Bitcoin, Ethereum, Blockchain, Tokens, ICOs: Why Should Anyone Care?
Awesome deep dive into the space. The two positions I object to are:<p>> In some ways, Bitcoin could be considered the first decentralized application since it runs on blockchain technology, is fully open-source, and runs without a central authority.<p>Decentralization is not a new thing that only came into existence with Bitcoin... Torrents are decentralized, the email protocol is decentralized, Tor is decentralized, etc. Decentralized protocols and applications have existed before the blockchain and what the blockchain adds as a decentralized application is decentralized transaction validation. Basically decentralizing the validation of what can and cannot get written to a database. If you make your "writes" application state, then you can generalize the validators to be not only validating database-writes, but program execution steps as well (Ethereum).<p>> By no means do I believe that decentralized applications have no benefits. In fact, I foresee a future where applications are 10x more secure, 10x cheaper, 10x more efficient, or 10x more on some dimension than the current ones.<p>Decentralization is always costlier. Netflix is faster and more reliable than torrents, Facebook is more reliable, faster and easier to use than Diaspora. Fiat and credit cards are faster and easier to use than Bitcoin. AWS is faster, cheaper and more reliable than StorJ, and on and on. When you decentralize something, you must add coordination and communication costs such that your overall costs will always be at least as high as the centralized alternative. So the claim that the decentralized applications will magically be faster and cheaper definitely needs research and a [citation needed].<p>If we realize that the decentralized application will always be costlier than its centralized alternative, we must ask ourselves: why do we need decentralization? Then, we will really know what blockchains are for!