[LINK] itN: Fancy that: "blockchain bets often bomb"

Roger Clarke Roger.Clarke at xamax.com.au
Fri Jul 19 06:45:31 AEST 2019


On 18/7/19 10:13 pm, Kim Holburn wrote:
 >   On the other hand there is no real argument here as to why 
cryptocurrency is not a useful means of exchange, a currency.  Except 
possibly the scalability argument.

The article I sent was about noncurrency applications of blockchain.

So I extracted some of Steve's and my own comments on that topic.

Blockchain involves a data model with particular characteristics.  A few 
instances of real-world data share those characteristics.  (The primary 
example I use is old-system land title).  Blockchain may have benefits 
in such circumstances.  Otherwise, its benefits are limited and its 
disbenefits and energy and other costs are high.

Cryptocurrency is a very particular application.  Skilful design has 
enabled it to function pretty effectively, but the energy costs are 
frightening, and a bunch of vulnerabilities have to be managed. 
Meaningful comments about cryptocurrency need far deeper study than I've 
ever put in, so I've made few and fairly superficial comments about it.

Steve's written more about it though, much of it accessible in his blog:
http://lockstep.com.au/blog/blockchain.html

_____________

On 18/7/19 10:13 pm, Kim Holburn wrote:
> 
> 
> 
>> On 2019/Jul/18, at 1:31 pm, Roger Clarke <Roger.Clarke at xamax.com.au> wrote:
>>
>> [In May 2016, Steve Wilson wrote:
>> http://lockstep.com.au/blog/2016/05/03/something-about-blockchain.html <http://lockstep.com.au/blog/2016/05/03/something-about-blockchain.html>
> 
>> The blockchain only does one thing (and it doesn’t even do that very well). It provides a way to verify the order in which entries are made to a ledger, without any centralized authority
> 
> ...
> 
>>  From a design perspective, the most troubling aspect of most non-payments proposals for the blockchain is the failure to explain why it’s better than a regular database. Blockchain does offer enormous redundancy and tamper resistance, thanks to a copy of the ledger staying up-to-date on thousands of computers all around the world, but why is that so much better than a digitally signed database with a good backup?
> 
> 
> ...
> 
>> The truth is that when we fold real world management, permissions, authorities and trust, back on top of the blockchain, we undo the decentralization at the heart of the design.
> 
> 
> These are well put.  All those commercial and government projects seem ridiculous.  And the idea of investing in cryptocurrency seems as ridiculous as investing in currency.  Currency doesn't do anything by itself.
> 
>   On the other hand there is no real argument here as to why cryptocurrency is not a useful means of exchange, a currency.  Except possibly the scalability argument.


-- 
Roger Clarke                            mailto:Roger.Clarke at xamax.com.au
T: +61 2 6288 6916   http://www.xamax.com.au  http://www.rogerclarke.com

Xamax Consultancy Pty Ltd      78 Sidaway St, Chapman ACT 2611 AUSTRALIA 

Visiting Professor in the Faculty of Law            University of N.S.W.
Visiting Professor in Computer Science    Australian National University



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