A blockchain ensures that some sequence of agreements was made in a way that everyone can trust. If everyone keeps their secret keys secure and solely in their possession, then no activity can be forged on the network by any significant likelihood.
Anywhere this concept has value, a blockchain has value. That's all there is to it. The rest is fairy dust and noise.
I don't really follow a lot of the discussion in this article. As I see it, most of the buzz around blockchains is just wild speculation and fantasy. For example, why would be want a "fat" protocol? In any other context in technology, "fat" anything is considered bad. Technologies are supposed to be "thin", simple, efficient, and composable. So why would the opposite be praised in this case? Furthermore, the characterization of existing foundational internet protocols as "thin" and blockchain protocols as "fat" seems like an inversion of truths. By my understanding, it would take as long or much longer to become well versed in all the nitty-gritty details of TCP/IP, DNS, etc. than it would to gain a solid understanding of Ethereum. Also, where is the need for software ecosystem micro-economies?
None of this makes any logical sense to me. It seems people have gotten it in their heads that the simple technological innovations of hash trees and distributed consensus protocols are going to somehow make them rich. And they're finding weird ways of justifying this.
Monegro believes that this paradigm shift affects the way that developers should think about their applications: “The combination of shared open data with an incentive system that prevents “winner-take-all” markets changes the game at the application layer and creates an entire new category of companies with fundamentally different business models at the protocol layer.”
Ok, thin protocols + fat apps --> fat protocols + thin apps. Neat theory. But this is putting the cart before the horse. Please can someone ELI5 to me:
* What problem does the fat-protocol, thin-app paradigm solve?
* Why would anyone be interested in developing a thin app for my fat protocol any more than anyone is interested today in developing a thin protocol that I can put my fat app on top of?
* Why is thin-protocol, fat-app considered to be in need of fixing in the first place? I consider the fact that apps capture more value than protocols to be a direct consequence of the free market. Apps capture business value because they solve actual user problems. Protocols define ways to build apps. But frankly I don't see a great demand for new protocols, and I consider that reason enough for the fact that protocols can't capture much value. To say that that would change with the blockchain is IMO equivalent to saying the market has it all wrong. What am I not seeing?
> For one, Ethereum is unable to access real time data from outside the blockchain. Developers need to rely on trusted third party data providers, called oracles, to provide smart contracts with outside information like weather, random numbers, or currency values.
I feel like this is more of a feature than a bug. If you're weaving applications into the blockchain, would it really be wise to have that chain communicate with abstract data off of the chain itself? Seems an unnecessary burden for the chain to bare!
Great article. I've recently gotten into Ethereum Dev and Solidity. It's really fun, fun stuff. This isn't directly addressed in the Ethereum portion of the article, but it's good to keep in mind that these things are all works in progress. Limitations today are non-such tomorrow; we don't quite know where the train is headed.
You, Developer, can help it get to wherever you feel it needs to go. Remember that before deciding not to contribute. :)
It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as they don't have to accept that Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. In other words, everything people hate about libertarians, they try to ignore in Bitcoin. Because they can't just ignore Bitcoin - it's not going away for some reason.
And it's not going away because there's a demand for Bitcoin. Why? Not because blockchain is some sort of an innovation. It's because people want a currency not controlled by any state institution. It's because people want freedom. Deny that all you want, it's not going away.
People are trying to solve a lot of interesting problems with blockchain, but I fear it's become the ultimate shoehorn solution for the modern era. See also: https://tonyarcieri.com/on-the-dangers-of-a-blockchain-monoc...
I've had meetings with prospective clients that opened with, "We have $problem, can we use blockchain to solve it?" where anything that doesn't qualify as a blockchain is cast to the wayside because it doesn't scratch that buzzword itch.
(Amusingly, I've witnessed one pitch where the person called it "bitchain" and it sounded like "ba-ching!" and I was waiting for the follow-up to what I thought was onomatopoeia for a cash register sound. I've since learned to not abbreviate cryptography as "crypto" lest I attract sketchy prospects.)
A lot of the problems that you might want to solve with a blockchain probably doesn't need a blockchain. A distributed, append-only cryptographic ledger will suffice. To wit: https://paragonie.com/blog/2017/07/chronicle-will-make-you-q...
Yet so far I still see almost nothing on the block chain (beyond its core currency use case) that is useful outside the domain of block chain stuff.
The only exception is things like Sia, and that's not cost or convenience competitive with Amazon S3 or Backblaze.
Where is the value here? When I visited this I was expecting to see at least something about building something useful for... something... Building what for the blockchain?
Oh kitties. Yeah.
I am absolutely aware of the fact that early stage tech often looks like a toy, but here's the thing. PCs were a toy but it didn't take long at all (VisiCalc, etc.) before they had actual uses. BBSes were a toy but they were immediately useful to their users for trading data and messaging.
We are now about eight years into block chain and beyond its one core use cases there is almost nothing. Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen.
Can someone provide a counter example? What are people doing in the real world with this stuff?
Naval does a much better job of explaining what the tech is about : https://startupboy.com/2014/04/01/the-fifth-protocol/
However, OP nor Naval, really understand the protocol, or wouldn't be supporting non-blockchain things like ethereum (there is nothing that you can do with ethereum but not with git).
>One of these developers, Vitalik Buterin, was frustrated by Bitcoin’s immobilism
I am amazed at how HN is selling a promo story invented for media by ethereum as a company. Digging IRC logs would reveal how Vitalik convoluted each aspect of the tech(and was often wrong)to the point that the devs stopped caring and let him be. Even technically, I have answered this on HN and other places numerous times - tell me one thing you can build with ethereum but not with bitcoin? (On the opposite, ethereum can't do money - mutable chain).
What about the problem of competitors copying your contract? Since all blockchain code is open. Isn't that a real problem developing Dapps?
In general, it's a red flag to see people promoting some technology or idea without concrete, end to end examples, and circular logic. It's okay for the authors to make speculations, but I am disappointed at their excessive handwaiving in answering just two simple questions.
a) Do "dapps" really to use their own tokens instead of USD or even ETH to function? b) How are closed ecosystems that utilize "utility tokens" benefitting customers? How are closed ecosystems better than open systems, open protocols?
Ethereum isn't useful for smart contracts; they are too expensive to call methods on chain and EVM is too inflexible and bug prone.
The only use for ethereum is shittokens, and you could practically coingen these for free, and trade forever. No load on the shared commons, isolate activity to the specific coin. The only advantage is the ECR20 standard that aids exchange integration.
SV is all a blaze about Ethereum, but I tell you, this too shall pass.
Long on other smart contract platforms, but not ETH.
Lots of smart people in this space disagree with "fat protocols."
I'll immodestly list my own first: https://www.evanvanness.com/post/166666272011/theres-no-such...
See also CoinFund's Jake Brukhman: https://blog.coinfund.io/fat-protocols-are-not-an-investment...
And Zeppelin's Teemu Paivinen: https://blog.zeppelin.solutions/thin-protocols-cc872258379f
I hear that even Joel doesn't agree with how his piece has been interpreted.
The negativity in this thread reminds me of the internet in the early nineties.
If someone had said that one day there will be a company that does billions by allowing people to fundamentally share their cat pictures and send each other happy birthday messages people would have laughed their asses off.
The blockchain can be seen as a giant immutable feed. Make of that what you will.
It uses sidechains in the near future to fix the problems ethereum has at the moment
Every time I see a Ycombinator article on Blockchain, I can't stop but feel a bitterness from the years of nasty comments I got here when advocating for Bitcoin, Ethereum and Blockchain technology here.
Anyone thinking of building anything on Ethereum should probably read and comprehend this recent blog post from the folks at BitGo: https://medium.com/@lopp/the-challenges-of-building-ethereum... There are many nasty subtleties and hidden traps they learned the hard way that aren't obvious.
It is misleading to describe etheteum as Turing-complete. If it were, an infinite while loop would soon crash the network. (As mentioned in the article, the processing of Ethereum contracts is powered/funded by a finite valuable currency called gas)
A novelty of the unfolding blockchain revolution is the realisation that there is a world of interesting non-turing-complete things to be built. We all assumed that anything non-turing-complete a waste of time. Surprise!
What you want to say here is that ethereum takes a large step towards creating a flexible development platform.
Ethereum has problems ahead of it. Just as C has an endless capacity to create memory leak bugs, Solidity offers opportunity for contracts that will drain people's accounts. Each time it happens, it will be reputational damage for the community.
If you wanted to learn Ethereum, it might make more sense to start with raw EVM than Solidity. Play at writing a macro assembler. Once you were tooled up, you might try your hand at becoming the Brendan Eich of the blockchain. Until you do, we are stuck with Brendan Eich.
If we do not find such an expression, general-purpose, public-access blockchain will gain permanent mistrust, and fail.
Message-driven concurrency is here to stay though. I am building a concurrency language centred around message-driven consensus-engines. (github.com/solent-eng/solent) It is designed to be host-distributed, but operated by a single party and not multi-party.
Here's my two cents. Is it a fad and a bubble? Most likely.
But do not discount value that the token creates as a network effect. Think of the currency as an investment vehicle to reward people who jump on to the network first. Consider Facebook, the first hundred customers are billions of times more valuable then the last hundred.
Once this fad dies, people should start joining the networks they plan to use, and early adopters will be rewarded for helping creating the network.
On top of that, it decentralizes the control of the network but temporarily provides capital for it's creators. It does not ensure that their system will belong to them in purpituity. Which is a good thing!
You can write Solidity in the browser now using their Remix IDE:
Blockchains, in part, provide the following value proposition:
Provable [X] without a central authority.
[X] can be the following:
Currency - Bitcoin
Computation - Ethereum
Anonymous currency - ZCash
Storage - Filecoin
Most of us would agree that central authority is too strong in many aspects of the economy and technology. The key question is for what values of [X] does the value proposition make sense? The core technology is less than 10 years old, anyone being too confidant in where this road goes should put it in a larger timeline. Besides not losing your money, as hackers we can only explore what may be possible.
ICO's are the equivalent of getting funding.
I think that the first successful blockchain based company won't be doing an ICO but just launch it's token/coin because it has utility in itself.
So this is exactly how I got started on a silly Ethereum side project over the holiday. Truffle, solidity docs, and reading the crypto kiddies code is all you need. I'm mostly interested in how Ethereum and other blockchain technologies work - there's no denying that building a dapp is just a fundamentally different experience from building a web app today and that in itself is exciting.
I'm mostly not interested in anything financial. Decentralization, immutability, and a built-in way to pay for usage are the main features of Ethereum (possibly combined with IPFS) that get me going.
So far the main benefit is democratizing investment, as has been stated here before. I love that I can get in on early stage projects without being a well-connected angel investor. Coins are like new, sexier penny stocks.
If you're interested in the intersection of blockchain and AI/ML check out the decentralized AI summit coming up on Feb 1st. https://decentralized-ai.com/ there are going to be a ton of good speakers and people into crypto/blockchain + IoT, Robotics, Autonomous Vehicles, etc -- it's like the world's faire of the future.
People are so upset about blockchain being useless.
Meanwhile I use it regularly to do business transactions from the command line and shell scripts, which appeals to me greatly as a hacker who does business.
Open source finance! It's the future, guys.
Sorry about the speculative bubble. It's not really my fault though. Traders and investors are a bit crazy.
I've wondered about the fat protocol concept. At the root of it, the token that allows the developers to monetize their fat protocol has to make sense as an investment. In other words, what are the investors getting when they buy this token? why should they expect a return? this, I don't understand very well.
Articles like these should come with a disclosure: "the authors own bitcoin and augur" or something to that effect.
Contrarian approach to this article : is there a way to short Bitcoin, and other "cryptocurrencies" ?
Inevitably because of the ICO component, there will be a lot of applications that tries to use block chain to search for a problem to solve more inefficiently than not using block chain. With the main idea so they can get the ICO to work for them.
Where I can see blockchain being more 'actually' useful is in simple things, like verifying the integrity of the app (or anything really), ala checksum hashes.
It makes a lot of sense for us to store them on the blockchain rather than hosting it on a webpage.
I stopped after reading this:
> “Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.”
And what was wrong with developers finding a market, developing a software and then monetizing it? I have tons of ideas each day, some of them blockchain related too but it seems unethical to use other people's money to test my hypothesis.
> Alternatively, the distribution of value in the blockchain paradigm can be described with fat protocols and a thin application layer. This paradigm shift is possible due to the innovation of cryptographic tokens.
As a long-time decentralization activist, this sentiment makes me want to tear my eyeballs out. Why are cryptographic tokens necessary to implement fat protocols? Why does "standardizing communication across applications" now also have to mean "implementing a global, secure financial market" in the process?!? This is maddening to me and nobody has explained to me why blockchains are a requirement to do this.
'Albert Wagner' should be 'Albert Wenger'
Bitcoin whitepaper url is broken.
Thanks for the article and the shoutout to blockgeeks!!
Vincent, could I translate this great article into Chinese?
Ethereum isn't decentralised to a large degree (see the DOA). Given such a thing, one may as well use a standard web stack.
Also, that makes any guides written for devs on the subject of negative utility. It wastes their time; since the premise, that the new paradigm derives its value from censorship resistance, is breached.
It takes some serious non-thinking to support Ethereum. The price is high, the value is low.