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From the solution-in-search-of-a-problem desk


Silverlocks

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From the solution-in-search-of-a-problem desk -

https://www.bloomberg.com/news/articles/2022-10-16/a-proposal-to-track-gold-bars-with-blockchain-technology

Somebody thinks we need blockchain technology to track physical assets normally traded in one of the most heavily secured and audited environments in the world.  Where does one even begin to list the reasons why this is a dumb idea?

Do we really need crypto to keep track of a 12kg lump of metal already being stored in a vault?

Answers and more after a word from our sponsor.

The Sovereign is the quintessentially British coin.  It has a German queen on the front, an Italian waiter on the back, and half of them were made in Australia.

 

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1 hour ago, Silverlocks said:

From the solution-in-search-of-a-problem desk -

https://www.bloomberg.com/news/articles/2022-10-16/a-proposal-to-track-gold-bars-with-blockchain-technology

Somebody thinks we need blockchain technology to track physical assets normally traded in one of the most heavily secured and audited environments in the world.  Where does one even begin to list the reasons why this is a dumb idea?

Do we really need crypto to keep track of a 12kg lump of metal already being stored in a vault?

Answers and more after a word from our sponsor.

Couldn’t agree more.  

Not my circus, not my monkeys

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1 minute ago, dicker said:

Couldn’t agree more.  

Blockchain gives you a decentralised ledger that can keep of transactions - i.e. who owns what.  Its main claim to fame is that you don't need a centralised bureau.  Gold exchanges are pretty much centralised by definition as somebody needs to maintain a strongroom to keep the gold.   Unless the management of the strongrooms are going to start accepting orders from some random schmoe saying 'Here, my wallet says I just bought 4,000oz of gold, please send it to this address.' I can't see any value in decentralising the trading platform.

 

The Sovereign is the quintessentially British coin.  It has a German queen on the front, an Italian waiter on the back, and half of them were made in Australia.

 

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1 hour ago, Silverlocks said:

Its main claim to fame is that you don't need a centralised bureau

And can't be copied, could put an end to these exchanges selling something they haven't got and manipulating the markets. 

If I was to go out with ten random people I bet eight of them would be in IT. I have mates in IT, no idea what they do and they all get paid more than me. Now go back 30 years, nobody I knew was in IT. What I am trying to say, as pointless as it is, it is the natural evolution of the way things are going. 

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6 minutes ago, Bigmarc said:

And can't be copied, could put an end to these exchanges selling something they haven't got and manipulating the markets. 

If I was to go out with ten random people I bet eight of them would be in IT. I have mates in IT, no idea what they do and they all get paid more than me. Now go back 30 years, nobody I knew was in IT. What I am trying to say, as pointless as it is, it is the natural evolution of the way things are going. 

You can achieve the benefits 'can't be copied' with any database management system that has consistent transactions, and in fact, several of the early exploits found in Bitcoin were enabled because the physical implementation used a DBMS (MongoDB) that explicitly trades off consistency for performance - if you query different nodes you can get different versions of the data until it's had time to synchronise.

All you get with a blockchain system is decentralised transaction clearance.  The 'can't be copied' feature really only matters on decentralised platform without a governance process; it doesn't matter if your trading platform is based on a transaction processing platform with consistent data.  In other words, unless there is an intrinsic benefit to having a decentralised platform then blockchain is a solution in search of a problem.  Bitcoin and blockchain tech been around for well over a decade now, and really hasn't taken the world by storm in the way the crypto bro set has been hyping it to do.  Blockchain doesn't offer any security over and above governance over physical access to the servers.  It solves a problem that it creates itself through its own decentralised nature.  This isn't a revolutionary capability; it's nothing more than an engineering problem that has to be solved in order to make this type of platform viable at all.  Don't get me wrong - it's clever, but it's not the second coming.

The IT industry has a long and storied tradition of faddish technologies that go viral, get hyped as the next big thing, eventually find a handful of niche applications where they're actually useful, and then get forgotten about by the rest of the industry.  A small handful (the WWW, for example) actually make a real difference to society, but those are in the minority.  Blockchain tech has been around for well over a decade.  The industry has had time to find the applications for which it's actually useful and I think we've seen most or all of what it has to offer already.

The Sovereign is the quintessentially British coin.  It has a German queen on the front, an Italian waiter on the back, and half of them were made in Australia.

 

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9 hours ago, Silverlocks said:

You can achieve the benefits 'can't be copied' with any database management system that has consistent transactions, and in fact, several of the early exploits found in Bitcoin were enabled because the physical implementation used a DBMS (MongoDB) that explicitly trades off consistency for performance - if you query different nodes you can get different versions of the data until it's had time to synchronise.

All you get with a blockchain system is decentralised transaction clearance.  The 'can't be copied' feature really only matters on decentralised platform without a governance process; it doesn't matter if your trading platform is based on a transaction processing platform with consistent data.  In other words, unless there is an intrinsic benefit to having a decentralised platform then blockchain is a solution in search of a problem.  Bitcoin and blockchain tech been around for well over a decade now, and really hasn't taken the world by storm in the way the crypto bro set has been hyping it to do.  Blockchain doesn't offer any security over and above governance over physical access to the servers.  It solves a problem that it creates itself through its own decentralised nature.  This isn't a revolutionary capability; it's nothing more than an engineering problem that has to be solved in order to make this type of platform viable at all.  Don't get me wrong - it's clever, but it's not the second coming.

The IT industry has a long and storied tradition of faddish technologies that go viral, get hyped as the next big thing, eventually find a handful of niche applications where they're actually useful, and then get forgotten about by the rest of the industry.  A small handful (the WWW, for example) actually make a real difference to society, but those are in the minority.  Blockchain tech has been around for well over a decade.  The industry has had time to find the applications for which it's actually useful and I think we've seen most or all of what it has to offer already.

There are a few members on here that advocate for kineses money. Very similar use case to the article you posted. You should have a look. It wasn't for me but I did try it a couple of years a go and I have heard things have moved on a bit. 

https://kinesis.money/about-us/ 

Screenshot_20221020-074037-646.thumb.png.48827214306d6ba63ce36f1817edaad4.png

 

 

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From what I understand, Kinesis is still just a crypto platform - i.e. a distributed ledger that keeps track of ownership of virtual gold, effectively a stablecoin of sorts.  Somebody else here mentioned it a while ago, and when I looked it up it wasn't really clear what the relationship between the accounts and the actual gold was.  There are plenty of virtual gold exchanges that do much the same thing but use a central database to keep track of the accounts.  While there's no intrinsic reason why one can't use a blockchain architecture for this, I can't really see a particular advantage to doing so. 

What was interesting was that they were trying to establish a payment clearance platform on top of it, but I'm still not convinced that it actually needs a crypto platform to function rather than being able to use one as a basis.  Stellar (the platform underlying kinesis) gets around the scalability problems with proof-of-work systems by relying on trusted third-party 'on ramps' so it's not strictly a zero-trust system and also potentially vulnerable to exploits affecting the on-ramps.  Does it work? Sure.  is it going to revolutionise banking and payment clearance? Probably not.

Edited by Silverlocks

The Sovereign is the quintessentially British coin.  It has a German queen on the front, an Italian waiter on the back, and half of them were made in Australia.

 

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