Where oh where have all my sweet gains gone?

Towards the end of 2017, if you were HODLing crypto of any kind, you were probably splitting your time between some version of celebrating your ludicrous gains, and literally yelling in the faces of anyone who’d stand still long enough: “The future is here! If you’d only listen, I’ll you lead you to the land of milk and alt-coin honey!”

I only say so because even though I pride myself on being logical and measured — especially when it comes to tech stuff — for a few weeks, I turned into the exact person described above. Only for a few weeks though… I’m not saying my excitement was short-lived just to pat myself on the back. I didn’t recover from the frenzy because I’m some super brain and better than everyone. I recovered quickly because unlike most, I’ve been programming professionally for a decade, and had actually built and deployed a number of smart contracts for Ethereum during the months leading up to the bull run. I have the level of education necessary to mess around with this tech. And mess around I did. The first thing I found?

None of this tech is close to ready.

The second thing I found?

Most of this tech will never be ready.

Before I explain myself, let me say clearly that the reason for my saying the above isn’t because of any technical limitations that I’ve spotted in any particular altcoin project or another. The reason for my criticism is much more fundamental, much simpler. It’s economics.

Let’s take the idea of decentralized storage on the blockchain, for example. If you’ve ever sent a Bitcoin transaction, you may have come across this interesting unit of fee: sat/byte (satoshis per byte). That’s the cost of having a miner commit the data that represents your transaction to the blockchain. This is usually a trivial amount of money as a monetary transaction requires relatively little data to describe it (the data: an amount, a sender, a recipient, and not much else). When you start pricing other things, however — like medical records, films, etc. — in satoshis per byte, then the cost becomes, well, astronomical.

At the time of this article’s writing, the BTC network’s transaction fees are 4 sat/byte. With a BTC price of $6,494.95, that puts the price per byte at $0.0002596942. Seems pretty cheap right? Wrong. Let’s scale that up to a gig. Now we’re paying $259.70! I think the last time I paid that much for a gig of storage was in the nineties!

Now, I get that blockchain tech is still in its infancy, but the blockchain doesn’t exist in a bubble. Let’s take a look at its most obvious competition in the storage space: Amazon’s S3. S3 charges $0.023 per gig. That’s not a trivial price difference. Storage on the blockchain is close to 10,000x more expensive than storage on S3! Moreover, Amazon’s been around longer than “the blockchain revolution”. In terms of reliability, scalability, and price there’s no discussion. I’m going with S3!

That being said, whoever promised blockchain storage or blockchain world computers or blockchain AI anyway? When did this enter into the discussion at all? The blockchain was always and still is a technology for ensuring two qualities in a dataset: immutability and chain of custody. It does those two things better than everything, and this is by no means trivial. Not only that, but the Ethereum blockchain also throws in payment routing as an added benefit. It boggles my mind that we’re constantly looking over the horizon to the next big dream, rather than using or working with the things we’ve spent so much time to build. Were we looking for distributed storage and crypto kitties? Or were we looking for resilient and safe money outside of the control of the banks? I know what I was looking for, and now that its here, I’m going to make use of it. I’m not going to spend my time simply trying to 10x my previous gains every month by following the speculators to crazier and crazier promises that can’t (and shouldn’t) be delivered on. I’m going to build things with the tools the blockchain has actually enabled.