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comment by rustyshackleford
rustyshackleford  ·  1253 days ago  ·  link  ·    ·  parent  ·  post: Blockchain, the amazing solution for almost nothing

Sure, but what's the motivation for anyone to use the blockchain? It effectively becomes just a new-fangled version of sending in your warranty card to Sears. Why would every owner of every widget-you-want-to-track in the world register their widget with the central blockchain managed by that company? why would everybody who owns a particular brand of a particular item agree to start using a particular app to register their purchases, sales, trades, and loans? Why would every retailer agree to report their sales to the same central registrar? And if you're talking about wildly expensive items, why would every rich person in the world want to make their assets publicly searchable and indexable?

What you're talking about isn't impossible, it just doesn't make any sense for people to take part in. If me and a buddy want to trade watches, or I want to give something expensive to a relative, you're telling me that I'm expected to report that home to the manufacturer? Fuck no. Hell no. Not on your goddamn life. If anything, the scenario you're describing is simply an incentive to not use blockchain at all because as soon as you start using blockchain-connected services, there's a possibility that you will, through no fault of your own, be accused of counterfeiting, theft, or forgery. You could be going about your business and suddenly something you own and love loses all value and becomes a crime.





kleinbl00  ·  1253 days ago  ·  link  ·  

    Sure, but what's the motivation for anyone to use the blockchain?

Authentication. As I've been saying for like eight posts now.

    It effectively becomes just a new-fangled version of sending in your warranty card to Sears.

It does not.

You buy electronics? B&H is one of the biggest vendors in the United States. For years they've sold gray market stuff openly - they even have a FAQ about it. What that means is they go to Thailand or Nigeria or Cyprus, buy Canon & Nikon & Sony & Whatever at 60% what it costs them in the US, haul it back to the US, and sell it for 10% off the US prices. They pocket the difference.

This doesn't work out well for Canon & Nikon & Sony & Whoever because they had to pay duties to sell in Cyprus. Cyprus duties are often hella higher than American duties, which means to compete Canon has to sell their products for much lower than they do in the US. If you're a foreigner buying abroad, though, it's duty-free. You'll probably save 40,50% on that Canon lens. And if you're B&H you smurf ten thousand lenses out of assorted world markets a year. What's Canon gonna do, not honor the warranty? They can't prove that you didn't go to Cyprus and buy it yourself! Thus the spread on an international item can be up to 80%. If I can make a watch for $400 and pay $200 in duties to sell it for $1000, my profit is $400. If I have to pay $500 in duties my profit is $100... but any tourist in that country just bought my $1000 watch for $500, free and clear, totally legal. The gray market arbitrages the difference between "taxes individuals pay" and "taxes corporations pay" by looping the sale through an extra individual.

Let's put a blockchain on it

All of a sudden I know that watch was bought in Cyprus. And I know it wasn't bought by an authorized dealer. And I know who I sold it to, and I know who is attempting to resell it, and blam just like that they're no longer dealers. The individual consumer? I don't wanna punish him, he's just looking for a deal. But the guys punishing me for being international? Fuck to the yes they're going down.

Again. $1.2T a year.

    Why would every owner of every widget-you-want-to-track in the world register their widget with the central blockchain managed by that company?

To procure warranty service. More importantly though I just need to track when they cross international borders so I don't really give a fuck what the consumer does. If I ship a bunch of watches to Cyprus and one of them shows up in NY I get curious. If two dozen show up in NY I unleash holy hellfire on my Mediterranean dealer network.

    why would everybody who owns a particular brand of a particular item agree to start using a particular app to register their purchases, sales, trades, and loans?

Because an authentic Rolex has the value of a Rolex and a fake rolex has the value of whatever you can get for it. If you wish to protect the resale value of your goods, you'd best participate. And I mean, look - Cabbage Patch Kids came with birth certificates. Nobody with an authentic spendybit wants to be accused of having a fake spendybit while everyone with a fake spendybit either doesn't want to be caught or wants to be ironic. You're legitimately arguing that provenance doesn't matter which is a fallacious position to take.

    Why would every retailer agree to report their sales to the same central registrar?

Because I won't sell to them otherwise. If you're a vendor you already have to do this since I'm not actually selling to you, I'm selling through you and generally fronting you the product.

    And if you're talking about wildly expensive items, why would every rich person in the world want to make their assets publicly searchable and indexable?

They aren't. There's a unique identifier and there's a time and place it changed hands. This is already done with anything valuable enough to be insured. It's the title on your car.

    What you're talking about isn't impossible, it just doesn't make any sense for people to take part in.

What I'm talking about isn't impossible. What I'm talking about isn't even exotic. It's mundane AF within the marketplace of high value product. What blockchain does is it (A) decentralizes it (B) anonymizes it (C) democratizes it such that verification is now trustless and frictionless.

    If me and a buddy want to trade watches, or I want to give something expensive to a relative, you're telling me that I'm expected to report that home to the manufacturer? Fuck no. Hell no.

A haaaa. Now we get to the crux of the issue.

If you give one of your friends an Audemars, he's received a gift of between $15 and $500k. IRS is gonna wanna know about that. It's the law NOW that it has to be reported, it's just that you can get away with it because nobody is watching. Only now if he wants to insure that audemars, get service on that audemars or resell that audemars, he'd best report it. The resale? Again, he's already required to report it BY LAW it's just easy to get around.

Piketty estimated that the black market is roughly 40% of the white market because of stuff like this. And look at that - a concept popularized by the tongs and Silk Road is suddenly rendering a large chunk of the black market obsolete. Want service on your Audemars? Gotta report the sale. BAM. Taxes.

    If anything, the scenario you're describing is simply an incentive to not use blockchain at all because as soon as you start using blockchain-connected services, there's a possibility that you will, through no fault of your own, be accused of counterfeiting, theft, or forgery.

Not up to you, pardner. Buy a Breitling and you're in the system. Buy a Vacheron and you're in the system. Buy a bunch of watches and you're in the system. Make no mistake: this is a vendor-friendly development. This is a government-friendly development. But we're talking about the stuff that tends to get used to sneak wealth across the border so let's not pretend you wouldn't be just as outraged if you heard about the guys who actually have a dozen black market watches in the forward cabin of their Donzi.

Let's stand back and look at the hill we've climbed: yesterday blockchain was this useless thing you made fun of because only nerds care about it. This morning it's a concept that makes you outraged because of its flagrant anti-privacy overreach.

Say what you will - you can't really argue it's a "solution for almost nothing."

rustyshackleford  ·  1253 days ago  ·  link  ·  

My position on blockchain hasn't changed, but I'm willing to put this thread to sleep. I still have yet to hear any argument in this discussion that makes the compelling argument that blockchain is the only, or in many cases best, solution to the problem. You've described a ton of problems that can be solved with better record-keeping or by enforcing existing laws, but nothing that doesn't already have answers, and in many of your examples, implementing a blockchain-based solution would introduce new issues that would then require new solutions. Nobody is saying that blockchain doesn't work for the purpose of storing data, only that in most cases, it's neither the only nor best answer.