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> (1) has no I/O functions Input: User identity, money. Output: Digital services, site subscriptions, digital assets, in-game items, NFT's representing real w

> (1) has no I/O functions Input: User identity, money. Output: Digital services, site subscriptions, digital assets, in-game items, NFT's representing real world assets held by trusted companies (wine, event tickets, tokenized securities). None of this requires oracles and exists today. Your mistake is thinking that just because the base layer is decentralised that we're somehow not allowed to connect to companies we choose to trust, just like we all already do. Then it becomes interesting because there's a programmable market for these assets/services that didn't previously exist because the underlying value was not represented in an exchangable form. The outputs are also inputs. Ethereum is the trustless, standardised substrate on which trusting parties can interact. HackerNews will continue to fail to see the utility of this system for years to come until it's mature and undeniable. It will be an interesting case study into how experts missed the potential of emergent technology in the same way we look back on yesterday's commentators not realising the disruption of Amazon or the internet. As to your second point, it's unlikely the end user will ever want to transact on layer 1. Layer 2 technology is making steady progress. See l2beat.com for examples.

apatters 5y ago
Let's say everyone on the planet is Ethereum enabled tomorrow. What is the business case for the winery to use it in your example? I get that Ethereum or any other crypto can be another payment option for their customers. Beyond that what use does a winery have for a programmable substrate underlying its transactions with customers or suppliers? I'm not saying there is none but if you're going to rip on HN users, frankly it's hard to parse what this language even means.
- kryptonomist 5y ago
  A winery could assign a token to each physical bottle, and lets its customers freely buy (winery is involved) and then exchange their tokens based on the supposed bottle value ups and downs (winery is not involved any more). Then, from time to time, they come to the winery to take back a real bottle from a token. Admittedly, there is little to program, but we can imagine all sorts of auctions, games (tokens becoming playable items in a virtual world, but still exchangeable for real bottles), etc., around those tokens.
  - ipaddr 5y ago
    Why would any of this need cryto? If you trust the winery to hold the wine you could trust them to rule the exchange. Each bottle could still have a token. Values could still rise and fall. All stored on a central exchange. These tokens issued by a trusted entity could perform the same function and can be cashed out. The key feature of cryto is around connecting trustless entities. Once you centralize on a physical product stored in a trusted location by a trusted party you lose point involving cryto. Who cares how secure the token is when the winery can switch labels?
    - tshaddox 5y ago
      > Why would any of this need cryto? If you trust the winery to hold the wine you could trust them to rule the exchange. That’s a little like saying “why would the winery need Apple to make computers for them, the winery could just develop their own computer hardware and software.” It doesn’t make sense for most wineries to develop its own online exchange system, and the fact that it’s technically possible for a winery to develop its own exchange system doesn’t mean that all existing exchange systems are pointless.
      - chipotle_coyote 5y ago
        The critique being made in the original article, I think, is that it's extremely hard to find a hypothetical use case for blockchain technology that can't be done without blockchain technology. A wine exchange seems to pretty clearly fall into the "things we can do pretty well without crypto" category, so one needs to explain what crypto is bringing to the party that makes it a marked improvement. In this particular example, both "trustlessness" and "decentralization" are off the table (e.g., there is only one winery and you are trusting them to hold the physical goods).
        koonsolo 5y ago
        The difference is that you can pick the exchange where you trade your token. Because the ownership of the token is really yours. If the central party charges 1% transaction fee, it's a 1% transaction fee. If they only open on weekdays, you can't trade in the weekend, etc. When it's your token, you can trade it wherever you want.
- ipaddr 5y ago
  What does facebook give it? A free marketing page and limited discussion board and the ability for anyone to find it. Ethereum would give it another payment option for customers. But also another payment option for suppliers. Could open a new hidden supply chain where a middlemen is not required. It doesn't solve physically shipping but it does resolve one problem. Prompt payment resolution. A check can take 7 years to bounce.
  - serverholic 5y ago
    > A check can take 7 years to bounce. The longer I live the more insane the current system feels. I really don't understand why we put up with this stuff.
- bsnsmsksjs 5y ago
  I’ll bite. A winery could sell ownership of wine stored or wine yet to be made. The purchaser, if sold via an NFT, could resell that ownership with no interaction with the winery until claiming the wine at a later date. This means both parties no longer need any relationship between the initial sale and claiming the eventual goods. The winery will simply be able to wait for someone to return with proof of ownership at a later date. If the winery gave out certificates or built some app it would need to verify and maintain that. With an NFT there is very little work on their end. Ultimately this turns these type of products into highly liquid assets. This will greatly increase their value to a potential customer and the initial purchase price. Which will make the winery more money for the wine it sells. This can effectively be done with anything that can be claimed at a later date after initial purchase.
  - nkuttler 5y ago
    If you rely on a trusted entity (winery) you don't need a blockchain to do anything you just described.
    - maccolgan 5y ago
      How are you going to transfer the right to have a wine bottle? By continuously signing legal documents?
      - chipotle_coyote 5y ago
        Yes, this is probably what you'd do in this hypothetical case, and it's hardly unheard of for contracts to be written up with transferability clauses. Given that we exist in a world where digital signatures also exist, it's unlikely to be particularly onerous. ("Continuously" is probably not the right word, unless you are envisioning the rather unlikely case of this transfer happening on an annual basis!)
      - lmm 5y ago
        Sure, or if you're willing to trust an electronic database you can put it in an electronic database. How do you think wholesalers buy and sell wine at the moment?
dperfect 5y ago
> Output: Digital services, site subscriptions, digital assets, in-game items, NFT's representing real world assets held by trusted companies (wine, event tickets, tokenized securities). > None of this requires oracles and exists today. While I only mentioned oracles specifically, I should have clarified: I'm referring both to oracles (making queries to external data sources and providing the results to the blockchain), and to external code that interprets data stored on the blockchain and acts on it. I'm not sure if there's a name for it in common use (I'd call it something like a "performer"). Either way, the issue is the same as that with oracles; whatever decentralization or smart contract guarantees you had on the blockchain disappear as soon as you have external code interpreting blockchain data to then make decisions in external systems (digital services, site subscriptions, digital assets, in-game items, NFT's, etc). If oracles provide inputs to the blockchain, these non-blockchain pieces of code provide the real-world outputs. Example: even if somewhere in the blockchain I can prove that I should own something in the real world, it's still up to your site/service/app/whatever to honor that through external code. If it doesn't honor it, I'm stuck relying on traditional legal means to intervene, just as with any other standard contract. That legal system – as flawed as it is – tends to work for contracts written on the back of a napkin, stored in a SQL database, or coded in a smart contract (though that's probably the most questionable at the moment). If I'm wrong, please correct me, but I've been interested in this stuff for a while, and I haven't found anything that actually solves the fundamental problem of oracles and the interpretation of blockchain data. That problem is important because it undermines many of the primary selling points of smart contracts. > Your mistake is thinking that just because the base layer is decentralised that we're somehow not allowed to connect to companies we choose to trust So, honest question: why care about the base layer being decentralized if in the end, you choose to trust those companies? What did the decentralization do for you in that interaction?
- EugeneG 5y ago
  Yep. Blockchain says I own this case of wine... but the other guy wont give me my wine! Who do I call? The physical, centralized police and the centralized legal system that back it. Without that legal system recognizing and honoring it, it's worthless. And if it all depends on my centralized legal system, then who cares about the decentralized blockchain. Might as well put it in a table in a database instance running on AWS, or in a written contract.
kranke155 5y ago
HN mostly doesn’t think NFTs work or have a purpose, even though they have 1 million+ users or so. They’re denying gravity after Newton at this point. All the arguments here are tech stack obsessions instead of looking at real world use.
kranke155 5y ago
HN users only see an inferior tech stack, but fail to understand that an inferior tech stack might have Greater Utility for the common people. HN users earn their living by being the best at what they do and choosing the best tech stack is a part of it, which is why they don’t understand blockchain. It’s an inferior tech stack, but it beats every other stack on game theory, which is not the usual purview of the average developer. Hence they reject it as “inefficient” because they keep looking at it through the prism of tech instead of society. For society trustless distributed systems are better, but if you keep looking at it from a tech/throughout perspective, you’ll never get it.

apatters 5y ago

Let's say everyone on the planet is Ethereum enabled tomorrow. What is the business case for the winery to use it in your example? I get that Ethereum or any other crypto can be another payment option for their customers. Beyond that what use does a winery have for a programmable substrate underlying its transactions with customers or suppliers? I'm not saying there is none but if you're going to rip on HN users, frankly it's hard to parse what this language even means.

kryptonomist 5y ago
A winery could assign a token to each physical bottle, and lets its customers freely buy (winery is involved) and then exchange their tokens based on the supposed bottle value ups and downs (winery is not involved any more). Then, from time to time, they come to the winery to take back a real bottle from a token. Admittedly, there is little to program, but we can imagine all sorts of auctions, games (tokens becoming playable items in a virtual world, but still exchangeable for real bottles), etc., around those tokens.
- ipaddr 5y ago
  Why would any of this need cryto? If you trust the winery to hold the wine you could trust them to rule the exchange. Each bottle could still have a token. Values could still rise and fall. All stored on a central exchange. These tokens issued by a trusted entity could perform the same function and can be cashed out. The key feature of cryto is around connecting trustless entities. Once you centralize on a physical product stored in a trusted location by a trusted party you lose point involving cryto. Who cares how secure the token is when the winery can switch labels?
  - tshaddox 5y ago
    > Why would any of this need cryto? If you trust the winery to hold the wine you could trust them to rule the exchange. That’s a little like saying “why would the winery need Apple to make computers for them, the winery could just develop their own computer hardware and software.” It doesn’t make sense for most wineries to develop its own online exchange system, and the fact that it’s technically possible for a winery to develop its own exchange system doesn’t mean that all existing exchange systems are pointless.
    - chipotle_coyote 5y ago
      The critique being made in the original article, I think, is that it's extremely hard to find a hypothetical use case for blockchain technology that can't be done without blockchain technology. A wine exchange seems to pretty clearly fall into the "things we can do pretty well without crypto" category, so one needs to explain what crypto is bringing to the party that makes it a marked improvement. In this particular example, both "trustlessness" and "decentralization" are off the table (e.g., there is only one winery and you are trusting them to hold the physical goods).
      - koonsolo 5y ago
        The difference is that you can pick the exchange where you trade your token. Because the ownership of the token is really yours. If the central party charges 1% transaction fee, it's a 1% transaction fee. If they only open on weekdays, you can't trade in the weekend, etc. When it's your token, you can trade it wherever you want.
ipaddr 5y ago
What does facebook give it? A free marketing page and limited discussion board and the ability for anyone to find it. Ethereum would give it another payment option for customers. But also another payment option for suppliers. Could open a new hidden supply chain where a middlemen is not required. It doesn't solve physically shipping but it does resolve one problem. Prompt payment resolution. A check can take 7 years to bounce.
- serverholic 5y ago
  > A check can take 7 years to bounce. The longer I live the more insane the current system feels. I really don't understand why we put up with this stuff.
bsnsmsksjs 5y ago
I’ll bite. A winery could sell ownership of wine stored or wine yet to be made. The purchaser, if sold via an NFT, could resell that ownership with no interaction with the winery until claiming the wine at a later date. This means both parties no longer need any relationship between the initial sale and claiming the eventual goods. The winery will simply be able to wait for someone to return with proof of ownership at a later date. If the winery gave out certificates or built some app it would need to verify and maintain that. With an NFT there is very little work on their end. Ultimately this turns these type of products into highly liquid assets. This will greatly increase their value to a potential customer and the initial purchase price. Which will make the winery more money for the wine it sells. This can effectively be done with anything that can be claimed at a later date after initial purchase.
- nkuttler 5y ago
  If you rely on a trusted entity (winery) you don't need a blockchain to do anything you just described.
  - maccolgan 5y ago
    How are you going to transfer the right to have a wine bottle? By continuously signing legal documents?
    - chipotle_coyote 5y ago
      Yes, this is probably what you'd do in this hypothetical case, and it's hardly unheard of for contracts to be written up with transferability clauses. Given that we exist in a world where digital signatures also exist, it's unlikely to be particularly onerous. ("Continuously" is probably not the right word, unless you are envisioning the rather unlikely case of this transfer happening on an annual basis!)
    - lmm 5y ago
      Sure, or if you're willing to trust an electronic database you can put it in an electronic database. How do you think wholesalers buy and sell wine at the moment?

dperfect 5y ago

> Output: Digital services, site subscriptions, digital assets, in-game items, NFT's representing real world assets held by trusted companies (wine, event tickets, tokenized securities). > None of this requires oracles and exists today. While I only mentioned oracles specifically, I should have clarified: I'm referring both to oracles (making queries to external data sources and providing the results to the blockchain), and to external code that interprets data stored on the blockchain and acts on it. I'm not sure if there's a name for it in common use (I'd call it something like a "performer"). Either way, the issue is the same as that with oracles; whatever decentralization or smart contract guarantees you had on the blockchain disappear as soon as you have external code interpreting blockchain data to then make decisions in external systems (digital services, site subscriptions, digital assets, in-game items, NFT's, etc). If oracles provide inputs to the blockchain, these non-blockchain pieces of code provide the real-world outputs. Example: even if somewhere in the blockchain I can prove that I should own something in the real world, it's still up to your site/service/app/whatever to honor that through external code. If it doesn't honor it, I'm stuck relying on traditional legal means to intervene, just as with any other standard contract. That legal system – as flawed as it is – tends to work for contracts written on the back of a napkin, stored in a SQL database, or coded in a smart contract (though that's probably the most questionable at the moment). If I'm wrong, please correct me, but I've been interested in this stuff for a while, and I haven't found anything that actually solves the fundamental problem of oracles and the interpretation of blockchain data. That problem is important because it undermines many of the primary selling points of smart contracts. > Your mistake is thinking that just because the base layer is decentralised that we're somehow not allowed to connect to companies we choose to trust So, honest question: why care about the base layer being decentralized if in the end, you choose to trust those companies? What did the decentralization do for you in that interaction?

EugeneG 5y ago
Yep. Blockchain says I own this case of wine... but the other guy wont give me my wine! Who do I call? The physical, centralized police and the centralized legal system that back it. Without that legal system recognizing and honoring it, it's worthless. And if it all depends on my centralized legal system, then who cares about the decentralized blockchain. Might as well put it in a table in a database instance running on AWS, or in a written contract.

kranke155 5y ago

HN mostly doesn’t think NFTs work or have a purpose, even though they have 1 million+ users or so. They’re denying gravity after Newton at this point. All the arguments here are tech stack obsessions instead of looking at real world use.

kranke155 5y ago

HN users only see an inferior tech stack, but fail to understand that an inferior tech stack might have Greater Utility for the common people. HN users earn their living by being the best at what they do and choosing the best tech stack is a part of it, which is why they don’t understand blockchain. It’s an inferior tech stack, but it beats every other stack on game theory, which is not the usual purview of the average developer. Hence they reject it as “inefficient” because they keep looking at it through the prism of tech instead of society. For society trustless distributed systems are better, but if you keep looking at it from a tech/throughout perspective, you’ll never get it.