This has always been obvious to anyone who spent the smallest amount of time working in consumer retail. Customer comes in and wants to buy a patio set they saw in the catalog. You check the database - says there are two in the back. You go to the back. You look for like ten minutes. Patio set is nowhere to be found. Customer has left in frustration by the time you return.
The hard problem has never been the specific form of database used to store info about the real world. The hard problem has always - and will always - be enforcing the correspondence between what's in the database and what's in the real world. This problem couldn't be solved at a single store in a single fairly small city. It's not gonna be solved worldwide.
Right. When blockchain became mainstream in 2017, I went to a blockchain for government event, and they had a speaker essentially explaining that blockchain was an immutable database, and that it could be used to replace your existing databases with something that couldn't be corrupted.
This was the "business" interpretation of blockchain for a long time, and people latched on to the database part and imagined all kinds of things that could come out of a more accurate database, without actually understanding how this was achieved.
So we ended up with these use cases where blockchain was supposed to magically solve physical world problems, because "that's what it does", without any causal mechanism.
I get the impression that a lot of folks take it as an article of faith that accuracy problems in the database must be due to a shortcoming of the database itself.
But if you replace the database with a spreadsheet, everyone seems to be able to intuitively understand that accuracy problems with the information in the spreadsheet aren't (necessarily) due to shortcomings in the basic idea behind Microsoft Excel. They're more often due to data entry errors, or the fact that it's fundamentally difficult to keep track of everything that happens in the messy, messy real world.
(Realistically, the former is just a special case of the latter.)
Did these people make it clear that blockchain enthusiasts consider any action or modification by "the courts" and "the legislative body of the government" to be "corruption of the database"?
Governments are the largest perpetuators of the "blockchain for real world assets" silliness. Non technical managers tend to push for these sorts of things to get a "blockchain project" to their name. For some reason the idea of lying to the blockchain isn't something that occurs to them very often.
If something is effectively "magic" to someone, even in the base case, an improvement is just another sort of magic.
This is why I don't have a lot of confidence in big-picture types that don't know anything about computer science but hold some parallel business analogies in their head and think they can make decisions on that basis.
On the other side, sometimes interesting and valuable things can happen when you don't have reality as a constraint. I read (but have not verified) that William Gibson's world of cyberspace and internet etc. in the Sprawl books ended up being so attractive largely because he understood almost nothing about computers.
> I read (but have not verified) that William Gibson's world of cyberspace and internet etc. in the Sprawl books ended up being so attractive largely because he understood almost nothing about computers.
He knew enough to know that computers and computer hackers were not the stuff of noir-action-thrillers, but saw the potential in answering the question: what if they were?
To quote Gibson:
The only computers I’d ever seen in those days were things the size of the side of a barn. And then one day, I walked by a bus stop and there was an Apple poster. The poster was a photograph of a businessman’s jacketed, neatly cuffed arm holding a life-size representation of a real-life computer that was not much bigger than a laptop is today. Everyone is going to have one of these, I thought, and everyone is going to want to live inside them. And somehow I knew that the notional space behind all of the computer screens would be one single universe.
What I had was a sticky neologism and a very vague chain of associations between the bus-stop Apple IIc advertisement, the posture of the kids playing arcade games, and something I’d heard about from these hobbyist characters from Seattle called the Internet. It was more tedious and more technical than anything I’d ever heard anybody talk about. It made ham radio sound really exciting. But I understood that, sometimes, you could send messages through it, like a telegraph. I also knew that it had begun as a project to explore how we might communicate during a really shit-hot nuclear war.
…
I knew that cyberspace was exciting, but none of the people I knew who were actually involved in the nascent digital industry were exciting. I wondered what it would be like if they were exciting, stylish, and sexy.
> hold some parallel business analogies in their head and think they can make decisions on that basis
The advantage with folks like this is it becomes abundantly clear when they open their mouths that they have no idea what they are talking about most of the time.
The major disadvantage though is these people tend to be the loudest in the space, and are heard more since people tend to want to hear exciting sexy ideas over the mundane reality of things.
I'm reminded of the pitch I heard from the IBM salesperson talking about the "logarithms" they had that were solving client problems. (Being charitable, maybe he was a slide rule enthusiast)
I find it typically very easy to tell someone is full of crap, but trying to call it does not always work in one's favor. Definitely agree it is a good sign you should get yourself out of the situation
Ha! Was this the "Goverment Blockchain Association" that was meeting in the DC Metro area? I may be have hornswoggled into one of their meetings at the time, and despite my vague enthusiasm for the technology, I felt like I was being sold a timeshare.
It was actually in Ottawa, Canada, targeting the canadian government. Same as you, I was interested in the tech, and my (non blockchain) company did business with the federal government, so I wanted to see what the hype was about. That was pretty much the end of my interest in the topic.
Long ago, I was a department manager at Walmart. Keeping the database even within the ballpark of real inventory was a labor-intensive, annoying, never-done task. My full-time job was struggling to make the point-of-sale replenishment work just tolerably well. It went in waves. Periods where most of the counts seemed pretty good, then periods where it was a mess. After all, it was just me manually locating and counting everything. Too many items with too many places for them to go missing “in the back”.
I would venture misplacement is more common than it'd be intuitive to layperson.
Whether an individual item that was returned or moved and is on the wrong shelf on wrong bay or underneath the shelf or in some weird corner; up to a whole skid of stuff mislabeled (skid group SKU is not accurate of the individual SKUs inside) or in the wrong place or not accounted for or counted twice.
A lot of human error during unloading trucks, scanning, counting, inventorying, etc.
Theft, yes. There are other leaks, such as a lazy or rushed employee discarding broken merch without reporting it. Also, customer satisfaction trumps other policies. That is not just PR. If anything about the POS system annoys a customer for 2 seconds, like a barcode that won’t scan, it got circumvented. And again, the warehouse out back was so huge and chaotic, stuff just got lost, to be discovered months later.
It's not a hard problem, it's an impossible problem, because it violates the first law of cybersecurity: physical access means game over. When you start allowing untrained and un-punishable customers to mess with your meatspace database, of course it will lose all semblance of usefulness.
This problem is not hard to solve when you limit physical access, i.e. in a warehouse, pharmacy, or locked room where multiple employees are responsible for checking in and out items. These solutions arose directly out of your conundrum in retail, and investigations are launched when someone discovers a mismatch between inventory and real life (think toxic chemicals, drugs, etc).
Of course it just so happens that nobody wants to go to a grocery store where they're not allowed to touch the items.
They used to work like that. You would come up to comrade cashier, and tell her what you wanted one by one, and pay. I still remember the shock when I went into a supermarket for the first time. Felt like going to a "authorized personnel only" place.
this was how things worked before supermarkets in general - you'd ask the general store clerk for x units of y good, think the deli counter or auto parts store model.
> problem is not hard to solve when you limit physical access, i.e. in a warehouse, pharmacy, or locked room where multiple employees are responsible for checking in and out items
Do you know anyone who works in retail, a warehouse or a pharmacy? Nothing is ever where it should be in the quantities the computer thinks it’s in.
> This problem is not hard to solve when you limit physical access, i.e. in a warehouse, pharmacy, or locked room where multiple employees are responsible for checking in and out items. These solutions arose directly out of your conundrum in retail, and investigations are launched when someone discovers a mismatch between inventory and real life
If the problem was not hard to solve, there would be no need for investigations into discrepancies.
Even in extremely high-tech warehouses like Amazon, major inventory mistakes still happen. A few weeks ago I ordered a $150 midi controller the size of a license plate and received an $800 synth the size of a snowboard that had an extra incorrect bar code stuck to it.
Makes me think of being in the Army. This was actually a problem we solved pretty well, using nothing other than hand-written paper receipts and property records. It was solved by doing hand physical counts every single time you moved anything or opened a room or box or vehicle, and holding whoever signed for the number on the receipt the value of the missing items if anything was missing.
Granted, there was a limit to what you could be held responsible for. I was responsible for breaking the main gun on an Abrams tank once and the sticker value was a bit over $120,000, but luckily they could only charge me a single paycheck.
You're explaining why it's an impossible problem to solve perfectly, 100% of the time. That might very well be the case, but it is not the case that this means "it will lose all semblance of usefulness."
Easy! Let's just make sure the people who stole the two patio sets update the blockchain. I mean, people who steal / ransom / hack bitcoin still update the blockchain, so criminals clearly can follow the rules
Or the box got stabbed with a forklift, bent a bunch of the pieces, and they are piled in the back somewhere, and the assistant manager handling it no longer works there.
Or the customer returned it because it was damaged, so now it is in inventory again.
Or, inventory is batched processes, so it will take at least a few hours before inventory is current.
Or the customer emptied a large (inexpensive) package and hid a smaller (more valuable) item inside, leaving the unwitting cashier to scan the larger package at checkout and now counts for both items are off.
Or the vendor discontinued the item and replaced it with a slightly different one, but they both got put in under the same stock number and are hanging on the same hook.
No matter how much we try to perfect the digital world, the real world will always be messy, and interfaces between the two will always be difficult.
Or someone had it on their cart on the way to the checkout, changed their mind, and somehow managed to cram it in a freezer behind some milk or something.
this happens at Ikea a lot - people take the thing and then decide they don't want it... there's a lot of places for things to go in the warehouse pickup section of an ikea store
Unless the tag could not be damaged, or interference from an electrical issue would not cause reading issues, or there are no other materials or objects that would prevent reading the tag, or the wrong tag was affixed prior to being delivered to the store (swapped).
Big package gets delivered. Two people working down the delivery, scanning and tagging every item. Both of them scan and tag opposite ends of the same box with inventory markers. An immutable record is created that says there are two of these things in stock.
Someone buys it. It gets checked out. One of the markers gets scanned, an immutable record is created saying there's still one in stock.
Physical reality has a way of screwing with all the best laid plans of computer systems. As Pat Helland says: there's no transaction rollback when a forklift drives over a box of eggs.
In fact blockchains only exacerbate the problem. In your stock keeping system you can simply correct the error by entering a new stock number. In the blockchain you can... what? Ask every participant in the system to agree to roll back that transaction, pretty please?
This highlights why “slow, expensive database” has not been a common need: you can handle that in an append-only style by publishing correction records but that puts even more strain on an already struggling system.
Unless you use an erp-system, which most companies have. In such systems, you cannot change things at will, because of compliance. Acctually, if you consider compliance regulations, a blockchain based approach would be useful...
Pat Helland has a great quip he's used in his talks over the years, along the lines of "it doesn't matter how consistent your database is if a forklift drives over the box in the warehouse."
That sounds like inventory management more than ownership which do obviously have overlap. But why would having something minted on purchase of say a Rolex be bad? Then when you sell it you could transfer that to the new owner. Showing a chain all the way back to the original purchase. This still has the issue of someone who could come into ownership of a minted item without the object and then try and make a convincing fake but this at first glance sounds like a great way to reduce fakes in the market significantly.
Situation #1: Lets say a thief steals the Rolex from X. It goes through the black market, and now Y claims to own that Rolex.
Lets take situation #2. X realizes that Situation#1 is possible. So X sells his Rolex to Y but fails to disclose that its blockchain-tracked. Now Y has the Rolex (and is out of some money). Now X-claims that Y stole the Rolex from him.
How does Blockchain differentiate from #1 (where the Rolex should be returned to X) and #2 (where the Rolex should be returned to Y) ? The only way to solve this issue is to ensure that Y transacts on the _same_ blockchain.
Which... isn't the case at all for NFTs, Bitcoin, DOGE, and etc. etc. There are so many blockchains (and each NFT basically makes its own blockchain). It is very easy for X to transact on the wrong blockchain to fool Y right now. (or off-blockchain, by transacting in USD for example).
In your case was the patio set sold to another customer or was it a logistics issue at the supplier etc or is there no way to know what the problem was? I think those are all separate problems that may have various solutions, and the only one that blockchain to my knowledge would even be remotely useful for is knowing where in the chain those sets not being in the store happened at.
Let's take houses, where the buyer and seller both need a title company to validate and transfer ownership. This process is extremely inefficent, and costly. It's pretty reasonable to imagine a public ledger replacing this process.
The real world enforcement of such thing is really the only hurdle.
Back to the point of this article: if someone steals my private key, do they now own my house?
What about liens? Will I as the owner agree to let an unpaid contractor put a lien against my title? Or can they somehow do it without my consent? If so, how do you stop bad actors from putting liens on everything?
The court is the authority on this. Title companies provide the valuable service of ensuring the state of the world matches what the seller claims.
We don’t need blockchain for this, a regular DB is sufficient.
> Back to the point of this article: if someone steals my private key, do they now own my house?
> We don’t need blockchain for this, a regular DB is sufficient.
If someone makes you sign over your car title to them under duress, do they then own your car? In most jurisdictions (let's use the USA for now), of course not. Assuming you have reasonable access to fair treatment by the legal system, that transfer would not be considered valid, and in fact the whole act would likely be a very serious crime. This is true regardless of how the ownership is officially represented: whether a blockchain, or a government database, or a pink slip with names written on it, etc.
Exactly, which is why an immutable record isn't as great as it sounds for these purposes. If everything is moved to the blockchain but that blockchain requires the exact same government override access to handle common problems, what's the point?
In a hypothetical blockchain ownership society, we'd probably end up paying extra insurance on our ownership as well as extra fees to a 3rd party to retain custody of our ownership tokens.
If the block chain is not the source of truth, and an external body can enforce changes on it, how is it in any way better than a database under control of the state?
Sufficiently powerful external bodies can always use force to do things regardless of what any particular database says. This isn't a problem with any particular type of database.
The point of blockchain isn't that the government can't steal your house; the (well, a) point of blockchain is that the government can't pretend you never owned your house in the first place. It establishes reliable records; that doesn't magically give it the ability to enforce those records.
It's absurd to expect any software change to somehow physically prevent people from taking your things. This "vulnerability" isn't worth talking about when evaluating software.
It is almost impossible for someone to physically steal my house. Certainly improbable. And it would be easy to recover with the help of the police.
It is by comparison easy for someone to steal crypto keys, or for them to be lost.
If we add a solution that allows us to fix the stolen or lost keys issue, then we eliminate the primary values of the block chain, decentralized trust and immutability.
So now we’re using a really complex database (potentially with POW energy use) for something that seems equally well solved by simpler tech.
So why would we want to use the block chain for this?
Right, so just use a normal database then. Shard and/or replicate it if you must. It's orders of magnitude more energy efficient, easier to mutate, maintain, and upgrade, and seems to solve the problem at least as adequately.
First of all, blockchain isn't the only technology that prevents alteration. any regular database can be run in append-only mode and can be published.
The only difference between blockchain and any other database in append-only mode is that there is no access controls or identity verification on the blockchain, so fraud is way easier (and that's why over $1 billion in crypto is stolen every year)
If it's officially represented by a blockchain, there's no power on earth capable of fixing it. Even if the government came and threw them in jail and confiscated their accounts, you couldn't get legal title to your car back.
Unless you include a backdoor in the blockchain, but that would make the whole thing moot. You could issue a new title and mark the old one as legally invalid, but again, that leaves you open to all the problems that the blockchain was supposed to solve.
There are undoubtedly technical solutions for resyncing the block chain to reality. But once you need them, you’re effectively saying the block chain is not the source of truth, and it’s governed by the same inefficient system that managed titles before.
At this point it is effectively a complicated solution to a simple problem - record all bits about property ownership in a publicly available place. It is unclear to me what properties the block chain has that makes it superior to a database with backups.
So I would argue that it’s not necessary and makes a complicated system more complicated, not less so.
What would really help is digitization of the records, which is a political and bureaucratic problem more than a technical one. There are undoubtedly better/worse implementations, but a block chain solution feels like it’s probably on the “worse” end of the spectrum.
It seems the unstated proposal here is that cryptography will reduce the burden necessary to validate a title. Maybe.
Let's say the house is in a town that has 100 houses and the current title verification process is that you go to the town hall, which is open from noon to 2PM on Thursdays and every other Tuesday, and you ask Ethyl, who is 71 and has cataracts, to go check the title and verify the owner is who you say it is. She takes the title document from you and then goes to an original master and checks the names. There was a flood in the town hall, so houses 21-40 had their original documents damaged in the box but there's an attestation process that applies in that case. Also, a bylaw requires that Ethyl only deals with a licensed title verification agent, of which there is one in the town, and he doesn't work Tuesdays.
This is burdensome! Both Ethyl and the verification agent are probably rent seekers!
It seems like your pitch is "if instead of this, the town webpage had a cryptographically signed register that simply notes who owns everything, then you could just go on the webpage and verify it yourself."
That would be simpler! But not because of blockchain. It's also the case that in a non-blockchain world, the town could put the ownership on a traditional database online, and give owners PINs that can be used to do the title verification. Or just list all the owners publicly by name and make the town webmaster the central trusted authority that the changes are not fraudulent. Or they could even make the ledger cryptographically signed exactly like a blockchain but with the contents centrally stored rather than distributed/public.
So it's still hard for me to think how you can separate the blockchain pitch "processes would be more efficient if we designed them to be efficient", blockchain or not.
Other problem is ownership transfer isn't even necessarily the bottleneck to liquidity of real estate. Most real estate is still occupied by people using the property for some reason, either for a place of business or because the live there. Moving their business or family to a new piece of land and someone else onto theirs requires changing school districts, updating bank records, work records, canceling utilities, physically moving all of the objects, packing, unpacking. All of that is much more cumbersome than transferring the legal ownership rights to the lot. Housing stock will never have high liquidity regardless of how you record ownership. If you want liquidity while exposing yourself to real estate as an investment vehicle, that's why REITs, MBSs, and CDOs exist. You don't want to trade physical houses.
While I agree real estate transactions are ripe for innovation, the problem is that real estate law and title can be complicated, with legal encumbrances on a property and title that are not digitized in any way. Some (such as traditional rights of access) may not even be written down. A title company is supposed to help with all that.
Making these sorts of encumbarances be written to a digitized ledger to have legal would definitely be a good innovation, but a blockchain solution isn't necessary or even desirable for a ledger. A government run database is just fine.
right, but there's no reason for that ledger to be on the blockchain - since property rights are always enforced by the government we should just have a public ledger that is akin to the ledger the gov records about driver's licenses.
Incidentally, the organization which keeps a central record of personal and commercial drivers' licenses in the United States (AAMVA, American Association of Motor Vehicle Administrators) is nominally non-governmental, although it works closely with state and federal jurisdictions as well as with 3rd parties. And it gets by fine with a conventional DB, although they have shown some interest in blockchain tech IIRC
It still requires blind faith and trust, but now you're trusting a combination of computer code that cannot apply common sense to transactions, and human programmers and bad actors, who can through accident or malice do a great job of fucking up your day.
And, since the government still would retain rights to seizing property under eminent domain or force the sale of a property for other reasons... you'd still need to put your blind faith and trust in the government to not seize your property. Essentially you've just increased the numbers of actors you need to all explicitly trust.
In what way is "these papers signed by these people in person, countersigned by notaries, postmarked on this date, after a thorough identity and title verification process conducted by these people, copied and hand delivered to bank, realtor, broker, seller, buyer, city, and state" blind faith
But "I found a message on the internet with a secret number attached" is not blind faith?
You don't need blockchain to establish such a system. Australia has been using the Torrens title system [1] since the 1800s, which is essentially a (semi) public register of titles and transfers.
New Zealand too, and it really is as good as it sounds. Transacting property can be done very quickly, safely and cheaply, and no title insurance is required.
The register is of course just a normal relational database.
One key to the success, though, is a large and mature body of legislation and processes to ensure that the register really is always correct.
Government run public digital database might be much simpler and efficient solution. No point involving blockchain for something where it is not needed.
How would you validate that the transactions related to the house on the blockchain is correct? What do you do if you inherit the house from someone who neglected to leave you the private key? You can come up with solutions to all the problems and you’ll have reinvented the entire existing process, which is inefficient and costly for a reason.
The process of transferring real estate ownership is messy and expensive for all kinds of reasons that aren't solved by a distributed append-only database.
If it is unclear to start with which titles are valid, then filling the ledger will be an issue, i.e. the effort is in creating a clean register and not with the register "mechanics".
Btw. there are also countries with very well maintained registers where this is not a problem at all at present.
Developers in crypto know about the oracle problem better than anyone. It's not some sort of revelation. The oracle problem has been discussed ad nauseum within the community since at least 2011/2012.
Well the oracle problem has been solved for something as simple as price feeds. So today you can easily get price feeds from any pair of assets into the blockchain in a decentralized way.
Why are there developers in crypto? Because it's very cool and interesting? I'm currently working on building applications for Starkware and layer 2 networks and I'm loving it. It's totally wild what you can do with programmable money, like https://alchemix.fi/ where you can get loans that repay themselves by providing liquidity to yield aggregating protocols. Totally new way of thinking about money and value. I think it's funny when people think this is useless. I suspect they wouldnt be saying that if they actually developed applications on the EVM
It's not infeasible. The smart contract in the block chain just pays a third party to access real world data. The business model of the oracle provider is to provide accurate data and get paid for it. It works well enough for data that is public.
Okay, but surely this is rare? I’ve used online stock checks for retail stores and found them to be accurate the overwhelming majority of the time. Obviously it’s going to occasionally happen that someone stole an item or has an item in their cart when you check, but that hardly means that inventory databases are useless.
That's not my experience. Last month I tried to buy a specific vacuum cleaner at Lowes. Online said it's in stock. It wasn't. Another nearby Lowes said it was in stock. It wasn't. I finally got smart enough to call the third Lowes instead of driving there. The guy said "it shows as in stock but let me check". They know. It wasn't.
This has been roughly par for the course in my experience, and not particularly with Lowes.
When you say accurate, do you count the number of available items on the shelf, or are you just looking for at least 1 of something?
It seems to matter more when there are only 1 or 2 ‘available’, but I have seen at Lowes where the packet has been ripped open and a piece of the assembly is gone, or it looks like it was returned, but with the wrong item in place.
It's much, much, much more common than "database owner falsifies records, leaving no trace behind, but is otherwise completely trustworthy" which is the issue with real world inventory management blockchain purports to solve
Nah, I’ve been doing inventory counts where I’ve been counting nuts and bolts for the sole purpose to update the inventory databases. These were nuts and bolts for trains but the inventory database were not correct for different reasons.
Microcenter deliberately lies about the stock of graphics cards on their website by saying that there are none in stock - even if they have some at the physical store itself - because, as overheard from a long term employee: "Just imagine what would happen if we said we had a graphics card online. It would be pandemonium. We set the stock at zero. If they come in, they'll be sold anyway."
Not sure where you're shopping, but I've found them to be highly inaccurate the majority of the time. Useful for telling me where something is located, but generally useless for actual quantity accuracy. This is for stores like Home Depot, Lowes, and Target.
Even though this happening often, software is still the best solution we have. They know that, and they don't stop using a system for it. Moreover, the same correlation problem would happen (even worse) by using paper for the records.
Blockchain doesn't solve any of the problems and in fact introduces new ones (like non-reversible theft). The question is why should we start using blockchain?
Blockchain in the form of something like Bitcoin is probably the worst possible database for this sort of ledger. It’s wildly inefficient, slow, and subject to failures of all sorts. If it’s a public blockchain with public nodes, it’s subject to being attacked by malicious actors. If it’s entirely controlled by the legal authority, then there’s no reason to use a blockchain.
Blockchains are slowly becoming a pseudoscience. People spout a bunch of jargon and crypto math but have no idea how anything is connected to the real world.
Most of the fraud that exists out there is due to social hacking. There is no real problem a blockchain solves.
The surprising thing is how many people are falling for it.
I'm broadly anti-blockchain and anti-cryptocurrency since I grew disillusioned by the scene early on, but even I think blockchain has solved some problems, I just don't think those problems are worth the cost or that those problems are of people that should have them, like criminals.
For example, blockchain is allowing many Russians to move capital out of the country while the state locks down foreign currency transactions. That's a real problem that's getting solved, and I'm sure in some cases it's good people trying their best to survive. On the other hand, it also allows individuals or organizations to avoid sanctions or paying taxes. The cost isn't worth it. I'd rather not have the crime, schemes, and pollution that so often come with crypto. Plus all the countless stories of good people losing all their money because they forgot their password to their cryptowallet.
> blockchain is allowing many Russians to move capital out of the country while the state locks down foreign currency transactions.
Like it or not, this means it's breaking the law. So this is just another way of saying that it allows you to break the laws you don't agree with. (also the ones you do agree with, of course)
> That's a real problem that's getting solved
On the flip side it's a real law that's being broken.
So your "on the one hand, on the other hand" is "it allows people to commit good crimes, but also commit bad crimes".
The law isn't perfect. Absolutely not. But the solution to bad law isn't "no law". That's not the path to a good future.
There are people out there who think all taxation is theft, and that tax evasion is as moral as smuggling money out of Russia. Of course others say exactly the same, but mean that they are both immoral.
I guess what I'm trying to say in defence here is that I 99.5% agree with your response to my comment. Yes: Lawlessness is abhorrent.
That said, there were plenty of inventions used by spies against The Third Reich. Those inventions, in of themselves, could be used to destabilize any possible state; but the fact that they were being used by real heroes in the fight against injustice does, at least in part, redeem them. We both may not like the practical consequences of most of what blockchain has to offer, but I think it would be intellectually dishonest to pretend as if there were no benefit. There is some partial benefit to blockchain, even if it is mostly a scam.
What about a piece of software designed to circumvent laws against accessing websites critical of some authoritarian regime? Should citizens of that country suck it up, because the solution to a bad law isn’t “no law”? Is using such software immoral?
Well, that depends. Is that software breaking local law? Then creating it is obviously immoral. Is that software breaking foreign law? That depends on whether your government currently sees that foreign country as an ally, or an enemy. If its an ally, it's obviously immoral. If it's an enemy, it's obviously moral.
This morality will, of course, flip along with the geopolitical situation.
... Unless, of course, your ethics are utilitarian in nature - in which case, you will need to do a full accounting of all plausibly foreseeable consequences of creating this software - the same kind of accounting that was done by people who were philosophically motivated to leak nuclear secrets to the USSR.
Well, if the parent commenter is of the latter persuasion, legal status of the specific issue should be irrelevant, only its utility points. Otherwise he’s arguing that all legal systems and their sets of laws ought to be respected, including mutually contradictory ones.
> Well, that depends. Is that software breaking local law? Then creating it is obviously immoral.
Breaking a law is not obviously immoral. Many people have broken traffic laws to save a life by getting them to the hospital, to give an obvious example.
(well, less obvious in case they actually hit someone. The morality shouldn't depend on the outcome. Anyway, this is getting a bit too deep)
I think both your options, which seem like they're referring to realpolitik and utilitarianism, are way too simplified to even be useful for practical application on this topic. And they are most certainly not an exhaustive list of the options.
So no, it's neither A nor B.
And as for utilitarianism, the problem with blockchain is exactly it's LARPing strength: "It's math". It's pretending that you have the right, today, to decide morality, and indeed utility, for all of time.
And you can't. Adding anonyminity to the mix means that you are even hiding evidence of something going wrong with your predictions.
Looking forward to seeing President Eric Trump ordering the treasury to transfer everything into some Monero account? That may impeach him, but the money is gone forever.
If it's the same guy looting Fort Knox, then we can send people to get the things back.
I already said the law isn't perfect. And to be explicit: It's not immoral to break bad law. But you should be honest about it. It's not "fixing the problem in a clever way", just like how if you think taxation is theft, to you it's moral to not pay taxes.
You seemed to have understood my "Bad law X" vs "No law X". No, I mean "Bad law X" vs "No laws what-so-ever", which is the actual tradeoff being done here.
You can not like crypto and still acknowledge the very real technology powering crypto.
Whether it's Byzantine fault tolerance, or cryptoeconomics, there are some good solutions there. People's issues tend to be whether the solutions are applicable to the world, and/or useful.
It is great, super interesting, very clever technology. Which is exactly why it is nerd-sniping: the CS of it is so interesting, it must be innovative and useful! Alas, nope not really. I was so excited about Bitcoin back when the whitepaper first came out - a totally new idea! based on ideas from cryptography! amazing! this will replace all digital payments and reshape the world! Alas, nope. Then Ethereum came along - smart contracts! so cool! just imagine the new legal infrastructure this will unlock! Alas, nope again.
I still hold out a hope (perhaps a fantasy) that all the talent and money funneling into all this, combined with the fundamentally interest and novel technology behind it, will come up with something truly innovative. It just seems like it must, right? But every new thing (most recently this NFT stuff) that comes out just further and further confirms my long-held tentative conclusion that there really isn't much there, there.
It looks to me like uniswap epitomizes the real world ownership problem discussed in the article we're discussing. "An experiment in tokenized socks" is (unironically?) highlighted on their home page.
Aave seems like something that is useful within the bubble of cryptocurrency traders, but not outside it. It strikes me as a meta thing, not a thing. It doesn't work if cryptocurrencies are never useful for anything outside that bubble.
Does Dai have a strategy for being actually useful as a currency to purchase things? Bitcoin has been trying to be useful as that for a decade with very little success.
Yearn seems to be in the same boat as Aave, it only exists in this bubble of cryptocurrency speculation.
None of this stuff or anything adjacent to it exists for anyone I interact with in my life outside of this website. What will blockchain technology be known for amongst people who are neither computer science nerds nor financial speculators? If it's just a new kind of speculative asset, like a new kind of derivative, then fine, that's innovative in a way, but it is extremely niche.
For whom? Folks at Google, Facebook, and Amazon that are building distributed databases aren't re-writing their backends to use blockchains, for obvious reasons.
As for people who aren't building general-purpose distributed databases, a solution to the Byzantine generals problem is more of a solution to a problem that they don't have - as other posts in this thread demonstrate.
They don't. Neyond some very small applications anything with "crypto" in it ends u reinventing all the institutions of trust that people have had for thousands of years.
> The surprising thing is how many people are falling for it.
I don't think they are falling for it, I think they are mostly trying to talk up their speculative investments. (Be they direct I-own-coins financial investments, or indirect I-make-money-by-consulting or I-am-building-a-startup carreer 'investments'.)
Blockchain provides a public ledger to trace the linage of transactions. It doesn't enforce ownership. The legal system enforces the ownership. Blockchain just makes the court's job easier. With blockchain, we can know that Mona Lisa is illegally transferred to the corrupted official, and know who that is.
If so then the legal system needs to be able to rewrite the ledger. Consider if you have some asset that is represented on the blockchain and you have it seized by the state for some reason. Or you die and you didn't have a system for your heirs to get your private keys. Or any other way that something needs to change owner without the current owner being willing or available.
And if the legal system needs to enforce it and can rewrite the ledger at will then why should the system be decentralized? Why should we need to have all this complexity when it gains us nothing?
You've got it. The entire concept is incoherent, and if you're confused by it or if it seems useless, then you're correct. It's incredible seeing people constantly shift their position and contradict themselves trying to reconcile the relationship between blockchains and the state.
We as a society have entrusted upon the court system to sort out ownership of properties, so yes, the court can declare ownership. The court issuing a transaction is just like the court issuing a paper declaring a judgement.
The consent of everyone on the blockchain only applies to the integrity of the transaction, i.e. yes, this transaction is issued from this particular wallet. That's it. No more. No less.
Everyone on the blockchain consents that the transaction is indeed from the court's wallet, not from some random guy off the street. The court's wallet is a well known one and carries some authority. Once the question of ownership is contested again, everyone can trace it back to the court's issuing of the transaction.
So you're saying that in this distributed ledger where we proof-of-stake and proof-of-work and proof-of-doge everything, there are some agents which are more special than other and we should trust them?
Look it’s easy to nay-say. There must be something that connects the ledger to the real world and that something is going to have to be able to modify the ledger when the real world doesn’t match.
Blockchains aren’t magic and can’t just query the state of the world without the help of people in meatspace.
This is not a fixable problem. It’s just a question of who the somebody is. It’s why I think blockchain for IRL goods is pointless because whatever entity you have to trust to enforce the database constraints could just run the database without a blockchain.
The wallets are the issuers of the transactions into the blockchain. The wallets can be used as the identification and representation of the real world entities.
It's just like the court's stamp on a piece of paper carrying more weight than your and my stamps on a piece of paper.
And each transaction gets to burn the equivalent of 10 gallons of gasoline instead of an atomic logged database transaction (which could even be published and cryptographically signed cheaply).
It will certainly be better with Proof of Stake & sharding, but I was curious how bad it is today, so I looked it up. One ETH transaction consumes 86.94 kWh of energy. Wikipedia says gasoline has 8.83 kWh/l energy content, so it looks like about 10L of gasoline per transaction (not 10gal). Still, there are about 3.8L/gal, so if you factor in that heat engines are about 25% efficient, then you are right. What a crazy world we live in.
If you use a smart contract and encode only certain actions what a court can do, under what circumstances it would work maybe. However, the smart contracts would grow into highly complex source code propably...
They'd have the consent of everyone to do it. The network controls the applicable laws, the court could be something defined by those laws with the authority to do this.
It could be something where like:
Any party in the chain of transaction (so anyone who used to own something) can use their key to initiate a "claim of wrongdoing".
When doing so, the network could assign say 5 jury from a pool, and grant them the power to vote on "remediation".
Now if the network started to feel like this became a means for abuse and loopholes, it could choose to modify the laws of the network to something else.
Basically, at the end of the day, it works very similarly to a democratic society. But things are run and managed on the blockchain network instead of pen/paper and various other systems.
Isn't the "vote on remediation" basically a trial?
Isn't the jury you mentioned basically just a jury?
"modify the laws of the network" is basically an election.
It sounds like everything would be the same as it is now except in the case where everyone is honest and agree on the transaction which is a case that is somewhat simple in today's system.
Why involve a blockchain in this at all? I'm all for efficiency in our systems and a lot of those systems would be better if more digitized but I don't get why people seem to think a blockchain magically solves some part of this.
I also want to give you another example. We know lots of people cheat taxes. Most of the time, they do so by hiding their money. If all money was a cryptocurrency, you could encode in the transaction rules that automatically on any transaction 10% is moved to the IRS wallet. Or you could have it that automatically at the tax due date, everyone's income for the year is talkies up and money from their wallet is transfered to the IRS. If you don't have enough money, an automatic dept could apply to you where 5% of all future income goes to payback what you owe. Etc.
That's the fancy automated stuff. At a minimum, it means there's be a truthful trusted ledger of how much money everyone made and that would make it very very hard for someone to cheat and hide their money.
So that's another example of how the tech could limit fraud in our system. It be the same system, but harder to cheat at, possibly easier to automate and scale.
But that's not about representing physical objects on a blockchain, which is what the article (and at least in my mind the discussion) is about.
Keeping digital objects (like bitcoin) on a digital system is of course easier than keeping physical objects on a digital system but it also brings a whole load of it's own complexity.
I also keep getting back to what does the blockchain actually give you here? Even in this example you need someone or something to have privileged access to the chain to handle things like bankruptcy, inheritance, seizure and so on. Your pitch is for applying programmable logic to money. That'd be great, but also extremely complex and I just don't get why the blockchain is needed.
> Most of the time, they do so by hiding their money.
They hide their money, in legal way. Specifically by misclassification. For example, you claim that a residence is your primary residence for tax purposes, but don't live in it. Or they claim a tax deduction on an art piece that was overvalued.
The issue isn't that the IRS can't collect money, the issue is that the tax code is complicated and cannot be automated. It requires interpretation, which is what lawyers do for a living.
For the average low-income person, the IRS could automatically do their taxes, but they don't. Not for lack of technical ability, but because of lobbying, which I'm not sure how blockchain would address.
Without a blockchain, couldn't this be done simply by empowering the IRS to do it (e.g. by requiring banks to give oracle access to bank accounts or requiring all employers to list complete transaction outflows?)
Like, you solved an incomplete information problem by saying suppose the state had complete information. If you're willing to do that, we wouldn't have a problem blockchain or no blockchain.
Well, it depends, I think people are privacy conscious, maybe you don't want people to know what you spend money on or how you make it.
A cryptocurrency could technically keep things anonymous, while still taking the appropriate tax money from the wallet and transactions.
But yes, this is similar to Uber and Google Search, and any other software technology, it doesn't allow doing things we couldn't before, it just enables doing them in possibly new ways, that might be more convenient, efficient, trustworthy, cheaper, etc.
How exactly, well this is what people are trying to crack. Similar to how everyone wish they had put the iPhone together first, companies and people are trying to figure out what is the right combination of features and use case for a blockchain based offering to go big and drastically change the way something is done today.
Now, are we better off for using cars? Are we better off for using telephones? Are we better off for using the internet? You can argue most technologies just changed things from how they used to be done to just being done differently and that it didn't really make anyone one of us more fulfilled and happy in our life. So you could say the same for blockchain, but I don't think that matters to a startup, you just want to disrupt and capture a new or existing market.
The blockchain is just technology. It makes all this more convenient, and possibly scale better.
But what people really argue for is that it makes the system much less prone to corruption and manipulation, because the system of tracking is much more resilient to being tempered with.
For example, right now Joe Shmoe could fabricate a fake paper deed showing that his great grandma owned the Mona Lisa, and it is thus his. And then sue the French government saying they need to either buy it off him or return it to him. Now you'd need forensic experts and all to try and check the authenticity of that deed and all that.
Now this is a bit of a stupid example obviously. What if the deed was real? Would the government still say well oh crap here you go? I guess that will depend on the French government and their laws.
But say the laws of France were such that yes, it should indeed therefore be returned to Joe.
Well with blockchain, the idea is that this wouldn't happen. First the "deed" would have never been lost, the ledger tells you who owns what, there'd be no confusion. Second, Joe (if he was lying), wouldn't be able to create a "fake" entry in the ledger as easily as maybe he can fabricate a deed. Now that's up for debate, but in theory a decentralized ledger need you to temper with all the nodes, so it's possibly much more difficult to scam with.
And back to the example in the article, the Mona Lisa would be transfered from the government to Joe, there'd be a record of this. Now the question is no longer, is this record valid? We know this happened, the question becomes was this transaction initiated fradulently? Obviously the computer doesn't know why the transaction came to be, just that it for sure did, not tempered with, no fake claims, this did happen and we know exactly from where and to where, and exactly what was it that was transacted.
Now you need people to investigate and asses if the transaction was fraudulent. Until there's a way for machines to with 100% accuracy read intent, this has to be handled by people. But in theory, a decentralized blockchain might make that process easier and more resilient to scams.
- Ahmed is registered as the rightful owner of Kolula Pushta Road, 25, Kabul.
- A month later Mohammad appears and is also registered as the rightful owner of that same place.
- Half a year later Zahra, who has never even lived in Afghanistan, wins a court battle and is registered as the rightful owner of that same place.
Questions:
- Who is the rightful owner?
- How does blockchain help here?
To skip long discussions, all of the below are possible, and are not solved in any way, shape, or form by blockchain.
- Ahmed is the rightful owner. Mohammad bribes local council which enters him as the rightful owner. Zahra is Ahmed's daughter, and has the money to chalenge this at court.
- Both Ahmed and Mohammad bribed the local council to become the owners. Zahra inherited this place from a relative and had to win a court battle to prove that she is the rightful owner.
- All of them bribed local councils and courts.
- All of them are rightful owners, they sold or gifted the property to the next person. However, at one point local authorities intervened and didn't allow Mohammed to transfer the property to Zahra, and she had to go to court.
As an illustrative example of the issues with the land registry in the region, a friend of mine wanted to settle some land he'd inherited in his village. He had the deed to several parcels of land owned by the family (registered in his deceased father's name, as the head of the family) in his possession, but it turned out an uncle who lived in the village had 'sold' possession of some parcels of land to somebody else. It took several trips (and bribes) to the district office to even be able to view the land records for the land - which had indeed been modified. Sure, with a legal battle he could have gotten it back, but it would take decades.
How might the blockchain help here? Prevent modification of the land records without the express wishes of the deed holder. Court cases involving land are severely backlogged in India, on the scale of decades.
I also agree that the blockchain would also create additional problems & burdens.
> but it turned out an uncle who lived in the village had 'sold' possession of some parcels of land to somebody else
How is this a) different from my examples and b) can be solved by blockchain?
Blockchain automagically makes selling of something impossible?
> How might the blockchain help here? Prevent modification of the land records without the express wishes of the deed holder.
You don't need "modification". All you need is the next entry: "the rightful owner of X is now Y". How is blockchain going to prevent anyone from doing this?
> Blockchain automagically makes selling of something impossible?
This issue here wasn't about selling something - unfortunately in India when it comes to land, possession is nine tenths of the law. It doesn't matter if you're the true legal owner if somebody else claims physical possession and has a vaguely genuine looking piece of paper. Proving or disproving the veracity of that piece of paper takes many many years, and in this aspect India is different from many other places in the world.
> How is this a) different from my examples
It's not very different from your example, though my anecdote is meant to demonstrate some of the real life issues meant to be addressed. I'm not convinced that a blockchain is the correct solution, but I can understand the motivation.
> You don't need "modification". All you need is the next entry: "the rightful owner of X is now Y". How is blockchain going to prevent anyone from doing this?
Unless I'm misunderstanding how blockchains work, how can that next entry be created without being signed by my private key (and my consent)? I have no idea if any concrete suggestions have been made around the architecture of land record blockchains, but it could presumably be something like a multisignature wallet: each transaction has to necessarily be signed by the seller, buyer, & government authority.
Of course, like I stated in my original comment, I'm not convinced that blockchain is the correct solution here, or how certain issues could be realistically resolved.
One of my own personal misgivings around the blockchain for government services is the management of private keys. However, I don't see this as a conversation killer, and is something that could probably be resolved. Issues around concepts like Power of Attorney, co-ownership, & time limited ownership can be resolved by something like Multisignature wallets. Court orders changing ownership without the owner's consent could also be resolved the same way: the Sessions Court is a non-required signatory on all multisignature land registry wallets, with the District Magistrate & Sessions Judge keys sufficient to sign transactions.
> It even breaks for my example of "Ahmet illegaly obtained ownership in the very beginning".
I don't think any sort of land registry record reform can hope to resolve issues like this. This problem isn't resolved by digitizing records to a regular database either.
In India, the sort of issues my family & others have faced around land ownership claims is that the original records are largely on paper, nearly impossible to verify with the district administration, and all most people have is a faded paper receipt decades old. This is the weak point exploited by bad actors. I'll offer a personal anecdote this time. Some years ago we tried to transfer the ownership of our home to the name of our mother (it was registered in the name of my late father). The only paperwork we had received decades ago was a paper receipt. We hired a lawyer, appeared before the District Magistrate, gave affidavits, and the process chugged along for years. When it came time to verify the details of the registration, the relevant pages from the registry were 'missing'. The fact that we had paperwork proving ownership meant nothing since the master records were unavailable. We filed another petition which took even more years, till our lawyer suggested that a bribe in the right hands in the district records office might surface the original missing pages. Sure enough, a few months later the missing pages were "rediscovered". Then there were inspection agents who came to remind us that everybody along the greasy pole had to be sufficiently lubricated. The entire process took 10 years, a great deal of anguish for my elderly mother, and quite some money. This was in a large city, and the situation is worse in more rural areas.
Does a blockchain based land registry resolve every single one of these concerns? No, but neither would a database. A database would resolve many, but not all of the problems I faced. Similarly, a blockchain might resolve different issues, and likely raise new concerns. From my perspective, given how bad actors at the district administration operate, I'd be wary of a database they had control over. Sure, there are probably ways to address those concerns, but I can also see why people see the blockchain as a possible solution.
The problem with blockchain is that it's just a distributed append-only log. There's really nothing else inherent in it. There are very few, if any, applications for it.
However, too many conversations around it attribute magical properties to it. And any solutions built on top of it can, and have been, built more efficiently using almost literally anything else. Well, paper records are less efficient :)
And as far as trusting databases goes, in the end you need government to accept whatever records there are. And nothing can help there. And even in blockchain world hard forks and re-writing of history happen even without any governments.
Maybe I'm confused here, but the blockchain basically will say:
Kolula Pushta Road 25 Kabul is owned by Ahmed with Public Key XYZ.
For it to be transfered to someone else, you need the private key that can pass validation for public key XYZ. Local officials do not have this private key, only Ahmed does, stored in his personal wallet. Local officials could try to temper with their node of the blockchain ledger, but other nodes would catch it and penalize them.
If you need to deal with an edge case, say someone claims Ahmed is dead and they are his heir. Local officials can initiate a transfer where the ledger says "conditional Amhed is dead and thus key XYZ is missing, transferring to his heir Mohammad with key HJL. This could be something that other nodes accept as a transaction. There could be many things here built into the system. You could have the nodes notify some associated email with the current owner Amhed and grant them like 60 days to cancel the transaction. Or you could let Ahmed show back at any time in the future and reclaim the possession, etc.
These are the kind of things that a decentralized trusted network running a blockchain could in theory be designed to manage.
If you narrow "blockchain" simply to mean a signed ledger of transaction that maintain history then no, it's not really that much better, since it's still centrally managed and operated. It's only once you distributed things and let the network define rules of operations that it can become beneficial in my opinion.
Edit: Now that said, even if it was centralized, in theory, the ledger could only be tempered with by people with access to the code of ledger database or its servers. Sometimes you might be able to trust those more so than say any clerk or local official which can only use the software, because they might be better paid or there are less of them and hard to contact and thus bribe. So even in that case, it might be a little better, maybe the local official can enter the transfer in the ledger, but et least if Ahmed goes to court after there is proof that local official X did a transfer on day Y and that Ahmed was the prior owner. Or you could still enforce the need for Ahmed's private key, etc. So there would be more trail or recourse for Ahmed in theory. Then without a blockchain, there'd be no trail, or no need for a key, or it might be possible for users to modify the whole history, etc.
> This could be something... There could be many things... You could have the nodes... you could let... could in theory be designed
See how many hypotheticals and "could be"s you're piling on top of blockchain just to make it barely handle the simplest of cases?
Moreover, none of these require a blockchain, and can be implemented better, and more efficiently with literally anything else.
Even more moreover, your entire premise of "nothing can be done without Ahmed's private key" immediately breaks for any of these:
- death, or other incapacitation. Even loss of access to the wallet
- power of attorney
- co-ownership
- time-limited ownership
- court orders requiring change of ownership
> It's only once you distributed things and let the network define rules of operations that it can become beneficial in my opinion.
So far, the "benefit" is: let's have blockchain for the sake of the magical words, and build a tower of babel on top of it to barely manage even the simplest of cases.
It just depends if you need a higher level of trust or not.
You can implement all that on a central network, or a single machine. But if you have it running over a decentralized network there's more certainty that validation rules and data won't be tempered with.
I'm not arguing to build everything with blockchain. I know very much how business can be swayed by buzzwords, but those also shouldn't take away or detract from the potential of a technology.
In this case, the ideal network in my opinion would be that you've got some global blockchain network that can record arbitrary data and run contracts attached to the data where it could scale and not be power hungry.
If we had that, then you could start to record things like land ownership, and attach contracts to them that dictates the rules for transfer of ownership, time-limited ownership, death, loss of key, etc.
Unlike a paper contract signed in handwriting, this contract is signed with people's private keys, and the rules aren't enforced manually but automatically. And you can trust in the data and the enforcement of the rules because you can have trust in the network to do so.
> It just depends if you need a higher level of trust or not.
I need trust. And blockchain doesn't provide it.
> It just depends if you need a higher level of trust or not.
And yet, all you can come up with is "a bit of a stupid example obviously". The moment I propose to you actual real-world problems, your entire argument breaks down into piles of "could be"s and lots and lots of words how blockchain magically solves everything.
> you've got some global blockchain network that can record arbitrary data and run contracts attached to the data
Why?
> then you could start to record things like land ownership
- Ahmed pays local authority to record him as an owner. Where's your solution for that?
- Ahmed is an atual rightful owner, but then Mohammed pays local authority to register him as the rightful owner instead. Where's your solution for that?
> this contract is signed with people's private keys
- Mohammad is now registered as the owner. 5 years later, after a prolonged court battle, Zahra proves that the original record is incorrect, and the court rules that the property is now Zahra's. Mohammad doesn't give up his private keys. Where's your solution for that?
> dictates the rules for transfer of ownership, time-limited ownership, death, loss of key, etc.
Ah, yes. Instead of contracts written in plain language, we now have a complex programmable system written in an esotheric language that requires programmatic access and integration to dozens, if not hundreds of other such systems. And all these contracts are guaranteed to be correct, foolproof, without omissions, and to 100% correctly represent the interests of the parties that sign the contract. Because blockchain.
> Unlike a paper contract signed in handwriting, this contract is signed with people's private keys and the rules aren't enforced manually but automatically.
Ah, yes. When a person dies, they automatically register their death from beyond the grave. Or when a person sells property, this is automatically entered into the system through the celestial sphere. Court orders are automatically applied to ownership simply because blockchain.
> And you can trust in the data and the enforcement of the rules because you can have trust in the network to do so.
Ah yes. The rules are enforced because some numbers in a highy ineffecient, slow distributed append-only log say something.
> The blockchain is just technology. It makes all this more convenient, and possibly scale better.
That’s an odd way to say “less convenient and slower”. Everything you described could be done faster, better, cheaper and in a distributed fashion using PKI – the important part is that a legal authority signed a particular document. The blockchain features aimed at working in environments where people don’t know or trust each other aren’t useful when the whole point is having a trusted third party verify claims.
You'd want a database that is pretty difficult to temper with or hack. This includes from external or internal bad actors.
If the government had a database used to identify all ownership of things, but it was possible for internal bad actors to change the data in it, or for external bad actors to do the same, that would be a problem.
With a decentralized database, this becomes a lot more difficult to temper with, so the data in the database is much more trustworthy. You can't just bribe your way to its DBA, so there's benefit to it.
Again, the benefit is not that the system is impossible to exploit in some way, the main benefit is that these actions are all recorded transparently, so you can have a complete picture of what exactly happened. That seems better than a database which at a fundamental level cannot have immutable guarantees.
In at least many places in the US land ownership is transparent. If you know a parcel of land you can search the county records office's website and find out who owns it.
It doesn't take a blockchain to make a dataset public.
You can have the advantages of a publicly verifiable blockchain without the hassle of distributed consensus if you have a trusted entity that can perform consensus. QLDB is a corporate owned example, no reason the government can't do the same thing.
> Or whoever that declares what keys are "special" and granted the special permissions.
Yes, that be the "network". Which is a quorum of all nodes running the code base. In most cryptocurrencies, everyone who has a computer can become a "node".
So, in an ideal scenario, each person has a computer running a node of the network. Thus "whoever declares" would be a vote amongst everyone. They vote by choosing what version of the code to run. The code tells you what "keys" are special.
That's the idea behind decentralization. There's no longer just one person that chooses, instead its got to be a multitude of people all agreeing.
The nice thing here too is that you could see the court's key owner was bribed in the ledger itself.
So nodes elect other nodes to have power to decide the rules for the shared community. Those nodes will probably need additional nodes to handle the computation needed so they will elect certain other nodes to act on their behalf.
Now replace nodes with people.
Does this not sound exactly like modern democracies but expressed in terms that are tech friendly? What is the actual difference? What is it solving?
It's like snail mail Vs email. Same thing, but yet not the same, one allows you to run things using computers, the other doesn't.
Most of software is simply finding ways to model real life processes with computers so you can manage those with computers instead of whatever non-computer based approach was there before.
The hope is that computers can make managing those processes more efficient and potentially allow for more optimizations.
One such thing is scarcity, that has always been hard to model in a computer when things can be freely copied. Another challenge was double spend, making sure that something is transfered without copying or duplication, it's a challenge to model things with computers that needs this property. Another challenge is trust in a system involving parties that don't trust each other. All these have always been difficult to model, now we have a technology that could model these, so the question is are there use cases that being able to do this now opens up to digitize and by doing so can it reduce the cost to manage the process and increase its scale and efficiency, lowers its defects, etc.
They do for some things. In many places whenever you transfer ownership of real estate, you submit a piece of paper that says "I am transferring ownership of X to Y" to a clerk/recorder/registrar. People can then go and search their database of transactions to verify that yes, someone did grant you ownership of X previously, and that that someone granted ownership beforehand, etc. (this research is usually done by a title company, who then provides insurance on their claim).
On a more serious note. Public ledger is better than a private database because it's public, open to inspection and verification by all. It's especially important for government and court to open their records.
A database can be public. Data in it can be signed. Keys for signing can be stored securely on hardware (for example many ID cards are smartcard capable, which would fit well for interacting with the legal/government systems). None of this is unique to a blockchain and has been around since way before blockchains.
I think the whole point of it being central is that it's not verified by everyone. "Everyone" doesn't have the force of law without getting into politics, but that "central" body does.
It doesn't make a difference if 51% of my neighbors think the house belongs to me, it matters who is going to get removed for trespassing. That's the problem people have with blockchain, it doesn't matter what the blockchain says, because the blockchain can't enforce anything. If the blockchain could mindlessly enforce anything, I would own your house if I stole the private key. If you need a 3rd party to be able to make a judgement call and unwind legal situations, then the power resides in them, making the blockchain just a database with extra steps. You can make a database open and "verifiable" by anyone (like property tax records) without a blockchain.
Because government entities would never lose their keys, because they are so technologically adept. And who be able to designate that organization X should have that ability? Are we back to verified SSL carts from verisign ?
Well if most transactions don't require central override using a blockchain could prevent going through bureaucracy every time you want to transfer something. You can sell your house without paying a title agency, but in the rare case of fraud the courts can reverse the transaction sounds better than pay thousands of dollars to lawyers every time.
> we can know that Mona Lisa is illegally transferred to the corrupted official, and know who that is.
You mean if the thieves are kind enough to record the "transaction"? Nice. I can imagine several replies trying to rationalize the scenario you made, but this is just silly, because without much effort I can take them apart just as easily. How can you possibly construct an argument that the blockchain would somehow magically help when the Mona Lisa gets lost - no matter using what scenario?
The pro-blockchain arguments always are soooo strange that I'm not sure what to think I read the enthusiastic comments. There never is a believable causal mechanism that connects those ideas to the blockchain showing how - and that - it helps. I'm feeling a bit lost that there is yet another such discussion, which looks exactly like all the previous ones I read (here, mostly).
Consider that for many of the blockchain enthusiasts a tenfold increase in the crypto currency du jour might enable their early retirement. It seems that this could motivate some mental flexibility around the topic if it helps convince others to jump aboard the blockchain train.
Wouldn't this only ever be true if we enforced some sort of blockchain-based Torrens title, though? Otherwise it will always become a matter of title research, and at that point I struggle to imagine how a blockchain is more useful than a conventional recorded deed.
Speed and cost. It takes time and money to register and maintain the title records. Searching takes time and money. Blockchain just lowers that, supposedly, if they can lower the cost of mining.
Is there any proof that a blockchain is (or can be) more efficient than a normal database?
Seems like every blockchain I've heard about wastes a lot of energy and time to try to make stuff securely decentralized and if we are going to have special authorities anyway the least secure part will be their keys/access to the chain and the decentralized part isn't really true anymore.
But many (most?) counties have already digitized recorded deeds, at least by index... so it's just a matter of logging into the clerk's system and searching for the situs address or APN or whatever's handy and you get the deed history, out of a good old fashioned relational database. How does blockchain improve on that?
If blockchains make the court's job easier, then presumably the Bitcoin world would demonstrate that. Given the vast amount of fraud and theft in that world, though, the opposite seems to be the case. One example among many is the QuadrigaCX case, a mess the courts have been trying to clean up for a couple of years without success: https://en.wikipedia.org/wiki/Quadriga_Fintech_Solutions
Losing the wallet is like burning up all the paper cash. They are gone. What can the court do? It's like Mona Lisa got burnt up. What can blockchain help in that case? Or what can the court do in that case?
And who is the authority whose job it is to update the blockchain? Why have a blockchain if a deed for property is already recorded in the courthouse on signed paper documents?
If ownership is determined by what is on the blockchain, and the blockchain says I own it, then clearly I didn't steal it. Either that, or the blockchain isn't reality, and I did steal the Mona Lisa, in which case what's the point?
keeping a ledger updated with what happens in the real world makes the court's job harder, not easier. keeping a ledger in sync with reality is going to be near impossible.
Kind of a strawman. AFAIK most NFTs are actual digital assets which can be copied, and in general people are not claiming that blockchain is magically going to enforce itself.
BUT, blockchains may replace Patreon and the like, by offering the satisfaction of connection to art, and the ability to prove it.
The article is not talking about NFTs, it's talking about the use of blockchain for tracking real, physical goods. Some of it may also be relevant for discussing NFTs. But the article is not about NFTs.
How is blockchain superior than me just creating a git repository on GitHub called "allmoney" and just setting it up such that a commit represents a transaction and the log represents the ledger?
I also don't see how block chains or smart contracts can override reality. Let's say you buy a house using a smart contract, and someone, in real life, comes to you with a gun and says give me your wallet and transfer it to me, or you die. Are we supposed to just accept that? If not, what mechanism will undo the crime and restore the house back to the [rightful] owner?
it just all seems dumb, imo - technology cannot exist in a vacuum, ever.
Git lets you rewrite history. And I can easily modify the files on GitHub to show that actually I own all your money.
Also, I can make a PR that says that Joe gave me 100$. When Joe in fact did not give me 100$, in fact, Joe doesn't even know me. Yet I can still make a PR for that and how would you know to merge it or not?
Also, I can make a PR where I have 0$, but I transfer 10000$ from myself to Barbara. What is there to stop it? You could just go and accept my patch and I just created money that didn't exist.
Another example is I can have 10000$ and make 10 PRs all showing that I am transferring that 10k to a different person. You merge them all, and now with only 10k I managed to transfer 100k.
Etc.
Basically it's just insufficient in many many ways.
Blockchain requires everything to be cryptographically signed. In a blockchain, each dollar is cryptographically accounted for. Each person is cryptographically accounted for. And the whole system is redundant so that if you temper with one repo it doesn't matter, you need to temper with the majority of them.
Edit: And to your other question. If someone forces you to transfer your coins from your wallet to theirs, you got your coins stolen. Currently most cryptocurrency are designed to be anonymous. In that case, you're screwed. But there could be non-anonymous cryptocurrencies. Those would allow to track criminals much more effectively as it be difficult for them to hide the trail of money. Even in the anonymous case though, if there were processes around this, the network could decide okay this transaction was fraudulent, we agree, and the money trail would all be there, so it could choose to correct it, reinstitute you the fund, do charge backs, or whatever else it wants. That would be much harder with real cash, because the cash is gone, even if you say yup your cash was stolen, nobody knows where it is now. With crypto you'd know where it is, and you'd know which wallet stole it from yours. So that's already a little better.
For example, you could imagine that you'd have say 24h to claim a fraudulent transaction, as soon as you do, all stolen funds could be frozen in the entire network for 14 day, where an investigation would take place. Etc. The technology opens up this kind of things.
Not quite true. Git makes it possible to hard fork it’s internal commit tree, and easily move the HEAD marker to your new fork. But it’s obvious to everyone observing the tree that the modification has happened.
Same applies to all normal blockchains. Only difference is that blockchain clients will ignore that fork if the correct proof work hasn’t been provided, but you could add that to a git commit if you really wanted too.
The git commit tree is cryptographically signed, every commit is identified by its cryptographic hash, and that has is taken from the content of the commit, which includes the hash of the parent commits. So you can cryptographically prove that a specific git tree is properly linked together, and the each individual commit hasn’t been tampered with.
The ability to detect tampered commits, and observe forks is all you really need for a blockchain. Everything else is just deciding how you determine which branch is the “real” branch. But you don’t need proof of work for that, it could be enforced by courts or governments the old fashioned way.
As for your PR stuff. You can fix that by publishing an agreed set of valid commit types, which limits the types of modifications that are allowable. Then when validating a tree, you ignore commits that don’t meet that specification (just like more traditional blockchains do).
Ultimately the only novel thing blockchains bring to the table is proof of work algorithms etc which allow for supposedly decentralised trust.
But decentralised trust doesn’t really exist when dealing with physical assets. At the end of the day ownership is determined by your ability to physically defend your assets, or ability to convince the state to defend them on your behalf. So if the state says you don’t own your house (and the courts agree), then the content of your decentralised blockchain is irrelevant because it won’t stop the police from forcibly evicting you.
I did assume that people meant a decentralized distributed ledger when saying blockchain. In that regard, git is lacking replication, consensus and validation, all of which are key to a decentralized distributed ledger.
Git has some of the properties you'd want, but not all, could you implement more things on top of git to create a blockchain, possibly yes, but that doesn't make git a blockchain.
I like the wikipedia qualification for this:
> Logically, a blockchain can be seen as consisting of several layers:[21]
> infrastructure (hardware) networking (node discovery, information propagation and verification)
> consensus (proof of work, proof of stake)
> data (blocks, transactions)
> application (smart contracts/dApps, if applicable)
Git is a distributed version control system, by design and definition it's decentralized.
Lacks replication? What do you think the git clone and fetch commands do?
Validation is easily turned on, you can tell git to traverse the tree it pulls and make sure it's cryptographic integrity is upheld, that just a config flag.
Consensus is that "hard" one, but even that has already been solved on community-by-community basis. For the Linux kernel the community consensus is that Linus git repo is truth, but that can easily be changed if the community wanted to.
Certainly you need a few extra bits and bobs to build a proper cryptocurrency on top of git. But all the basics are there, and for many applications a git repository would be a perfect substitute for blockchain.
Is this actually a serious question? Do you think there is no point to PayPal, or do you think your GitHub repo is an equivalent replacement? Is forwarding an email to a bunch of people equal to twitter?
The point of cryptocurrency and smart contracts from a technology perspective is that it is distributed, decentralized/p2p, and has immutable atomic operations. There were lots of early cryptocurrencies and lots of early ledgers. World of Worldcraft gold is a a digital currency if you want to call it one.
What bitcoin solved was decentralized atomic operations (double spend). That's pretty much it. Whether or not you need that is open for debate, but points like you're making are ridiculous.
yeah, I am serious. git is already distributed and decentralized. you can also enable immutable atomic operations. it's also optionally transparent like a blockchain.
in practice what's the difference? what can you do with a blockchain that you couldn't do with a repo?
Settle positions between two mutually non cooperating parties. Your github solution doesn't consider that many non cooperating parties may want to do conflicting things on chain and you need a trustless way to resolve those conflicts. First writer wins to a centralized database at github is not an acceptable settlement method for billion dollar transactions.
EDIT: A blockchain is not just about keeping a history, it's also about maintaining liveness of the chain and preventing censorship even when many non cooperating parties are involved with conflicting incentives.
you don't need a trustless way - the two mutually non cooperating parties could fork the repo, reconcile separately using traditional git tools and then have the new commit(s), representing the conflict, merged into the main branch.
this is literally already what happens with software development now.
This is how I view the handling of the "well what about complex transactions..." game. You can create a totally separate branch to process that complex beast and then attempt to merge it back into the main. If there is a merge conflict (someone debited/credited the account line between branch & merge operation), the transaction would be aborted. Rebasing of transactions on top of the main branch would be possible and the semantics of this even make sense for real world use cases - "We attempted to reconcile your transaction into the main flow, but there was a change in the circumstances of the various basis accounts. Can you rebase your transactions on these circumstances and resubmit?" As part of that rebase operation, you would re-run your biz constraints on the complex transaction and then resubmit if you could still satisfy them all.
Depending on how you use and understand git for software, it is either a hauntingly-similar facsimile of any arbitrary blockchain tech today, or a completely alien technology with no practical relationship to blockchain whatsoever.
There also seems to be some notion that the time domain must flow in a continuous way. The time domain in git is discrete, but this does not violate any of the semantics. Just hypothetical processes around them.
these are transactions with extremely high value and often extremely urgent and not possible to merge together - e.g. the both liquidate the same unhealthy loan position (could be worth ~$10m+)
the whole point is it's not remotely easy to just "reconcile separately" when you have two mutually exclusive financial operations - these are not code changes made by mutually cooperating developers happy to change their code to resolve merge conflicts, they are actively fighting against each other
edit: this also point out how having a centralized entity decide the ordering of transactions is a horrible idea - sequencing is worth enormous amounts of money and you could not be trusted to resolve transactions in a way that is sometimes against your interests but in the interest of other participants in the network
outside of trivial transfer transactions there are much more complicated things you can do with smart contracts such as decentralized lending and decentralized exchange of assets
these are more like arbitrary atomic changes to on chain state that can affect many wallets and different contracts (and depend on the existing state) rather than just a transfer from my wallet to another address, which can be reordered freely
see protocols such as uniswap, compound, aave, synthetix, sushiswap, liquity, etc.
yes, decentralized. That's why you were using Github? (i'm going to completely leave out issues such timings of updates in the repo, failed nodes, etc)
the groundbreaking innovation when it comes to blockchain is distributed trust. you don't have one entity that decides what happens in case there is disagreement. Everyone, following the same rules, reach the same conclusion.
In practice the transactions you perform on the blockchain have value in USD whereas the transactions on your equally-technically-sophisticated git repo have no value at all. So there is no reason for the average person to choose your repo over existing blockchains.
Do you think there is no point to PayPal, or do you think your GitHub repo is an equivalent replacement? Is forwarding an email to a bunch of people equal to twitter?
Yes, and yes.
Paypal is superior to a github repo, but that doesn't mean they can't do the same job. Twitter is superior to an email chain, in most situations, but that doesn't mean it can't do the same job.
Concrete is superior to wood, that doesn't mean you cannot build houses out of wood. You could theoretically build a payments system on top of github, it might not be as efficient but it'll work.
Crypto does not override reality as much as it creates new pockets for reality to exist within. Want to create a group project that splits funds with people in various parts of the world? Crypto might work well for that.
To partially address your question about the github "allmoney" repository, some people already have a similar system called Hawala. People who make that system need to have networks of trust set up.
I actually use this analogy in my own thinking. I think there are for sure similarities although I say this without having read any crypto white papers.
In my mind at least, blockchain is probably a stricter subset of the git feature set (no git push --force, only git commit -a -m is allowed, and probably a much more strict process to merge PRs to the master branch). There's probably a built in verification and mirroring aspect as well.
In my mind, blockchain is a very strict, application specific implementation of git for finance.
> How is blockchain superior than me just creating a git repository on GitHub called "allmoney" and just setting it up such that a commit represents a transaction and the log represents the ledger?
Blockchains are designed in such a way that each new block contains information from the previous block. Changing a single transaction in the past on a blockchain requires doing all the work to make each subsequent block conform to the rules, something which is designed to be prohibitively expensive to do by generating unlikely random hashes with special properties. Even if someone decided to do this anyway, the protocol says that in the case of competing chains, go with the chain that has the most work put into it. So it's just not feasible for someone to rewrite history in a healthy chain with many nodes validating/mining blocks; they just can't catch up, and nobody will trust their chain.
Git commits are designed around the idea that they can be rearranged relatively freely, and rearrangements are cheap, so there's no good criteria for trusting the git history that has the most work done with it.
This is more a social convention than a technical limitation. Both Git and blockchains use Merkle trees to describe a linear history, and both allow rewriting history (via "git rebase" for the former and forking + the manual equivalent of a rebase for the latter). Many hosted Git repos disallow rewriting history on the central branch (i.e., they do not permit force-pushing to the main/master branch).
I think you have it backwards. On git it is a social convention, and when it's a technical one it's only because some singular 3rd party (e.g. Github) has made it this way. e.g. an employee at GH certainly can rewrite history on the central branch of your repo.
I don't see how it's not true for a distributed blockchain. People have forked the Ethereum and Bitcoin blockchains, and individuals chose whether to follow the fork or what they believed to be the original, uncorrupted version. Technically, anyone can fork a blockchain; socially and due to the governance processes of the blockchain's user community, this is difficult to pull off.
yes, and when it is modified the hash changes - it would be obvious it was modified. how are you suggesting they do this in a way that is not detectable?
I'm not really following you. in this scenario, the source of the truth, is the repo, not necessarily the repo on GitHub. GitHub is just hosting the repo. in your attack situation, since it's trivial to see it was changed, you would just push over the verifiably correct repo and switch hosting providers.
Secure or not you still have two blockchains and people have to decide which one they prefer. Do you understand there have been bitcoin and ethereum forks where exactly that has happened?
Yeah so like you've just rediscovered proof of work. If a bunch of people clone it, who can say which repo is the real repo? Well you burn a bunch of electricity in a provable way to vote for a repo. The repo with the most burned electricity is the real repo.
> Yeah so like you've just rediscovered proof of work. If a bunch of people clone it, who can say which repo is the real repo? Well you burn a bunch of electricity in a provable way to vote for a repo. The repo with the most burned electricity is the real repo.
what? no, the original repo is the real repo. my point is, is that the transparency makes it impossible for you to not trust me/GitHub.
why wouldn't you trust? you can see nothing was altered yourself - and if it is altered, the issue isn't trust anymore, I've simply committed fraud and you can use the existing legal system to punish me.
this is the same reason you would trust open source software installed on your machine, said machine that presumably has access to your environment/browser/etc which could contain a virus to take your existing fiat money today.
The central authority (here, Github or the repo owner) can rewrite history by rebasing and then force pushing. The only way you can detect that as a third party is by cloning the repo and periodically pulling to make sure the history of the main/master branch has not been altered.
If it has been altered, how can you prove that you didn't just rewrite history locally and then make a spurious claim? You would need others with local copies to vote on which history was legitimate.
if one were to actually implement what I'm describing, the transactions would need to be signed by the participating parties, so it wouldn't be possible to do what you're describing anyway.
How can you know nothing was altered, even if you stay in constant sync with the git repo, if github wanted they could selectively send different copies to different people. The entire point is that it's a trustless system where malicious actors get drowned out by others, especially if they're uncoordinated.
So in case you get mismatches, you can then have a bunch of humans figure out what happened and how to recover from it, and if necessary, involve a court system to settle disputes based on the evidence that exists.
This type of human resolution is needed even in blockchain systems: people will try and fork, people will try to launch 51% attacks, software will have bugs. In the end, a blockchain is a bunch of bits. People believing it and acting based on it is what matters.
Then what happens when your comparison fails. There's no consensus mechanism. But then can't everyone just start using a fork from the last time you all agreed (ignoring that coming to a consensus on where to fork would pretty much be impossible)? Well since github is hosting that git repo, and they're the malicious actor, they just alter that as well. You could take them to court, but this would take a huge amount of time. Effectively if you have a central authority you gain nothing from a public ledger because you have to trust them in the first place. Maybe it makes it quicker to find out that fraud has been committed, but the individual(s) who suffered from it will probably be suing anyhow.
that's not really possible - presumably if someone were implementing what I was describing they'd have it so all transactions are signed by the participants. they wouldn't have the private key(s) so, well, it's impossible.
American law allows for a very wide range of legal trusts. Courts will generally enforce any legal entity that the grantor chooses to structure. It's easy enough to setup the DAO as a formal legal trust that grants ownership rights to whoever can demonstrate ownership of an NFT.
Some people might ask what the point is. After all, you're still relying on a fair and enforceable court system at a base layer. That's true, but it allows you to abstract away all the other complexities from higher layers in the financial system. For example the cost of transferring title on land tends to be fairly high. You have stamp tax, title insurance, lawyers to review the contract, etc. With a DAO as the nominal owner, selling property simply becomes a matter of executing a smart contract transaction on the blockchain.
From there, you can imagine increasingly complex structures built entirely in the blockchain. A mortgage based smart contract can allow for a specific owner, but transfer the property to the creditor once the payment is missed. Mortgage underwriters can pool their blockchain based loans into pooled securities, and sell CDO-like products as smart contracts. This allows investors to completely bypass all the financial regulations and restrictions that exist on subprime mortgages.
It also cuts out an enormous amount of the legal, settlement, and due diligence costs associated with the creation of these securities. Everything's executed atomically and autonomously through smart contracts. The point is you can use a mix-and-match hybrid model, where some layers are secured through fiat law while other layers are secured through crypto law.
American law also allows for a court to invalidate any and all contracts deemed not legal, or not enforceable, or subject to a bankruptsy, or any of a billion other reasons.
What now?
What you have done here is make the simple case simpler, and the hard parts impossible.
You made the ACTUAL problems WORSE, because you do not understand what the ACTUAL problems even are in the space where you try to sprinkle "blockchain" as if it adds any value at all.
There is no fiat contract to enforce. There's simply a legal trust (the DAO) that holds property in perpetuity. All contracts and liabilities exist in crypto space.
The only way a fiat court could unwind the structure is if they declared the trust structure itself to be invalid. That's extremely rare in common law systems, because very few parties will have standing to challenge the trust formation. Moreover the risk can be minimized by making sure the DAO is incorporated in a friendly jurisdiction, like the Cayman Islands.[1] Since US law allows foreign entities to own domestic property, you're not tied to the jurisdiction where the property's located.
> The only way a fiat court could unwind the structure is if they declared the trust structure itself to be invalid.
Right. Which it would do at the drop of a hat if it got in the way of a lawful judgement. It'd need to get there, sure, but yes a court can actually order the blockchain to be incorrect as it relates to ownership of a thing.
If nothing else the government has standing. Emminent domain, for example.
And once the blockchain is wrong, it's wrong.
> by making sure the DAO is incorporated in a friendly jurisdiction,
Ha ha ha, do you think a french court will allow a tax haven company to make french courts null and void within the borders of France? That's basically giving up sovereignity.
Who's going to stop french police vacating a property? Math?
I don't know if you've read court judgements ever, but it's extremely common that things involved in a crime are considered "spent", "consumed" (I forget the word). That means it's not yours anymore.
Your "but It's mine on the blockchain!" means zilch.
I see two possible situations in what you describe:
* Ownership of a land/property is tied directly to ownership of a cryptocurrency. In that case getting hacked means people can steal your house. Forgetting your password means losing your house/not being able to sell your house again. This is unacceptable and will never happen in reality.
* Ownership of a land/property is not tied to cryptocurrency, but vaguely relates to it. It still sits in a blockchain, but does not correspond exactly with property ownership as ownership might diverge from true ownership in case of theft. Real ownership is still managed centrally by the government, and all of the property law around this will still need to happen all the same. Nothing changes, except we now have a blockchain.
> In that case getting hacked means people can steal your house... This is unacceptable and will never happen in reality.
We already have institutions which entrust billions in assets based on the ability to keep private keys safe. Coinbase, BlockFi, Celsius, Next, Grayscale, etc. all are trusted by millions to hold crypto assets in custody. In many cases insurers are even willing to write policies against the risk of hacks. Existing DeFi protocols have tens of billions locked inside their smart contracts.
I'm not saying that everyone will be comfortable with the risk. But clearly some non-trivial fraction of insitutional investors are already comfortable enough with crypto security technology and custodial services to trust it with "real money"
I see. So this is specifically about speculation, not about replacing all property ownership. This then involves trusting a central authority (the DOA) to grant ownership of the property to who-ever owns the NFT (which can be seen as a derivative from the property). Then the idea is that transfer of ownership through the blockchain is cheaper faster than actual transfer of ownership of a property through the government.
That is interesting, but it seems to me that the legal problems here are far from trivial. How do you, as someone that purchases a NFT that is supposed to grant you ownership of a property, supposed to be ensured that you are actually purchasing a property? What if the DOA simply refuses to give it to you? Are you trusting a central authority without any legal fallback?
There are also laws on eviction. It's not as simple as "if you get a mortgage and don't pay for a month, the house belongs to the bank". The government will not be pleased if people try to wriggle their way around those laws using a setup like this. There is strong regulation in this domain for a reason.
It's interesting how the conversation in so many of these threads go from.
Art ownership -> Property ownership -> Digital assets
Only because blockchains somehow work for digital assets, doesn't mean they work for real world assets. In fact the whole blog is specifically about blockchain use cases beyond digital assets (See the initial post: https://schlockchain.substack.com/p/the-statement)
> From there, you can imagine increasingly complex structures built entirely in the blockchain.
> It also cuts out an enormous amount of the legal, settlement
Ah, yes. Because increasingly complex structures written in obscure esoteric languages are immediately absolved of all problems, are automatically correct, require no enforcement or verification.
Courts don't look kindly on attempts to circumvent regulations through financial engineering. If they determine that the intent was bad then they may treat the transactions as shams.
> With a DAO as the nominal owner, selling property simply becomes a matter of executing a smart contract transaction on the blockchain.
Except legally speaking that means nothing unless you go through the legal process of transferring your title.
Sure if governments ran on it, but the cost won't really go away, you will still have taxes, and you will still have lawyers, and you will still have disputes. Smart contracts does not fix the oven that was not working properly when the title was transferred.
You wouldn't formally transfer title, because the corporate entity owning the property would remain the same. Corporations can change ownership without triggering any title changes on the real property they own. For example if Hilton Inc. was acquired by a private equity firm, it wouldn't require any title transfer on the hotel properties they own.
There’s a reason for all those legal, settlement, due diligence costs, and regulations. Finding ways around monetary regulations is called “money laundering” and “fraud” and it’s already illegal. So I wouldn’t recommend pursuing this path.
That's not really true at all. There are entire divisions at investment banking firms called "delta-one" desks. They exist solely for the purpose of creating synthetic equity positions to avoid regulatory, tax, capital, settlement rules on cash equities. I can easily sell you a "total return swap" in lieu of shares, which bypasses all kinds of existing rules.
Fraud and money laundering are very narrowly defined, and require mens rea. If simply structuring alternative financial vehicles constituted fraud, then nearly all of Wall Street would be in jail.
> Mortgage underwriters can pool their blockchain based loans into pooled securities, and sell CDO-like products as smart contracts. This allows investors to completely bypass all the financial regulations and restrictions that exist on subprime mortgages.
Hey, you mentioned in another post that you're working on a real estate application. Curious to know how that is going. Do you have a link to it that you can share?
The only DB problem blockchain solves is: when DB users don't agree on who should manage the DB. That's it.
Every other attempted use case for blockchain is most likely a newly minted "blockchain consultant" trying to sell you something you don't need.
That said, there are _a few_ cases where DB users don't agree on who should own the DB. Most prominently of which would be decentralized digital currency. Say what you will about blockchain hype, but millions of dark market consumers/sellers can't be wrong...
Back before there was blockchain, banks selling mortgages didn't like having to record ownership of deeds and mortgages with the county recorders. It was slow and expensive, and they wanted to shred the mortgages up and sell the pieces. So they created a system called MERS, that would track the notes as they went through the bond market. Except that MERS didn't really do that. It just pretended to. When all the loans went bust, it turned out that they hadn't properly kept track of the ownership of the notes. And MERS itself appeared to have no owners or employees--no one took responsibility for it. It was, you know, decentralized. So loan servicers took to forging signatures on papers to claim ownership of the loans they were foreclosing. And courts in some states let them get away with that.
So whenever someone says, hey we have a decentralized to do away with the old system of recorders, I think, we have heard this story before. It does not have a happy ending.
Remember, it's not the job of consultants to solve your problems. It's their job to sell you consulting. The blockchain concept was incredible for these guys, because it was so poorly understood by most people (including the consultants) and so incredibly hyped, that it literally sold itself.
One of my businesses is a software consultancy, but we try to be ethical, only taking on projects we believe in. At the height of the hype, we were approached by a shoe company who wanted to sell their shoes (yes, shoes) on a blockchain. We repeatedly told them it was a stupid idea, but they were hell bent on proceeding. In the end we actually had to implement it to convince them that it gave them nothing more than their standard database (in fact it gave them poorer reporting capabilities and performance). I decided to drop them as a client after that - you cannot satisfy clients with stupid or poorly defined requirements.
A tenet of sociology is that reality is socially constructed.
Since HN is populated with literalists, I will clarify here that this obviously does not mean that all aspects of reality are created by consensus. The Earth will not unroll and flatten itself out given a sufficient number of Flat Earthers. By "reality", they mean that a suprisingly large subset of what we consider "the world" is actually human level authored truth.
Some examples:
* Janet is a police officer.
* Dave is a criminal.
* France owns the Mona Lisa.
* France is a country.
* Idaho is not a country.
* Lance Armstrong is a cyclist.
* Bats are not birds.
* You can buy a car for $20,000.
In all of these examples, the fundamental process that determines the truth or falsehood of those statements is consensus. I can hear you already. "If you don't get a paycheck from the city, you aren't a cop." "You aren't a criminal unless you are convicted by the legal system." "The Mona Lisa is literally in the Louvre." "Bats are mammals, in order chiroptera. All birds are in class aves." "If I give someone the money, I will literally have a car that I can drive around."
For literal-minded folks like us, the idea that key properties of what we consider cold hard objective reality is in fact just squishy agreement can be unsettling. Hell, half of us got into computers specifically to avoid hand-wavey subjectivism.
But it's true. If you root cause any of those statements, you will eventually bottom out on "some people agree on it". There is no ground truth below human consensus on any of these and many many many more critical, tangible facets of our lives.
Tech folks will spend a truly Herculean effort to avoid this uncomfortable reality. They really really want things to feel solid. I look at the entire blockchain enterprise as essentially that. A boondoggle to try to subtract the humans out of human-constructed reality. But as this article shows, it is always doomed to failure. If you want your tech to actually do anything, then it has to interact with humans. And those humans will only choose to act in accordance with your tech if they believe the reality that it claims. Which means ultimately it is their belief that defines what the blockchain means, and not vice versa. Consent is always at the bottom.
Cryptocurrencies such as bitcoin extend the power of a person's imagination out of their mind and into the minds of other people. They do this because the cryptocurrencies create rules that people have a very hard time breaking, and people can communicate ideas through those rules. In this way, bitcoin does not subtract humans, it extends the human mind outward.
I agree! Cryptocurrencies can be a useful tool if you have the right mindset. The trick is to think of them not as a means of replacing consensus, but a tool for achieving it.
Because once you have that mindset, then you can start thinking about how it compares with other consensus-making tools (like the state and banks), and you can think about hybrid models that combine those in interesting ways.
There's a saying in the space that all cryptocurrencies are built on Layer 0 which is the social consensus layer. Bitcoin is only Bitcoin because everyone agrees on it.
> For literal-minded folks like us, the idea that key properties of what we consider cold hard objective reality is in fact just squishy agreement can be unsettling. Hell, half of us got into computers specifically to avoid hand-wavey subjectivism.
Objective reality begins to falter even before leaving computing. For example: values for binary ones and zeros are hand-wavey down in the hardware voltage level. People believe it is as simple as: 5V is one and 0V is zero. In reality, (5V TTL logic levels) voltages above 2.7V are high/one and below 0.8V are low/zero. Details: https://learn.sparkfun.com/tutorials/logic-levels/all
To be clear though, any such consensus _could_ theoretically be modeled using a smart contract between multiple parties, including how ownership was to be revoked (e.g. "party `X` owns thing `z` unless party `Y` says otherwise").
The challenges are in:
1. knowing ahead of time what the parameters and participants of the contract need to be ("I own the house I paid for... unless 'the government' invokes eminent domain")
2. finding the usecases where it's even beneficial to store proof of ownership in a distributed fashion (rather than at, for example, town hall).
> To be clear though, any such consensus _could_ theoretically be modeled using a smart contract between multiple parties
Sure, but it's only a model, in the same sense of "model" as a model train set.
If you want that blockchain's consensus model to actually do real things involving real humans, then the humans have to agree to act on that model, which itself requires consensus. So now you have two consensus systems.
That's funny. I consider the hacker mindset to include the exact opposite of this accusation - the ability to deconstruct reality, but also to perceive structure where there didn't appear to be any. And, really, of all things, blockchain is where you see excessive rigid thinking? I don't like it much myself, but it came about from a bunch of people going 'well, money is fake anyway'.
It's been more than 10 years now. Crypto isn't going to replace financial institutions. It's naive to think that a New World Order will come where banks don't exist and we're all happy trading in bitcoin
This reminds me the idea of using the blockchain to implement land registry in Bolivia, Peru and Paraguay. Some Swedish startup came with this idea, I guess.
But if the legal authorities there aren't reliable/competent enough to implement a land registry why would they be reliable to enforce a blockchain-based registry?
- "This blockchain says this land is mine!"
- "This gun says get the f**k out and that police officer I bribed agrees with my gun".
It should be entirely possible to have a block chain system where every record is basically a multisig address where the source of truth holds enough keys to override. What would the point of that be vs a central database? Well they don't have to be different. A blockchain doesn't need to be decentralized. However, it does provide a very clear and secure record of who did what. It would certainly make sense to have a very redundant set of copies of that blockchain, perhaps with the pubic being given the option to participate. But a blockchain construction could simply make it very secure and clear what records have been changed and by who.
This way, in the Mona Lisa case, a court system would decide to take possession back, and they would pull out their government keys out to record that. There are lots of constructions that could be useful there.
If it's not decentralized it's usually referred to as a "permissioned blockchain" which purists don't consider a "real blockchain" and at this point where "blockchain" becomes a marketing term.
But leaving that aside. What bothers me is the implication that only a blockchain implementation can provide sufficient transparacy. There are a million different ways to increase transparency within a computer system:
- audit logs
- access logs
- offside backups
- paper copies
- distributing data amongst a set of trusted but independent parties
- you could even enforce cryptographic signatures on all changes
But most importantly: policy
If you are losing your job (and get sued) because you changed data in the production database without authorization most people are less likely to do it. And in today's world it's really hard not to cover your tracks. The idea that we need to be 100x safer than that is just absurd.
Sure. At that point its semantics, but fair. I certainly wouldn't recommend a proof of work blockchain with hundreds of thousands of nodes for this. A federated blockchain would be ideal for a situation where the final source of truth is a centralized system.
> the implication that only a blockchain implementation can provide sufficient transparacy
I don't think anything I said implies that. I certainly didn't intend to imply that. Certainly there are other secure solutions, however I'm saying that a blockchain is a pretty well understood solution that should work.
> If you are losing your job (and get sued) because you changed data in the production database without authorization most people are less likely to do it.
I think people are looking for better solutions than "most people don't screw up the system".
> The idea that we need to be 100x safer than that is just absurd.
Again, not something I said at all. But if there's a solution that's 100x safer and no more costly (in fact maybe even cheaper), why not do it?
Even the examples of people forgetting their crypto password and not being able to sell their asset is an example of this. That is completely dysfunctional.
well, having a process around multi signature would mostly solve it. The blockchain alone won't solve any problem. Blockchain + process may improve some processes. Last time that I checked, Brazil was/is using blockchain quite successfully to authenticate official documentations, but they still request ID validation before operations. Just the signature and registration that the operation happened, are stored in the blockchain. In their use-case, nobody will steal your wallet and transfer the asset, but in another hand it helps to take paperwork out of their way.
> All in all: when your source of truth is the legal system, there is absolutely no point for a blockchain and you might as well record ownership in a database.
Crypto works well as a source of truth for things that start out in our imaginations but still have a large presence in the real world. For example, ownership of things like money accounts or even shares in group projects both come from and exist within our imagination, and crypto allows us to create rules and boundaries for those things easily and in a relatively trustless manner. I think the article focuses on objects that start out in the real world. If we want to manage the rules and boundaries for those kinds of things, then talking, writing, and violence probably work better than crypto.
Society cannot be boostrapped on top of cryptodelusions, exactly because people will not accept it.
If your bank account gets drained through something "unfair" (hack, robbed, bug, etc...) society delegates power to courts to order your money back.
Society will drop "the blockchain" like day old garbage every time, because people Do. Not. Care, about it. They care that they live in a society of relative fairness, judged by their peers. Not by a bug in a program.
There is no link between the blockchain and reality in the shared delusion of society.
There is a link between the courts, and the government, and the treasury, and the shared delusion of society.
There have been armed uprisings against governments that don't live up to the promise. And to the extent people DON'T rise up against the government it's because the government has guns.
The blockchain has no guns. Society will just stop believing in it, when it's wrong. You can't just "stop believing in the government" (i.e. look at the success of "sovereign citizens").
The government of all levels doesn't go away when you're not looking at it. Nor the dollar (because of the government). The blockchain does.
Not sure what you mean by bootstrapping society. But I do think that most people won't keep all their money in crypto accounts. Instead, some people will probably just use crypto to move a bit of money around on the internet, maybe use it as a rainy day account, maybe do a group project. It could work pretty well for that.
I have multiple accounts because FDIC (and other reasons), and different investment platforms.
Using blockchain for a slush fund like this is just LARPing. And I get the thrill of "being your own banking", I really do. But that's all it is. And it doesn't make it in any way a good idea, for anybody and everybody.
Let's say I wanted to start a small podcasting collective with people from many different countries. We would all know each other in so far as any member of a small online group knows other members. We might want to have people tip our podcasts and streams, and we might want to use a system to split up that income to the people in the collective. Bitcoin can allow that kind of revenue splitting without having to mess with hiccups in the legacy financial system.
Whatever people's reasons, I don't think crypto is just one thing because there is a whole world of things people might use it for, and I can't trust myself to know of or approve or appreciate the value of all of them. In that way, crypto kinda reminds me of learning to play Go.
Yes, the world needs a system for microtransactions.
The thing is that your use case can be likened to you and your friends coming together to play poker, so we need a system for allowing anyone to create a casino of any size.
As for what I meant by "bootstrapping":
Why do we have money, society, or any other social construct? It's because we as humans believe in some form of "life, liberty, and the pursuit of happiness".
Different cultures have different tradeoffs between these. And they may not recognize these things in people who don't look like them, or don't have the same gender, but the point is that this is the foundation of why we build social constructs such as government, police, and money.
The issues are complex, and sometimes contradictory, but this is what we bootstrap on.
Math is not that.
> for example, ownership of things like money accounts or even shares in group projects both come from and exist within our imagination, and crypto allows us to create rules and boundaries for those things
It does allow us to create those rules. But they are useless rules. Unless you think you can math-codify not only morality itself, but also exceptions and overrides.
And we don't know the exceptions until we encounter them.
Before we had DNA evidence we did not need to know what is "right" thing to do is, for someone who's just been proven innocent after 40 years. Not that we know now, either, but we have the mechanisms for trying, at least.
Blockchain enthusiasts want to make this impossible.
And that's why nobody will accept it. You think people are upset about the 1% now, imagine if it were literally impossible to change rules (laws, taxes, or anything else) that are clearly being exploited through a loophole.
It's the difference between mass surveillance and a proper legal court-approved search warrant.
This should not surprise you: People actually want search warrants to be a thing.
> I can't trust myself to know of or approve or appreciate the value of all of them.
Similarly you can't know the existence or value of all the things that a blockchain-based economy would make impossible.
Whereas the alternative (fiat currency) makes nothing impossible, as long as we can want it.
I think I understand your point a bit better now: people will not accept crypto because they prefer a mutable legal system over an immutable system of crypto contracts. However, your argument relies on taking an imagined crypto-future and applying it seamlessly over all of society.
Also, I think a crucial element in this equation exists in the form of all of us regular people that do not have power in the system today. Besides, so long as we have some combination of riots, guns, and jails, I wonder if people will experience much of a difference between a system of "who has the gold makes the rules" and "who has the egold makes the rules".
> I wonder if people will experience much of a difference between a system of "who has the gold makes the rules" and "who has the egold makes the rules".
If the people who don't have the gold are treated poorly enough, then in a democracy they in principle have the power to change it. In a non-democracy there's a second threshold where they will overthrow the power at a risk of their own lives.
You can't vote out the person with the egold, you can't rebel against them.
So yes, I do believe that the people who have egold and nothing to fear will be far more tyrannical than the people who have gold, for this reason.
If we could at least get online microtransactions for it, but we can't (at least with bitcoin) because of all its other technical flaws.
As you stated, people don't want crypto systems to seamlessly cover all of society. So, we can reasonably expect other systems to exist and also some crypto systems to exist. I have a cautious eye towards crypto, but a realistic future includes people using crypto for some things and using interpersonal agreements for other things.
What people want is incompatible with cryptocurrencies existing.
Maybe some use will be accepted, just like some level of murder is accepted. We sacrifice some lives for the benefit of not living in another type of dystopia.
But no, there's no harmony there. There is no right amount of AIDS in your blood.
This thinking might be fine with the Mona Lisa. But what about regular people and the poor? This is what btc/blockchain really helps. In the USA the USD$ is supreme, so you can easily discount about of crypto as a scam. But in most places in the world their government fiat is the scam.
Back to ownership of physical on the blockchain. It can help for many physical items such as property to have the ownership easily accessible and hard to refute. In the USA again it is very easy to look up as it is mostly public record. If we go into something like a vehicle, a blockchain system may help. Current inventory control and shipping inventory control is also due for a massive overhaul. I work at a large supplier and everytime we order something from China, there is always something missing. These are usually full shipping containers. There is tons of back and forth and eventually many hours are wasted to negotiate what is suppose to happen because every party says it was the other side that owes whatevers.
Criticisms like this are so strange to me. Blockchains are socially constructed tools. They aren't meant to be some absolute source of truth that can never be subverted by any social institution. They are meant to be a ledger that only updates in certain pre-determined conditions in certain pre-determined ways.
In the scenario described in the article, the French government can simply issue a new token and say it's the Mona Lisa's. As long as everyone else accepts this, there's no problem.
The point of the blockchain isn't to say that chain ownership is the ultimate and final source of truth, it's to say that you cannot secretly contravene that source of truth. If the French government wishes to issue a new Mona Lisa token, they must do so transparently and in view of the public.
They are forced to do so transparently because of the properties of the blockchain. It does not prevent anyone from changing the relation of chain entries to social institutions. It simply forces things that in the past could have occurred behind closed doors and without scrutiny into public view, and subject to public social censure.
This isn't just theoretical, either. This is exactly what happened with The DAO debacle early on in Ethereum. People didn't like what the blockchain said, so they simply changed it. But critically, they had to do so in public, and they had to do so in a way that was truly democratic. Democratic in the sense that nobody was forced to migrate to the new chain. Ethereum Classic is still operating today, and if you want to transact on it, nobody is stopping you. This is true voluntaryism and democracy in the purest sense.
> They aren't meant to be some absolute source of truth that can never be subverted by any social institution.
I'm fairly certain that would be news to many of its adherents. The bitcoin whitepaper begins with, "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."
> As long as everyone else accepts this
If you already have an efficiently functioning consensus system that can answer questions like this, what value does adding a blockchain have?
> If you already have an efficiently functioning consensus system that can answer questions like this, what value does adding a blockchain have?
It alters the political topology. I would analogize it to saying "What does social media do? I can already talk to my friends". Essentially it forces accountability and transparency to happen in ways that they were not guaranteed to in the past.
If you have a corrupt government, often corruption happens in private, which makes it harder to regulate, and harder for the public to even be aware of. They may know generally that things are happening and assets are being expropriated, but they don't know which or when, and to who. Having a blockchain does not prevent the corruption from occurring in some mechanical sense, but it does force it to the social surface. I think this is a real benefit with important consequences.
> I'm fairly certain that would be news to many of its adherents. The bitcoin whitepaper begins with, "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."
Ya, I think most people into blockchain/crypto get this wrong. You wouldn't even want an immutable, deterministic system that cannot be altered. Not only is it not what blockchain does, but it's a terrible idea. I think my take on its benefits is much better, and I wish people would adopt it.
Interesting read, but I can easily come up with way more complicated scenarios. Imagine inheriting the house of your dying relative who forgot to unlock the key. Or needing to split the inheritance with your siblings ... according to local law.
Leaving Blockchain aside, it would be cool if clearing house, such as Euroclear, would record -- but not decide -- ownership of non-financial assets too. Think houses, cars, bikes, artwork, everything!
>Think of this scenario. The French government has a top notch security protocol in place to secure the private key to the ownership of the Mona Lisa. But we have a change of government and some high ranking government official gets corrupted. They have access to the keys and he uses them to transfer the Mona Lisa to one of his rich buddies Joe Shmoe.
A "top notch security protocol" would require more than one official to sign off on the transfer precisely because this particular attack is so easily anticipated.
A blockchain for asserting ownership of the mona lisa would be largely ceremonial anyway - a bit like the land title deeds for the French Parliament. That doesn't mean that, like the deeds, it won't some day exist, but it will, like the deeds, not really mean anything. The "true owner" will forever be whomever has a monopoly on violence in France.
His assertion that a database is just as good for recording ownership, I think, misunderstands what blockchain is good at - distributing trust (everybody runs the database), rather than centralizing it (one party runs the database).
This isn't a theoretical concern, either.
I see the blockchain as a tool to prevent the MERS debacle, where a group of banks decided to come together and tried to make their privately run centralized database of mortgage titles into, quite literally, law (if you're in our database, we can foreclose on your house): https://www.nakedcapitalism.com/2012/01/mers-the-law-and-the...
This gambit worked in a lower court but, IIRC failed in the supreme court, but it created an almighty paperwork headache.
>"All in all: when your source of truth is the legal system, there is absolutely no point for a blockchain and you might as well record ownership in a database."
Could be generalized a lot further than the author seems to imagine. For 99.999% of proposed blockchain use cases you absolutely would be better off just using a database.
The argument makes sense when you put it that way, and especially in the terms of NFTs. In my opinion it all depends on what we envision the future will look like. If you ask me, I’d love to take the responsibility of managing my own keys and being my own bank , regardless of the issues that come with this approach (for example losing the keys).
I suggest you take a look at what we at AMPnet (www.ampnet.io) are doing and how we plan to bridge the real world assets to the blockchain.
two main issues here pointed out:
- losing the keys
- ownership transfer issue
We are building the decentralised network of auditors, on top of Ethereum. Auditors are randomly selected every now and then to continuously verify listed assets and check if the ownership structure fetched from the government databases matches the blockchain representation of the listed asset. In order for asset to get listed, one must provide the collateral less than or equal to the $$$ value of the asset (depending on some factors this amount can vary from asset to asset). Once the asset is bridged you get all the nice things distributed ledgers can provide, such as the cheap transfer of wealth, or out of the box integration with many existing defi protocols. If something shady happens with the listed asset (for example owner sells the asset in the real world while he remains the owner on the chain) then he gets slashed and the collateral is automatically liquidated. Auditors will detect this in the next auditing cycle.
For the faint of heart or the ones wanting to play with the blockchain but are not ready to take care of the keys we’ve integrated the hosted wallet support by using the Arkane services. They hide the wallet behind the simple google/fb signin methods and users don’t have to worry about losing the keys. Arkane guarantees to not lose or leak your keys and provides the insurance on every hosted wallet.
So yeah, I agree the challenges exist, but so do the solutions. Benefits of the blockchain are simply too good to not try many different approaches on solving these issues.
This is nonsense. What he describes is not a oroblem with the Blockchain but a problem with the security of the "wallet" of keys. That is a basic issue with any system that has security. If someone gets the "keys" (password, access etc. ) he can whatever he want.
The solution make the "locking mechanism" more complex. Add additional / multiple keys.
Methodolgies to secure system are all ready used. Wgat blockchain adds is a datastore that is more tamper proof (while adtionaly adding decentralization and fault tolerance using consensus mecahniam).
Any system can have vulnerabilities. Blockchain-like technologies may have the potential abilty to reduce and/or eliminate some of them.
No. The security issues is an arbitrary example. The actual problem is that when a disagreement between the legal system and the database, whether or not its blockchain.
Courts are the source of truth concerning ownership. The legal system needs the ability to overrule or edit the db, otherwise the blockchain is inaccurate.
You can think of "security problem" as an armed robber forcing you to reveal your password. With Bitcoin, they now have the coins and there's no going back. It doesn't matter that a court doesn't consider the robber to be the owner. Bitcoin doesn't represent anything outside of the blockchain. With a painting, stock or deed, something outside of blockchain needs to honour your blockchain claim. If the blockchain is unreliable, they won't, and it no longer reflects true ownership.
If your blockchain isn't the fundamental source of truth, there's really no point. Instead of a centralised db, you have centralised control over a distributed DB.
IMO there's confusion in this writing between ownership (legal concept) and possession (facts on the ground). The two can get out of sync. That doesn't mean blockchain is an irrelevant tool for tracking ownership - although I personally think it is, but for different reasons. Any ownership tracking ledger is going to have the problem that it doesn't map with real-world ownership, but that's not a failure of the tracking system, actually that's the reason for people to want such ledgers in the first place: because it gives the right to sue or other tools to try to rectify the situation.
Unfortunately, this is a 2015 take on blockchain. Protocols are now to the point where you can have the ability to create "courts" and social governance protocols on the network itself to resolve this kind of thing, also see: https://vitalik.ca/general/2021/03/23/legitimacy.html
Imagine a magic chalkboard that can never be erased, and is very large, and you can write on it with an infinite number of colors of chalk. No two pieces of chalk are the same color. Put this chalkboard in a public space and let people write on it with their uniquely colored pieces of chalk. What uses could such a chalkboard serve?
This is how I like to imagine blockchains. The magic chalkboard and a blockchain solve, or fail to solve, the same problems.
I like your analogy. If people came into the crypto space (and other spaces) with some kind of fan fic about how it works, they wouldn't fall for so many scams or have such a negative attitude about the space's potential.
I mean, the use case is (generally) providing a verifiable transaction chain. We have complex processes in place for doing this IRL right now for assets such as real estate deeds, vehicle titles, etc. Obviously, these all work because we collectively agree on the system in place. Blockchain would provide an alternative process for this. With tokenization, it would be possible to have multiple stakeholder ownership for a real asset.
Shorter version: if real estate is on the blockchain, and you guess my password or threaten me with a crowbar until I give it to you, do you get to keep my house?
I worked for a non-ICO blockchain company (no longer in business). We used Hyperledger Fabric for our offering and after leaving the company was informed that AWS was hosting Fabric and if I could develop anything to leverage that I'd have their support.
And after some contemplation, could not come up with a compelling pitch for a blockchain solution -- a pity because I liked Fabric and would have been happy to take it to the cloud.
This makes me think of a funnel. Into the top, you pour all of the people interested in maybe using a blockchain. A lot of sober evaluators of technology exit the funnel for the same reason: blockchains don't provide much advantage for most real-world projects.
That means further down the funnel you end up with a lot of people who for whatever reason miss or ignore that. I remember a meeting with a would-be entrepreneur whose product was "reporting sexual harassment in the the workplace but with blockchain". When I asked what "blockchain" brought to the project, they said it brought security. When I asked how users would see that, the answer was basically that users would just have to take the company's word for it. I explained that if that was the case, they didn't have an advantage over competitors. The entrepreneur did not like that one bit, and that was basically the end of the meeting.
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Meh. It's a private blockchain and the general principles stand.
The company I worked for was so incompetent that they wanted to have customers access the data directly through their APIs, and that the blockchain entities were all the same -- effectively making it a really slow and expensive K/V store.
I should write up the story of my time there -- it was insane. When I came aboard their system was a MySQL frontend with a ton of code to replicate it to the chain (because they couldn't figure out how to get more than one transaction per second, which was because they had no idea how Fabric actually worked).
A lot of folks here are making some version of the observation that an immutable public unforgeable database is, in practice, equivalent to ANY database which is sponsored by the state. That feels persuasive to me.
Does this imply that the blockchain ledger might have greater utility in areas where there is weak or no state control? Basically, the criminal underworld and black markets. What's been written about this?
Ownership is a social construct, dependent on the established social system, particularly a legal one.
It's hard to get around that.
Maybe there are some niche cases for parameterized control for blockchain i.e. we de-facto leave it to the block chain, but there can be 'amendments' to the chain by specific legal authorities that just become part of the system. Not utopian ideal, but maybe 'mostly practical'.
The explosion of cryptocurrencies/blockchain and the sudden demise of monetarism (overstatement, but YKWIM) is clarifying a lot about what money & sovereignty are.
A property registrar, stock exchange or currency that isn't subject to state control, isn't really those things... it seems.
If you have a blockchain like that wouldn’t you be able to rewrite the blockchain if you are the only one with the access? Isn’t the idea that that there should be enough others so you can’t rewrite it? AFICT this is what happens when you fork a chain?
It seems like a basic principle is that the court needs to be able to order the land registry to be changed? A blockchain that allows court orders to work might as well be a centralized database controlled by the court system.
Merkle trees are still useful, though. Compare with certificate transparency for DNS.
Except real estate. Someone can already come with a made up deed and say they own your house. Blockchain would make this much more secure than it is today.
There is a whole legal system around property transfer in most reasonably run countries. Title registration, a legal process including a process to refute a claim.
Simply having a fraudulent piece of paper saying "Deed" doesn't go very far beyond getting you a free trip to jail.
Further I don't see how a blockchain would help at all. So if I can acquire someone's keys I can transfer their property to myself and I'm thereby the full and legal, irrefutable owner? It has all of the same problems mentioned about the Mona Lisa.
You've hit the nail on an issue that bothers me about the tech industry in general - not understanding how the real world works and trying to create problems where none exist. This is in an attempt to shoehorn "tech" into the process when there is no need. The block chain in real estate is a great example.
The blockchain and crypto currencies in general both seem to be solutions looking for a problem.
The real world problem in real estate titling today is the pervasive need for title insurance. In a typical real estate transaction, both the buyer and the seller will have an insurance policy to cover losses stemming from a sale based on an illegitimate title.
In theory, because title registers are public (at least in the US) and run by a the local government, you could have higher trust in a title (and therefore lower title insurance premiums) if you could query the current holder from the appropriate government.
That said, I'm not sure why blockchain makes more sense for this use case than, say, a read-only API at land-register.<city/county>.<state>.gov.
Title insurance is very inexpensive because there are few actual title disputes. Those that do arise are usually of right of way claims, encroachments, or survey issues.
Actual cases of someone defrauding someone of property is astonishingly rare.
>Simply having a fraudulent piece of paper saying "Deed" doesn't go very far beyond getting you a free trip to jail.
That's exactly what MERS did. It tossed people out of their homes on the basis of a row in their privately run database.
It took a supreme court ruling to overturn this. Lower courts (e.g. the supreme court of michigan) LET them foreclose. The row in the privately run database reigned supreme.
>Further I don't see how a blockchain would help at all.
MERS was created to circumvent this whole legal system around property transfer because the system might be trustworthy, but is archaic, slow and frustrating.
A nationwide adopted blockchain system that didn't require private ownership by a party like MERS whom you clearly can't trust or an archaic, slow and frustrating paperwork system serves everybody's interests (except the people who used MERS to, y'know, steal people's homes).
I have zero doubt that there are flawed systems in some jurisdictions. That's the nature of the real world, with its ugly edges.
However a cursory examination is that MERS wasn't title registration at all. It was a registration of mortgage holders, where mortgages would be "assigned" to MERS. And the dispute wasn't over the accuracy of the rows in that database (which would be trivial to legally dispute and correct), but a technicality of whether MERS could be the one to foreclose -- itself a whole legal process, only at the very end impacting the title -- versus the one who assigned the mortgage. The net effect is identical, and I'm not sure if the difference between ABC Credit foreclosing on a defaulted mortgage versus MERS foreclosing means "stealing" someone's home.
"Sorry Mr. Anderson, the house you've been living in for twenty years now belongs to Ms. White. The blockchain has decided. You have to vacate your house in two weeks."
"But... your honor, that's preposterous! The Californian Blockchain Deed Corporation was hacked last summer, and we all know their private key was stolen! I'm a simple man, I don't even know what's a 'private key,' how could the system do this to me?"
"(clears throat) You Honor, my client, Ms. White, has already sold her house - as we all know the transaction is irreversible. If Mr. Anderson doesn't cooperate, Ms. White will be homeless in two weeks. We respectively request the court to proceed with the decision."
Maybe in your country. But where I'm from pretty much all property is recorded by the government run Land Registry, and their DB is the source of truth.
Not a single blockchain in sight, and has been working fine for decades.
Real estate has most of the same problems as any other physical good. Really the only difference is that it's (usually) easier to locate & define.
I'm struggling to think of one aspect of real estate records that is improved by blockchain that couldn't be improved equivalently by other technology (and in some jurisdictions, has). Any central registry addresses the problem you point out, especially with a court system backing it to resolve issues that run deeper.
I mean a fake deed document will only get you so far. Depends on what kind of scam you're trying to pull though. I am renting someone's apartment and I didn't look at any deed, but every property is registered with the city and I can verify ownership that way.
And with the rise of casual to state enforced surveillance in public and private spaces I can imagine near absolute resource tracking "cradle to cradle" via RFID, GPS, wi-fi, surveillance video, and block chain.
Someone can social-engineer your password out of you, and you're saying that if they obtain access to your Bitcoin wallet they can take your house from you (transfer it to another party), in exchange for nothing. That's a lot less secure than what we have today. Blockchain just trades one set of security problems for another.
Perhaps you could break down the exact steps that mean a fraudulent claim of ownership would be impossible? Given the frequent theft of cryptocurrencies, it seems like false claims of ownership on the blockchain would not only be possible, but common.
Typically such theft happens not on the blockchain but rather blockchain-adjacent.
This works because blockchains are too expensive and inconvenient to use. Instead people use exchanges, which provide none of the guarantees.
And that’s a basic rule of finance (and fraud): security measures will be bypassed because trusting people is always cheaper and easier, until it fails.
I read a fantastic book about this recently:
Lying For Money: How Legendary Frauds Reveal the Workings of Our World
I agree plenty of theft is happening on exchanges. But that's because most of the actual use has shifted to exchanges. Why? Convenience, sure, but also safety. Back when direct blockchain transactions were more popular, there we plenty of stories of thefts recorded right on the blockchain. Mt Gox was one of many examples.
Do you really think the entire country runs on an old copy of Microsoft Access? Databases are routinely replicated and in this case there’s a natural partitioning scheme: your transaction is recorded by your local clerk and replicated to state mirrors. Since updates only happen in one place, each node only needs write capacity to handle local traffic – a huge advantage over a blockchain – and read replicas are trivial.
Put another way, the banking system handles orders of magnitude more traffic with far fewer resources than a blockchain. There’s no reason to think people are suddenly going to start making real estate transactions at a significantly greater volume than credit card transactions.
I hear what you are saying, but think a more interesting case can be made for items that are (a) fungible and (b) accepted as a medium of exchange.
Ownership of gold in a vault would be a good one to critique, although I suppose you'd have to find some way to pay for the transactions.
If gold fails this test, then I can't see any point in using a blockchain for any store of value but simply as an in-and-out mechanism for transmitting money.
hm, maybe. I can't find my landlord's name attached to the building I owned. But his name is associated with the company which owns it.
My old boss also would buy property through LLCs, so if I looked up his address he would not be associated with it. I was not able to link him to the company because the LLC didn't actually transact any business aside from holding this property. But maybe I just don't know where to look.
I'm not sure a world where 60% (was it more?) of the currency ever created in the history of mankind has been created in the last year is the best benchmark for what's hype and what's not.
The market can stay irrational longer than you can stay solvent, but it can't stay irrational longer than the real world forces allow it to. Everything that goes up must come down.
Crypto anarchism (the movement to move all the trust to crypto and leave nothing to the government) is suffering from Dunning-Kruger effect in their understand of the legal system, it's purpose and nuances and generally the fact that the real world has to base its law system around humans interpreting the law because there are simply no better solutions, and the legal system came where it is after years and years of evolution and if simple inflexible rules would be a viable solution you wouldn't need a legal system.
It's the same flawed logic that usually opposes government access to communications, even with warrants, as if they are something sacred (while the government can literally jail you up if you break the law, even freedom isn't sacred, and it's much more vital than communications). You need to respect the rule of law and the fact that there are simply no better solutions than the legal system - it is just like decades old code that has been refined to deal with all the nuances of the real world.
The killer app for blockchain is, and always has been, a currency.
Immutability/trustlessness has a use outside of money, but we're just starting to scratch the surface. Most of the ideas I've seen could be executed better with a standard database or are still subject to garbage in garbage out. The stuff that's truly new and novel is in the exploratory stages.
Unrelated, it feels like there's a coordinated propaganda campaign against crypto going on right now. Many of the comments here, and in other threads, are repeats of emotional talking points that don't really make sense when you think it through.
My guess is institutions are looking for or trying to create a buying opportunity. Is that ETF about to be approved or something?
Ever heard of a thing called counterfeit?
Now combine blockchain with your favorite collectible, and you have a trustable, secure way to prove ownership of an original.
Sure, you can transfer ownership on the blockchain and still sell the physical counterfeit. But what is your "stolen" piece of art now worth without the private key to it? Probably much less, combined with a much smaller and illegal market.
Now take that concept and imagine some tamper-proof or difficult to tamper with hardware inside certain items like expensive designer clothes or bags or watches or whatnot, and you can probably make that possibility even harder.
It's a real world use case, and digital art should be self-explanatory I assume (although NFTs have a lot of problems (though probably solvable ones) to figure out..)
I don't agree. The article misunderstands a potentially useful aspect of blockchains, physical assets and the legal system. The blockchain is a linked list of immutable data. But this doesn't mean the legal system is prevented from taking action.
Lets say that the matter of ownership goes to court but events leading up to that mean the private key has been destroyed. The asset is still owned and is sitting in a gallery or lockup. The naive now think "who holds the now-lost key owns the painting but now the key is lost no one owns it". Wrong.
The matter is brought to court and the potential list of owners can be determined from the blockchain itself. The court can then confirm using that record the ownership by going back into the blockchain, finding and determining who is the legitimate owner and then order the creation of a new blockchain asset item[1]. Failing to assert ownership in court might even work against you. Then the new blockchain asset is linked to the old. The old block chain item doesn't even need to be updated or deleted. Even if you could. Why? It still provides valuable history.
Blockchains recording ownership of assets is a benefit to the court system. Except for keys to lost cryptocurrency wallets. That's likely always going to be a dead end. But that is no different to burning cash[2] or losing gold because you buried it near a beach.
[1] a new blockchain tracking item. Not a new Mona Lisa.
[2] except that cryptos once destroyed or lost usually can't be replaced.
>The court can then confirm using that record the ownership by going back into the blockchain, finding and determining who is the legitimate owner and then order the creation of a new asset.
- What if the legitimate owner (according to the blockchain) is dead?
- What if the last "legitimate owner" in the blockchain decided to give the item to someone else and never updated the blockchain? And if they can't be located to confirm as much?
- How does a court order the recreation of an asset such as the Mona Lisa, whose value lies in its history, how complicated it would've been to have painted it when it was painted, and the fact that the painter is certainly not alive to create a new one?
Present in court. The descendant as proxy isn’t a new concept.
Failing to update the blockchain means the sale didn't go through. You can't assert ownership via a blockchain then believe failing to update the blockchain is acceptable. The buyer has records of transfer, eg payment. Right? That would be admissable in court.
The court orders new block chain transadtion/item. That new item refers to existing that presumably has all these details.
>Failing to update the blockchain means the sale didn't go through.
What sale? An artist I love offers a vinyl record for sale via NFT. Being a fan of the artist moreso than a proponent of blockchain technology, I purchase the record. An unknown number of years go by and I decide that I don’t really enjoy the record anymore. The record sits on my shelf collecting dust for years until a friend comes over and expresses interest in it. I casually tell them they can keep it and I move on with my life. That friend now, for all intents and purposes, owns the record that I bought. It belongs to them.
>You can’t assert ownership via a blockchain then believe failing to update the blockchain is acceptable.
But in my example, I don’t care about the blockchain. I’m more interested in the music, the blockchain is just a barrier to me obtaining it. My physical copy is far more important to me than an electronic record that says I bought it, so as long as the record makes it to my house after I purchase it, I’m happy.
Unless there’s a law that stipulates that I absolutely MUST update the blockchain when I pass it on to my friend, I may just not care about it. Hell, I might even forget about it if that's one of the only blockchain transactions I've ever made. It'd be a damn shame if I forget my blockchain account credentials, too...
>The buyer has records of transfer, eg payment. Right?
Not always, no. Did you write out, and get notarized, something that says you gave your friend your used frying pan and let them keep it? If I bought that record and just told my friend, “Eh, sure, take it, it’s yours,” then typically we’re not going to generate a record of that transaction.
>The court orders new block chain item.
Ah, see, that’s where I misunderstood your first post. You used the word “asset” in reference to the artwork early on, and then said the court could “order the creation of a new asset”, when you actually meant, “order the creation of a new blockchain transaction”, correct?
But the point is that the blockchain is not a source of truth, the legal system is. So the blockchain is at best an eventually-consistent view.
But if that's the case, then why bother with a blockchain at all? Just use a regular database. There are plenty of ways to make that auditable and/or public without bothering with consensus algorithms.
Certainly it can be used as a record of ownership. But it's not the real record - that's whatever the legal system holds. So now we're talking about just using it as a view on top of the actual system of record.
It being difficult to mess up doesn't even matter, because it's just a view - it it's wrong go back to the source and fix it. Distributed consensus doesn't matter, because no matter what the consensus says the truth is whatever is in the legal system.
The main design goals of a blockchain are valuable for a system of record. They are not valuable for things that are just a copy of something else. So while you could use it for that, it's not a good fit.
The hard problem has never been the specific form of database used to store info about the real world. The hard problem has always - and will always - be enforcing the correspondence between what's in the database and what's in the real world. This problem couldn't be solved at a single store in a single fairly small city. It's not gonna be solved worldwide.