Cryptocosm: George Gilder’s Life After Google Shows How Blockchain Will Transform Your World

Townhall ^ | Nov 02, 2018 | Ralph Benko

[Deaf Smith]

"Google makes billions of dollars in profit a year by advertising to you"

Google does not get me.

If they did, I would get ads for M1A's, accessories, 762 & 556 amunition...

So, no ad hits from me.

[gandalftb]

BTW, bitcoin is only one of the many users of blockchain.

Currency trading is the largest worldwide business, by far. Traders are jumping on the security that blockchain offers to their transactions.

[Cedar]

Since you seem to understand the “logistics” of it all, I have a silly question...

If in a few years there was a sophisticated hacker(s) who could change say half of the encrypted database network, would that result in a civil war, so to speak, of which database network had the real (true) transactions?

Maybe the Blockchain “founding fathers” have already anticipated this and planned accordingly.

[poconopundit]

Before you buy the book, try the same content on podcast. The Hoover institution has a long interview with Gilder that I listened to and I'm not so sure Gilder has still got all his marbles.

He seems enamored with the secure distribution of data through blockchain, but there are problems. For instance:

1. The criminals of the world like Bitcoin because it hides their fraud.
   
   
2. Our FDIC insures dollar deposits in banks up to $100,000. Bitcoin guarantees nothing -- as a lot of people found out when the currency tanked.
   
   
3. Bankers and investors with "skin-in-the-game" is what we need. Someone needs to be responsible unlike General Motors who takes taxpayer money and throws it away.
   
   
4. Blockchain based currencies will encourage abuse. I can hear them begging for money already: "It's not our fault that the blockchain was compromised -- bail out my company because it's too big to fail!"
   

[tarpit]

A blockchain is, as you noted, a decentralized distributed public ledger. It can be used for many different purposes but at the end of the day it is a public ledger.

When a transaction is posted, consensus must be reached that the transaction is valid. Valid transactions are added to the ledger while invalid transactions are rejected. There are different methods to reach consensus. The two most popular are referred to as proof of work (computationally expensive) and proof of,stake (less expensive).

Blockchains play an important role when the decision making (ie. validation of a transaction) is not centrally controlled. For example, in a typical client server model the server is authoritative and thus a blockchain is not necessarily useful. In a peer-to-peer environment, however, there is no central authoritative model so a blockchain is very useful.

The mistake people make, IMHO, is that they presume all blockchains relate to crypto currencies, which clearly is not the case. Crypto is one such use of a blockchain but there are plenty of useful cases that have nothing to do with crypto currencies.

The big rush in crypto currencies plateaued in June 2018 when a report can out that some 80% of ICOs (initial coin offerings), predominantly on the Ethereum blockchain, were scams. Since then ICOs as a funding source have dropped 74%.

That’s not to say the market has evaporated. In fact, venture cap is now the primary means for funding blockchain, crypto, and AI projects. Of course that is now requiring founders to provide more incentives to the funding sources, but money is out there.

The plus side is this is making the marketplace grow up. It is inevitable just like the dot com bubble crash where folks where plugging smell-a-vision types apps and all sorts of silly things. I remember seeing business plans that were outright rejected if they did not include advertisement budgets and advertisement revenue at the same time. Anyhow, the markets are maturing and what we see is a consolidation taking place.

At the same time it would be short sighted to presume only the current blockchains have merit. We are seeing some amazing advances in blockchain technology on the horizon and expect,some really cool implementations to,be released this coming year.

So what does that mean? Well, when blockchain first started going mainstream people developed their solutions around the particular implementation of the blockchain. That no longer applies. Your intellectual property is not the blockchain. The blockchain is simply a technology you can use to implement your IP.

A great quote I recently saw is 1) your app must likely does not need the blockchain; 2) you cannot live without a blockchain; 3) when 2 applies you will not know you are using a blockchain.

[poconopundit]

Hey, Marine. Enjoyed our story, but somehow I don’t trust tech wizards to be Semper Fi :- )

In fact, the tech wizards are blocking my free speech these days and partnering with globalists who want to put me out of work.

One way or the other, criminals will find a way to scam people. And if the blockchain is theoretically “secure”, then it’s probably in the actual gateway to and from the blockchain where the fraudsters will focus their attention.

Yeah, it all seems cool. But I think we’re opening up a can of worms. I urge caution. The collapse of Bitcoin should make people think twice about blockchain.

[SamAdams76]

I agree that caution is definitely needed as it's still the Wild West out there. There was a time when most people didn't trust banks and would rather keep money under mattresses. Many times they had good reason. Banks would fail and were not backed up with federal insurance. You could literally lose your life savings in a bank at one time.

So while I'm fascinated with the new technology and have always liked being a pioneer (I was one of the first people to put my credit card info online and buy a book on Amazon back in 1995), I am still at the poking my toe in the water stage with this. I am not advocating full immersion!

[HonkyTonkMan]

First part of book is good. He lays out the case for a flattened network (ie blockchain) rather than the current model of data silos (Google, FB). If we can establish Gilder’s vision of a “blockchain economy”, we take control of our data and siphon off the big data silos that collect our data and make money off us.

[stig]

validating a transaction using most blockchain implementations takes far too long to be viable for point of sale and other transactions.

and it costs too much. These are part of the reasons that Bitcoin has lost so much value. It is unable to beat the transaction cost of a simple credit card and it takes too long.

[YogicCowboy]

You and me both.

I have never entirely trusted Gilder’s perspicacity since he asserted that women civilize men.

That isca worldly idea I reject as a Christian.

[YogicCowboy]

I do not see TPTB in this fallen world allowing individuals that much freedom.

Follow the money means there has to be money to follow. This sounds too utopian to my jaded ears.

[zeugma]

Gilder is usually worth paying attention to. This book has been on my Christmas List for awhile.

I didn't know he was still around. I read some of his stuff several years ago.

[zeugma]

As currently implemented, most if not all blockchains have numerous inherent security flaws and other issues. For one example, most blockchains use standard private/public key cryptography based on the difficulty of factoring large composite numbers. The public keys are published in the chain. Quantum computing is going to render that completely useless from a security perspective — in fact already has for smaller sized keys. For another example, validating a transaction using most blockchain implementations takes far too long to be viable for point of sale and other transactions.

I'd worry less about the factoring issues of small public exponents than about the other implementation issues. The most recent factoring record that I was able to find was 56153, which was reported in 2014. My desktop computer can factor 45219326826295417525240588747 in .167 seconds, and it is 7 years old.

[zeugma]

In simple lingo it sounds like a new way to exchange funds around the world electronically using a mathematical equation(s).

This is it's primary application these days. When blockchain tech was first starting to get traction, I looked into it and thought some of the other uses were actually more interesting. I thought the proposal to store real estate transactions via blockchain was a really interesting idea. Folks have looked at using blockchain with a lot of things, but nothing but bitcoin type things have really taken off to any great degree from what I've seen.

[Wuli]

Another new internet model that someone will find a way to be at the top of the pyramind over. The game changes hands but does not really change.

[poconopundit]

Some good analogies there, SamAdams. In my analyst/journalist role in the tech industry, one of areas I study is anti-fraud solutions, so my conversations with experts is what fuels my caution.

Like any technology, I suppose, there are benefits and also some not-so-desirable side effects. We shall see.

[poconopundit]

Some good analogies there, SamAdams. In my analyst/journalist role in the tech industry, one of areas I study is anti-fraud solutions, so my conversations with experts is what fuels my caution.

Like any technology, I suppose, there are benefits and also some not-so-desirable side effects. We shall see.

[gandalftb]

The blockchain succeeds because of decentralization. 51% of many thousands of data storages have to agree, and at exactly the same time, for authentication to happen.

And, any changes to the established past authentication would be signaled to the data authority (user or subscriber) before any change could happen. The true user has to agree.

So that’s pretty solid. A lot better than what we have now.

The danger is that, to keep costs down, data silos get bigger and bigger. That centralization of records make hackers drool, as they have much less work to do in attacking a single entry point.

Here’s the kicker, the harder hackers have to work, the less successful they will be, just human nature.

Normal transactions will be slowed from 2-3 seconds to 10-14 seconds, for now, until routers speed up, which they will.

[Cedar]

That does help to clarify, thanks so much. It does seem to be almost 100% secure for now. Guess nothing man-made will ever be 100% secure.