this post was submitted on 21 Oct 2024
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No bubble has deserved to pop as much as AI deserves to
Blockchain and crypto were worse. „AI” has some actual use even if it’s way overblown.
Blockchain has many valuable uses. A distributed zero trust ledger is useful. Sadly the finance scammers and the digital beanie baby collectors attracted all the marketing money.
And yet, every single company that has ever tried to implement a distributed zero trust ledger into their products and processes has inevitably ditched the idea after releasing that it does not, in fact, provide any useful benefit.
It is exceptionally useful for the auditing of damn near everything in digital space, as long as shared resources and 3rd parties have access to the blockchain ... which is probably the major reason corporations and politicians don't want anything to do with it.
It'd be a lot harder to hide crimes, fraud, grey business dealings, bribery and illegal donations, sanction violations, secret police slush funds, etc, etc if every event in the entire financial system and supply chain was logged and cryptographically verifiable.
EDIT: NOTE I'm not talking about everyones transactions being in a public ledger (bad). Only enhancing the current system between businesses and orgs so it's exceptionally difficult for any of them to falsify data without the others knowing, as well as having near instant visibility and analytics of the entire market (great for regulators, academics, etc).
A supply-chain wide blockchain could enable individuals to view every raw material that went into every product they consume, down to the location, date — even the exact time in many cases — each was mined, refined, harvested, transported, picked, traded, etc. in a way that no individual corp could hide or falsify dramatically. Each corp and individuals true (embodied energy consumption would be visible to every buyer; developed world politicians and corporations couldn't simply blame China and other developing countries for their own consumption.
The reason major businesses haven't bothered using distributed blockchains for auditing is because they fundamentally do not actually help in any way with auditing.
At the end of the day, the blockchain is just a ledger. At some point a person has to enter the information into that ledger.
Now, hear me out here, because this is going to be some totally out there craziness that is going to blow your mind... What happens if that person lies?
Like, you've built your huge, complicated system to track every banana you buy from the farm to the grocery store... But what happens if the shipper just sends you a different crate of bananas with the wrong label on them? How does your system solve that? What happens if the company growing your bananas claims to use only ethical practices but in reality their workers are effectively slaves? How does a blockchain help fix that?
The data in a system is only as good as your ability to verify it. Verifying the integrity of the data within systems was largely a solved problem long before distributed blockchains came along, and was rarely if ever the primary avenue for fraud. It's the human components of these systems where fraud can most easily occur. And distributed blockchains do absolutely nothing to solve that.
Counterpoint, having a currency where every token is tied into its own transaction history might be unpopular with large businesses for other reasons. Like maybe they don't want to be that transparent or accountable. The FBI have made public statements about how much easier it is to track criminals who used Crypto.
Your opinion seems to contradict reality.
This is a very poorly considered argument. Even if we suppose that everything you've said is true, the existence of a second plausible explanation doesn't invalidate the first. You've not actually offered any reason why any of what I said is wrong, you just said "X is possible, therefore Y cannot be true."
Also, I want to note that this particular digression wasn't about cryptocurrency at all. The point I was responding to was a claim that blockchains had uses other than as currencies. So you really might want to step back a bit and consider what you think is being discussed here, and what you're actually trying to say.
The idea has merit, in theory -- but in practice, in the vast majority of cases, having a trusted regulator managing the system, who can proactively step in to block or unwind suspicious activity, turns out to be vastly preferable to the "code is law" status quo of most blockchain implementations. Not to mention most potential applications really need a mechanism for transactions to clear in seconds, rather than minutes to days, and it'd be preferable if they didn't need to boil the oceans dry in the process of doing so.
If I was really reaching, I could maybe imagine a valid use case for say, a hypothetical, federated open source game that needed to have a trusted way for every node to validate the creation and trading of loot and items, that could serve as a layer of protection against cheating nodes duping items, for instance. But that's insanely niche, and for nearly every other use case a database held by a trusted entity is faster, simpler, safer, more efficient, and easier to manage.