I’m not an expert but I would say that I have a decent understanding of how things work on a technical level. Since you are asking very general questions, I’m going to give quite general thoughts.
(1) The central innovation of the blockchain is the proof-of-work mechanism. It is is an ingenious idea which tackles a specific problem (finding consensus between possibly adversarial parties in a global setting without an external source of trust).
(2) Since Bitcoin has made the blockchain popular, everybody wants to have the specific problem it allegedly solves but almost nobody does.
(3) Proof-of-work has a certain empirical track record. This is mostly for cryptocurrencies and in the regime where the main profit of the transaction validators is from minting new coins.
(4) Proof-of-work isn’t sustainable. The things which it secures (Bitcoin, smart contracts, etc.) are secure only as long as an increasing amount of energy is put into the system. Sure, traditional institutions like the government or a central bank also use a lot of energy but they can’t be abandoned as easily as a blockchain because they are monopolies which have proven to be robust over long time scales. Proof-of-work becomes increasingly unstable when the monetary incentive for the people doing the validations goes down.
(5) Other proposed consensus mechanisms (proofs-of-something-else) remove the central innovation of the blockchain. I don’t see them as ingenious ideas like proof-of-work but mostly as wishful thinking of having one’s cake and eating it too. I’m open to change my mind here but I don’t see any evidence yet.
(6) I don’t share the optimism that clever technological solutions which bypass trust will lead to a flourishing society. I think the empirical link between inter-personal trust and a flourishing society is strong. Also as far as trust in people and institutions is bypassed, it is replaced by trust in code. I think it is worthwhile to spell this out explicitly.
(7) Comparisons with the .com bubble don’t seem sensible to me. Bitcoin has been popular for ten years now and I still only see pyramid schemes and no sensible applications of the blockchain. Bitcoin and NFTs aren’t used, people invest in them and hold them. Crypto right now is almost completely about the anticipated future value of things. In contrast, when the .com bubble became a bubble there were many websites which were heavily used at the time.
(8) Moxie Marlinspike, the founder of Signal, also makes some interesting points regarding web3: We already have an example of a decentralized system becoming widespread: the internet. Did people take matters in their hand and run their own servers? No. What happened is the emergence of centralized platforms and the same thing is happening with blockchains already. I think at least some of the potential people see with blockchains wouldn’t be realized because of this dynamic.
(5) Other proposed consensus mechanisms (proofs-of-something-else) remove the central innovation of the blockchain. I don’t see them as ingenious ideas like proof-of-work but mostly as wishful thinking of having one’s cake and eating it too. I’m open to change my mind here but I don’t see any evidence yet.
In what way do you believe Polkadot and Solana have problems because of their setups? Why don’t you see those systems working as evidence that other systems are viable?
I’m not an expert but I would say that I have a decent understanding of how things work on a technical level. Since you are asking very general questions, I’m going to give quite general thoughts.
(1) The central innovation of the blockchain is the proof-of-work mechanism. It is is an ingenious idea which tackles a specific problem (finding consensus between possibly adversarial parties in a global setting without an external source of trust).
(2) Since Bitcoin has made the blockchain popular, everybody wants to have the specific problem it allegedly solves but almost nobody does.
(3) Proof-of-work has a certain empirical track record. This is mostly for cryptocurrencies and in the regime where the main profit of the transaction validators is from minting new coins.
(4) Proof-of-work isn’t sustainable. The things which it secures (Bitcoin, smart contracts, etc.) are secure only as long as an increasing amount of energy is put into the system. Sure, traditional institutions like the government or a central bank also use a lot of energy but they can’t be abandoned as easily as a blockchain because they are monopolies which have proven to be robust over long time scales. Proof-of-work becomes increasingly unstable when the monetary incentive for the people doing the validations goes down.
(5) Other proposed consensus mechanisms (proofs-of-something-else) remove the central innovation of the blockchain. I don’t see them as ingenious ideas like proof-of-work but mostly as wishful thinking of having one’s cake and eating it too. I’m open to change my mind here but I don’t see any evidence yet.
(6) I don’t share the optimism that clever technological solutions which bypass trust will lead to a flourishing society. I think the empirical link between inter-personal trust and a flourishing society is strong. Also as far as trust in people and institutions is bypassed, it is replaced by trust in code. I think it is worthwhile to spell this out explicitly.
(7) Comparisons with the .com bubble don’t seem sensible to me. Bitcoin has been popular for ten years now and I still only see pyramid schemes and no sensible applications of the blockchain. Bitcoin and NFTs aren’t used, people invest in them and hold them. Crypto right now is almost completely about the anticipated future value of things. In contrast, when the .com bubble became a bubble there were many websites which were heavily used at the time.
(8) Moxie Marlinspike, the founder of Signal, also makes some interesting points regarding web3: We already have an example of a decentralized system becoming widespread: the internet. Did people take matters in their hand and run their own servers? No. What happened is the emergence of centralized platforms and the same thing is happening with blockchains already. I think at least some of the potential people see with blockchains wouldn’t be realized because of this dynamic.
In what way do you believe Polkadot and Solana have problems because of their setups? Why don’t you see those systems working as evidence that other systems are viable?
Thanks, you’ve given me some things to think about.