Re. Blockchain is not only crappy technology but a bad vision for the future

["Dave Farber" <farber () gmail com>]

Begin forwarded message:

> From: "Roger Bohn" <Rbohn () ucsd edu>
> Date: May 6, 2018 at 8:02:45 AM EDT
> To: dave () farber net
> Cc: ip <ip () listbox com>
> Subject: Re: [IP] Re. Blockchain is not only crappy technology but a bad vision for the future
>
> In article <9676F745-D55E-43BD-B93A-C3CDAD921F57 () gmail com> you write:
>
> Comments welcome djf
>
> The original Kai Stinchcombe articles are indeed very interesting and mostly persuasive.
>
> https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 (December 2017)
>
> https://medium.com/@kaistinchcombe/decentralized-and-trustless-crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec
>  (April 2018)
>
> JL’s response is funny, but still begs clarification.
>
> We all agree that Blockchain is more than a proposed method for cryptocurrency. Some advocates conflate the two, and 
> some even conflate “Bitcoin” with all cryptocurrency. Major confusion ensues.
>
> It is indeed obvious that Bitcoin, with its current electricity-gobbling and ultra-slow instantiation, has no 
> practical value. The Bitcoin bubble will crash.
>
> Can some other cryptocurrency solve these problems and become useful? The claim made by Stinchcombe is “no,” because 
> there is no inherent value in decentralized currency. This is the big message of his December article. I am (right 
> now) 80% persuaded by the argument. But in any case IMHO there are additional reasons to be skeptical of 
> cryptocurrency.
>
> The other half of his analysis is more interesting because more novel: there is no value in a distributed ledger for 
> ANY purpose! This is re-iterated in his April article. 
> a. Any blockchain system is ridiculously inefficient for storing information, because it replicates the actual bytes 
> on a massive scale, it requires significant “proof of effort,” and so forth. See Quote #1
> b. That leaves the advocates with one main potential class of applications: smart/self-enforcing contracts.
>
> I have never understood what “smart contract” means. Mr. Stinchcombe’s argument seems to be that the concept is 
> vacuous. Some actual transaction still has to take place, and some mechanism is still needed to verify that it was 
> not subverted. (Quote 2) A claimed smart contract example is renting an apartment. Each month, I send the apartment 
> owner $1500, and the contract automatically sends me a digital key good for 30 days. BUT, how does this smart 
> contract know whether the digital key actually opens the door? And what if the lock breaks, or is deliberately 
> broken. We could add sensors, but who validates that the sensors have not been subverted?
>
> After reading these short articles, the burden of proof is now on blockchain advocates to demonstrate that any of 
> their claims holds in any real world.
> Roger
>
> Quote #1
>
> The same argument holds for proposed distributed computing and secure messaging applications. Encrypting it, storing 
> it forever, and replicating it across the entire network is just a ton of overhead relative to what you’re actually 
> trying to accomplish. There are excellent computing, messaging, and storage solutions out there that have all the 
> encryption and replication anyone needs — actually better than blockchain based solutions — and have plenty of other 
> great features in addition.
>
> Quote 2
>
> Blockchain systems do not magically make the data in them accurate or the people entering the data trustworthy, they 
> merely enable you to audit whether it has been tampered with. A person who sprayed pesticides on a mango can still 
> enter onto a blockchain system that the mangoes were organic. A corrupt government can create a blockchain system to 
> count the votes and just allocate an extra million addresses to their cronies. An investment fund whose charter is 
> written in software can still misallocate funds.
>
> Roger Bohn
> Professor of Technology Management
> School of Global Policy and Strategy, UC San Diego
> +1 858 381-2015 cell/text
>
> Spring 2018 courses:
> Big Data Analytics: https://bda2020.wordpress.com
> Startup Workshop: https://UCSDstartup.com
>
>
>
>
> Begin forwarded message:
>
> > From: "John Levine" <johnl () iecc com>
> > Date: May 5, 2018 at 1:49:22 PM EDT
> > To: dave () farber net
> > Subject: Re: [IP] Blockchain is not only crappy technology but a bad vision for the future
> >
> > In article <9676F745-D55E-43BD-B93A-C3CDAD921F57 () gmail com> you write:
> > > Comments welcome djf
> >
> > Well, gee, everything he says is self-evidently true.
> >
> > Bitcoins remind me of a story from the late chair of the Princeton U.
> > astronomy department.  In 1950 Immanuel Velikovsky published "Worlds
> > in Collision", a controversial best selling book that claimed that
> > 3500 years ago Venus and Mars swooped near the earth, causing
> > catastrophes that were passed down in religions and mythologies.
> >
> > The astronomer was talking to an anthrpologist at a party and the book
> > came up.  
> >
> > "The astronomy is nonsense," said the astronomer, "but the anthropology
> > is really interesting."
> >
> > "Funny," replied the anthropologist, "I was going to say almost the
> > same thing."
> >
> > Bitcoin and blockchains lash together an unusual distributed database
> > with a libertarian economic model.  People who understand databases
> > realize that blockchains only work as long as there are incentives to
> > keep a sufficient number of non-colluding miners active, preventing
> > collusion is probably impossible, and that scaling blockchains up to
> > handle an interesting transaction rate is very hard, but that
> > no-government money is really interesting.
> >
> > People who understand economics and particularly economic history
> > understand why central banks manage their currencies, thin markets
> > like the ones for cryptocurrencies are easy to corrupt, and a payment
> > system nees a way to undo bogus payments, but that free permanent
> > database ledger is really interesting.
> >
> > Not surprisingly, the most enthusiastic bitcoin and blockchain
> > proponents are the ones who understand neither databases nor
> > economics.
> >
> > R's,
> > John
>
> This message was sent to the list address and trashed, but can be found online.



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