction across two stock exchanges?<p>(2) How can I take stock held on one exchange, and use it as collateral on an unaffiliated lending platform?<p>(3) How can I launch a new financial app, as a small startup, and open it to assets held on ETrade.<p>All of these are impossible in the current system. In contrast they are all trivial using Ethereum’s blockchain.<p><a href="https://ortutay.substack.com/p/the-computer-science-case-for-web3" rel="nofollow">https://ortutay.substack.com/p/the-computer-science-case-for...</a>
Blockchain in itself is nothing else, just a chain of blocks (linked list of bunch of data with cryptographic hash of the previous block stored in the blocks).<p>It's an amazing data structure, but putting money in it is no different than putting money into hash maps (which is another great data structure): it doesn't make sense in itself.<p>What some companies and VCs really want to do (and are doing) is reputation laundering: invest a bit of money in some crypto tokens, and sell them to retail investors for much higher price.<p>Of course after FTX collapsed they have to wait a few years to do it again.
I am always torn when it comes to blockchain.<p>(As an aside, I was an advisor to Storj.io, a web3 storage company. Largely because of my relationship with the CEO and less because of my enthusiasm with the space.)<p>The leveraged, financial engineering side of Crypto as a get rich scheme never really appealed to me. I see this like any other risky investment, blurring the lines between lawful and not. Borrowing a ton of money and staking it on crypto seemed like a path to glory to many, and I am saddened by all of the people that lost their shirt in the process.<p>There's another side of me, however, that sees web3 as an evolution of the traditional technology marketplace. A lot like early days of the internet, or of open source.. web3 seemed to be the continuation of the hacker spirit, where builders met to build cool stuff.<p>Some of the coolest websites and communities these days are related to NFT's and minting them. Some cool thinking about persistent storage, or cloud, or storage with blockchain/coins as an incentive structure for micropayments. How to directly monetize content on the web without having to prop up the ad industry. Interesting, worthy goals.<p>It's hard to reconcile this spectrum of thoughts and come up with a clear, personal, answer on the value of blockchain technology as a whole.
When I was in university around 15 years ago, the idea of peer-to-peer currency was floating around as an evolution of the tit-for-tat idea in BitTorrent, which was still popular at the time.<p>The expectation back then was that peer-to-peer would continue to evolve, especially in the area of distributed computing. Clouds did not exist yet, but projects like SETI@Home were having some success in terms of sharing compute resources. A peer-to-peer network could meter you for your consumption of compute resources through a lot of microtransactions in a virtual currency that avoided traditional banks or credit card providers.<p>Then came the first and least efficient implementation of peer-to-peer currency: Bitcoin, which did not sell the distributed computing capacity, but used it to do meaningless computations. It was clever, since up until that point the problem of zero-cost identity had been unaddressed, but appears to have few practical applications. It is surprising to me that people view it as some kind of alternative currency or store of value and send real currency to "trusted" exchanges. You deposit money just for the pleasure of doing a transaction? Yeh, sure, you don't need to agree on a global, trusted intermediary, but you still need to trust your exchange not to screw you over.<p>Ethereum is closer to the original ideas behind distributed computing and peer-to-peer currency, but the Internet has largely moved on from peer-to-peer networks. Today I can instantly get all the compute resources I need in a trustworthy, secure environment, and only pay for what I use. BitTorrent has also lost a lot much of its relevance with streaming services providing a greater level of convenience.
Blockchains are an incredible technology. It is obvious that their first attempted uses are contractual and monetary, because blockchain guarantees can make things better fastest in those arenas. The unfortunate part is it doesn't seem like anyone has really figured out the how yet.<p>I am reminded of the Web, Amazon was the first company to really "get" e-commerce and made all the money - there will likely be a similar story with blockchains 10 years from now.
In Italy a famous news website is using blockchain since 2020 to, I quote literally: "help readers check source of news", "strengthen bonds of trust between its organization and its readers and customers", "trace the history and source of each news item."<p>News (EN): <a href="https://www.ansa.it/english/news/science_tecnology/2020/04/06/ansa-using-blockchain-to-help-readers_af820b4f-0947-439b-843e-52e114f53318.html" rel="nofollow">https://www.ansa.it/english/news/science_tecnology/2020/04/0...</a><p>Example of news in the blockchain: <a href="https://blockchain.check.ansa.it/landing/b150aff9f028f7339f0c5649935e8d90/XCW7SUR847X047N" rel="nofollow">https://blockchain.check.ansa.it/landing/b150aff9f028f7339f0...</a><p>The first time I saw it I was quite surprised. I'd like to hear opinions about it here. Eg: it's blockchain stricly necessary here?
Blockchain needs a good "winter" imo. Stuff like hashgraph and some other non-proof of work protocols have a lot of potential but there's way too much hype in the industry and way too much investment ensuring BTC's dominance for them to ever really emerge
> Since I left AWS in 2020, I’ve been super-careful not to share things from behind the scenes. I can’t actually remember the details of the nondisclosure agreement, but I have strong feelings about the ethics. This story, though, doesn’t reflect poorly on anyone and I’m pretty sure nothing in it is material to any business plans at AWS or elsewhere.<p>"Can't actually remember"? Yikes.<p>"I'm pretty sure" ... based on...? Not working there any more?<p>"Strong feelings about the ethics?" Dude. Contracts are not about your feelings about ethics.<p>Mr. Bray doesn't have -- or didn't take the time to find -- a signed contract from two years ago.<p>Not a great example to follow.
Oh well...never mind... another fried air article which deserves only criticism...mixing rug pulls with actual good technology is a tragic error made my a newbie... here's some help free of charge...PoS = centralization or in other words no trust involved. There are a number or PoW Blockchains that literally kick ass yawning. Kadena, for instance has been founded and created by the very ppl that deployed JPM first Blockchain, their target is US stock exchanges to run on their braided chains... Hathor, another excellent example....but most importantly the point is triple entry accounting....go figure what a third accounting dimension does to accounting...
I believe that putting the equal sign between a blockchain and a database is fundamentally wrong. I also think that a lot of "cryptos" were just get rich quick schemes. After the dust settles we will see if blockchain is really useful or not.
> But the Eth folk managed to get proof-of-stake to work at scale; good on ’em.
That’s a bit charitable IMO. It works with at least two major caveats:<p>1. You can’t unstake staked ETH. (This seems to have all manner of strange effects.). Fixing this is apparently a big deal, and, if nothing else, could enable attacks in which one unstakes and then uses knowledge of old staked private keys to attack other parties.<p>2. It hasn’t actually been that long, and the major validators likely have a strong interest in making Ethereum work well. Just working at scale does not mean it’s secure at scale.
Very big article that basically buried the core difference: zero trust or some "trusted transaction manager".<p>Moving from the second to the first is very trivial - just make it based on distributed consensus of nodes that are run by separate entities, may be even several different cloud vendors.<p>AWS also doesn't have some interesting things from crypto-world - smart contracts, that are just like lambda functions that couldn't be altered in any way and could be trusted by third-party. They have Nitro Enclaves, this is close, but quite hard to use.
For whatever reason, SMS operators in India rely on blockchain to validate SMS templates and customer’s do-not-disturb settings.<p>For a sense of scale, SMS is a 12.5 billion dollar business in India.
from a developer perspective, “smart contract” platforms are very unique and cheap<p>pay to write once and never pay again at any level of traffic, customers pay. no SaaS service offers this<p>developers bring their whole communities to that platform and this keeps happening<p>you know whats most important? <i>I don’t care what the underlying consensus model or blockchain is, or whether there is one at all</i>, but there is no [meaningful] smart contract platform operating any other way, and I don’t care about that being the case either. but the equilibrium in consensus mechanisms are why it is this way.<p>its cheaper for developers and as far as customer acquisition and convincing a customer to pay, it is a highly optimized version of the web 2.0 funnel, as every call-to-action <i>is</i> a payment<p>the development stack is dead simple - frontend website with a single call-to-action (possible even a static site), and a few variables stored in a smart contract - and the customers already want to pay
Everyone uses Git by day and then moans how blockchain in not useful by night.<p>Specific technologies have specific applications. Blockchains in general - immutable history. Crypto blockchains - consensus in untrusted environment. Just use given technology for what it’s designed for, and stop being full of yourself.
Only thing annoying the the flood of negative articles only pop up after a crash. All that VC money made a lot of people afraid to look like fools by speaking up against the tech.
Where was he (not personally, as a symbol of tech bloggers) at the height of the bubble?
Off topic: isn’t Amazon know for forcing people to be better writers due to how they conduct meetings with written memos.<p>I bring this up because that post could have been 1/2 the length, if not shorter, without losing any content or messaging.
It is a shame that we are ending up here with "Blockchain technology". Beyond the financial aspect (Bitcoin/Stablecoins), here are a few use cases where a Blockchain will <i>shine</i>:<p>- Tracking shipments across countries. This is an append-only operation, across multiple jurisdictions/languages/infrastructures. A blockchain ledger can play the role of standardizing operations for the tracking of shipments.<p>- Healthcare records.<p>- Company registry records. Once submitted, they are publicly available and immutable.<p>- Title deeds. You wouldn't own the NFT yourself. The government could assign it to you and be the only one able to transfer it across its "subjects".<p>- Stocks/Assets. For this one I'll blame ASE for failing to deliver. They have picked the wrong company to build such a thing while spending a gigantic sum of money in the process.<p>- Digital Identities. There was never enough investment in this area, especially for key retrieval in the case of loss.<p>- Decentralized DNS. The tech is there (Namecoin) and roughly functional. There was never any investment in this comparing to the billions thrown in NFTs and other crap projects.<p>Instead of addressing any of the above points, Blockchain and Crypto degenerated into fancy websites and gifs aimed to drill money from everyone who can be influenced. We are here 5-6 years later after the Defi/Smart Contracts fever and all we have to show for it is some apes NFT. This could have been done a lot earlier with Namecoin which has a much more native support of NFT. But Namecoin never took off because the founders were never interested to make money out of this.<p>It does seem that governments might be more fundamental than we thought. They might be protecting us more from ourselves than we see them as an imposition on our freedom. Here we have a worldwide experiment of a government-less operation at wild.
I've lost count of how many product owners have interchanged the word Database with Blockchain to try and score some PR points with their customers/bosses.
>A huge, almost incomprehensible, volume of venture capital was flowing into the sector, and that money was localized in the Finance sector, specifically in Manhattan.<p>I think the worst part about this whole thing is there are <i>still millions if not billions of dollars</i> being pumped into it. I literally just got a job interview request for a crypto exchange with hundreds of millions supposedly in the bank. It's absurd.
People saying a database is as good as a blockchain are taking a look from the wrong perspective.<p>Blockchains are more like always available, immutable logs for interfacing parties that don't trust each other or an intermediary.<p>Blockchains are more like an API than a database.
Unrelated, but<p>> Which was pretty nice, except for it was stinking hot that August and we were on multiple steamy subway trips every day; got back to our hotel rooms pretty well emptied out.<p>Upper level amazon engineers can’t take ubers through new york?
reminds me of my post where i tried to understand blockchain in good faith:<p><a href="https://news.ycombinator.com/item?id=31132610" rel="nofollow">https://news.ycombinator.com/item?id=31132610</a>
TL;DR anyone? I couldn't care less about communication skills of Andy and whether some meeting was in person, before even getting a hint of what is the point of that post.
So is the fundamental problem with blockchain, as described here anyway, that you can basically do all of the cool parts of blockchain that people get excited about, but using a central service instead?<p>I feel like I don't really understand that, because wouldn't that mean you'd have to re-solve a lot of problems on your own, with your own team? Wouldn't it be easier to figure out how to plug blockchain into this central service instead?
Amid all this sudden blockchain skepticism, one question remains prominent in my mind: where were all these skeptics when blockchain enthusiasm was on the rise?<p>Sure, hindsight is 20/20, but you have to wonder if this chorus of I-toldya-so's were genuinely right, or if they are merely rewriting history to boost their own credibility.<p>Blockchain was always experimental. The chance of success on any given project was always slim, but the potential payoff huge. So, putting anything more than what you are willing to lose is reckless.