Sure, basically using blockchain to record ownership of things that change hands besides currency, which at the end of the day is really what blockchain is. It creates actual value and generally doesn't require building a Dyson sphere around the sun to enable. For example, tracking stock share ownership, that should already have all been moved to blockchain and the 2 in T+2 should refer to minutes, not business days. A little more work, but I think it would be spectacular if we could eliminate the paper volumes that track land ownership with blockchain. Right now land ownership records are as archaic as it gets, and the transaction costs in both time and money for recording a sale, getting title insurance... are all just a deadweight loss. Perfect kind of problem that blockchain could solve. There all kinds of niches with similar ownership and chain of custody issues that blockchain would be perfect for, for example tracking organic commodities, or FSC lumber, or grain fed beef, or WI cheese or Champagne (that actually comes from Champagne). There's lots of opportunity to create real value, while if they're honest with themselves the vast majority of crypto currency evangelists are just trying to pump their speculative investment and if they come up with a benefit it's done post hoc to make themselves feel better about it rather than the other way around.
El Salvador hopes to becomes the world’s first country to adopt bitcoin as legal tender
- Thread starter johnarb
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I think where we diverge is on the the basic difference in equity between PoW and PoS chains. BTC was unique in it's emergence and was not the beneficiary of the Cantillion effect even though it's currently being perceived as a Dyson sphere.
Agreed on the various applications you've mentioned. Beefchain is something that is spinning up on ADA, although I haven't heard too much about it lately. There's also Vechain's VET which is focused on the supply chain issues. Walmart China is currently testing this.
The unlocking of value in the RE is gonna be huge. Currently aware of this project; https://consensys.net/codefi/assets/hmlr/
I'm sure there are many others, thanks for bringing up these use cases. They are worthy of a re-visit.
The UK project is exactly what I was thinking about. I have a classmate who is working on something different but in that same space. Realtybits is his company, but he has kind of been sucked into the financial side of it because that's where the VC bubble is. We've had similar discussions to this one, although I think his current iteration does have legs. As I've said elsewhere, there were great ideas to pick up for pennies on the dollar or even free after the .com bust; I think this will be similar.
I know right...imagine putting most of your wealth into an asset (or a assets) that continually go through massive bubbles and then plunges to new depths to where your wealth falls 50% or lower, every few years...over and over....oh wait that's the US stock market.
And you are right..it will indeed blow up our economy.
There's a great concept in the world of finance called risk adjusted return. To simplify it, the guy in El Salvador making the average income of $300 a month isn't looking for any return. He just needs to be able to buy roughly the same amount of rice at the end of the month for a given amount of currency as he could at the beginning. As a result, he expects near zero risk of fluctuation of the value of his currency between when he earns that currency and when he spends it. On the exact opposite end of the spectrum are investors who are looking for more than the risk-free return. They put their money into a variety of assets, including stocks, according to a very well accepted financial concept whereby the higher the risk the higher the expected returns over the long term. This works exceedingly well for the economy. Some folks are looking for VC level risks and get VC level returns. Others want much lower risk, so they invest in a portfolio of lower beta stocks that return much less than the S&P 500 but also fall much less than it does in a downturn. Still others invest in TIPS and effectively get a return equal to inflation. This whole concept is literally the foundation of most of the prosperity capitalist societies enjoy today.
BTW, I believe we've had only 2 drops of more than 50% in the stock market in the past century, 1929 and 2007-2009. That's hardly "every few years" and certainly orders of magnitude less frequent than crypto. However that's merely an aside to the faulty assumption that fluctuations in a country's stock market and their currency are somehow equivalent on their impact to that country's economy.
Only if they used power that came from a nuclear plant with a few $B in cost overruns that were being passed on to ratepayersIn essence, you are saying that it would be the greatest insult to anyone's moral compass to buy a Tesla with BTC. Ohhhh, the irony!
What makes blockchain the best, or even a remotely appropriate way to address these problems/use cases?
The point of a blockchain-based system is to ensure integrity of the ledger while allowing said ledger to be distributed across a network of pseudo-anonymous, inherently untrustworthy nodes. This sort of structure makes no sense at all to use for tracking stock trades or land sales, which can be handled just fine by a centralized trusted authority. There's no technical limitation forcing T+3 equity settlement any more than there is for Fedwire to still take 24 hours or more to settle transfers; it's purely due to laziness on the part of the central authority failing to update its systems.
Chain of custody issues for commodities? That's mostly a coordination problem of getting a large number of competing entities up and down the value chain to agree on a common system, decide how the system is to be paid for, etc. Using a blockchain-style database doesn't make these issues any more tractable than using a conventional database. And then, the trust problem which needs to be solved here has nothing to do with the integrity of the database itself, or the central service being compromised - it's that unscrupulous but properly-permissioned actors might feed bad information to the database in the first place, mixing non-organic coffee beans in the organic shipment, or claiming the lumber to be from a plantation when it's really fresh-cut from the Amazon. Again, using a distributed ledger does nothing to address this.
You're right in some respects. But as you can probably tell I'm all about pragmatism over idealism. While a trusted centralized authority could do T+3 minute settlement, that costs money and requires a system with much higher tolerances for them to manage. If you're going to spend that money, you might as well spend it to convert to blockchain and at the same type absolve a bunch of risk averse civil service types (I was one so I can speak ill of at least the risk aversion) of the specter that they'll get blamed for screwing something that big up every day if they're the one's running it. And this is a shiny object, sometimes people will go for the shiny object even if the slog of setting up instant stock transactions otherwise might be just as doable.
On property records, the problem we have now is that there are thousands of centralized trusted authorities, literally every county in the country. Again with the pragmatism, while ideally we might set up a national registry run by the federal government, but let's be realistic, that's never going to happen for a variety of reasons, but a big one is the fact that a big part of our population believes any central government to be inherently evil. Again the shiny object might get some counties to jump on and when the rest see that they can jettison this previously uninteresting cost center to a decentralized system that isn't the gubmn't a lot might jump on the bandwagon.
Chain of custody you're right has a variety of aspects. Obviously the original certification has to be valid, blockchain doesn't help that. But it does help from there on out. If a lumber yard sells X board feet of FSC certified lumber to Home Depot, it will need to prove it bought X board feet of FSC certified lumber and didn't sell any of those board feet to anyone else. The visibility of every transaction in the blockchain can prove that (ironic since people use BTC with the mistaken idea that it hides their identity), without the current fox guarding the henhouse system we have now where the folks checking that are often conflicted.
These are all ideas that need work, and like many ideas at this stage many won't work out but investigating them will spawn some adjacent or even not so adjacent ideas that do end up working out. That's how entrepreneurship works. I just wish the whole mistaken idea that blockchain is all cryptocurrency and cryptocurrency should become the world's reserve currency wasn't sucking all the oxygen out of the blockchain entrepreneurial ecosystem at the moment. Perhaps it won't be for much longer, as I indicated earlier the energy use alone of that is going to cause some pretty substantial backlash once it's more commonly understood.
