Well, mostly asking for responses to a very general question(s) I have regarding blockchain.

I don't have any direct cryptocurrency exposure but do have some blockchain related investments. My view there is that I'm not sure about the currency related aspects of blockchain technology for the future but do think that blockchain itself has a lot of potential value and use going forward. So my thinking there is that the infrastructure type investments will have greater probability of having good returns (but unlikely to have the type of returns seen in cryptocurrencies or will be seen if best case scenarios for the currencies play out). 

I'm not sure that view is a good one to hold though. Knowing that many here are a lot more expertise in this space I'm wondering if the view I hold here is naive or just wrong. Does blockchain really live or die on the payments sword?

A related question I'm also having is current state versus future. I'm largely thinking what we're seeing is something similar to what we got in the .com bubble/bust in 2000. In that view we're really just seeing some shakeups and a process of weeding out the weaker implementations and application but a stronger blockchain industry should be expected in the near futures (5 - 10 year frame or even shorter). Does that view seem a reasonable one or is that a really bad historical example to inform on the current world?


Note: Adding a request to the original. For those who disagree it would be most helpful if you at least noted what you are disagreeing with. Just seeing a disagree click (or multiple) provides very little allowing my updating my own reading of the comment. Thanks.

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I'm not an expert but I would say that I have a decent understanding of how things work on a technical level. Since you are asking very general questions, I'm going to give quite general thoughts.

(1) The central innovation of the blockchain is the proof-of-work mechanism. It is is an ingenious idea which tackles a specific problem (finding consensus between possibly adversarial parties in a global setting without an external source of trust).

(2) Since Bitcoin has made the blockchain popular, everybody wants to have the specific problem it allegedly solves but almost nobody does.

(3) Proof-of-work has a certain empirical track record. This is mostly for cryptocurrencies and in the regime where the main profit of the transaction validators is from minting new coins.

(4) Proof-of-work isn't sustainable. The things which it secures (Bitcoin, smart contracts, etc.) are secure only as long as an increasing amount of energy is put into the system. Sure, traditional institutions like the government or a central bank also use a lot of energy but they can't be abandoned as easily as a blockchain because they are monopolies which have proven to be robust over long time scales. Proof-of-work becomes increasingly unstable when the monetary incentive for the people doing the validations goes down.

(5) Other proposed consensus mechanisms (proofs-of-something-else) remove the central innovation of the blockchain. I don't see them as ingenious ideas like proof-of-work but mostly as wishful thinking of having one's cake and eating it too. I'm open to change my mind here but I don't see any evidence yet.

(6) I don't share the optimism that clever technological solutions which bypass trust will lead to a flourishing society. I think the empirical link between inter-personal trust and a flourishing society is strong. Also as far as trust in people and institutions is bypassed, it is replaced by trust in code. I think it is worthwhile to spell this out explicitly.

(7) Comparisons with the .com bubble don't seem sensible to me. Bitcoin has been popular for ten years now and I still only see pyramid schemes and no sensible applications of the blockchain. Bitcoin and NFTs aren't used, people invest in them and hold them. Crypto right now is almost completely about the anticipated future value of things. In contrast, when the .com bubble became a bubble there were many websites which were heavily used at the time.

(8) Moxie Marlinspike, the founder of Signal, also makes some interesting points regarding web3: We already have an example of a decentralized system becoming widespread: the internet. Did people take matters in their hand and run their own servers? No. What happened is the emergence of centralized platforms and the same thing is happening with blockchains already. I think at least some of the potential people see with blockchains wouldn't be realized because of this dynamic.

(5) Other proposed consensus mechanisms (proofs-of-something-else) remove the central innovation of the blockchain. I don't see them as ingenious ideas like proof-of-work but mostly as wishful thinking of having one's cake and eating it too. I'm open to change my mind here but I don't see any evidence yet.

In what way do you believe Polkadot and Solana have problems because of their setups? Why don't you see those systems working as evidence that other systems are viable?

Thanks, you've given me some things to think about.

Disclaimer: I spent about 2 months diving into the crypto space this past December-January. Read a bunch of stuff (here's a shortened list), got an ENS domain, and wrote some Solidity code (w/o deploying any of it, even to a testchain though).

I seems to me that blockchain tech has a lot of potential for building newer, better coordination tools that integrate with an increasingly online lifestyle and culture.

Currently, most of the community's energy seems to be going into financial solutions, which also produces many, many highly suspicious projects--either outright scams or extremely early alpha work that's presented as mature.

My personal bet is that we're in a similar place where PCs used to be in the 80's: crude, underperfoming tech that never amounted to much (ie. productivity gains) but attracted a lot of academics and enthusiasts that kept building and building until we arrived in today's world where our lives are deeply enmeshed with personal computing technology + networks. So I'm expecting that the next 5-10 years will bring even more failed projects in this space, but maybe 1 or 2 will turn out  to be transformational technologies. 

My thinking here is that we need only 1 or 2 "killer apps", something like email or facebook, that give people immense utility, for blockchain to nudge our digital lives onto a different track. Seeing how much people like Vitalik write and talk about eg. quadratic voting or what the people at (Other Internet) are putting out reassures me that some folks in this space are working on coordination tools. 

Thanks for the feedback -- particularly your view on where things are in the timeline.

The Web3 industry and crypto space is so large that I have been working in the sector as a Project Manager for over 3 years and my knowledge still just scratches the surface.

As for “1 or 2 killer DApps” I do know that the blockchain we have been building on, https://Hive.io offers utility.

Users own their social media accounts through a Master Key similar to Bitcoin holders owning their BTC through a wallet address and key.

  • The usernames on Hive are the wallet addresses.

Social media DApps on Hive are also open source with more on the way, increasing acco... (read more)