Hello,
I have been researching about blockchains and stuff and it all seems like a big scam. It’s not sustainable and can be replaced by a simple database.
is there any legitimate use cases of blockchains or it is all just a big scam?
Hello,
I have been researching about blockchains and stuff and it all seems like a big scam. It’s not sustainable and can be replaced by a simple database.
is there any legitimate use cases of blockchains or it is all just a big scam?
The lack of a trusted central authority is key. If you have at least one authority you can trust just barely enough, the whole idea of a blockchain collapses. There needs to be an urgent trust crisis for this to work.
Also, if you have no trusted parties, you have a huge “First Owner” problem.
If we were to set up a blockchain to track the ownership of fluffy hats, what’s to stop me from seeing your fluffy hat, and quickly registering it as mine?
That is a good point. If there’s a dispute about the first owner, there’s no clean way to solve it. However, the current owner is clear, so we could just start tracking the history from the current time onwards, and ignore the history that’s shrouded in mystery and controversy.
That’s not the first-owner problem. I’ll try to explain in more detail. The problem arises when you’re using the blockchain as a “reciept”. You can only ever trace the ownership of the reciept, not the item it represents, without a trusted party.
Say we made a blockchain that determines the ownership of all fluffy hats in the world. It starts at june 1st 2026. Lets just assume there’s a trivial way to perfectly describe fluffy hats that we can put in a token. Or hell, pretend it’s super complex, that changes nothing.
You bought a fluffy hat in 2002, and made one for yourself in 2008. You own both, wearing one to bed when you go to sleep on may 31st, 2026.
At 1 second past midnight, june 1st 2026, I make two tokens, one for each of your hats.
I am now officially the first owner of those hats. You are suddenly a thief holding my property, even though it never left your head.
That’s the first owner problem. Without a trusted source, there is no way to ensure the first owner in a blockchain is actually the owner under the current legal definition (as in, you made the hat from homespun wool, it’s on your head right now). It gets even worse though, because I can even make tokens for nonexistent fluffy hats that haven’t been made. As soon as someone makes it, i’m already the owner.
The ONLY application for a blockchain with a trustless system is if the entire property is directly on the blockchain, and that doesn’t work.
Oh… Well that’s pretty bad. It’s like Wild West at that point. Anyone can make these fraudulent tokens. Someone would need to prove that there exists a connection between the token and the real world item it represents.
I guess therein lies the problem. These tokens shouldn’t represent physical objects. If you really want them to, you need a certification authority. If you can find one, it means that you actually can trust someone, so you don’t even need to use a blockchain for tracking these things. Why not just use a trusted authority to handle a traditional database.
So what does that leave us with? What can you do with a blockchain that doesn’t require the tokens to be connected to real world objects?
It’s also a problem of ownership. For exchanges between banks, a blockchain is better because no bank would be the owner of the database.
Plus it’s safer because altering a database is usually trivial while altering a blockchain is virtually impossible.
If you have multiple banks, you can have multiple copies of the same database. If any one bank modifies their copy, it is obvious who modified it and what was changed. No blockchain needed.
Everything is possible, but it would be a much more complex solution than running a blockchain that is designed for that use case.