<story><title>The blockchain paradox: Why DLTs may do little to transform the economy</title><url>https://www.oii.ox.ac.uk/blog/the-blockchain-paradox-why-distributed-ledger-technologies-may-do-little-to-transform-the-economy/</url></story><parent_chain><item><author>russdpale</author><text>With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract.&lt;p&gt;I suggest listening to this Tim Ferris podcast with Nick Szabo: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;tim.blog&amp;#x2F;2017&amp;#x2F;06&amp;#x2F;04&amp;#x2F;nick-szabo&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;tim.blog&amp;#x2F;2017&amp;#x2F;06&amp;#x2F;04&amp;#x2F;nick-szabo&amp;#x2F;&lt;/a&gt;&lt;p&gt;The entire idea is that no arbiter is truly neutral, no third party is truly trustworthy. Block chain is the onset of FAT protocols and trustful computing.&lt;p&gt;If the poor of the world can understand the social mobility that crypto currency affords them, there will be no stopping it, in my opinion.</text></item><item><author>rockmeamedee</author><text>I agree with this article.&lt;p&gt;Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don&amp;#x27;t ever hear them sort through the issue of how to agree on the schema for this trustless database.&lt;p&gt;For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the system will work, and how the data will flow.&lt;p&gt;For example I&amp;#x27;ve seen people on here mention applications such as a decentralized stock exchange, and a decentralized hotel rooms marketplace.&lt;p&gt;For either of these, it&amp;#x27;s necessary to get all the users of the system in a room and agree what is in scope and what is not, and in general what can be done with the system and how. At this point they already have a consensus, they trust each other, they might as well just set up a centralized database run by a 3rd party that manages the system, keeps it up to date and adds upgrades, instead of building it on the blockchain and hoping there are no major bugs in the cloud code and that it will live off gas.&lt;p&gt;For the stock exchange, that&amp;#x27;s exactly what we already have. We have institutions that are dedicated to running exchanges, which act as neutral arbiters. They use regular old centralised databases. When they have bugs in their code or the system makes a mistake they can even roll back trades, which they couldn&amp;#x27;t do on the blockchain.&lt;p&gt;Essentially this is the same argument as OP. The 3rd party&amp;#x27;s act of ironing out issues, deciding what the rules are and how they interact is synonymous with OP&amp;#x27;s term &amp;quot;governance&amp;quot;. We agree that using&amp;#x2F;running the system is different than defining&amp;#x2F;implementing the system and the latter can&amp;#x27;t be done trustlessly.&lt;p&gt;And also governance gets a lot easier when you also run the system centralized ;)</text></item></parent_chain><comment><author>sciyoshi</author><text>OP&amp;#x27;s argument is that this distributed consensus algorithm works only if there is already consensus about which algorithm to use in the first place! If you and I disagree about which block history is valid (for example, because my history includes blocks with a lower difficulty), then the assumptions are no longer valid and there&amp;#x27;s a hard fork. Also, note that a 51% attack can only exclude transactions or allow double spending - the ledger still can&amp;#x27;t be arbitrarily manipulated since transactions are signed by private keys.</text></comment>
<story><title>The blockchain paradox: Why DLTs may do little to transform the economy</title><url>https://www.oii.ox.ac.uk/blog/the-blockchain-paradox-why-distributed-ledger-technologies-may-do-little-to-transform-the-economy/</url></story><parent_chain><item><author>russdpale</author><text>With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract.&lt;p&gt;I suggest listening to this Tim Ferris podcast with Nick Szabo: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;tim.blog&amp;#x2F;2017&amp;#x2F;06&amp;#x2F;04&amp;#x2F;nick-szabo&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;tim.blog&amp;#x2F;2017&amp;#x2F;06&amp;#x2F;04&amp;#x2F;nick-szabo&amp;#x2F;&lt;/a&gt;&lt;p&gt;The entire idea is that no arbiter is truly neutral, no third party is truly trustworthy. Block chain is the onset of FAT protocols and trustful computing.&lt;p&gt;If the poor of the world can understand the social mobility that crypto currency affords them, there will be no stopping it, in my opinion.</text></item><item><author>rockmeamedee</author><text>I agree with this article.&lt;p&gt;Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don&amp;#x27;t ever hear them sort through the issue of how to agree on the schema for this trustless database.&lt;p&gt;For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the system will work, and how the data will flow.&lt;p&gt;For example I&amp;#x27;ve seen people on here mention applications such as a decentralized stock exchange, and a decentralized hotel rooms marketplace.&lt;p&gt;For either of these, it&amp;#x27;s necessary to get all the users of the system in a room and agree what is in scope and what is not, and in general what can be done with the system and how. At this point they already have a consensus, they trust each other, they might as well just set up a centralized database run by a 3rd party that manages the system, keeps it up to date and adds upgrades, instead of building it on the blockchain and hoping there are no major bugs in the cloud code and that it will live off gas.&lt;p&gt;For the stock exchange, that&amp;#x27;s exactly what we already have. We have institutions that are dedicated to running exchanges, which act as neutral arbiters. They use regular old centralised databases. When they have bugs in their code or the system makes a mistake they can even roll back trades, which they couldn&amp;#x27;t do on the blockchain.&lt;p&gt;Essentially this is the same argument as OP. The 3rd party&amp;#x27;s act of ironing out issues, deciding what the rules are and how they interact is synonymous with OP&amp;#x27;s term &amp;quot;governance&amp;quot;. We agree that using&amp;#x2F;running the system is different than defining&amp;#x2F;implementing the system and the latter can&amp;#x27;t be done trustlessly.&lt;p&gt;And also governance gets a lot easier when you also run the system centralized ;)</text></item></parent_chain><comment><author>jakewins</author><text>&amp;gt; If the poor of the world can understand the social mobility that crypto currency affords them&lt;p&gt;Can you expand on how crypto currencies relate to positive social mobility?&lt;p&gt;Off-handedly it seems to me it would be the opposite, although I&amp;#x27;m admittedly fuzzy on this..&lt;p&gt;In theory crypto currencies reduce rent-seeking from intermediaries; since much financial rent seeking is established as percentages of an exchange (like a credit card transfer), removing those rents will give bigger net advantages to those transferring large amounts than those transferring small ones.&lt;p&gt;Not saying removing rent seeking is bad (it&amp;#x27;s awesome!), but I don&amp;#x27;t see how that does anything but increase the difficulty for someone with low capital to catch up; rather it should be doing the opposite.</text></comment>