> In short, adding a decentralized network of paid/incentivized actors to any existing potential cryptographic problem space (a fair rough summary of the smart contract notion?), in particular the subset relevant for most businesses, doesn't seem to solve anything particularly well and typically decreases critical measures of engineering elegance such as simplicity, comprehensibility, predictability, etc. while increasing negative measures such as technical lock-in to piles of rapidly evolving technologies for which hiring and building is expensive and error-prone.
You could say very much the same thing about most supply-side innovations when they came out. Why buy a factory machine when your workers do it just fine? It's complicated, error-prone, you'll have to hire expensive, specialized mechanics to deal with it when it breaks down. It decreases measures of engineering elegance, like simplicity, comprehensibility and predictability. All the locking you into that vendor with a massive upfront capital cost.
Smart contracts eliminate trusted third parties (sometimes) and automate certain processes that previously couldn't be automated due to trust issues, or were automated but centralized (with the aggregating entity extracting rents). Fixing these things will reduce transaction costs globally, just as factory automation did.
Will it solve everything? No, at least not soon. Will it eliminate lawyers, courts, and so on? Not even close. But it will do some things. Things like escrow, notarization, and assurance contracts (e.g. kickstarter) are all easily amenable to blockchain / smart contract solutions. Prediction markets are another good one.
My point is basically this: People have been making unbelievably grandiose claims about cryptocurrencies. And those claims are, largely, bullshit. However, there are some things that they do very well, and they are starting to do them.
You could say very much the same thing about most supply-side innovations when they came out
Maybe. If the input and output are the same, but the efficiency is larger, or the quality is greater or more controllable, then you have some value-add.
If the input and output are artificially constricted and the business case is basically undefined then skepticism is expected and logical.
I never denied there are use cases, just stated they are very limited. I stand by that assessment.
> Maybe. If the input and output are the same, but the efficiency is larger, or the quality is greater or more controllable, then you have some value-add.
Ya, but if I may re-summarize that objection it's, 'except for all the things that it does improve'.
> If the input and output are artificially constricted and the business case is basically undefined then skepticism is expected and logical.
> I never denied there are use cases, just stated they are very limited. I stand by that assessment.
I don't disagree per se. I think we may just disagree over how limited is 'very limited'. I think, even just interbank transaction settlement (e.g. Ripple) is an enormously valuable usecase for blockchains. Some smart contracts make sense as well, keeping in mind that you can always offload parts of a contract to human auditors and mediators. People sometimes equate there being any human involvement with trustless execution being worthless. However, that's not really fair. For instance, suppose you are in a country with a corrupt legal system. You can't enter into a normal contract safely, because justice there is disbursed to the highest bidder. So, what do you do instead? You enter into a smart contract that specifies a mutually agreed upon 3rd party outside of the country as the arbiter of disputes, and gives them a private key that they can use to enforce their judgments. Now, you've created a functioning judicial system (admittedly, only for finance) in a country that didn't previously have it. I'd say that's a pretty valuable use case for people in say, Venezuela, or Russia.
You could say very much the same thing about most supply-side innovations when they came out. Why buy a factory machine when your workers do it just fine? It's complicated, error-prone, you'll have to hire expensive, specialized mechanics to deal with it when it breaks down. It decreases measures of engineering elegance, like simplicity, comprehensibility and predictability. All the locking you into that vendor with a massive upfront capital cost.
Smart contracts eliminate trusted third parties (sometimes) and automate certain processes that previously couldn't be automated due to trust issues, or were automated but centralized (with the aggregating entity extracting rents). Fixing these things will reduce transaction costs globally, just as factory automation did.
Will it solve everything? No, at least not soon. Will it eliminate lawyers, courts, and so on? Not even close. But it will do some things. Things like escrow, notarization, and assurance contracts (e.g. kickstarter) are all easily amenable to blockchain / smart contract solutions. Prediction markets are another good one.
My point is basically this: People have been making unbelievably grandiose claims about cryptocurrencies. And those claims are, largely, bullshit. However, there are some things that they do very well, and they are starting to do them.