Category Archives: “Smart contracts”

Blockchain Use Cases: Theme Parks?

Jegar Pitchforth writes in Coindesk about “5 Ways Theme Parks Could Embrace Blockchain” [1]. His basic idea is that theme parks are historically “early adopters” and pioneers of technology, and should pioneer the use of blockchain technology.

He specifically identifies five use cases:

  1. Ticketing
  2. “Fastpass tickets” (i.e., specific deals)
  3. Theme Park Currency (Branded)
  4. Audience Surveys
  5. Pay audience to advertise

Hmm.

These are scarcely new ideas. Indeed, the entire article refers to existing programs. The point must be, and the question is, what does blockchain technology bring to the table? How would a blockchain be better than current technology?

Let’s look at his use cases to see what value blockchain brings, if any.

In the case of ticketing, it seems that the main advantage is that a blockchain system can be securely accessed by any smartphone.   Current systems work fine, as far as I know, and wearable technology makes it even more convenient than a smartphone.

The “Fastpass” use case has the potentially interesting wrinkle of using “smart contracts” to implement markets for these ‘rights’. Guests could trade and bargain for seats on rides, and so on.  Or there could be various conditions attached (“You can ride if you and 3 of your friends show up in 15 minutes….”)

Assuming that this kind of activity is a desirable feature (and for some fantasy worlds, I’m not sure that you want people diverting attention to such matters), it isn’t clear that blockchain is any better or worse than any other technology. After all, so called “smart contracts” are really, really simple logic, which can easily be built into a conventional database.

The idea of Theme Park Currency is nothing more or less than digital tokens or coupons, with a ton of general purpose overhead. Since these ‘coins’ are essentially private tokens issued by the park, they aren’t “decentralized” at all. In that sense, blockchain is a terrible choice, completely incongruent with the use case.

The last two hinge on using the cryptocurrency as loyalty points to incentivize the victims guests. This may or may not be desirable thematically (and is certainly ethically problematic when children are involved), but you don’t need a blockchain or private cryptocurrency to make it work.

Overall, there is little technical or logical reason why blockchain technology is especially well suited for any of these use cases. Indeed, to the degree that blockchain is generic and invites attention to commerce it is interfering with the effort to create a magic world and to command total attention and immersion.

It is true that a blockchain-based solution might be cheap and easy compared to creating a secure private network. However, much of the cost and effort must go into the user experience not the back end details, so I’m not sure if there would be much cost savings.

Most of the features of the blockchain are actually irrelevant to these use cases. The data systems of a theme park are extremely private and highly localized. What is the advantage of using an open, internet-wide data system?

Above all, the entire theme of a “theme park” is trust. We hand over part of our life to the designers, trusting them to give us a safe and enchanting experience. Ticketing, tokens, and whatever else must all be integrated to be part of this trusted experience. What is the advantage of using a “trustless” technology to implement this deeply trustful system?

Overall, it looks to me like you could use blockchain technology, but there is hardly a compelling case to do so. And if you do, it will be necessary to integrate it into the overall magic, which likely will mean that the blockchain should be invisible. If it is done right, you’ll never know it is there.

Actually, a successful deployment would be very good for blockcahin technology in general, because it would have to create a safe and wonderful user experience.  To data, the “user experience” with blockchains is very, very weak. A Disney quality interface would lift all boats.

For example, a blockchain system requires guests (including children?) to manage cryptokeys  In the theme park this must be safe, intuitive, and generally invisible.  Developing cool metaphors and UI to do this would be a great thing to see, and would advance the whole field.


  1. Jegar Pitchforth, 5 Ways Theme Parks Could Embrace Blockchain (And Why They Should) May 16 2017, http://www.coindesk.com/5-ways-theme-parks-embrace-blockchain/

 

Cryptocurrency Thursday

A Bad Idea Implemented with A Bad Idea

Let’s be clear. I find gambling to be boring and stupid myself, and I don’t admire gambling businesses that are built the weaknesses of people. Casino and other on-site gambling is a bad idea, but at least it gets people out in the world a little bit. Online gambling is a really, really bad idea, enabling people to feed their worst inclinations in the privacy of their own home.

You won’t b surprised that I’m not a big fan of the new initiative by an opaque company called Better Gaming, who are building an Ethereum Slot Machine: a slot machine that uses Ethereum smart contracts.

The innovation here is that this game is running entirely in a smart contract. No servers are required to operate the game, unlike existing online casinos.

Running “entirely in a smart contract” isn’t quite accurate: there is no server, but much of the logic runs on your local device.  However the logic of the gambling machine is implemented with smart contracts, which is the main point.

Readers of this blog know that I have a low opinion of “smart” contracts, Ethereum or otherwise. So, I’m especially excited to see this poorly designed technology used to implement the inherently bad idea of a slot machine. Not.

Obviously, the game itself isn’t innovative. They have gone to great trouble to replicated the behavior of these ubiquitous one-armed bandits. The “innovation” is to eliminate the server, in a fully decentralised and provably fair.” system.

For once, this Distributed App (Dapp) is actually solving a real problem: trusting your online gambling provider not to cheat is, well, a gamble. Gamblers can’t win, but they want to lose honestly.

The game’s logic has to be wholly processed within the smart contracts so that anyone who wants to can see that the game is playing by the rules and can’t cheat

Of course, they are also “solving” another problem, how to run an unregulated gaming operation, “off shore” from everywhere. Cryptocurrency is, if nothing else, a perfect digital “poker chip”, easy to move around, and not tracked by annoying tax agencies or vice squads. This slot machine isn’t taxed or regulated, and all the money goes…who know where it goes?

To give them their due, there are a couple of legitimate technical innovations in this product (at least according to their write up).

First of all, they made the user app asynchronous from the blockthain. It’s extremely important to give instant gratification to the lab rat gamer, and the blockchain has too much latency to always respond instantly. So they worked out protocols to mask the delay, presumably with caching on your local device. This is a significant achievement, and certainly caught Corin Faife’s attention in Coindesk. If this is successful, it may be a model to emulated by every Dapp.

A second technical feature is the random number generation (RNG). As Donald Knuth pointed out all those years ago, “Random numbers should not be generated with a method chosen at random.” [2] This group uses the blockchain with its pseudorandom hash in its random umber generation. I’m not sure what their method is, exactly, but this is a rather clever idea because the hashes are already very solid pseudorandom numbers.

 

Overall, this is yet another example of how bad ideas sometimes inspire brilliant software. This sounds like it will be a very solid implementation of a bad idea (a digital slot machines), and it will make excellent use of a bad idea (Distributed apps using Ethereum contracts), with some creative technical wrinkles. Sigh.

One sign that this is technology whose time has come: the Better Gaming  folks are already making legally licensed online games, and presumably making money.  Yet they believe it is worth building with this new tech, even though they are well aware that the powers-that-be will not easily approve it.  They should get credit for a gutsy technical gamble, and it shows just how promising this technology is.

it’s so new that we don’t expect regulators to fully grasp nor appreciate the implications overnight and there will need to be lots of discussion and negotiation before existing gaming jurisdictions license such activity.”


  1. Corin Faife, Watch This Ethereum Slot Machine Make Payouts in Real Time. Coindesk.April 21 2017, http://www.coindesk.com/watch-ethereum-slot-machine-video/
  2. Donald Knuth, The Art of Computer Programming: Vol. 2: Seminumerical algorithms (3 ed.). Boston, Addison-Wesley, 1997.
  3. Jez San, 1st Demonstration of real-time casino games built with Ethereum Smart Contracts, in Medium. 2017. https://medium.com/@aerobatic/1st-demonstration-of-real-time-casino-games-built-with-ethereum-smart-contracts-165ba72be02e

 

Cryptcurrency Thursday

More Bogosity From Matchpool

I looked at Matchpool earlier. Actually, it is fair to say that I scowled at this project, raising a number of questions and objections. My view is that they don’t understand what they are doing, and are offering a non-solution to a misstated problem.

I concluded

It is early days, so no one is really using this cunning app yet. We’ll have to see, but I’m not expecting it to work very well.

Evidently, this logically shaky project has had a rocky execution as a company as well.

Corin Faife describes “The ICO ‘Scandal’ That Wasn’t”, walking through a couple of news items that he explains aren’t as “scandalous” as some have said.

Much of the fuss seems to be the departure of one of the founders. On the way out the door, he complained about a less-than-completely-transparent transfer of funds, over $1 million worth, out of the ICO account.

Faife tells us that this was actually a transfer from Ethereum into Bitcoin, as a “currency hedge” against the volatility of Ethereum. This isn’t an implausible story, though one wonders whether this kind of volatility it is a great sign for a business that is built on Ethereum.

A second issue is that the transfer itself required three signatures (keys), which is intended to prevent simple theft. It turns out that the remaining founder has two keys (!), partly subverting this security mechanism. He found one other person, and they just did it.

Perhaps multisignature wallets are not quite the silver bullet that some think they are. Anyway, this seems at least a bit “scandalous” to me, that large amounts of cash are sloshing around with little effective accountability.

Faife comments that, if not actually scandalous, the departure of a founder from a brand new company is certainly a bad sign. He reports that the company claims that he left because he submitted code that was rejected and had to be rewritten. (His code was “fired”, so the code quit?)

The story doesn’t explain what kinds of “errors” were flagged, though it is said to be “smart contract code”, which is the stuff that brought down The DAO, and which is notoriously iffy  even when done well.

If this story is true, then it is kind of scandalous that such a poor coder was allowed anywhere near the code base in the first place. It also suggests that this founder probably doesn’t know as much as he believes he does about smart contracts.

Overall, I have to wonder if these people actually have any idea at all what they are doing. These are silly, rookie errors that suggest they really don’t deserve the confidence of investors or users. On top of their fundamental misunderstanding of the real world problems they aim to “fix”, they don’t seem to be able to run a software development project.

The article includes an unintentionally revealing “endorsement”, by project advisor Joe Shapira of Jdate,

I think that Matchpool will be a very beneficial venture for its founders and the investors in its currency.” (quote from Shapira)

Whoa! A dating service that is very beneficial to the founders and investors, but has nothing to say to the actual users? Is that really the right idea?  I don’t think so.

To the extent that this project is focused on investors and not on customers, it is absolutely guaranteed to fail. Assuming it even gets to release. At the rate they are going, I wouldn’t bet on it.


  1. Corin Faife, Matchpool: The ICO ‘Scandal’ That Wasn’t. Coindesk.April 15 2017, http://www.coindesk.com/the-matchpool-ico-scandal-is-all-smoke-and-no-fire/

 

Cryptocurrency Thursday

Bitcoins Not so smart contracts

Garrett Keirns reports in Coindesk on a new paper about “Smart Contract-Based Bribes”, which “threaten” Bitcoin Mining Pools.

My first thought was, “duh!” Any kind of bribes in the blockchain expose miners to possible liability. It hasn’t happened yet, but it’s only a matter of time before someone, somewhere hauls a Bitcoin miner into court, charging them with abetting criminal activity by processing the records of illicit transactions.

But this isn’t what Kairns is talking about. He refers to a paper by Yaron Velntner, Jason Teutsch, and Loi Luu [2].  What the researchers are actually talking about something more nefarious, and actually quite amusing.

Their idea is basically to offer a corrupt payment to miners, enticing them to “work slower”, reducing the yield of the whole pool. Presumably, this benefits other miners who will beat out the hobbled pool.

The authors do a lot of careful work to show how to make it work, and I don’t completely understand the details. But clearly executable contracts are ideally suited for this and many other kinds of automated skimming. The paper notes a number of other examples.

This particular scam is one of the oldest tricks in the book (bribe the bank clerk to “lose” the records for a time), utilizing the 21st century technology and the peculiar “trustless” nature of cryptocurrencies. In the physical world, this kind of shenanigan is defeated by, well, trust.

The amusing part is that the  clever bit is the amount of work they do to make this dead simple scam work as a decentralized program, i.e., where no one actually knows or trusts any of the others involved. It is fascinating to watch this fetish for technology in action, working out proofs and algorithms that have little value except to prove that the fantasy world of “trustless” systems can simulate yet another kind of transaction. In this case, yet another undesirable kind of transaction.

(As an aside, I note that the report is published in something called the Cryptology ePrint Archive, an unrefereed repository patterned after arXiv and other preprint services.  A bit of a cargo cult, no?)

It would be so much simpler to just bribe or threaten the miner into colluding, and I’m sure that happens all the time. But it is fascinating to watch this fetish for technology in action.


  1. Garrett Keirns, Could Smart Contract-Based Bribes Threaten Bitcoin Mining Pools. Coindesk.2017, http://www.coindesk.com/smart-contract-bribes-bitcoin-mining-pools/
  2. Yaron Velner, Jason Teutsch, and Loi Luu, Smart Contracts Make Bitcoin Mining Pools Vulnerable. Report 2017/230, Cryptology ePrint Archive, 2017. http://eprint.iacr.org/2017/230

 

Cryptocurrency Thursday

Ethereum Developer’s Conference: Unstoppable Zombie Technology

The Ethereum Developers conference was in Paris a few weeks ago, and despite a really, really bad year, optimism seemed to be high.

I haven’t really sorted through all the proposals floated at this conference, but Coindesk reports on several “improvements”, include private blockchains, “supercharged” contracts, and fundamental changes to the basic protocol. These ideas mostly have been seen before, and we’ll see if Ethereum development is any more agile than Bitcoin. (Ethereum certainly has a track record of quick, if disastrous evolution.)

More remarkable and possibly alarming, Alyssa Hertig reports that, “[d]espite the spectacular demise of The DAO, developers are still excited about the concept”. As Hertig trenchantly comments that these ”developers see such promise in a system whereby businesses decisions are automated to a degree that power and bureaucracy can be limited.”

Sigh.

Given the utter catastrophe of The DAO, many of the efforts have rebranded to avoid that particular term, which keeping the same bogus technology. The folks who brought you The DAO even have a new project, supposedly for charity. Old wine, new bottle.  Who can possibly take this seriously??

A similar idea comes from “Aragon” which hopes to be a platform for “unstoppable companies”. (I guess these people probably like the idea of cars with no brakes.)

Luis Cuende of Aragon gushes that, “The blockchain removes intermediaries by making trust obsolete.” (Really?)

Actually, Cuende’s manifesto is unintentionally brilliant throughout, clearly stating some of the often hidden fallacies underlying this whole enterprise. For example, he claims that, “One of the most basic needs in humans’ lives is to transact.” Actually, not, unless you are a fictional human living in an undergraduate microeconomics textbook.

He let’s that cat out of the bag with his analysis of all those pesky overheads companies have to pay because of “the system”.

“Today, companies spend a huge part of their time and capital just dealing with the system.

“Dealing with compliance, know your customer, tax filings, payroll, international payments, cap table management, board approvals…

“And they also spend a notable chunk of their capital in taxes.”

As he says, “Death to paperwork. Avoid useless intermediaries.” Only chumps follow the law or pay taxes. He imagines that executable contracts will somehow be offshore from everywhere.

Another cunning plan is “Colony ” a “task management” system using Ethereum (for payments) and “smart contracts” to run the show. It looks tome like a pretty vanilla crowdsourcing or project management system, except there is no one actually in charge.

The feature set is pretty similar to, say Loomio. The innovations seem to be that voting is managed by executable contracts rather than humans, and there is a cryptocurrency which makes payments, including micro- and nanopayments feasible.

Is that an important improvement? I honestly don’t know. For small scale and/or local collaborations-such as targeted by Loomio-it is unlikely that you need the Ethereum technology. So, what would be the use case for Colony?

At least Colony seems like it might be useful, maybe, unlike the “unstoppable companies” folks, who are just bonkers.

Overall, there wasn’t all that much innovation, and some really bad ideas that just won’t go away no matter how they fail in the real world.

It is difficult to be optimistic about the future of Ethereum.


  1. Colony, Colony Beta Overview, in Medium. 2017. https://blog.colony.io/colony-beta-product-summary-2121a357d61d – .rjtkokfou
  2. Luis Cuende, Introducing Aragon: Unstoppable companies, in Medium. 2017. https://medium.com/aragondec/introducing-aragon-unstoppable-companies-58c1fd2d00ce – .3y7vj015z
  3. Alyssa Hertig,  Rebranding The DAO: The Contentious Blockchain Concept is Back. Coindesk.Feburary 20 2017, http://www.coindesk.com/rebranding-dao-controversial-blockchain-concept-back/

 

Cryptocurrency Thursday

Misguided Matchmaking “Platform”

Sigh.

There seems to be no end to the bad ideas that accrete to cryptocurrencies.

Matchpool” is a new app with its own cryptocurrency. Matchpool aims to “disrupt the dating industry”, by providing a platform for anyone to set up as a matchmaker.

They have a cryptocurrency and blockchain which they use for micropayments to encourage sign ups and participation.

What problem do they think they are solving?


They believe that people need digital matchmaking, but they think the current apps suck. “We think the future should look like the past (The distant past) . We enable anyone to help his tribe or similar people to break the ice with his or her potential partner….

Basically, they want to recreate an imaginary state where young people were introduced to each other in “trusted” environments, such as their home.

“in a nightclub or in a dating app- youre [sic] not acting naturally there. The reason for that is that you are not feeling its familiar and hence put yourselves layers of protection which decrease the chance for you and for the other side to truly [sic] like each other and moving to the next phase.

We can see problems with this analysis already. I’ll grant the discomfort in the untrusted venue, but I’m not sure that anyone ever acts “naturally” when hoping to meetup, nor is it clear that acting naturally will improve the meeting. And it is extremely telling that the situation is described as an effort to “move to the next phase”—extremely tactical.

The developers imaging a better world.

Imagine a state that feels exactly like in your friends house -only in the internet.

They spin out this fantasy in a sketchy history of matchmaking. Their history is naïve and revealing. They have little understanding of history or anthropology, and certainly know little of the history of dating (see Weigle [3]) For that matter they seem to have little understanding of contemporary dating, which they propose to “disrupt” (see perhaps Ansari [1]).

Their basic conclusion is:

We think the future should look like the past (The distant past) . We enable anyone to help his tribe or similar people to break the ice with his or her potential partner, and get rewarded . Anyone can open a pool and set its rules . The most important part: be a matchmaker .

While they talk about history, I think they are actually more interested in “Disrupting the Dating Industry via Blockchain,” regardless of whether this actually does anyone any good or not.

What this turns out to mean is creating a platform “that allows anyone to open his own mini dating site”. The solution to sucky dating apps, they suggest,  is a million tiny dating apps, each curated by someone. You find a matchmaker your trust, and join his or her pool. Their white paper [2] claims that “[m]atchpool solves these game-theoretic problems”, which certainly gives us an idea of how they think about the world.

The cryptocurrency is used to incentivize participants and, probably to cover costs. One technical feature uses Ethereum “smart contracts” to implement “matchlock”: “which keeps a 50:50 ratio between x and y. If a certain number of x users enters the pool, then the matchlock will stop more x from entering until the same number of y’s arrive.” [2]

(I guess curators are too busy making matches to implement a complicated rule like this.)


It is early days, so no one is really using this cunning app yet. We’ll have to see, but I’m not expecting it to work very well.

First of all, everything depends on finding matchmakers. It should be noted that the historical precedents sited by the company are extremely small scale: a given matchmaker (or team of matchmakers) would operate for a pool of people they know personally, which would be no more than dozens. Indeed, Matchpool sets a limit of 144 people in a pool. At this scale, there will need to be thousands of matchmakers in a city, and a given user will use one or two.

To be a matchmaker, you need to have a pool of people you know, and who you can stake your own reputation on. If Matchpool works via digital connections, it may be difficult to reliably recommend people. So a matchmaker should do due diligence, which will be time consuming and difficult.

Alternatively, matchmakers may be tempted to play a more commercial game, and simply run their own mini-match.com. Aside from the questionable ethics of this kind of “monetization”, it won’t necessarily work well unless the pool is very large. Commercial dating sites work by having large enough pools so you have a chance of finding “the one”.


I note that there are well known shortcomings of the pre-digital matchmaking process that Matchpool ignores. While the connections might be “safe” (e.g., vetted by elders), the matchmaker usually has his or her own agenda. Arranged marriages are notoriously unhappy.

Matchmakers are also a force for self selection. The pool is “safe” because it is a pool of “people just like you”. Indeed, one of the common agendas for matchmakers is to make a match that is good for the group. One of the few really good things about Modern Romance is that it is very possible to break out of your isolated in-group.

In the digital incarnation, this selection will take the form of many tiny “market segments”, which will promote yet more self-selection. This platform not only does a poor job of finding matches, it encourages social segregation of the most corrosive kind.  It is designed to select a very narrow group.

We are sure to see pools that play to all kinds of prejudices. They will offer “safe” people to meet, people who are just like you. This is only increasing the destructive isolation and self selection of the social Internet.

Now, if I were to invent an app to “solve” this problem, I might think about the following:

  • Use tracking, etc, to detect “good” behavior: meeting and conversing in person. Ideally, offer help to be authentic, etc. Extra points for turning off you phone during the meetup!
  • Use a digital platform to anti-select, to deliberately find (nice, interesting, etc.) people that don’t fit your preconceptions of who you want to meet
  • Use micropayments to implement some kind of “karma”. The idea is to give away all your coins to help others. In the dating case, you spend your own coins to match others, the person with the least karma “wins”.  (Paying people to participate is extremely counterproductive in this game.)

Anyway, we shall see.

Kids will be kids, love will happen.  I don’t think Matchpool is going to make much difference.


  1. Aziz Ansari, Modern Romance, New York, Penguin Press, 2015.
  2. Philip Saunders and Yonatan Ben Shimon, Matchpool. Matchpool White Paper, 2017. http://matchpool.co/wp-content/uploads/2016/12/Matchpool_Whitepaper_140117.pdf
  3. Moira Weigel, Labor of Love: The Invention of Dating, New York, Farrar, Straus and Giroux, 2016.

Cryptocurrency Thursday