Skepticism Sunday #1 - Why am I still not using any software built upon a blockchain in my day to day life?

Ecosystem
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What’s this all about?

Start here: Skepticism Sundays - raising the standard of debate, argument and critique of ideas in the ecosystem .

Giving credit where it’s due, Wei prompted this in Polkadot Direction, and Monero birthed it.

How does it work?

It’s very simple - only negative aspects of the project/network/ecosystem are allowed to be discussed.

We had a few suggestions from @brenzi @shawntabrizi @tomaka @crystalin @taqtiqa-mark and myself.

As forum instigator I reserve the right to cherry pick a few from the prompts for this first week - I’ve edited them a little where necessary to fit a question structure - but feel free to select any from the original post or introduce you own.

Each week a contributor can do the same so we introduce diversity of selection and avoid any biases.

Chatting with Wei he suggested that maybe we keep this a week long thing to begin with so there’s a little time to breath / get people involved.

Why are we doing this?

Meaty enough discussions can discover useful insights and dig to root causes which can lead to actions, can lead to forward progress rather than circular debate and only fixing symptoms of deeper issues.

Potential topics for future weeks.

  • What are the potential negative impacts of this technology on humans or society?

  • Were crowdloans a blessing or a curse?

  • Is it concerning that its hard to define the boundaries of Polkadot (polkadot) in terms of the protocol, the network, the ecosystem and the brand?

  • Should we add more utility to the DOT token, for example system level parachains for contracts paid in DOT?

  • Given that most users are technically and economically illiterate, will OpenGov not lead to wrong decisions and a sabotage of the network?

  • What would happen if a social media parachain used by a hate group appeared tomorrow?

  • Should we promote voting or delegating your tokens - or spending from the treasury when this may have the potential to carry serious legal liabilities?

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Don’t you think we should do just a single topic per week? Else people will just yell over one another in fragmented conversation threads.

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Let the community suggest and up/downvote topics, form an invite-only panel (like AAG) and pick the top 1-3 top topics each week to discuss live, keeping chat commentary open.

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Well we can do that for sure. Or we can have a small list and then people can respond in line to what they’re interested in?

No idea best way for this to work, so sure we can reduce - could start with a vote on the topic based on those already suggested?

Issue with too many layers to begin with is engagement I guess - as well as your point about convos overlapping.

What single topic do you prefer?

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Nice, we are going to begin doing native video on this forum too, so that can work.

What topics would you suggest?

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For skeptical topics, it’s usually involve opinion collection from the community. I believe off-chain voting proposals can help do temperature check. We’d like to suggest the off-chain voting tool by OpenSquare. Currently there are 3 spaces we can take advantage of:

Feel free to contact me if anyone need help about this tool.

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I also agree with 1 or maybe 2 topics per week. I’ll give a crack at starting off a conversation on the first one.

Why am I still not using any software built upon a blockchain in my day to day life?

I think the fundamental problem is that the trust model of a public, decentralized blockchain often breaks down when trying to provide general utility, as the actual value involved is usually not directly related to the blockchain. As trust always breaks at the weakest link, it means that the involvement of blockchain is often nigh meaningless.

Tokens that are meant to act as currency (or speculative asset…) have value merely by the operation of the blockchain, so that is fine. Similarly, using the blockchain purely as a trusted source of computation on blockchain data works as well, as seen in DEXs and others.

However, a traditional application or website that uses blockchain data does not. For instance, take a traditional application that lets users own a certain NFT to access some content, or get some privilege. This could be an online game that uses NFTs to represent in-game items, a social media site that makes your profile icon a special shape, or a concert that uses on-chain representations of tickets.

In all of these cases, the value of that on-chain object comes purely from the real utility it provides. But the utility is provided only if both the blockchain is trusted, and the website/application is trusted. Even if you have on-chain ownership of an object, the application can unilaterally decide to deny access. Or a website can decide to make objects non-transferable by voiding them if they change ownership on-chain.

In that case, the user is just trusting the website or application anyways. The blockchain doesn’t change that, the privilege may as well be stored in the application’s database. There is an advantage in that there is more transparency as to when the application chooses not to respect the chain state, but in my opinion that is relatively minimal.

I do think that this issue is massively reduced when applications have novel ownership/deployment methods (self-hostable / federated services / code vetted by a DAO before deployment), but so far, that usually comes with pretty high overhead in various areas.

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One topic per week per @shawntabrizi. Thanks @NateArmstrong for taking the initiative. Lets keep it simple and not overthink it. We don’t need to vote on everything, lets see where this goes.

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Why am I still not using any software built upon a blockchain in my day to day life?

In essence, why is there Limited Adoption?

Summary of the below - Learning curve, scalability, performance, limited use cases, poor user experience/interface, regulatory/legal uncertainty, no critical mass of network effects/ecosystem development.

  1. Complexity: Understanding concepts such as decentralized networks, cryptographic algorithms, and smart contracts can be overwhelming for individuals. The integration of blockchain into the ecosystem requires time and effort, and most people are not interested in, or have the capacity to, understand the underlying technical details. Ownership, privacy, security, financial inclusion, transparency, empowerment, and interoperability are compelling to those who actively seek empowerment. However, the majority of individuals simply want to open an app and have it work seamlessly. While Web3 has the potential to transform how people interact with technology, achieving this will require significant dismantling, gradual rebuilding, and cultural transformation - all of which take time. Moreover, educational resources like videos, documentation, and wikis often fall short of delivering effective learning experiences (for Christ’s sake, update your wikis). To facilitate the learning curve associated with blockchain, access to better educational materials is needed. However, the multitude of chains with different architectures, communication channels, and governance models makes it challenging for the average person to engage in the short-term.

  2. User Interface and Experience: What is going on with this? I’ve jumped through so many hoops just to get involved with a chain or use a DApp that I deserve a gold medal in the “Decentralized Crypto Agility Olympics”. If the software is not easy to navigate or understand, it will discourage adoption. I have yet to use a blockchain application that is user-friendly or is intuitive, which makes it less appealing to the average and new user.

  3. Limited Use Cases: Currently, blockchain technology is primarily associated with cryptocurrencies like Bitcoin and Ethereum. While Web3 envisions a revolution across various industries such as healthcare and finance, widespread adoption of blockchain-based software in these areas is still lacking. Moreover, the focus seems to be heavily tilted towards DeFi. However, despite years of development, I have yet to come across a DeFi project that truly resonates with the average population, which is crucial for widespread adoption. Instead, most engagements with blockchain are centered around the “coin go brrrr” mentality prevalent among crypto enthusiasts. After all these years, I’m still wondering: Where can I actually use crypto with merchants? Where can I conveniently convert my crypto to fiat currency?

  4. Scalability and Speed: They are just not suitable for certain real-time or high-throughput applications.

  5. Trust and Security Concerns: There have been instances of security breaches, scams, and vulnerabilities in certain blockchain projects. Trust in blockchain-based software is still a concern for some individuals and obviously the general population.

  6. Regulatory and Legal Considerations: The regulatory frameworks vary from region to region. Uncertainty or lack of clarity regarding regulations is creating barriers to adoption and limiting novel software development. There’s concerns over privacy/surveillance, digital identity, geopolitical considerations, social impact, interest of industry players and lobbying.

  7. Limited Network Effects and Ecosystem Development: The absence of a critical mass in terms of network effects and ecosystem development stems from insufficient availability of resources that could drive self-reinforcement, attract more users, and spur further growth. It is imperative to foster the creation of self-assembling and self-replicable systems. For example, if we aspire to have a greater number of blockchain developers, we should establish programs that facilitate their creation and nurture their skills. Embracing more grassroots approaches is the key—an approach where seedlings sprout into towering trees bearing the most delightful fruits.

These issues have been well-documented and acknowledged for a considerable period. I eagerly anticipate the day when we witness substantial development and robust, sustained growth in addressing these challenges.

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You can flip things around and actually present a counter argument - adoption is in fact at the right point, its that valuations cloud and distract people to that fact, and it is the market caps that are the illusions we need to turn our attentions to rather than blindly pressing on with all this swiss-army knife complexity, that just piles new problems on top of old ones.

You do not need a token or a blockchain for the vast majority of issues that the industry (inside and outside of the ecosystem) claims to address.

This forum has 1200 ‘members’ - why do we not consider that it is the network effects of these 1200 people that we need to build for. Sure its a small number, but if we build in a focused way for this super smart group of people, their interests, associations and talents, then I have no doubt 1200 can scale us into many thousands, and beyond.

When you begin with this core insight, the vast majority of the current ecosystem is effectively redundant - tokens as products, attempting to reverse their way into products and services.

Sadly people aren’t economically incentivised to face up to that fact, because, guess what, they want NUMBER GO UP! This leads us inexorably into a weird dream state - a beautiful delusion, where large groups of people - founders, investors and contributors aka ‘communities’ convince themselves that they need a token, when they almost certainly don’t.

Polkadot can afford to let tokens and chains die - they will do inevitably, but we cannot let the talent leave, this is what we must protect and support and develop.

Mission over the marketcap.

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