The blockchain hype is huge, the ICO craze (“Coindike”) is generating millions if not billions of “funding” for businesses that claim to revolutionize basically anything.
I’ve been following all of that for a while. I got my first (and only) Bitcoin several years ago, I know how the technology works, I’ve implemented the data structure part, I’ve tried (with varying success) to install an Ethereum wallet since almost as soon as Ethereum appeared, and I’ve read and subscribed to newsletters about dozens of projects and new cryptocurrencies, including storj.io, siacoin, namecoin, etc. I would say I’m at least above average in terms of knowledge on how the cryptocurrencies, blockchain, smart contracts, EVM, proof-of-wahtever operates. And I’ve voiced my concerns about the technology in general.
Now it’s rant time.
I’ve been reading whitepapers of various projects, I’ve been to various meetups and talks, I’ve been reading the professed future applications of the blockchain, and I have to admit – it’s all Greek to me. I have no clue what these people are talking about. And why would all of that make any sense. I still think I’m not clever enough to understand the upcoming revolution, but there’s also a cynical side of me that says “this is all a scam”.
Why “X on the blockchain” somehow makes it magical and superior to a good old centralized solution? No, spare me the cliches about “immutable ledger”, “lack of central authority” and the likes. These are the phrases that a person learns after reading literally one article about blockchain. Have you actually written anything apart from a complex-sounding whitepaper or a hello-world smart contract? Do you really know how the overlay network works, how the economic incentives behind that network work, how all the cryptography works? Maybe there are many, many people that indeed know that and they know it better than me and are thus able to imagine the business case behind “X on the blockchain”.
I can’t. I can’t see why it would be useful to abandon a centralized database that you can query in dozens of ways, test easily and scale trivially in favour of a clunky write-only, low-throughput, hard-to-debug privacy nightmare that is any public blockchain. And how do you imagine to gain a substantial userbase with an ecosystem where the Windows client for the 2nd most popular blockchain (Ethereum) has been so buggy, I (a software engineer) couldn’t get it work and sync the whole chain. And why would building a website ontop of that clunky, user-unfriendly database has any benefit over a centralized competitor?
Do we all believe that somehow the huge datacenters with guarnateed power backups, regular hardware and network checks, regular backups and overall – guaranteed redundancy – will somehow be beaten by a few thousand machines hosting a software that has the sole purpose of guaranteeing integrity? Bitcoin has 10 thousand nodes. Ethereum has 22 thousand nodes. And while these nodes are probably very well GPU-equipped, they aren’t supercomputers. Amazon’s AWS has a million servers. How’s that for comparison. And why would anyone take seriously 22 thousand non-servers. Or even 220 thousand, if we believe in some inevitable growth.
Don’t get me wrong, the technology is really cool. The way tamper-evident data structures (hash chains) were combined with a consensus algorithm, an overlay network and a financial incentive is really awesome. When you add a distributed execution environment, it gets even cooler. But is it suitable for literally everything? I fail to see how.
I’m sure I’m missing something. The fact that many of those whitepapers sound increasingly like Greek to me might hint that I’m just a dumb developer and those enlightened people are really onto something huge. I guess time will tell.
But I happen to be living in a country that saw a transition to capitalism in the years of my childhood. And there were a lot of scams and ponzi schemes that people believed in. Because they didn’t know how capitalism works, how the market works. I’m seeing some similarities – we have no idea how the digital realm really works, and so a lot of scams are bound to appear, until we as a society learn the basics.
Until then – enjoy your ICO, enjoy your tokens, enjoy your big-player competitor with practically the same business model, only on a worse database.
And I hope that after the smoke of hype and fraud clears, we’ll be able to enjoy the true benefits of the blockchain innovation.