this post was submitted on 13 Jul 2023
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I’m very happy to see that the industry has moved away from the blockchain hype. AI/ML hype at least useful even if it is a buzzword for most places
So true.
With LLMs, I can think of a few realistic and valuable applications even if they don’t successfully deliver on the hype and don’t actually shake the world upside down. With blockchain, I just could never see anything in it. Anyone trying to sell me on its promises would use the exact words people use to sell a scam.
Blockchain is a great solution to a almost nonexistent problem. If you need a small, public, slow, append only, hard to tamper with database, then it is perfect. 99.9% of the time you want a database that is read-write, fast and private.
While applying it where most shitcoins have applied Blockchain, I agree it's all hype. But Blockchain doesn't solve a non-existent problem.
Trusting humans is an inherent security flaw. Blockchain solves that problem. You don't have to trust banks to not shortsell the housing market with your own money (causing a recession for the entire world) if you could cut humans out of the equation.
Forget money. Say the data that you want to be able to transact and operate on is health data instead of financial information. You could create a decentralized identity system based on people's biometric information. From there, you could automate and decentralize governance in general.
Suggesting Blockchain solves a non-existent problem is like suggesting Lemmy solves a non-existent problem
Unrelated to the overall point you're trying to make, but shorts didn't cause the '08 recession. They just profited from it. The cause was banks treating mortgage backed securities as if they were an unsinkable asset class.
Relating things back to your point though, I'm not convinced that blockchains solve this. Take the crypto crash of spring/summer '22: You have a few products (TerraUSD/Luna, CEL token) "generating" yield that everyone (DEFI, CEFI, retail, institutions) piles on top of. Then that base layer of "value" turns out to be a naked emperor and there's a massive crash when everything based on that system is now backed by nothing. Rigid computerized rules are only as solid as the axioms that underpin them. You can decentralize the interpretation of rules, but somebody can always start with a flawed assumption and then it doesn't matter how reliable your decentralized system is.
As long as any asset can be rehypothecated into another, shinier asset, there's always a risk that the underlying asset is shit. It's no less true in crypto as in conventional banking.
He did not claim that shorting caused the 08 crash, or am i missing something?
According to "the big short", the reason was that banks gave loans to people who could not really afford them in case of an unexpected drop in the housingmarket (mortage backed, as you say), bundled the loans into packages, went to rating agencies who gave best ratings for the packages, sold them to other institutions and then shorted them when they noticed that the market unexpectedly dropped, knowing people would not be able to pay back the loans in the packages. Which was completely reasonable, just somewhat unethical.
So, i think you could say it was an error of the rating agencies, as they underestimated the risk of a drop in the housing market when giving out the rating.