Hello, I have a boring answer for you.
Blockchain is neither useless nor it is likely to be a revolution.
Blockchain is not a product, it is a technology.
New products that solves a real important problem in the real world can cause a revolution. That usually do not require a super sophisticated technology.
Wikipedia is built with PHP. It is a genuine revolution.
The guy who asked doctors to wash their hands before helping women to give birth caused a revolution.
The technology used there? water.
The result? Countless millions of women stopped to die.
Bitcoin is a product. But it solves as a problem that almost nobody has: there is no single Central Bank on Earth that I trust more than I trust my own cryptographic skills.
Bitcoin's main use case is: unregulated internet gambling.
It's pretty good for that to be honest.
What about the technology?
It is a technology at the peak of its hype cycle. Or maybe on the descending phase.
Lots of blockchain fans love to use complex words.
But what you have to understand is that Blockchain is basically two things
The first part (GIT) is very useful, but it's not new. It is git
The second part is new, but it's almost never the simplest solution to a given problem.
People are always asking the wrong question.
It's not: can we build dev.to on the blockchain?
Yes you can, but there is a much simpler solution that works.
The consensus algorithm is also terribly wasteful. If you care about climate change, and more generally about energy, the first thing you should throw away is the whole blockchain industry.
The point about "democracy" are usually fake.
Trusting no-one is not the right ideal to strive for.
In the dark ages, we trusted no one.
Thanks for your in-depth analysis and interesting answer Jean-Michael!
I know that Blockchain is just the underlying technology innovative products could be built on, but do you really think that the Blockchain itself will become such a widely spread industry standard like modern internet protocols? It's often refered to as the "biggest thing since the internet" and I'm not really getting the hype. Distributed databases aren't an innovation at all, neither are merkle trees or even hashing algorithms. I was just wondering if there's any useful product right now, that shows the true value of Blockchain?
Wikipedia could also have been built on another tech stack, I think PHP was just the way to go at that time. But Blockchain isn't just an alternative tech-stack imo. You don't just swap your SQL or mongoDB for some ethereum-based blockchain if there's no reason to do so, am I right?
I agree with you.
I think that in general new simple technologies have more use cases than ad hoc sophisticated technologies. For example none of the coolest stuff invented by the space industry did change the world as much as the simple and stupid container. I'm not talking about Docker here. About the real container, one of the most underrated recent invention.
There are multiple requirements that must be met for the blockchain to makes sense - else it's just an over engineered git. Of course I don't know what will happen in the future better or worse than anyone else, so I might be wrong.
I loath that Gartner hype chart, it's so full of it. The only reason why some of Gartner's "predictions" come close is because they try to create a self fulfilling prophecy. COs like to drink the Garner cool-aid, and because of that a lot of attention goes toward buzzwords (because the CO's FOMO), and thus validating Gartner's point.
I don't see it as as prediction tool, you are right that this would be yet another way to be a slave off the hype cycle.
I see it as a good reminder that I should focus not on the hotness of $TECH but on the problems that my products are solving.
Please read Jean-Michel's answer first, it's really a great answer. However, it's wrong. :-D (no offence)
So why don't we see great products, yet? Because blockchain technology can solve problems when big corporations are doing business together. So we're talking about enterprise software like Oracle and SAP are building. And how long did it take for these companies to build a decent product? (Some might say they still haven't succeeded. Their crappy software is just being used due to no better alternatives.)
So consumers probably won't see products based on blockchain technology anytime soon, unless Facebook achieves to persuade governments all over the globe to allow Libra. While from a technological perspective you might very well see it as another "copy of Bitcoin" it is far more interesting to keep an eye on the political and economical impact of Libra.
=> Why did nobody bother when Amazon introduced Amazon Coins, but now with Libra every politician seems to go wild?
=> Why are there so many consumer platforms for buying stuff (eBay) and social interaction (facebook.com), but nearly no such platforms that corporations use for doing business together?
Because money and power.
Amazon coins are just vouchers, they cannot be used as money, so they are no threat to a countries money sovereignty. But Libra would be, because 30 (or 100) big companies are behind Libra as well as more than 2 billion possible users. He who controls Libra has the power to destroy most counties' economies.
Corporations see how easy it is for eBay to make money just by providing a platform for consumers to trade. Wouldn't you think that there would be plenty of these platforms for B2B as well? There aren't, because the platform owner is king - he controls margins and even access to the platform. As a business owner you don't want an intermediary have so much power over you. And here blockchain comes to the rescue. Now we can have decentralised platforms with no intermediary, because he who builds the platform is just a software provider, and has no stakes in the business. Owners of B2B blockchain platforms will only receive license fees, so everything related to money and power will stay in the hands of those doing business on the platform.
You might argue that such B2B platforms could have been possible in the past w/o blockchain technology, e.g. a contract could have enforced the platform owner of keeping out from the business that is being done on his platform as well. I guess that's right. But nonetheless there are no such platforms. It required blockchain technology to kick off such a development.
tl;dr: The revolutionary products are on their way, but they are hard to build and they are targeting B2B.
I was intrigued about Libra so I researched the subject more and have found this:
Longer version here:
Oh man that was a devastating read.
Those tech monopolies are run by children that have no ideas what they are doing.
You asked why politicians are afraid by Lira? Well not only politicians, Visa, Mastercard, Stripe, eBay and others have quit Libra. But the reason why politicians are rightfully afraid, is because Facebook might succeed in delivering a global currency with obvious flaws, the kind of flaws for which wars have been fought in the history.
Well, those companies have been pushed out by politicians, too. But anyway - since Libra directly affects (threatens) the main business of each of these companies, one could have asked why they wanted to be part of Libra in the first place. Maybe they thought better be part of the competitor that supersedes your business than being pushed out by him.
Libra is dangerous and has flaws, yes. Should we forbid it? Maybe. But what are the alternatives? I mean the technology is here, it's open source, everybody can use it. At least Facebook wants to work together with regulators all over the world to make Libra compliant. If we forbid Libra, there will be a next effort by someone else - and then the initiator might just ignore regulators and governments.
Can we just all agree that a global currency is toxic and should not be introduced? No. There is no global agreement. I mean after the invention of atomic bombs there was no global consensus to just not build them, because they are too dangerous. Of course they have been built. So why should there be a global agreement to not start another effort of introducing a global currency despite all its benefits?
Few things can inflict as much massive pain and suffering to whole countries than a flawed currency.
So to be clear, yes, I hope that Libra will either failed or be forbidden.
To answer to your later point, I think that monetary policies should stay firmly under the control of democratically controlled national institutions.
War is too important to be left to the generals (Clemenceau)
War is too important to be left to the generals (Clemenceau)
Money is too important to be left to tech companies.
I couldn't have said it better. Chapeau!
I agree that blockchain has some pretty neat use cases in B2B, especially when it comes to supply chain management or production tracking stuff. However, I don't think that the big tech companies like MS or SAP will be the major users of that, but more old-school manufacturing companies like for example Volkswagen, who're experimenting with IOTA right now.
For me, Libra isn't really blockchain-based at all. At least in their early days, all transactions are running over the libra association's on servers - which is not far from bank's function today. It's a digital currency and I've got no doubt that it would be much faster and cheaper than the current system, but I don't really know if it's what mankind is really needing, as it's another big step towards plutocracy.
I may be wrong, and I will happily change my mind if facts change.
I don't think block chain tech has achieved anything of note to date, at least anything that can parallel the hype it gained. It's rather like hyping up any other data structure like hash maps and claiming it can solve world's problems. I understand why block chains are special in that regard, nevertheless I find most of the proposed applications of it amusing at best.
Libra is a joke being played on the US government. The tears of laughter never stop. Anyone who understands Blockchain knows there is no way to build it, as promoted, with current tech without undoing the very parts of blockchain that make it appealing.
In the current world, your blockchain app needs broad international distribution (PoW has that, but at a high cost, POS can have it, but you need to mandate 10k validators or more to start approaching unassailability. Now that distributed nature requires bandwidth. A safe limit, given the state of the internet, is 2MB per second. So, if your transaction data size is 1kB (reasonable size) you can handle ~2k TPS. That will not support a decentralized global currency. Ever.
There are regional products that could work with that and there are non currency oriented use cases that could support global products.
For 2020, and probably a few years beyond, 2 MB/s is your cap for a truly decentralized blockchain-based product.
For the product designers out there. There are two core properties to keep in mind for your product (when it's fully scaled out) ;
Verus is truly doing something that could change the world. Something many might even consider the holy grail of blockchain tech.
A simple UI for easy and secure full scale cryptocurrency creation (mineable/stakeable) with the ability to exchange currencies simply on sending from one chain to another different chain.
This is elegant decentralized code being executed on the protocol level which has the added benefit of being immune to censorship (think Bitcoin vs Libra).
Verus Coin, currently in an open to the public testnet, enables anyone to make new full scale true blockchains and currencies, each with the ability to scale and operational independence, zk-SNARK privacy, automatic wallet support, and 100% liquid conversion between testnet currency at any volume.
Sending currencies cross-chain or converting between currencies is as easy as sending a cryptocurrency in less advanced systems today, except that the new Verus protocol enables you to include another blockchain as part of your destination and convert a fractional reserve currency to and from its reserve, according to its exact price along the way. All conversions are fully decentralized, require a standard protocol fee of 0.01%, which goes 100% to miners and stakers of the network, and calculates one price per block for all buys and sells in that block with zero spread, counteracting the well established problem of front-running.
Verus PBaaS Reserve technology enables any organization of any size to make a currency with its own blockchain, support it in world class wallets, develop its own applications, and use it for payments worldwide that can be converted to the reserve currency without ever having to leave the blockchain network. Each blockchain is independent and connected through the Verus Reserve protocol.
They use a CPU tuned algo that is hardware agnostic, allowing both CPUs and FPGAs to mine at relative profit on the same network.
The lead developer has spent decades in the field programming and is a former Vice President and Technical Fellow at Microsoft, recognized founder and architect of Microsoft’s .Net platform, ex-Technical Fellow of Microsoft’s advertising platform, ex-CTO, Parallels Corporation, and an experienced distributed computing and machine learning architect. The project he helped create employs and makes use of a diverse myriad of technologies and security features to form one of the most advanced and secure cryptocurrencies to date.
Check em out. You won't be disappointed.
I don't see the real value here. If you know the basic theories of economics, you know that there isn't any cryptocurrency right now that's able to compete with the USD or EUR. Enabling people to create even more kinds of that not really valuable currencies isn't really changing the world in any way, at least in my opinion. I wrote an article about cryptocurrencies from a central bank's perspective earlier this year, check it out!
Oh yes... It wastes so much electricity under the cover of new "gold rush" ..
Wow... incredible ignorant answer before me coming from someone who never traveled the world. You can make low cost world wide transactions at a heartbeat... that a great technology and product and has changed already millions of lives who have been disenfranchised by banking system.
What's next? Well I'd point to bitbay.market you can trade anything with double deposit escrow and it essentially can replace any notary system in the world. And the dynamic peg can make it a true store of value, without relying on any other asset to back it.
That's just gambling and speculation in my opinion. BTC-fanboys are often throwing that "financial inclusion" argument, but where are all of those people? Why aren't they just using PayPal? And before you say something like "they can't because they don't have credit cards or bank accounts to connect with PayPal", then how the hell do they swap their received BTC back to their local currency again? Additionally, just think of the volatility BTC shows us everyday! If you're unlucky, your transaction will be much more expensive than Western Union or comparable options.
These people are everywhere. Only because the majority of the people are blind to world issues does not make them non existent. Risk mamangment of Banks does not allow many to open accounts with people who have no income or little income, or not adquate ID. Not even Western Union serves rejects many people. Sure, there are pay to go debit cards, phone credit solutions and these people use and of course tons of other methods, such as simple cash or valuable items. Bitcoin is just one of many, and yes, I totally aggree that the volatity is a huge issue for day to day workers who can't risk a 5% change in price when sending money home to their loved ones. However, you are coming most likly from a first world country with a stable national currency. Talk to someone with rupee, brazial real or venezuelan bolívar. The risk reward is relative.
Hence I mentioned bitbay.market here, since it offers an unique value propostion to be a "stable coin" that does not rely on a central authority (which we know fails on average in 26 years intervals. Check average life span fiat currency, and the only reason the average is so high is because of the British Pound, which actually had multple reforms to sustain it's existance).
However... I can confirm from first hand experiance that Blockchain is certainly really changing the world. I personally helped thousands of people who would have otherwise never had the means to make fast, low cost, transnational transactions or even start entire buisnesses. And I can tell you that bitbay.market is going to change the world even more as soon it's "dynamic peg" goes live in too soon future.
I get your point, don't get me wrong, I think financial inclusion is one of the most urgent challenges mankind's facing by now.
But I still don't see how people in poorer countries benefit from a transaction in some cryptocurrency, as they can hardly pay anything from it without changing it into something locally accepted, like a rupee, brazil real an so on. I'm just curious about how they swap that digital currency without paying a lot of fees or using semi-legal exchanges.
What makes you think they can hardly pay anythign from it? There are huge networks we simply have no good metrics to messure them because they are informal buisnesses. You can call it also at hoc economy, or unreported economy. Just take this number I pulled from wiki. "In the U.S. unreported income is estimated to be $2 trillion resulting in a "tax gap" of $450–$600 billion."
Are real issue is fraud, scams, and security, people thinking they are buying bitcoin but ending up with some shitcoin. Also overcharging is a huge problem. That's why education of what bitcoin really is and how to use it safe and sound is really important but ever since the marketing people came into the game and wanted to make bitcoin mainstream... that learning curve got washed away... sadly. Greed has taken over.
Well... just my few cents for now.
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