Blockchain Is Dangerous Nonsense(eisfunke.com)
eisfunke.com
Blockchain Is Dangerous Nonsense
https://www.eisfunke.com/article/blockchain-technology.html
384 comments
It seems a bit off to assert that "people feel it is a price worth paying" when almost all purchases online are made with credit cards which have some protections against fraud, and almost none are made with blockchains in comparison. It seems like so far, most people don't think it's a price worth paying?
Blockchain is just a decentralized ledger of transactions. A cryptocurrency is an implementation of digital currency using a blockchain. Blaming blockchain for not having fraud prevention tech is like blaming TCP/IP stack for delivering a scam email to your inbox. This is a problem to be solved in a higher layer, which we're seemingly nowhere near as we're still just trying to get blockchain to scale efficiently.
>Blockchain is just a decentralized ledger of transactions. A cryptocurrency is an implementation of digital currency using a blockchain. Blaming blockchain for not having fraud prevention tech is like blaming TCP/IP stack for delivering a scam email to your inbox.
It's more like blaming a water utility company that doesn't give potable water, and its supporters tell you "but you can always buy a bottle of water from the store. Or maybe dig for water yourself!".
Yes, one can build the "fraud prevention" and other measures on top of blockchain. But then you have a financial institution just like a bank, and you can drop the blockchain part - anything it "solves" can be solved much simpler and with 1000x less energy once you have the other trappings of a financial institution.
It's more like blaming a water utility company that doesn't give potable water, and its supporters tell you "but you can always buy a bottle of water from the store. Or maybe dig for water yourself!".
Yes, one can build the "fraud prevention" and other measures on top of blockchain. But then you have a financial institution just like a bank, and you can drop the blockchain part - anything it "solves" can be solved much simpler and with 1000x less energy once you have the other trappings of a financial institution.
That's not true. A bank does not allow universal and unquestioning withdrawal nor does it truly require user consent to complete transactions. Clever cryptography makes it possible to do both building on top of Bitcoin or whatever ledger has the desired security and feature set.
>That's not true. A bank does not allow universal and unquestioning withdrawal
Neither the "full blockchain solution" would, once the fraud protection and other safety checks are added.
Which is the point I've made.
You can't simultaneously claim the benefits of blockchain being without protection, and respond to the criticism about the dangers with "it's just a toolkit, you can add protection in layers above". Or you can, but you're claiming the pros on both sides of a XOR feature set.
Neither the "full blockchain solution" would, once the fraud protection and other safety checks are added.
Which is the point I've made.
You can't simultaneously claim the benefits of blockchain being without protection, and respond to the criticism about the dangers with "it's just a toolkit, you can add protection in layers above". Or you can, but you're claiming the pros on both sides of a XOR feature set.
[deleted]
Correct, crypto is great when you need an append only database with no root password.
Outside of that use case crypto is a speculative investment vehicle. Maybe BTC will replace gold as a store of value. But that is just speculation.
Outside of that use case crypto is a speculative investment vehicle. Maybe BTC will replace gold as a store of value. But that is just speculation.
Yes, and if it was promoted as a "decentralized ledger of transactions" it would be fine and almost no one would have heard of it. But it's often aggressively promoted as a replacement for traditional currencies and banking with many benefits over the old-fashioned models, ignoring the fact that those models account for many issues that blockchain does not. There's a reason banks and economies evolved in the way they did.
This is technically true, but crypto currency does make the most sense when there is no middle-man. If you merely replace the backend of the banking system with a blockchain, nobody would care.
> Blockchain is just a decentralized ledger of transactions.
Well, so is Git!
The big difference is that the blockchain requires all transactions to appear on all nodes, and has a wildly expensive and slow consensus phase.
Thing is, these two features provide great negative utility for the average person and no positive utility at all unless you are an anonymous entity wanting to transact with other anonymous entities with no legal framework at all.
Well, so is Git!
The big difference is that the blockchain requires all transactions to appear on all nodes, and has a wildly expensive and slow consensus phase.
Thing is, these two features provide great negative utility for the average person and no positive utility at all unless you are an anonymous entity wanting to transact with other anonymous entities with no legal framework at all.
I'd go one step further: the few legal purchases done with crypto currencies are mostly done by people unaware they're paying that price
I am one of those people that uses cash and bitcoin for privacy and reliability and for 100% legal use cases.
I have experienced bank accounts of mine and those I know be frozen, emptied without warning due to identity theft, a false criminal accusation, forgotten debts, etc. I also know very well that banks have data sharing relationships with Visa, etc, that form a full map of where and when you spend money to aid data brokers in selling changes in your behavior to advertisers. Do you really want metadata on every purchase you make at a sex shop or a pharmacy stored in databases and sold to the highest bidder?
Cash has limits though. It is impractical and unsafe to put cash in the mail when paying friends back for dinner after we all go our separate ways or if I am buying something online I wish to be anonymous like a VPN subscription. In those cases Bitcoin solves a problem and I have legitimately used it on a regular basis for many years. I never use venmo etc and friends and I regularly settle debts with Bitcoin.
I would prefer not to have to carry around cash all the time so when possible to use Bitcoin in retail, I do. I have used bitcoin to buy drinks at bars in Germany, electronics at big box stores in Japan, meals at various restaurants, and coffee hundreds of times. I can also get cash from Bitcoin ATMs worldwide without having to deal with a bank denying me my own money because I am in an unexpected country.
Bitcoin, when purchased with cash, gives me all the privacy of cash with all the portability of a visa card.
I have experienced bank accounts of mine and those I know be frozen, emptied without warning due to identity theft, a false criminal accusation, forgotten debts, etc. I also know very well that banks have data sharing relationships with Visa, etc, that form a full map of where and when you spend money to aid data brokers in selling changes in your behavior to advertisers. Do you really want metadata on every purchase you make at a sex shop or a pharmacy stored in databases and sold to the highest bidder?
Cash has limits though. It is impractical and unsafe to put cash in the mail when paying friends back for dinner after we all go our separate ways or if I am buying something online I wish to be anonymous like a VPN subscription. In those cases Bitcoin solves a problem and I have legitimately used it on a regular basis for many years. I never use venmo etc and friends and I regularly settle debts with Bitcoin.
I would prefer not to have to carry around cash all the time so when possible to use Bitcoin in retail, I do. I have used bitcoin to buy drinks at bars in Germany, electronics at big box stores in Japan, meals at various restaurants, and coffee hundreds of times. I can also get cash from Bitcoin ATMs worldwide without having to deal with a bank denying me my own money because I am in an unexpected country.
Bitcoin, when purchased with cash, gives me all the privacy of cash with all the portability of a visa card.
> I have experienced bank accounts of mine and those I know be frozen, emptied without warning due to identity theft, a false criminal accusation, forgotten debts, etc.
Your bank account has been frozen and emptied at least four times?!
Surely the common factor in these incidents is you!
Your bank account has been frozen and emptied at least four times?!
Surely the common factor in these incidents is you!
I said those I know.
Mine was frozen once over a clerical error. I have also had mine frozen a number of times for trying to make medium sized cash withdrawals when traveling. This is a common anti fraud tactic but it is very annoying when I can not spend my own money. I do not carry a phone and even if I did waiting on hold with a bank in front of an ATM in a random country sucks.
Several people I know, including family, have suffered identity theft and had accounts drained that way. I know someone else who had an account frozen due to a false accusation.
Someone I know had theirs drained with no warning due to a decade old forgotten debtor getting a court order. I know others who have had accounts frozen or dismissed because the bank did not like the nature of their business. They commonly do this for legal cannibis, adult, gambling, or crypto asset business they consider a brand risk.
In short banks have a lot of nasty edge cases I like to avoid.
Mine was frozen once over a clerical error. I have also had mine frozen a number of times for trying to make medium sized cash withdrawals when traveling. This is a common anti fraud tactic but it is very annoying when I can not spend my own money. I do not carry a phone and even if I did waiting on hold with a bank in front of an ATM in a random country sucks.
Several people I know, including family, have suffered identity theft and had accounts drained that way. I know someone else who had an account frozen due to a false accusation.
Someone I know had theirs drained with no warning due to a decade old forgotten debtor getting a court order. I know others who have had accounts frozen or dismissed because the bank did not like the nature of their business. They commonly do this for legal cannibis, adult, gambling, or crypto asset business they consider a brand risk.
In short banks have a lot of nasty edge cases I like to avoid.
How does it give you privacy when all your transactions are visible to all on chain?
The same way Tor gives me privacy. The network knows what traffic went where, but it does not know the identity of the initiator.
Similarly when you get BTC in exchange for cash or p2p exchange without KYC then those transactions are no more tagged to you than the list of transactions in the register of each vendor you pay cash to.
Even when you use cash, serial numbers can be logged on withdrawal and deposit to track movements of cash and secret service does do this when they are targeting someone.
Being anonymous with cash and Bitcoin is similar. Do not identify yourself when you obtain or spend your cash/bitcoin and then logs of their use, which do happen, are at least not directly tied to you.
Bitcoin has the added advantage of each vendor usually generates random withdrawal addresses so no one from the public even can easily identify the recipients, unlike with a credit card transaction where both sides are IDed and logged.
Neither cash or Bitcoin will stop someone tailing me on foot and tagging transactions to me but my primary adversary is surveillance capitalism and it would not be profitable for them to go that far.
Similarly when you get BTC in exchange for cash or p2p exchange without KYC then those transactions are no more tagged to you than the list of transactions in the register of each vendor you pay cash to.
Even when you use cash, serial numbers can be logged on withdrawal and deposit to track movements of cash and secret service does do this when they are targeting someone.
Being anonymous with cash and Bitcoin is similar. Do not identify yourself when you obtain or spend your cash/bitcoin and then logs of their use, which do happen, are at least not directly tied to you.
Bitcoin has the added advantage of each vendor usually generates random withdrawal addresses so no one from the public even can easily identify the recipients, unlike with a credit card transaction where both sides are IDed and logged.
Neither cash or Bitcoin will stop someone tailing me on foot and tagging transactions to me but my primary adversary is surveillance capitalism and it would not be profitable for them to go that far.
How are you purchasing bitcoin with cash? I know it happens but I don't know how it's happening. Is it safe?
Bitcoin ATMs, and repayment from friends when I pay for things in cash. There are also p2p exchanges like LocalCoinSwap where you can meet people in person in public places to buy or sell an amount of BTC you are comfortable carrying. Some let you use escrow where you deposit cash to a bank account then you are sent BTC on receipt. None of these methods can be stopped no matter how much regulators demand KYC from the Coinbases of the world. Humans can always trade directly.
Similarly I am also paid directly in Bitcoin by some of my clients I do consulting for so neither side needs to fuss with bank transfers. Lastly I can always buy on an exchanges, convert to Monero, then back to Bitcoin to de-associate the Bitcoin to me.
Similarly I am also paid directly in Bitcoin by some of my clients I do consulting for so neither side needs to fuss with bank transfers. Lastly I can always buy on an exchanges, convert to Monero, then back to Bitcoin to de-associate the Bitcoin to me.
> convert to Monero, then back to Bitcoin to de-associate the Bitcoin to me.
So you do KYC and AML on one exchange, transfer BTC there, exchange to Monero, then transfer those to your own wallet, do KYC and AML on another exchange, transfer the Monero there, and exchange it back to BTC?
So you do KYC and AML on one exchange, transfer BTC there, exchange to Monero, then transfer those to your own wallet, do KYC and AML on another exchange, transfer the Monero there, and exchange it back to BTC?
I think you hit the nail on the head. Most people who genuinely want to use cryptocurrencies as a replacement for classic ones in legal day to day transactions don't realize the drawbacks. There's an implicit assumption that by being a "currency" crypto gives the same benefits as a classic one, plus the digital aspect and other advantages.
But I like to think this is like buying medicine from a street dealer. Maybe it's faster or more convenient, maybe you get the same quality. But those "maybes" are clearer for people when buying medication from a back alley. It's not at all visible to people using crypto as a replacement for their classic currency.
Every time there's an exchange hack, a massive fraud, a price crash, etc. more people start feeling the drawbacks and push for the kind of regulation, oversight, supervision that today are antithetical with cryptocurrencies and its associated parties.
But I like to think this is like buying medicine from a street dealer. Maybe it's faster or more convenient, maybe you get the same quality. But those "maybes" are clearer for people when buying medication from a back alley. It's not at all visible to people using crypto as a replacement for their classic currency.
Every time there's an exchange hack, a massive fraud, a price crash, etc. more people start feeling the drawbacks and push for the kind of regulation, oversight, supervision that today are antithetical with cryptocurrencies and its associated parties.
Purchases, perhaps. Money transfer, definitely not. Bitcoin is a pretty cheap way to transfer money across international borders.
A person probably wouldn't use bitcoin at the grocery store to buy milk, but it works better for sending grandma (located in a third world country) a bunch of money.
A person probably wouldn't use bitcoin at the grocery store to buy milk, but it works better for sending grandma (located in a third world country) a bunch of money.
Bitcoin is still more expensive than the banking system
among first-world countries. How much can it be worth to send money to third-world countries of no banks are willing to set up there?
Bitcoin BTC is currently more expensive than the banking system in first world countries because of the specific technical choices they have made. When I first used bitcoin it was free to the user (i.e. it was paid for by issuance). Other cryptocurrency systems that have made different technical choices are much cheaper these days - bitcoin BTC is a bit of an outlier in that regard. I personally have been experimenting with USDC on Argent wallet (a zksync L2 on ethereum). It's easy to use, quick and the transaction fees are around 20c at the moment (and likely to reduce further), and I'm sending a stable coin that tracks dollar.
You could always use the crypto currency as the store of value there, just as people did with MPesa. You don't necessarily ever have to convert it to a local currency.
MPesa doesn't store your money in some kind of private currency with a fluctuating value. If you're thinking of it as storing "minutes" as some American cellphone providers would, that's not right.
You deposit and withdraw Kenyan Shillings, or your local equivalent, just as if it were a shilling-denominated bank account.
You deposit and withdraw Kenyan Shillings, or your local equivalent, just as if it were a shilling-denominated bank account.
Yes, and you could make this hypothetical Kenyan cryptocurrency work the same way. One KCoin is one shilling, redeemable for minutes.
where are you getting these $1 international wire transfers? Sign me up!
SEPA transfers cost €0, which (still) is less than $1.
Ok, let me send dollars from the US to Japan via SEPA real quick.
You asked “where”, and the answer is “in the SEPA countries”, which at least includes most of Europe.
Then I apologize for my imprecision! I meant "what financial institution will provide me and my counterparty this service for the currency we currently use in our current countries of residence" rather than "what pair of countries can me and my counterparty relocate to to obtain this service in at least one currency."
I was referring to people in crypto. Obviously the general public prefers traditional payment systems because most people have no problem trusting that the banks will do the right thing.
Millions of people work at banks… lots of middlemen that maybe don’t need to be there anymore…
I mean you don't need people to manually make money transfers anymore, but I don't think many people do that. Banks have a lot of different jobs, very few of them are obsoleted by crypto, at least so far.
That’s the opportunity, right? Some code does the work.
As I said, little or no manual labour is involved when you pay your bills or transfer money. Bank employees meet customers, set up mortgages, program the payment infrastructure, make deals with other banks, help hide money in shady jurisdictions etc.
There's still a need for them though. Societies still want to do AML/KYC stuff, and tax audits.
In fact bitcoin makes it harder[1], so we probably need MORE people doing these investigations.
So we actually maybe need millions MORE people to work these things.
[1] mostly. In some ways also easier. But probably on net harder.
In fact bitcoin makes it harder[1], so we probably need MORE people doing these investigations.
So we actually maybe need millions MORE people to work these things.
[1] mostly. In some ways also easier. But probably on net harder.
If only we could invent a way of settling transactions that takes more money and energy than running traditional banks. It might sound like the worst idea ever, but with enough buzzwords and a sprinkle of Ponzi, I think it will be a hit.
Maybe in US. In Europe people pay a lot with money transfer and payments are considered to be mostly irreversible. Banks don't take responsibility for your mistakes (like typos or getting scammed).
Prepayment fraud is somewhat prevelant, so most transactions are post paid or direct debit. Neither form has that problem.
Even when fraud occurs, the recipient is a known actual person. Know your costumer rules successfully prevent these kinds of scams to a sufficient degree.
Banks will also monitor transactions and will delay execution when there are signs of fraud. That's why so many scams rely on other methods of payment, especially gift cards, western union and... Crypto coins.
Even when fraud occurs, the recipient is a known actual person. Know your costumer rules successfully prevent these kinds of scams to a sufficient degree.
Banks will also monitor transactions and will delay execution when there are signs of fraud. That's why so many scams rely on other methods of payment, especially gift cards, western union and... Crypto coins.
> Even when fraud occurs, the recipient is a known actual person.
Not really. It's easy enough to set up fake identity that people who go and scam people on the internet usually do that.
I mean crypto and gift cards are way worse than banks of course. I'm just saying that there's no expectation in Europe that most payments are reversible.
Not really. It's easy enough to set up fake identity that people who go and scam people on the internet usually do that.
I mean crypto and gift cards are way worse than banks of course. I'm just saying that there's no expectation in Europe that most payments are reversible.
If people used wire transfers for online payments the same issues would arise. Using Bitcoin natively on layer-1 for online payments is like using wire transfers. Semi-custodial or layer-2 options will compete with credit cards.
I think I'm defrauded a lot less than 1/20 of the time, so it may make more sense for me to stop paying Stripe and Visa 5% or whatever, if I ever have that option.
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
These features and capabilities are usually implied for financial systems. It's really just common sense.
These features and capabilities are usually implied for financial systems. It's really just common sense.
to be clear about the semantics here: cash doesn't count as a "financial system", right?
Blockchain currencies are basically counterfeit-proof, digital cash with an audit trail. comparing them to credit cards is an apples:oranges comparison.
Blockchain currencies are basically counterfeit-proof, digital cash with an audit trail. comparing them to credit cards is an apples:oranges comparison.
Sorry if my comment wasn't clear - I wasn't trying to compare cash to credit cards, of course.
Regulation around "cash" transactions are quite strict here (including the definition of a verbal contract etc.), so unless one is engaged in "under the counter" activities, you can benefit from similar protections. Of course, in contrast to credit cards and online transactions, recovery from cash fraud/mistakes is more complicated since you'd need to contact the authorities/the other party yourself and deal with the whole process "manually" (instead of just clicking a button in your bank's web portal and letting them take care of it)
Regulation around "cash" transactions are quite strict here (including the definition of a verbal contract etc.), so unless one is engaged in "under the counter" activities, you can benefit from similar protections. Of course, in contrast to credit cards and online transactions, recovery from cash fraud/mistakes is more complicated since you'd need to contact the authorities/the other party yourself and deal with the whole process "manually" (instead of just clicking a button in your bank's web portal and letting them take care of it)
With cash that limitation exists because there isn't really an alternative. That doesn't mean we should use it as example, being able to undo mistakes is a valuable feature. That's also one of the reasons most online accounts aren't E2E-encrypted, most people prefer having a way to reset their password/key over losing all access to data.
[deleted]
Yes, it is, in the traditional financial system. Crypto is an attempt at building an alternative, with different trade-offs. You might not agree with the trade-offs, most people don't - I mostly don't, but it's definitely a choice, it's not inevitable.
I mean when you put it that way, blockchains aren't really financial systems in the first place.
If blockchain proponents want to replace the existing system that does protect against human-factor scams and frauds (ie. the current financial system that lets governments and institutions control it to enforce the law) then it's going to be part of the discussion whether they like it or not.
Of course it should be part of the discussion, but the article seems to think that crypto people are unaware of it. They're not, they just think it's worth it.
It doesn't matter if crypto advocates are aware of it, these arguments are for other people to understand. The argument is well-known because it's incredibly valid and common for people to want protection against those problems of fraud. When people point out that you're not wearing any pants, "uh I know I'm not wearing any pants" doesn't really address the relevant concern.
Of course it does. It's like saying "but Uber doesn't own any cars, they can't run a taxi service". There are pros and cons with their approach, and you might prefer the traditional way, but they purposely chose another way.
Clever reframing, but when you choose such a different way with clear downsides, it's on you to justify it. It would have been the responsibility of the founders of Uber to explain to stakeholders why they were justified in running a taxi service without owning cars. Just like if I point out that you're not wearing pants, I'm generally expecting the response to explain why that's justified for me to continue standing next to an apparently pantless lunatic instead of telling me that you already have.
There's no part of the article that ever said crypto people aren't aware of this problem, it pointed out the problem. It's a problem. "I have intentionally chosen a path that runs into this glaring problem" is not helpful or interesting at all. If you have nothing more to say beyond "they know", then I guess I don't have anything more to say either.
There's no part of the article that ever said crypto people aren't aware of this problem, it pointed out the problem. It's a problem. "I have intentionally chosen a path that runs into this glaring problem" is not helpful or interesting at all. If you have nothing more to say beyond "they know", then I guess I don't have anything more to say either.
I think they have been pretty clear about what they think the upside is: decentralisation. No need to trust banks and governments.
Obviously you don't think it's a good trade-off, but they do.
Obviously you don't think it's a good trade-off, but they do.
The problem with the article is that there are no real arguments besides citing other articles. At best, it’s a summary of Bruce Schneier’s works with a catchy headline.
I’m not a blockchain die-hard, but there are some solid practical uses. For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help. Have a look at Corda/R3 as an example; there’s a reason why big financial institutions are investing a lot in this space because it can really drive efficiencies.
As with most things in life, the answer is seldom black or white. The same rule applies to blockchain as well.
I’m not a blockchain die-hard, but there are some solid practical uses. For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help. Have a look at Corda/R3 as an example; there’s a reason why big financial institutions are investing a lot in this space because it can really drive efficiencies.
As with most things in life, the answer is seldom black or white. The same rule applies to blockchain as well.
> For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help.
When does that happen?
When does that happen?
Documentary trade finance - e.g cross-border trade where importers and exporters transact physical goods using letters of credit issued and endorsed by banks on both sides of the transaction. A good example is a container load of crude oil shipped from an upstream exporter in India to a refinery (importer) in the States.
Banks act as facilitators of such as transaction on import / export side, often have to interact with shipping / logistics and insurance providers to ascertain that goods have been sent in order to clear and settle payment from buyer to seller. It’s an entirely event-driven and very paper-based business with lots of complex processing logic which can very well be replaced by a smart contract, especially because each party may not trust each other a lot (eg exporter wishing to audit transactions of the importer’s bank). A blockchain works quite well for this type of problem.
Disclaimer: I do not work for Corda.
Banks act as facilitators of such as transaction on import / export side, often have to interact with shipping / logistics and insurance providers to ascertain that goods have been sent in order to clear and settle payment from buyer to seller. It’s an entirely event-driven and very paper-based business with lots of complex processing logic which can very well be replaced by a smart contract, especially because each party may not trust each other a lot (eg exporter wishing to audit transactions of the importer’s bank). A blockchain works quite well for this type of problem.
Disclaimer: I do not work for Corda.
How come the trust regarding the physical goods themselves does not expand to the financial aspects of the transaction?
Maybe read up on trade finance :)
Let me rephrase: you don't need a public permissionless blockchain to have an append-only ledger that allow you to audit transactions. If you're not using a public permissionless blockchain, then there's nothing new that hasn't been around for decades. See also the paragraph about private blockchains in https://www.schneier.com/essays/archives/2019/02/theres_no_g...
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
I don't think this argument is nonsensical. It's true that these things were not goals.
The author's point, I think, is that obviously they should have been. Because this is how people lose money. You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers.
> Clearly people feel [the loss of reversal] is a price worth paying.
I don't think so. I think the vast majority of even pro-bitcoin people are actually either in the camp of not realizing the full meaning of this, or they don't truly understand that there's no recourse, until it actually happens to them.
Certainly people in general expect "the bank" or "the police" or "courts" to "just fix it". If cryptocurrency people were honest about this in their MLM pitches then people would tell them to piss off.
> It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea.
Well, "store of value" is the idea now, now that the initial plan proved a massive failure.
I don't think this argument is nonsensical. It's true that these things were not goals.
The author's point, I think, is that obviously they should have been. Because this is how people lose money. You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers.
> Clearly people feel [the loss of reversal] is a price worth paying.
I don't think so. I think the vast majority of even pro-bitcoin people are actually either in the camp of not realizing the full meaning of this, or they don't truly understand that there's no recourse, until it actually happens to them.
Certainly people in general expect "the bank" or "the police" or "courts" to "just fix it". If cryptocurrency people were honest about this in their MLM pitches then people would tell them to piss off.
> It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea.
Well, "store of value" is the idea now, now that the initial plan proved a massive failure.
> You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers.
Different people have different perspectives. Clearly a lot of coiners think it's totally fine to put the burden on the user. Of course the author is free to disagree, but it's silly to pretend there is only one possible set of priorities.
Different people have different perspectives. Clearly a lot of coiners think it's totally fine to put the burden on the user. Of course the author is free to disagree, but it's silly to pretend there is only one possible set of priorities.
Also it is difficult to bring up the real reason without looking a bit crazy.
The governments of the world - pretty much all the major ones - are behaving in a completely irresponsible way. "Trustless" isn't something to be applied to a neighbour. It is a polite way of saying that people are really sick of the lies emanating from the halls of power about what good economic management looks like.
It still baffles me that the official policy is that prices should rise exponentially. I haven't seen evidence it is a good policy and it is weird that there are no serious political challenges to it. Easy to explain, but still weird.
The governments of the world - pretty much all the major ones - are behaving in a completely irresponsible way. "Trustless" isn't something to be applied to a neighbour. It is a polite way of saying that people are really sick of the lies emanating from the halls of power about what good economic management looks like.
It still baffles me that the official policy is that prices should rise exponentially. I haven't seen evidence it is a good policy and it is weird that there are no serious political challenges to it. Easy to explain, but still weird.
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
In a sense, it admits that traditional banking has the advantage in that regard because it has things like traceability, reversibility, insurance, accountability, and legal guarantees. These have been put aside on purpose in the crypto market, and while I think I understand the whys and wherefores, I don't see giving up these consumer protections is worth it.
Well, not to me anyway, but I'm not getting rich off of crypto.
In a sense, it admits that traditional banking has the advantage in that regard because it has things like traceability, reversibility, insurance, accountability, and legal guarantees. These have been put aside on purpose in the crypto market, and while I think I understand the whys and wherefores, I don't see giving up these consumer protections is worth it.
Well, not to me anyway, but I'm not getting rich off of crypto.
For most people it isn't. Maybe at some point it will, if governments let the money printer brr even more, or if we see more of what Canada did. If that is amplified by say 10x, I think a lot of people would start to reconsider.
If the money printer runs for long enough, we might get to see the sort of volatility that's a daily occurence with crypto.
...so therefore crypto is better?
And if you're afraid of cancel culture coming to a financial instrument near you, why would you want to put all your financial transactions on a permanent record? Sure, it's pseudonymous, but your entire purchase history is one hell of a fingerprint.
Traditional currency has a perfectly anonymous payment method: send cash.
...so therefore crypto is better?
And if you're afraid of cancel culture coming to a financial instrument near you, why would you want to put all your financial transactions on a permanent record? Sure, it's pseudonymous, but your entire purchase history is one hell of a fingerprint.
Traditional currency has a perfectly anonymous payment method: send cash.
Yes, cash is great, but it's pretty clear that most first world governments are trying to get rid of cash. And it's pretty inconvenient, especially since you need to trust the recipient.
Crypto currencies being volatile is not inherent in the technology. You can easily imagine a crypto currency pegged to something like gold, ideally not run by scammers like in the case of tether. The purchase history is also a non-argument, that's not inherent in the concept of a crypto currency.
Also, the problem with inflation is not really volatility as such, it's depreciation. Having a currency that jumps up and down by a factor of 2 like bitcoin in the last year is still better than one that melts away, so if BTC can remain as "stable" as it is now that would be pretty acceptable
Crypto currencies being volatile is not inherent in the technology. You can easily imagine a crypto currency pegged to something like gold, ideally not run by scammers like in the case of tether. The purchase history is also a non-argument, that's not inherent in the concept of a crypto currency.
Also, the problem with inflation is not really volatility as such, it's depreciation. Having a currency that jumps up and down by a factor of 2 like bitcoin in the last year is still better than one that melts away, so if BTC can remain as "stable" as it is now that would be pretty acceptable
> Crypto currencies being volatile is not inherent in the technology
How so? It has no control mechanism to prevent it. I get that the brakes (central banks) don't always work perfectly, but removing them entirely is an odd choice.
> Having a currency that jumps up and down by a factor of 2 like bitcoin in the last year is still better than one that melts away
To whom? When?
> You can easily imagine [...], that's not inherent in the concept of a crypto currency
It's easy to win an argument when you compare a real world system to one that doesn't exist.
How so? It has no control mechanism to prevent it. I get that the brakes (central banks) don't always work perfectly, but removing them entirely is an odd choice.
> Having a currency that jumps up and down by a factor of 2 like bitcoin in the last year is still better than one that melts away
To whom? When?
> You can easily imagine [...], that's not inherent in the concept of a crypto currency
It's easy to win an argument when you compare a real world system to one that doesn't exist.
We're discussing the technology of crypto currencies, not just the currencies that exist now. It wouldn't be hard to make a utility coin that gives you something real, but virtual, like megabytes of data on your phone plan, domain hosting, virtual goods in games to the value of 1 dollar etc. Such a coin would not be as volatile as one that is untethered from anything tangible, like Bitcoin.
> To whom? When?
To most people. Look at BTC/USD for the last year, and then look at a currency during hyperinflation, that loses 10% a day, every day. Which would you rather hold?
> To whom? When?
To most people. Look at BTC/USD for the last year, and then look at a currency during hyperinflation, that loses 10% a day, every day. Which would you rather hold?
On one side you cherry pick the failures of a system in use, and on the other you tout the benefits of something that could be. Do you see why this is not a fair comparison?
Speaking of cherry picking, the hyperinflation events that you mention happened a few times over centuries, but they happen on a quarterly basis in cryptoland. And somehow that makes crypto better?
How does "everyone" benefit from a massively unstable currency? Who actually desires money that can double and halve in value overnight, and why?
Speaking of cherry picking, the hyperinflation events that you mention happened a few times over centuries, but they happen on a quarterly basis in cryptoland. And somehow that makes crypto better?
How does "everyone" benefit from a massively unstable currency? Who actually desires money that can double and halve in value overnight, and why?
I guess you're replying to the wrong person. I clearly said that for "most people" it's NOT worth it. And I haven't cherry picked any failures in the current system. I'm not a crypto proponent. I don't own any crypto, I'm definitely not saying we should replace dollars with crypto.
> Who actually desires money that can double and halve in value overnight, and why?
As I said twice above, if you live in Zimbabwe, or even Argentina, bitcoin is probably preferable to the state currency. That's really all I'm saying. Technical hyperinflation is not all that common perhaps, but even at 10-20% a month it gets hard.
> Who actually desires money that can double and halve in value overnight, and why?
As I said twice above, if you live in Zimbabwe, or even Argentina, bitcoin is probably preferable to the state currency. That's really all I'm saying. Technical hyperinflation is not all that common perhaps, but even at 10-20% a month it gets hard.
At no point will people deliberately give up consumer protections they have today. If an economy is undergoing extreme hyperinflation, the consumer protections would have likely already been gone at that point.
What does it matter if people "give up the protections" or if they disappear? The result could still be that they flock to crypto, which is what we're discussing.
But it's not a binary question. Some people are already "giving up consumer protections" in some cases. And not just by buying crypto. Ordering stuff from Wish is also a gamble.
But it's not a binary question. Some people are already "giving up consumer protections" in some cases. And not just by buying crypto. Ordering stuff from Wish is also a gamble.
> > But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
The problem is any payment system DOES need that. And the competition has it.
Abstract goals without connection to real life needs are nice. Not useful.
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
The problem is any payment system DOES need that. And the competition has it.
Abstract goals without connection to real life needs are nice. Not useful.
I don't agree at all. It is definitely a nice feature, but as with everything else, it's a trade-off. Most people, today, want these features, but it's definitely not true that a payment system "has to" have them. Cash largely doesn't.
It's like saying that any messaging system needs to be traceable, so you can see who sent you something. That is convenient and useful, but we survived until email without it.
It's like saying that any messaging system needs to be traceable, so you can see who sent you something. That is convenient and useful, but we survived until email without it.
> Cash largely doesn't.
If you get a contract/receipts you can use the legal system to attempt to recover your cash. With blockchain that's technically impossible?
There recently was a piece of news about some blockchain believers who locked themselves out of 20 million in <random crypto coin> because they used a "smart contract" and their code was buggy. Both the payer and the payee would like the transaction to go through but neither can do anything about it.
Edit: random link
https://vnexplorer.net/aku-ethereum-nft-launch-ends-with-34m...
If you get a contract/receipts you can use the legal system to attempt to recover your cash. With blockchain that's technically impossible?
There recently was a piece of news about some blockchain believers who locked themselves out of 20 million in <random crypto coin> because they used a "smart contract" and their code was buggy. Both the payer and the payee would like the transaction to go through but neither can do anything about it.
Edit: random link
https://vnexplorer.net/aku-ethereum-nft-launch-ends-with-34m...
How would a cryptocurrency be different here? If the counterparty is known you can still go after them via the legal system. If they are unknown, there would be no way of recovering the cash either.
>I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
Doesn't matter if "it was a goal".
It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation.
>Clearly people feel it is a price worth paying.
People felt that for smoking too. Then they didn't. And tons of people are just misinformed with Amway-style proselitization, and when they lose money without recourse they are surprised...
Doesn't matter if "it was a goal".
It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation.
>Clearly people feel it is a price worth paying.
People felt that for smoking too. Then they didn't. And tons of people are just misinformed with Amway-style proselitization, and when they lose money without recourse they are surprised...
> It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation.
Why are you the one to decide what should have been a goal? And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries.
Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
Why are you the one to decide what should have been a goal? And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries.
Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
>Why are you the one to decide what should have been a goal?
Notice how this is an absurd strawman. Also how this is not an argument.
I'm not claiming "I am the one to decide", if it wasn't obvious.
I'm stating my opinion on what should have been decided, followed by some arguments/qualifiers on where/why it should be applicable.
Generally, when people say something, it's their opinion. No clarification is required on that, it's a convention of human discussion. Even though people state things should be X or Y, they don't necessarily make the claim that they are the sole arbitrers of the ultimate authority on a subject: they convey their take on what should be/have been done.
>And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries
We've had inflation and catastrophes and we managed to move value without the blockchain.
>Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
You can trust the blockchain even less then.
Notice how this is an absurd strawman. Also how this is not an argument.
I'm not claiming "I am the one to decide", if it wasn't obvious.
I'm stating my opinion on what should have been decided, followed by some arguments/qualifiers on where/why it should be applicable.
Generally, when people say something, it's their opinion. No clarification is required on that, it's a convention of human discussion. Even though people state things should be X or Y, they don't necessarily make the claim that they are the sole arbitrers of the ultimate authority on a subject: they convey their take on what should be/have been done.
>And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries
We've had inflation and catastrophes and we managed to move value without the blockchain.
>Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
You can trust the blockchain even less then.
> We've had inflation and catastrophes and we managed to move value without the blockchain.
Nobody claims that life is impossible without crypto, we were talking about reasons and situations where it makes sense, and one example is when fiat currencies fail or are inflated away. No, it's not the only solution, but it's a solution.
>> Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
> You can trust the blockchain even less then.
That's objectively false. Bitcoin, for example, is not controlled by any single entity, especially not any political entity, so obviously you can trust "the blockchain" not to steal your money for supporting the wrong politics, that can't even happen in theory. But we did just see it happen in the regular banking system in a supposedly free democracy.
Nobody claims that life is impossible without crypto, we were talking about reasons and situations where it makes sense, and one example is when fiat currencies fail or are inflated away. No, it's not the only solution, but it's a solution.
>> Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
> You can trust the blockchain even less then.
That's objectively false. Bitcoin, for example, is not controlled by any single entity, especially not any political entity, so obviously you can trust "the blockchain" not to steal your money for supporting the wrong politics, that can't even happen in theory. But we did just see it happen in the regular banking system in a supposedly free democracy.
> It can be used for storing value
It can only do this for as long as ownership of a certain private key is valuable. Some keys have shown to hold value for ~10 years (those tied to the BTC ticker symbol), but some keys have gone from valuable to worthless pretty quick. The fact that you have to bet on holding the right kind of private key I think makes it pretty clear that blockchains do not, in fact, reliably store value.
> transferring value in a decentralised way
There are no longer any decentralized blockchains that also have significant value (ie. worth transferring). For instance, the figurehead known as Bitcoin has been centralized for a while [0].
[0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...
It can only do this for as long as ownership of a certain private key is valuable. Some keys have shown to hold value for ~10 years (those tied to the BTC ticker symbol), but some keys have gone from valuable to worthless pretty quick. The fact that you have to bet on holding the right kind of private key I think makes it pretty clear that blockchains do not, in fact, reliably store value.
> transferring value in a decentralised way
There are no longer any decentralized blockchains that also have significant value (ie. worth transferring). For instance, the figurehead known as Bitcoin has been centralized for a while [0].
[0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...
Coordination in rollling out a bugfix is not a strong indication of bitcoin being centralized. There are certainly aspects where bitcoin is not as decentralized as one would hope, but overall and when compared against alternatives, it's pretty decentralized.
> Coordination in rollling out a bugfix is not a strong indication of bitcoin being centralized.
It depends on how many parties, relative to the whole, are coordinating. It is a very strong indication when 2 devs are coordinating a fundamental decision for thousands of people.
You have to realize also that "bugfix" is subjective to human judgement. It's often unclear whether a given behavior is truly contrary to intent or not, and it takes humans in authority to judge this for the rest to avoid perpetual conflict.
It depends on how many parties, relative to the whole, are coordinating. It is a very strong indication when 2 devs are coordinating a fundamental decision for thousands of people.
You have to realize also that "bugfix" is subjective to human judgement. It's often unclear whether a given behavior is truly contrary to intent or not, and it takes humans in authority to judge this for the rest to avoid perpetual conflict.
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
And there's a reason you never hear it as an argument - the lack of such fundamental protection is a massive weakness of these blockchain currencies. The extremely technical savvy early adopters do not care, because evading authorities is actually an objective and they profit regardless as long as the value of their holdings goes up, but protecting normies from scams is actually kind of important if you want to be used as a "normal" currency rather than a speculative asset.
A central authority with the ability to deal with bad actors is a fundamental aspect of making fiat currency actually work in the real world.
And there's a reason you never hear it as an argument - the lack of such fundamental protection is a massive weakness of these blockchain currencies. The extremely technical savvy early adopters do not care, because evading authorities is actually an objective and they profit regardless as long as the value of their holdings goes up, but protecting normies from scams is actually kind of important if you want to be used as a "normal" currency rather than a speculative asset.
A central authority with the ability to deal with bad actors is a fundamental aspect of making fiat currency actually work in the real world.
One thing people forget, or just plain do not know, is that Bitcoin has "smart
contracts" (at least it had them when one BTC was around 0.2€ ... haven't
checked in much after that).
One example of those smart contracts was involving a trusted third party into a payment. The smart contract in that payment would only clear if two parties signed off on the payment. That's definitely a way to avoid fraud.
One example of those smart contracts was involving a trusted third party into a payment. The smart contract in that payment would only clear if two parties signed off on the payment. That's definitely a way to avoid fraud.
Assuming that you can trust the "smart contracts". And I think there's a lot of reasons why such trust is not warranted.
This is true. I suppose what is important to me is that cryptocurrencies solve the problem that they set out to solve, but the problem they have defined seems to be based on a lot of shaky premises (e.g. a volatile, deflationary currency is useful) and set in a world that doesn't exist (one with limitless green energy and no fraud).
Yeah, sounds like this guy needs to just not use the internet or computers at all. That is where almost all scams originate. Don't bother even talking to people. When the internet was created, no one knew the power. Maybe some day soon we will be able to employ this tech to further humanity.
> Clearly people feel it is a price worth paying.
I was never asked and I really don't think phone scams and ransomware, which are both enabled by cryto currency, is a price worth paying. In fact, I think it's a major disservice to humanity really.
I was never asked and I really don't think phone scams and ransomware, which are both enabled by cryto currency, is a price worth paying. In fact, I think it's a major disservice to humanity really.
Just because it's getting ignored, doesn't mean it doesn't matter.
I bring that up on all Blockchain discussions.
I bring that up on all Blockchain discussions.
> Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans.
This "could" happen, but in practice it rarely happens because the money has moved on as soon as it hits the account. Additionally, for many types of fraud, there has to be an actual court order to get a bank to take action. So the argument is predicated on a false assumption.
This "could" happen, but in practice it rarely happens because the money has moved on as soon as it hits the account. Additionally, for many types of fraud, there has to be an actual court order to get a bank to take action. So the argument is predicated on a false assumption.
I cannot judge the American banking situation but I can attest to the fact that transactions are reverted constantly in Europe. The reason for this is the SEPA direct debit system where debitors can directly charge an account via SEPA direct debit and fraud does happen. For that reason banks are very happy to reverse the transaction and it's not at all a unique situation.
Actually reversals frequently happen. For example, a multi day delay is built into ACH, partly for this exact reason. Also, with credit cards and some flavors of bank transactions you as the end user are protected against fraud, even if (yes)the money has already moved on, you are made whole. The loss is absorbed by the bank. By absorbed, of course I mean you've paid for that service with various fees which amount to a kind of insurance. (Nothing really comes "for free".)
But yes, there are plenty of other types of transactions, like gift card scams, that you would not be made whole for.
But yes, there are plenty of other types of transactions, like gift card scams, that you would not be made whole for.
I guess it differs by geography, but here in Sweden, when I accidentally transferred €10k to an old account that didn't exist anymore I wasn't the least bit concerned that the money would get lost. I would have been extremely surprised if they hadn't given me the money back.
That's the advantage of a high trust society. Heck, once an ATM retracted my cash because I wasn't quick enough, I called the bank and they just credited my account with the €300 or whatever it was. No questions asked.
That's the advantage of a high trust society. Heck, once an ATM retracted my cash because I wasn't quick enough, I called the bank and they just credited my account with the €300 or whatever it was. No questions asked.
Do you have a source for that?
In my experience transfers are pretty much always successfully reversed.
Hell, when one of the PirateBay founders hacked a bank and tried to rob it they actually reversed/prevented most of that, even though he had full access to the bank mainframe. He only managed to extract a couple of thousand that his accomplices took out of an ATM, IIRC.
In my experience transfers are pretty much always successfully reversed.
Hell, when one of the PirateBay founders hacked a bank and tried to rob it they actually reversed/prevented most of that, even though he had full access to the bank mainframe. He only managed to extract a couple of thousand that his accomplices took out of an ATM, IIRC.
It amazes me how polarizing blockchain and cryptocurrency is. It is to black/white, love/hate. I really don't ever remember a technology that has created such a visceral reaction from people.
I personally, believe there is a quite novel concept behind the trust-less consensus mechanisms. It amazes me that computers can come to an agreement in a hostile environment--fully decentralized.
How that is put to use in practicality maybe debatable. But I think arguments like this tend to just throw the baby out with the bathwater.
I personally, believe there is a quite novel concept behind the trust-less consensus mechanisms. It amazes me that computers can come to an agreement in a hostile environment--fully decentralized.
How that is put to use in practicality maybe debatable. But I think arguments like this tend to just throw the baby out with the bathwater.
I’ll bite.
My friends and I were into bitcoin in mid-2009. We mined some coins on our 8800 GT.
At the time, I read the papers and the wiki and understood that the technology will not scale so greatly, in a way it wasn’t even designed to; it felt like an interesting proof of concept, the ability to actually buy things with bitcoins felt largely like a novelty, I remember buying a coffee in Prague a few years later for like 16 bitcoins or something.
I was ambivalent on the technology, but understood that fundamentally it was quite wasteful (computationally).
But something changed, suddenly people were using it to launder money, then once it started earning value (due to it being finite and so many people having already mined the majority of coins and probably losing the wallets) scammers crept in.
Now I see reels on Instagram glorifying “trader” life, so many of the old tired schemes from 100 years ago that used to plague the markets are new again.
Just like how our bodies have no tolerance to thousand year old virus’ that have long since gone extinct; our brains are not easily capable of understanding these schemes anymore: because they’ve been illegal and regulated for more than our lifetimes, we have no “natural immunity” to them.
When alls said and done, the initial promise isn’t even kept, there’s very few “super miners” who if they worked together would be able to control the entire bitcoin economy, which is the situation with central banks.
So what were left with is a scam ridden, fundamentally wasteful technology that doesn’t scale properly and does not solve the problem it was meant to; and the main reason that this is the case is because scammers adopted it so readily.
You can see exactly what I mean when you look at Monero. Objectively Monero solves the problems with bitcoin, but because it’s very difficult to trade with (due to it being privacy focused and no exchange willing to trade it) the price is very stable, since it can’t easily be used for money laundering or scams due to it’s higher barrier to entry.
That said, I’m still fairly ambivalent but leaning towards negative.
I will not work for a “crypto” company or with “NFTs” for example.
My friends and I were into bitcoin in mid-2009. We mined some coins on our 8800 GT.
At the time, I read the papers and the wiki and understood that the technology will not scale so greatly, in a way it wasn’t even designed to; it felt like an interesting proof of concept, the ability to actually buy things with bitcoins felt largely like a novelty, I remember buying a coffee in Prague a few years later for like 16 bitcoins or something.
I was ambivalent on the technology, but understood that fundamentally it was quite wasteful (computationally).
But something changed, suddenly people were using it to launder money, then once it started earning value (due to it being finite and so many people having already mined the majority of coins and probably losing the wallets) scammers crept in.
Now I see reels on Instagram glorifying “trader” life, so many of the old tired schemes from 100 years ago that used to plague the markets are new again.
Just like how our bodies have no tolerance to thousand year old virus’ that have long since gone extinct; our brains are not easily capable of understanding these schemes anymore: because they’ve been illegal and regulated for more than our lifetimes, we have no “natural immunity” to them.
When alls said and done, the initial promise isn’t even kept, there’s very few “super miners” who if they worked together would be able to control the entire bitcoin economy, which is the situation with central banks.
So what were left with is a scam ridden, fundamentally wasteful technology that doesn’t scale properly and does not solve the problem it was meant to; and the main reason that this is the case is because scammers adopted it so readily.
You can see exactly what I mean when you look at Monero. Objectively Monero solves the problems with bitcoin, but because it’s very difficult to trade with (due to it being privacy focused and no exchange willing to trade it) the price is very stable, since it can’t easily be used for money laundering or scams due to it’s higher barrier to entry.
That said, I’m still fairly ambivalent but leaning towards negative.
I will not work for a “crypto” company or with “NFTs” for example.
> I remember buying a coffee in Prague a few years later for like 16 bitcoins or something.
Was that a coffee shop in the Holesovice area? I remember a café where you could only pay in Bitcoin, which I thought was a rather dumb idea.
Was that a coffee shop in the Holesovice area? I remember a café where you could only pay in Bitcoin, which I thought was a rather dumb idea.
> When alls said and done, the initial promise isn’t even kept, there’s very few “super miners” who if they worked together would be able to control the entire bitcoin economy, which is the situation with central banks.
> You can see exactly what I mean when you look at Monero. Objectively Monero solves the problems with bitcoin, but because it’s very difficult to trade with (due to it being privacy focused and no exchange willing to trade it) the price is very stable, since it can’t easily be used for money laundering or scams due to it’s higher barrier to entry.
>> When alls said and done, the initial promise isn’t even kept, there’s very few “super miners” who if they worked together would be able to control the entire bitcoin economy, which is the situation with central banks.
> There is no way to actually proof that.
Every day it becomes more and more true; even if you can't prove that it's true now (which, it probably is true now) it will eventually be true, economic effects cause centralisation: https://www.nasdaq.com/articles/how-centralized-is-bitcoin-m...
> There is no way to actually proof that.
Every day it becomes more and more true; even if you can't prove that it's true now (which, it probably is true now) it will eventually be true, economic effects cause centralisation: https://www.nasdaq.com/articles/how-centralized-is-bitcoin-m...
> mining 1000 Monero per second
They couldn't mine it, but if someone somehow learned the number h such that H = h * G (where G,H are the generators of Pedersen commitments), then they could undetectably mint arbitrary amounts of Monero.
They couldn't mine it, but if someone somehow learned the number h such that H = h * G (where G,H are the generators of Pedersen commitments), then they could undetectably mint arbitrary amounts of Monero.
There is no baby. The technology does not solve technical problems that havent been solved better. The only thing bchains does is give ppl with a lot of money to become stakeholders, the possibility to comodify even more parts of the internet.
Thats the only upside of the technology, scam ppl for their money.
https://www.stephendiehl.com/blog/against-crypto.html
https://web3isgoinggreat.com/
https://www.stephendiehl.com/blog/against-crypto.html
https://web3isgoinggreat.com/
> technology does not solve technical problems that havent been solved better
Critics like Diehl repeat this often, but without ever referencing the solutions. What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network? Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?
I would love to see the following succinctly solved by a non-crypto and non-blockchain solution:
- User A holds digital asset X (such as a valuable domain name "xyz.eth") and User B holds digital asset Y (such as a valuable sum of stablecoin tokens) and these users wish to exchange them in a single public + cryptographically verifiable transaction (i.e. atomic swap), without relying on the trust (and for-profit services) of a third-party escrow agent.
Critics like Diehl repeat this often, but without ever referencing the solutions. What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network? Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?
I would love to see the following succinctly solved by a non-crypto and non-blockchain solution:
- User A holds digital asset X (such as a valuable domain name "xyz.eth") and User B holds digital asset Y (such as a valuable sum of stablecoin tokens) and these users wish to exchange them in a single public + cryptographically verifiable transaction (i.e. atomic swap), without relying on the trust (and for-profit services) of a third-party escrow agent.
You're being willfully obtuse here.
> What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network?
Literally any trusted central authority or database.
> Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?
You haven't actually stated a problem here, you've described a solution in search of a problem.
> User A holds digital asset X (such as a valuable domain name "xyz.eth")
You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.
> What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network?
Literally any trusted central authority or database.
> Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?
You haven't actually stated a problem here, you've described a solution in search of a problem.
> User A holds digital asset X (such as a valuable domain name "xyz.eth")
You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.
As usual, “just trust Amazon or Google” which is centrally owned, and not peer-to-peer (distributed/decentralized), and not an answer to my question.
> You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.
Your argument feels in bad faith, but I’ll bite: “.eth” and ENS is a valuable construct for those transacting in the network. These assets do have clear market value, even if you personally feel they shouldn’t.
> You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.
Your argument feels in bad faith, but I’ll bite: “.eth” and ENS is a valuable construct for those transacting in the network. These assets do have clear market value, even if you personally feel they shouldn’t.
Nothing is stopping a peer-to-peer network from having a central database administered by the a randomly selected group of peers, for example.
The bigger issues in pure decentralized and distributed networks in finance are around KYC/CFT etc. Who ensures compliance if there is no control about flow of funds, for example.
The bigger issues in pure decentralized and distributed networks in finance are around KYC/CFT etc. Who ensures compliance if there is no control about flow of funds, for example.
What you are suggesting sounds like a consensus mechanism. How do you safely choose which peers to assign this responsibility? How do you ensure it is resistant to a Sybil attack?
Suddenly the answers begin to look a lot like Proof of Work or Proof of Stake.
Suddenly the answers begin to look a lot like Proof of Work or Proof of Stake.
The answer could or could not look like that. In practice people have done this many times throughout history totally without blockchains (or computers) for that matter (e.g., money transfer systems, exchanges, etc.).
If this has been done many times in a way that solves my original question (decentralized escrow), there should be some concrete examples you can point to besides blockchain/crypto systems.
Obviously, non-digital assets, but does the Hawala system fit your analog version for decentralized escrow? Early stock exchanges were sometimes created to get around existing third parties ("auctioneers") and allow the brokers to directly transact p2p. What about a credit coop (it is central, but it is also owned by all the users)?
Edit: at it's most basic, reliable coinage was kind of way to create reliable p2p abilities without risk of "double spend". Once the coins were out there, central authority didn't matter so much, i.e., "good" coins were used fair and wide beyond the coining state (e.g., Athenian tetradrachma). Funny add. in some areas people actually allow temporary double spend (so that can be another solution)...
Edit: at it's most basic, reliable coinage was kind of way to create reliable p2p abilities without risk of "double spend". Once the coins were out there, central authority didn't matter so much, i.e., "good" coins were used fair and wide beyond the coining state (e.g., Athenian tetradrachma). Funny add. in some areas people actually allow temporary double spend (so that can be another solution)...
Perhaps, but my original question was around digital assets across the internet (and ideally on a global scale). If you are trading a plush toy for a coconut the "atomic swap" could be done with each party's two hands.
In the generic form, blockchain/DLT cannot solve the double spend there either. Selling a picture for a token does not magically delete all copies or makes it impossible for me to sell it again (yes, someone could look in some blockchain, but that might not even deter another buyer - even fake goods trade).
Basically, for on-chain assets, a blockchain solves double spend and also ensures that on-chain funds/assets are correctly delivered (malicious attacks aside). This also exists outside of blockchains, for example in payment vs payment settlement in FX. Banks created CLS precisely to avoid having one part of an FX transaction settle while the other was still outstanding - so other ecosystems with immaterial goods and risky settlement found other solutions/created their own "middle man mechanic".
Basically, for on-chain assets, a blockchain solves double spend and also ensures that on-chain funds/assets are correctly delivered (malicious attacks aside). This also exists outside of blockchains, for example in payment vs payment settlement in FX. Banks created CLS precisely to avoid having one part of an FX transaction settle while the other was still outstanding - so other ecosystems with immaterial goods and risky settlement found other solutions/created their own "middle man mechanic".
So how do you coordinate this so called decentralized transaction? Over the internet through SSL certs that are centrally signed? You're still putting blind trust in something.
Transactions are broadcast with RPC. Once accepted and written to the ledger (ie: after a number of confirmations), you can verify the state of the transaction via your own local node.
It is impossible to completely remove the need for trust. We trust that our computers work as expected, that our modems and routers are not compromised, that RPC endpoints and software is running as expected, that the internet infrastructure in our country is sending messages correctly.
The blockchain isn’t a catch-all solution to our need to trust things in life. But it does allow us to, say, record and alter global state without placing it in the control of a single centralized intermediary.
It is impossible to completely remove the need for trust. We trust that our computers work as expected, that our modems and routers are not compromised, that RPC endpoints and software is running as expected, that the internet infrastructure in our country is sending messages correctly.
The blockchain isn’t a catch-all solution to our need to trust things in life. But it does allow us to, say, record and alter global state without placing it in the control of a single centralized intermediary.
You trust the private companies/individuals making your hardware and protecting your communications but suddenly trusting a private escrow is heresy? Seems like a weird double standard.
> record and alter global state without placing it in the control of a single centralized intermediary
Paxos solved this in the 90s
> record and alter global state without placing it in the control of a single centralized intermediary
Paxos solved this in the 90s
A centralized escrow is not heresy; it involves a different set of trade-offs. In some cases the decentralized escrow might be more appealing. To go back to my original example of a domain transfer, the exchange can occur in a matter of seconds or minutes within a blockchain, rather than 1 to 20 business days with escrow.com.
Never heard of Paxos, if it could achieve the same problems I've outlined earlier, I'd be curious to see it implemented.
Never heard of Paxos, if it could achieve the same problems I've outlined earlier, I'd be curious to see it implemented.
The 20 days delay is a problem with escrow.com specifically. Domain sales are a trivially automated process that should be instant e.g. literally any domain registrar.
Paxos family of algorithms solves distributed state replication. It is the backbone of the database engines that already power most of the internet.
https://en.wikipedia.org/wiki/Paxos_(computer_science)
Paxos family of algorithms solves distributed state replication. It is the backbone of the database engines that already power most of the internet.
https://en.wikipedia.org/wiki/Paxos_(computer_science)
Namecheap: 10% commission, only works with Namecheap-registered domains, the exchange may take up to 96 hours, and then 5 days later you can withdraw these funds to PayPal (which will incur additional fees).
Compare this to, say, Tezos domains: exchange and transfer of funds settled in ~30 seconds, without any need for currency conversion, across any ".tez" domain in the network, 2.5% commission (or 0% via custom contract), no private data shared with registrar, and very low transaction fees.
Looking at Paxos: it is permissioned, lacks Sybil protection, uses leader-based rather than peer-to-peer data replication, and seems limited in how many nodes it can support. This isn't to say it's useless, but it clearly aims to solve a different set of problems than Nakamoto's consensus mechanism (and, more generally, cryptocurrency networks).
Compare this to, say, Tezos domains: exchange and transfer of funds settled in ~30 seconds, without any need for currency conversion, across any ".tez" domain in the network, 2.5% commission (or 0% via custom contract), no private data shared with registrar, and very low transaction fees.
Looking at Paxos: it is permissioned, lacks Sybil protection, uses leader-based rather than peer-to-peer data replication, and seems limited in how many nodes it can support. This isn't to say it's useless, but it clearly aims to solve a different set of problems than Nakamoto's consensus mechanism (and, more generally, cryptocurrency networks).
> Namecheap: 10% commission, only works with Namecheap-registered domains, the exchange may take up to 96 hours, and then 5 days later you can withdraw these funds to PayPal (which will incur additional fees).
> Compare this to, say, Tezos domains: exchange and transfer of funds settled in ~30 seconds, without any need for currency conversion, across any ".tez" domain in the network, 2.5% commission (or 0% via custom contract), no private data shared with registrar, and very low transaction fees.
You're not comparing the same products. Namecheap probably doesn't sell .tez, and you probably cannot buy a .com via Tezos. There are big differences between TLDs, I didn't even know about .tez websites until today. If I receive a .xyz link I tend to think it's a scam. If I had received a .tez link before today, I would have thought it was just a weird typo.
Beyond this, assuming equivalent products, there's no technical reason for the Tezos solution to be superior. Consider this: whatever Tezos is doing, Namecheap could do the same using the same technology (they don't have tougher requirements, maybe short of regulations, but I don't think you're talking about regulation arbitrage here anyway). They could just use a blockchain but be the sole entity allowed to interact with it.
Namecheap can get away with higher prices, so they do (it's a business). On the other hand many blockchain-based systems are highly subsidized (I don't know if that's the case for the Tezos domain system), making direct comparisons difficult.
> Compare this to, say, Tezos domains: exchange and transfer of funds settled in ~30 seconds, without any need for currency conversion, across any ".tez" domain in the network, 2.5% commission (or 0% via custom contract), no private data shared with registrar, and very low transaction fees.
You're not comparing the same products. Namecheap probably doesn't sell .tez, and you probably cannot buy a .com via Tezos. There are big differences between TLDs, I didn't even know about .tez websites until today. If I receive a .xyz link I tend to think it's a scam. If I had received a .tez link before today, I would have thought it was just a weird typo.
Beyond this, assuming equivalent products, there's no technical reason for the Tezos solution to be superior. Consider this: whatever Tezos is doing, Namecheap could do the same using the same technology (they don't have tougher requirements, maybe short of regulations, but I don't think you're talking about regulation arbitrage here anyway). They could just use a blockchain but be the sole entity allowed to interact with it.
Namecheap can get away with higher prices, so they do (it's a business). On the other hand many blockchain-based systems are highly subsidized (I don't know if that's the case for the Tezos domain system), making direct comparisons difficult.
> Literally any trusted central authority or database.
But they said peer-to-peer network.
But they said peer-to-peer network.
> User A holds digital asset X (such as a valuable domain name "xyz.eth") and User B holds digital asset Y (such as a valuable sum of stablecoin tokens) and these users wish to exchange them in a single public + cryptographically verifiable transaction (i.e. atomic swap), without relying on the trust (and for-profit services) of a third-party escrow agent.
OK, how do they do this? Let's say X has 1M gold in World of Warcraft, and Y has 100M Gil in Final Fantasy XIV. How can X and Y use a blockchain to exchange these atomically?
OK, how do they do this? Let's say X has 1M gold in World of Warcraft, and Y has 100M Gil in Final Fantasy XIV. How can X and Y use a blockchain to exchange these atomically?
If both assets are defined by the same blockchain protocol, a contract can be written that provides both users the ability to deposit the two assets into it. Only once both assets have been deposited will the atomic swap occur. And at any point before this, a deposit could be safely withdrawn (ie: if other party backs out of deal).
Edit: if your question is “how does this technically look in practice”, here is an example: [1]
[1] https://github.com/niftyhorde/swap.kiwi/blob/master/contract...
Edit: if your question is “how does this technically look in practice”, here is an example: [1]
[1] https://github.com/niftyhorde/swap.kiwi/blob/master/contract...
You claimed that blockchains solve the problem of atomically transferring digital assets. I gave an example of two digital assets I may like to transfer.
Please tell me how Ethereum solves the problem of exchanging WoW gold for FF14 Gil in a trust less manner.
The problem of transferring digital goods controlled by the same entity in a trust less manner is trivial and solved by many technologies predating Bitcoin. I can already trustlessly sell a piece of copper in World of Warcraft for gold without involving any other third party.
Please tell me how Ethereum solves the problem of exchanging WoW gold for FF14 Gil in a trust less manner.
The problem of transferring digital goods controlled by the same entity in a trust less manner is trivial and solved by many technologies predating Bitcoin. I can already trustlessly sell a piece of copper in World of Warcraft for gold without involving any other third party.
This is a pretty stupid argument; WoW and FF14 gold are not assets defined on the network. The goal of Ethereum is to record Ethereum-based assets (e.g. ERC20, ERC721), not to record the exchange of every asset on the web.
> I can already trustlessly sell a piece of copper in World of Warcraft for gold without involving any other third party.
In this case the third party is Blizzard Entertainment, who can control the state and data.
> I can already trustlessly sell a piece of copper in World of Warcraft for gold without involving any other third party.
In this case the third party is Blizzard Entertainment, who can control the state and data.
> In this case the third party is Blizzard Entertainment, who can control the state and data.
And in the case of two Ethereum based assets, the third party is the Ethereum network, which can be forked to control the state and data (as it was after the DAO fiasco).
And in the case of two Ethereum based assets, the third party is the Ethereum network, which can be forked to control the state and data (as it was after the DAO fiasco).
I think more importantly the integration with Ethereum network is done by third parties, so even if WOW hooks into eth, your eth assets are worthless without depending on blizzard to maintain that integration. So what was gained?
"And in the case of two Ethereum based assets, the third party is the Ethereum network, which can be forked to control the state and data"
ETH Classic still exists, but the community came to the agreement that forking was the best way to deal with the issue. The only person who lost on that agreement was the hacker. Where as Blizzard can do whatever it wants. Surely you can see how a forked blockchain was a more democratic process than a centralized database.
ETH Classic still exists, but the community came to the agreement that forking was the best way to deal with the issue. The only person who lost on that agreement was the hacker. Where as Blizzard can do whatever it wants. Surely you can see how a forked blockchain was a more democratic process than a centralized database.
A company like Blizzard that might define ERC20WoWGold can fork the blockchain to try and alter a record on their contract, but it would have little effect.
A successful fork requires a consensus across the majority of developers and users in the network.
A successful fork requires a consensus across the majority of developers and users in the network.
> What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network? Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?
That question sounds like an XY problem.
https://en.wikipedia.org/wiki/XY_problem
That question sounds like an XY problem.
https://en.wikipedia.org/wiki/XY_problem
Yes, Blockchain does indeed solve the problem it creates.
These problems (the desire to find peer-to-peer systems to transfer and record digital assets) predate blockchain/crypto.
And they were trivially solved by trust.
Trusty ol' FAANG.
What does FAANG have to do with exchanging money?
“We don’t need peer-to-peer digital assets when we can just trust [insert major tech corporation]” tends to be the common answer to my earlier question a couple comments up.
You're naming tech companies. We're talking about heavily regulated banks.
My original comment[1] is responding to the notion that crypto's technical problems are better solved by non-blockchain alternatives. The most common alternative is placing trust in an Amazon or Google database, or another tech corporation like Namecheap or escrow.com (for domain exchanges, as in my example). Banks do not typically manage domain name exchanges.
[1] https://news.ycombinator.com/item?id=31190423
[1] https://news.ycombinator.com/item?id=31190423
And believers always pull of this subtle shift in frame: you bring in trust-less peer to peer decentralised networks, and of course there's no other solution, because it's a setting invented by the same people who came up with cryptocurrency. The rest of the world relaxes the trust-less assumption and talks about Web of Trust, about decentralised roots of trust, federation etc.
And this is a rhetorical technique: When we talk about economics, we talk about business or human problems. But the trustless-online-decentralised-ledger problem is a technical one. So the GP was saying "there is no business problem that crypto solves that hasn't been solved in a better way already. And then the crypto-bros come in and say "nuh-uh! If you for whatever reason want to run digital assets on physical infrastructure that needs to be maintained off chain without trusting anyone (say, the person the network depends on for maintaining the power infrastructure) then this is the only solution!".
YES! Well done. This is even useful, in a horrible hellscape where dog eats dog, everyone carries their own portable nuclear reactor and uses unstoppable point to point laser communication to run the internet and we forego all of the efficiency gains offered by using social consensus and democratic decision making to build webs of trust and centralised infrastructure with checks and balances (for example, by having the root certificates expire and be re-legitimised by some social ceremony repeatedly...say in an election). But in the real world, at some point everyone wants to build a society, put some basic trust down and improve living standards. And while people like Putin and the Kims and warlords still alive can fuck this up
1. They generally only survive because they are leeching of the more functional parts of society which uses trust (not unlike crypto with its Ponzi structure)
2. Crypto won't save you from them because they'll physically take away your electricity and/or torture you to get your keys
So what problems that aren't technical toy problems but real business and coordination problems in realistic settings (remember, if you have a state you trust to protect your private property rights, you can probably also use that to run the root certificate and organise the ledger) does crypto solve again?
And this is a rhetorical technique: When we talk about economics, we talk about business or human problems. But the trustless-online-decentralised-ledger problem is a technical one. So the GP was saying "there is no business problem that crypto solves that hasn't been solved in a better way already. And then the crypto-bros come in and say "nuh-uh! If you for whatever reason want to run digital assets on physical infrastructure that needs to be maintained off chain without trusting anyone (say, the person the network depends on for maintaining the power infrastructure) then this is the only solution!".
YES! Well done. This is even useful, in a horrible hellscape where dog eats dog, everyone carries their own portable nuclear reactor and uses unstoppable point to point laser communication to run the internet and we forego all of the efficiency gains offered by using social consensus and democratic decision making to build webs of trust and centralised infrastructure with checks and balances (for example, by having the root certificates expire and be re-legitimised by some social ceremony repeatedly...say in an election). But in the real world, at some point everyone wants to build a society, put some basic trust down and improve living standards. And while people like Putin and the Kims and warlords still alive can fuck this up
1. They generally only survive because they are leeching of the more functional parts of society which uses trust (not unlike crypto with its Ponzi structure)
2. Crypto won't save you from them because they'll physically take away your electricity and/or torture you to get your keys
So what problems that aren't technical toy problems but real business and coordination problems in realistic settings (remember, if you have a state you trust to protect your private property rights, you can probably also use that to run the root certificate and organise the ledger) does crypto solve again?
Consider a simple answer: my ENS domain is one of the few digital assets I own (and have “digital ownership” over) that is not inextricably linked to a single corporately-owned user account (that ultimately has full control over the asset).
Perhaps you do not see a value in that, or do not feel the risks outweigh this benefit, which is fine. We are acting on a different set of interests.
Perhaps you do not see a value in that, or do not feel the risks outweigh this benefit, which is fine. We are acting on a different set of interests.
What is is it good for compared to a traditional domain? If it's censorship resistance,if you break the laws of your country using it, how will you hide from the police trying to force you to take down the content?
The whole point of the distributed ledger is that no single entity can “take away” ownership of, say, an ERC721 (NFT, which domains also are) without access to my keys. Websites can de-list this but anybody can still see it clearly indexed in the blockchain state as the system is distributed.
I am not doing this to be censorship resistant from police (who can force me to give up my keys).
The point is that, rather than an asset owned by X company or Y bank, it is owned by me (in a decentralized system). eg: A tech company being acquired or shuttered will have no bearing on my ownership of and ability to transfer this asset.
I am not doing this to be censorship resistant from police (who can force me to give up my keys).
The point is that, rather than an asset owned by X company or Y bank, it is owned by me (in a decentralized system). eg: A tech company being acquired or shuttered will have no bearing on my ownership of and ability to transfer this asset.
So again, what can you do with it? What's the usage except "I have it and you can't"?
Because, if you use it to point to an IP, who's giving you that IP?
An asset has value, just because you call it an asset doesn't make it one.
Because, if you use it to point to an IP, who's giving you that IP?
An asset has value, just because you call it an asset doesn't make it one.
you point an ENS name to an address (a public key hash). in a system built on private/public keys, it can be useful as an alias. the “IP”, or address in this case, is my own, because it is directly generated from a 24 word seed phrase.
this naming system has value for myself and the millions of other users interacting within the network.
this naming system has value for myself and the millions of other users interacting within the network.
But unless you have a completely independent physical layer, that network and alias is only reachable via an IP you rent or buy from the normal Systems. So what's the added value once you have that IP pointing somewhere? Like, if everything you can do with the ENS depends on an IP, which can do the same things as an IP, what's the use case? You are already dependent on the system, without an avenue out, what's the advantage of using an ENS vs something in the system?
not really sure what you are referring to; ENS does not depend on IP addresses or have anything to do with internet protocol domain names.
Wait, are you saying that scenario has been solved (or is solvable in the future) by blockchain? Where can I learn more? Is eth even a real TLD?
.eth is a TLD for crypto addresses (the system is called ENS). Instead of saying, send it to 0x827DCAB38F00624466A99211e9c5a48b9D6Ec14D or whatever I can say "send it to myname.eth". The ENS is an NFT, so all the NFT infrastructure can be used to manage it. NFT's are generic digital assets so any marketplace can do the swap. The major downside is that gas on eth is SUPER expensive, when I regestered my ENS name, it cost $5 for the name, and $200 for gas. On the other hand, ETH is an obsolete chain (there is a v2 coming, and L2's are starting to come on, but V1 is obsolete... lets be honest), and some new more modern chains solve the problem better. I have a .AVAX name (not fully deployed yet) which cost $15 for the name (which has a weird public notice period thing, kind of interesting) and $.15 for gas. Again, it's an NFT, so I can use any of the numerous marketplaces to buy and sell it.
[deleted]
[deleted]
double spending problem, anyone ?
Every banking system ever? At vastly lower energy waste, at higher transaction rates, and with all the legal protection of centuries of well developed needs.
> trust-less
Trusting a central authority (bank) is not a solution to trust-less prevention of double spending.
Trusting a central authority (bank) is not a solution to trust-less prevention of double spending.
>Trusting a central authority (bank)
Strawman?
A bank is not a central authority any more than large mining pools are central authorities. Or China (when it controlled enough BTC to double spend at will).
The banking system is vastly distributed. Trust is a giant network of accountants, central banks, regulators, investors, and lots more that help ensure there is no double spending. There are checks all throughout the system, ledgers, reports, audit trails, and, unlike BTC, when something is actually stolen, lots of protections and methods to claw back stolen money.
BTC can be double spent via majority control, so double spend protection is at best a statistical claim, just like real banking.
A large problem with Bitcoin is developers were unaware of modern (or even ancient) banking and money systems and have tried to reinvent simple money with all the same problems that mankind moved from millennia ago.
Then people unaware of the why of modern money systems think crypto solves an important problem that modern economies and users don't care about, while ignoring all the problems modern systems solved as if they don't exist.
And honestly, in all my life, I have never heard of anyone in the normal banking system double spend. So chalk one more up to the Bitcoin make believe event crowd. How many double spend events have you performed in your entire life via normal banking?
Strawman?
A bank is not a central authority any more than large mining pools are central authorities. Or China (when it controlled enough BTC to double spend at will).
The banking system is vastly distributed. Trust is a giant network of accountants, central banks, regulators, investors, and lots more that help ensure there is no double spending. There are checks all throughout the system, ledgers, reports, audit trails, and, unlike BTC, when something is actually stolen, lots of protections and methods to claw back stolen money.
BTC can be double spent via majority control, so double spend protection is at best a statistical claim, just like real banking.
A large problem with Bitcoin is developers were unaware of modern (or even ancient) banking and money systems and have tried to reinvent simple money with all the same problems that mankind moved from millennia ago.
Then people unaware of the why of modern money systems think crypto solves an important problem that modern economies and users don't care about, while ignoring all the problems modern systems solved as if they don't exist.
And honestly, in all my life, I have never heard of anyone in the normal banking system double spend. So chalk one more up to the Bitcoin make believe event crowd. How many double spend events have you performed in your entire life via normal banking?
Why does it need to be trustless? And why is it worth paying such a premium for it?
For me, bitcoin solves very real problems that I wouldn't be able to solve without it: getting paid circumventing Putin's banking system.
What does the Russian president have to do with anything in that context?
He is a dictator who controls money flowing in and out of country, using the tax revenue to fund his regime and wage war. He can't tax or block bitcoin payments, or steal proceeds by forcing foreign currency sale at a very unfair exchange rate.
Bitcoin helps live without paying taxes and fund opposition without repercussions. In fact, cryptocurrency payments are the only way for Russians to fund anti-Putin opposition. So anyone who says that cryptocurrencies are useless, please, kindly, stop saying this nonsense. If you are lucky to be born in a first world country you simply don't know how easily banking can be used to suffocate a person in a (lawless) cashless society. Bitcoin is a hedge against that, and a powerful one.
Bitcoin helps live without paying taxes and fund opposition without repercussions. In fact, cryptocurrency payments are the only way for Russians to fund anti-Putin opposition. So anyone who says that cryptocurrencies are useless, please, kindly, stop saying this nonsense. If you are lucky to be born in a first world country you simply don't know how easily banking can be used to suffocate a person in a (lawless) cashless society. Bitcoin is a hedge against that, and a powerful one.
What technical solution do you have for multiple parties needing to transact where they do not trust each other and cannot depend on a third party or the court system for dispute resolution? I'll wait.
If you’re transacting with a bunch of people that you do not trust then the payment rails are the least of your problems.
Your comment just feels like typical crypto-booster vague handwaving to me - can you give an actual example of such a situation where the existing third parties that alreayd exist to solve these kind of problems cannot be used? Be concrete.
Your comment just feels like typical crypto-booster vague handwaving to me - can you give an actual example of such a situation where the existing third parties that alreayd exist to solve these kind of problems cannot be used? Be concrete.
I gave an example here[1].
The typical answer is "just trust a third-party service" which side-steps the constraints in the question.
FWIW there is a variety of reasons you may not want to use a service like escrow.com — they take a cut of the exchange, operate as a for-profit business in a particular US-based jurisdictions, only operate on a limited set of currencies, request personal/private data sharing, and tend to settle the transaction in days, not seconds or minutes.
[1] https://news.ycombinator.com/item?id=31190423
The typical answer is "just trust a third-party service" which side-steps the constraints in the question.
FWIW there is a variety of reasons you may not want to use a service like escrow.com — they take a cut of the exchange, operate as a for-profit business in a particular US-based jurisdictions, only operate on a limited set of currencies, request personal/private data sharing, and tend to settle the transaction in days, not seconds or minutes.
[1] https://news.ycombinator.com/item?id=31190423
Your example only works because you're considering an asset that lives in the blockchain itself. So it doesn't apply to anything physical, as in this case, you need a trusted channel to transfer the asset anyway, and a blockchain doesn't solve that.
Even considering only these digital assets, you have an implicit notion of trust. The xyz.eth representation on the Ethereum blockchain is considered valuable because most people think it does represent what people expect to find at xyz.eth. But the ICANN can change this at any moment by adding .eth to https://en.wikipedia.org/wiki/List_of_Internet_top-level_dom... and this will all be gone.
Humans don't live in a blockchain, and blockchain rules don't apply outside of it, so you can't solve this boundary problem. Or rather, you solve it by trusting whoever's in charge of this boundary.
Even considering only these digital assets, you have an implicit notion of trust. The xyz.eth representation on the Ethereum blockchain is considered valuable because most people think it does represent what people expect to find at xyz.eth. But the ICANN can change this at any moment by adding .eth to https://en.wikipedia.org/wiki/List_of_Internet_top-level_dom... and this will all be gone.
Humans don't live in a blockchain, and blockchain rules don't apply outside of it, so you can't solve this boundary problem. Or rather, you solve it by trusting whoever's in charge of this boundary.
The whole point is peer to peer transfer of digital assets and digital state that is recorded on-chain. The goal is not “how to transfer a physical asset.”
These assets do have market value (despite your own personal feeling on what they “should” be worth) and so users do wish to find ways of interacting with and trading them without an intermediary.
The TLD/ICANN is irrelevant, as “.eth” is a construct for Ethereum clients, not HTTPS clients.
And yes, we build trust of, say, an immutable contract address originated by a human, and continue to trust in it years later because (a) the ledger is incredibly expensive to dismantle and (b) we can cryptographically verify this on our own local node.
These assets do have market value (despite your own personal feeling on what they “should” be worth) and so users do wish to find ways of interacting with and trading them without an intermediary.
The TLD/ICANN is irrelevant, as “.eth” is a construct for Ethereum clients, not HTTPS clients.
And yes, we build trust of, say, an immutable contract address originated by a human, and continue to trust in it years later because (a) the ledger is incredibly expensive to dismantle and (b) we can cryptographically verify this on our own local node.
> The whole point is peer to peer transfer of digital assets and digital state that is recorded on-chain. The goal is not “how to transfer a physical asset.”
Yes I understood where you were going. Just pointing out that the scope of the problem you're solving is way smaller than that of a generic transaction, to the point that it has very little relevance for pretty much anything real.
> The TLD/ICANN is irrelevant, as “.eth” is a construct for Ethereum clients, not HTTPS clients.
What do you think would happen to the value of the xyz.eth domain registered on Ethereum if ICANN decided to have .eth as a TLD and somebody made a website on a xyz.eth reachable natively via mainstream browsers?
This value would decrease, independently of what actually happens on the blockchain. Value doesn't exist independently from the real world.
Trusting a certain smart contract about what's at xyz.eth rather than another is also arbitrary and is a matter of social capital, again something that's not embedded within the blockchain.
Yes I understood where you were going. Just pointing out that the scope of the problem you're solving is way smaller than that of a generic transaction, to the point that it has very little relevance for pretty much anything real.
> The TLD/ICANN is irrelevant, as “.eth” is a construct for Ethereum clients, not HTTPS clients.
What do you think would happen to the value of the xyz.eth domain registered on Ethereum if ICANN decided to have .eth as a TLD and somebody made a website on a xyz.eth reachable natively via mainstream browsers?
This value would decrease, independently of what actually happens on the blockchain. Value doesn't exist independently from the real world.
Trusting a certain smart contract about what's at xyz.eth rather than another is also arbitrary and is a matter of social capital, again something that's not embedded within the blockchain.
The assets are “real” in the same way domain names are “real.” These are social constructs, maintained by social consensus.
It is very easy to come to a shared consensus about what address “mattdesl.eth” points to, because the history is recorded on-chain, and can be verified locally. I’m sure the exact valuation of this domain will go up and down, but as long as the the chain and network continues to exist, the asset holds value within the network, regardless of what occurs with ICANN/TLDs.
It is very easy to come to a shared consensus about what address “mattdesl.eth” points to, because the history is recorded on-chain, and can be verified locally. I’m sure the exact valuation of this domain will go up and down, but as long as the the chain and network continues to exist, the asset holds value within the network, regardless of what occurs with ICANN/TLDs.
> These are social constructs, maintained by social consensus.
AKA trust, so we're not transacting only with "a bunch of people that you do not trust".
AKA trust, so we're not transacting only with "a bunch of people that you do not trust".
> of digital assets and digital state that is recorded on-chain. The goal is not “how to transfer a physical asset.”
Even with "purely digital assets" you have the trouble with oracles that provide you with data and whom you must explicitly trust, and with trust in general (when someone sells you NFTs that may or not be stolen from someone else).
The sum total of "p2p transfer of digital assets and digital state that is recorded on-chain between parties [without intermediaries - d.] that don't trust each other" is a very minuscule part of a very minuscule subset of a very minuscule number of activities that people engage in.
Even with "purely digital assets" you have the trouble with oracles that provide you with data and whom you must explicitly trust, and with trust in general (when someone sells you NFTs that may or not be stolen from someone else).
The sum total of "p2p transfer of digital assets and digital state that is recorded on-chain between parties [without intermediaries - d.] that don't trust each other" is a very minuscule part of a very minuscule subset of a very minuscule number of activities that people engage in.
I'm not sure what point you are making. Using a blockchain doesn't mean you no longer need trust. But it can be used as a tool to help build social consensus about certain digital state/records without placing the data in control of a single centralized entity. Same discussion was had here[1].
[1] https://news.ycombinator.com/item?id=31190947
[1] https://news.ycombinator.com/item?id=31190947
> I'm not sure what point you are making.
As a simbling comment desctibed it, "the scope of the problem you're solving is way smaller than that of a generic transaction, to the point that it has very little relevance for pretty much anything real."
As a simbling comment desctibed it, "the scope of the problem you're solving is way smaller than that of a generic transaction, to the point that it has very little relevance for pretty much anything real."
The scope of the problem is basically what is happening on Uniswap (peer-to-peer swapping of ERC20 tokens) and Opensea (peer-to-peer swapping of ERC721/1155 tokens), which together account for the vast majority of Ethereum's daily contract activity.
These discussions often circle back to the notion that USDC, ENS, or any other ERC20 or ERC721 (NFT) is "not real" and therefore this problem is not worthy of study.
And yet nobody has an issue with Namecheap marketplace—a centralized ledger that manages token balances and virtual property exchange (domain names), without these token credits/debits ever being realized in your bank account (i.e. you can transact within their virtual dollar system without withdrawing funds to PayPal).
These discussions often circle back to the notion that USDC, ENS, or any other ERC20 or ERC721 (NFT) is "not real" and therefore this problem is not worthy of study.
And yet nobody has an issue with Namecheap marketplace—a centralized ledger that manages token balances and virtual property exchange (domain names), without these token credits/debits ever being realized in your bank account (i.e. you can transact within their virtual dollar system without withdrawing funds to PayPal).
> The scope of the problem is basically what is happening on Uniswap
So,
1. "a very minuscule subset of a very minuscule number of activities that people engage in", to quote myself, and
2. flash loans and "HFT" using speculative virtual tokens, so very much a circular reference
> And yet nobody has an issue with Namecheap marketplace
1. First time I heard of it
2. It doesn't pretend to be "redefining finance", or "being a revolution", or "destroying traditional banking", or whatever other bullcrap comes out of "DeFi" and other crypto
3. Never does it say anything about "virtual dollars", all prices are listed in real money, and the deposits you may make into your account are also real money
So,
1. "a very minuscule subset of a very minuscule number of activities that people engage in", to quote myself, and
2. flash loans and "HFT" using speculative virtual tokens, so very much a circular reference
> And yet nobody has an issue with Namecheap marketplace
1. First time I heard of it
2. It doesn't pretend to be "redefining finance", or "being a revolution", or "destroying traditional banking", or whatever other bullcrap comes out of "DeFi" and other crypto
3. Never does it say anything about "virtual dollars", all prices are listed in real money, and the deposits you may make into your account are also real money
> And yet nobody has an issue with Namecheap marketplace—a centralized ledger
If nobody has an issue with it, why are you talking about an alternative to it? What's the benefit? Also note that Namecheap does sell domains that are then recognized by many other entities, it's not a "virtual property" that only leaves within Namecheap's system, it's something you end up owning in the legal world.
The "not real" argument is that you change your trust model as soon as you reach boundaries. Uniswap etc. are trustless, but only up to the point where the assets traded become real and are redeemed outside of the blockchain and some legal entity can actually back up the value of the tokens you traded. One of the selling points of Ethereum is that you don't need to trust anyone; if that's not the case, as we both agree, what's left? Why do you need Uniswap to be trustless when you rely on legal entities to ensure that what you're trading has some non-fictitious value?
You wrote:
> it can be used as a tool to help build social consensus about certain digital state/records without placing the data in control of a single centralized entity
If I try to parse this, you substitute some blockchain to the laws usually ruling relationships between entities, and instead of a judge, you use smart contracts to decide what happens. But again the scope is too limited to be useful, because the real world doesn't live in a blockchain, and the smart contracts will only rule a tiny part of these relationships. That's the token redemption example above.
If nobody has an issue with it, why are you talking about an alternative to it? What's the benefit? Also note that Namecheap does sell domains that are then recognized by many other entities, it's not a "virtual property" that only leaves within Namecheap's system, it's something you end up owning in the legal world.
The "not real" argument is that you change your trust model as soon as you reach boundaries. Uniswap etc. are trustless, but only up to the point where the assets traded become real and are redeemed outside of the blockchain and some legal entity can actually back up the value of the tokens you traded. One of the selling points of Ethereum is that you don't need to trust anyone; if that's not the case, as we both agree, what's left? Why do you need Uniswap to be trustless when you rely on legal entities to ensure that what you're trading has some non-fictitious value?
You wrote:
> it can be used as a tool to help build social consensus about certain digital state/records without placing the data in control of a single centralized entity
If I try to parse this, you substitute some blockchain to the laws usually ruling relationships between entities, and instead of a judge, you use smart contracts to decide what happens. But again the scope is too limited to be useful, because the real world doesn't live in a blockchain, and the smart contracts will only rule a tiny part of these relationships. That's the token redemption example above.
I always thought the grocery supply chain was a good example use case. Multiple parties (seed origin, farmer, fertilizer manufacturer and/or dispenser, pesticide manufacturer and/or crop duster, harvester, transporter(s), grocery association, grocer) who all handle any given tomato, all with incentive and opportunity to lie to some other members along the chain, but not to their immediate neighbors. Plus, even who the members ARE is not necessarily known from the beginning (eg the destination country for produce in the EU is decided based on market conditions when it's already en route). And the end consumer (or their representative in the grocery store) cares about the entire origin chain. (By which definition(s) is this tomato organic? How was this chicken treated? What was this cow fed? What's the real carbon cost? Etc)
In order to solve this in a centralized way, you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper... the third party company which has enormous financial incentive to cheat, on behalf of literally all its customers.
But with distributed ledgers with attestation, the record is unfalsifiable. Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard and the value of the lie is low.
You could achieve this with paper and signatures for each tomato, but it would be a lot of paper.
In order to solve this in a centralized way, you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper... the third party company which has enormous financial incentive to cheat, on behalf of literally all its customers.
But with distributed ledgers with attestation, the record is unfalsifiable. Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard and the value of the lie is low.
You could achieve this with paper and signatures for each tomato, but it would be a lot of paper.
This is a very good example of the typical argument that shows the critical flaw.
The flaw is that there is never any way to actually tie the real world to the Blockchain. It's literally impossible. You can have all the fancy mathematically proven Blockchain records you like, but it's just impossible to tie that to an actual tomato or actual pesticide.
We have track and trace system already for crops and they have the same problem: all the paperwork in the world can't prevent someone from, say, weighing a box of tissues instead of the box of cigars you intend to sell. In the end you need to trust someone.
The flaw is that there is never any way to actually tie the real world to the Blockchain. It's literally impossible. You can have all the fancy mathematically proven Blockchain records you like, but it's just impossible to tie that to an actual tomato or actual pesticide.
We have track and trace system already for crops and they have the same problem: all the paperwork in the world can't prevent someone from, say, weighing a box of tissues instead of the box of cigars you intend to sell. In the end you need to trust someone.
I'm a huge blockchain advocate, but I 100% think this is an important point people need to understand. The blockchain is a great solution for pure digital assets. Its an awful solution for physical stuff.
I think this is a holdover of thought from bitcoin. Bitcoin wanted to be a currency for our real world economy. It never became more than that for many reasons. ETH (and now more modern chains) have become more than currencies. They are digital economies. Physical items are foreign goods in a foreign jurisdiction the local economy has little control over.
Even within crypto, different L1's are like foreign economies, and moving assets cross chain is complicated.
I think this is a holdover of thought from bitcoin. Bitcoin wanted to be a currency for our real world economy. It never became more than that for many reasons. ETH (and now more modern chains) have become more than currencies. They are digital economies. Physical items are foreign goods in a foreign jurisdiction the local economy has little control over.
Even within crypto, different L1's are like foreign economies, and moving assets cross chain is complicated.
How do you tie real world tomatoes to NFT tomatoes? Who verifies this? How do you tie an NFT of a grassfed chicken to a real world grassfed chicken? Who verifies these chickens are actually grass fed?
You don't understand. People didn't have tomatoes and grass-fed chicken until Blockchain came along and solved these problems. /s
> all with incentive and opportunity to lie to some other members along the chain, but not to their immediate neighbors
And how does blockchain prevent them from lying?
> you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper
Instead they all need to sign up onto the blockchain and lie directly on the blockchain
> Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard
Fertilizer put on the record that tomatos are fertilized.
Sprayer put on the blockchain that tomatos were sprayed.
Transporter put on the record that tomatos were transported.
You arrive at the shop to find rotten potatoes instead.
How did blockchain help?
Also note that in this current world that is so horrible according to you you arrive at a shop to find tomatos that have passed all inspections and have been delivered to you. What eaxctly does blockchain intend to solve?
And how does blockchain prevent them from lying?
> you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper
Instead they all need to sign up onto the blockchain and lie directly on the blockchain
> Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard
Fertilizer put on the record that tomatos are fertilized.
Sprayer put on the blockchain that tomatos were sprayed.
Transporter put on the record that tomatos were transported.
You arrive at the shop to find rotten potatoes instead.
How did blockchain help?
Also note that in this current world that is so horrible according to you you arrive at a shop to find tomatos that have passed all inspections and have been delivered to you. What eaxctly does blockchain intend to solve?
My suggestion is: "grow up".
All of human society is based on trust, and it works just fine and has for centuries.
Who would even want to live in a trust less society? That sounds like hell.
All of human society is based on trust, and it works just fine and has for centuries.
Who would even want to live in a trust less society? That sounds like hell.
I might trust someone enough to give them $20. I might not trust someone enough to enter my credit card details on their webpage.
That's why we have things like paypal and temporary virtual credit cards.
Many kinds of fraud attack the fallible human element, not technology. And blockchains cannot change that, as you can see with a glance at crypto news.
Many kinds of fraud attack the fallible human element, not technology. And blockchains cannot change that, as you can see with a glance at crypto news.
The technical solution to that is temporary CC numbers, not a giant crypto chain.
Sure, that's one technical solution, assuming you can get a card.
I was just trying to point out that trust is not binary.
I was just trying to point out that trust is not binary.
Trust is a short-cut for the complexities the physical world presents. But in a purely digital world you can build things that doesn't NEED the short-cut. And that's a new capability. It let's you build things not possible before. DeFi exists because trustless transactions are possible. Not everything can and should be trustless, it's just a tool not a new society. But it's SUPER useful.
This is not a technical solution.
Growing up is also realizing that some problems require non-technical solutions :).
Sure, but it also makes it not an answer to the question which was asked.
And just because the technical solution to a technical problem might not be (/isn’t) a good/practical solution to the practical problem that the technical problem is inspired by, doesn’t make interest in the technical solution illegitimate.
And just because the technical solution to a technical problem might not be (/isn’t) a good/practical solution to the practical problem that the technical problem is inspired by, doesn’t make interest in the technical solution illegitimate.
That only holds if you donate your BTC. In practice you want to buy something with it. How do you guarantee that you do receive the thing you're buying once you've given your BTC?
You need to trust this other channel through which you're receiving it.
You need to trust this other channel through which you're receiving it.
Are you implying that block chains solve this?
So, I can buy a car from someone I don't trust by using a blockchain, with no need to rely on courts or other third parties?
So, I can buy a car from someone I don't trust by using a blockchain, with no need to rely on courts or other third parties?
A digital car... yeah.
The more i've tried to hack with smart contracts for physical stuff, the more I realize that's not what it's good for. But if you stop thinking of the physical world, and only think of the digital world, and you use a modern chain (I use avax). It works pretty good. I think there's a few missing pieces of infrastructure still, but the people who "are in it to build, and not for the money" (I include myself in this) stick around to build what I consider the first purely digital economy.
The more i've tried to hack with smart contracts for physical stuff, the more I realize that's not what it's good for. But if you stop thinking of the physical world, and only think of the digital world, and you use a modern chain (I use avax). It works pretty good. I think there's a few missing pieces of infrastructure still, but the people who "are in it to build, and not for the money" (I include myself in this) stick around to build what I consider the first purely digital economy.
Ok, then how can I buy a World of Warcraft mount from another player I don't trust by using my Final Fantasy 14 money and a block chain?
Or, if that's too silly, how do I buy a .com domain name in exchange for some ETH, assuming neither I nor the seller of the domain name trust each other?
These are all digital goods, so can avax help me do it?
Or, if that's too silly, how do I buy a .com domain name in exchange for some ETH, assuming neither I nor the seller of the domain name trust each other?
These are all digital goods, so can avax help me do it?
The games needs to be built to allow this, however here's how it works for games that do implement it.
This is using the C-Chain. Most games now would use a subnet (which is like a parallel blockchain integrated with the mainnet, but cheaper transactions)
1. Dev Create an ERC721 contract for WoW items
2. Dev Create an ERC20 contract for Final Fantasy 14 money
3. ANYONE can Create a liquidity pair for the Final Fantasy ERC20 with AVAX in one or more of the numerous dex's (since i'm using avax, probably using Trader Joe's)
4. Players Swap Final Fantasy money for AVAX, use AVAX to purchase WOW NFT at any of the numerous NFT marketplaces.
This is using the C-Chain. Most games now would use a subnet (which is like a parallel blockchain integrated with the mainnet, but cheaper transactions)
1. Dev Create an ERC721 contract for WoW items
2. Dev Create an ERC20 contract for Final Fantasy 14 money
3. ANYONE can Create a liquidity pair for the Final Fantasy ERC20 with AVAX in one or more of the numerous dex's (since i'm using avax, probably using Trader Joe's)
4. Players Swap Final Fantasy money for AVAX, use AVAX to purchase WOW NFT at any of the numerous NFT marketplaces.
Sure, if I'm allowed to change the games, I can link them even without a block chain. Transacting digital assets on a particular market (be it a single blockchain or Steam or the WoW Auction House) is a solved problem, and is not helped in any clear way by adding a blockchain in the middle.
"Sure, if I'm allowed to change the games, I can link them even without a block chain."
The game should be integrated with the blockchain directly, if I was unclear I apologize. That means, when you open the game, you need to use your wallet to connect to the game. You don't have a "Steam" account or whatever, you have your Web3 identity.
"Transacting digital assets on a particular market (be it a single blockchain or Steam or the WoW Auction House) is a solved problem"
1 of those things is not like the other. The blockchain isn't "a market", it's an economy. An economy with multiple markets... and it's your choice. Steam is a single market, and I have no choices.
If your assets are on the Avalanche blockchain (that's the avax I keep talking about) you can choose to use Trader Joes (https://traderjoexyz.com/trade#/) Pangolin (https://app.pangolin.exchange/#/swap) Sushiswap (https://app.sushi.com/swap) or one of the hundred other choices. If you want to buy items you can use NFT Trade (https://nftrade.com/) Kalao (https://marketplace.kalao.io/) or one of the other hundred choices popping up. It's an economy with choices and competition. Steam is a centralized market that sets the rules, and you either have to take it or leave it. They get to charge a premium for that privledge, and there's no possibility of competition to check that privledge.
Saying you prefer steam, is like saying you'd prefer to buy popcorn from a movie theatre over a grocery store.
The game should be integrated with the blockchain directly, if I was unclear I apologize. That means, when you open the game, you need to use your wallet to connect to the game. You don't have a "Steam" account or whatever, you have your Web3 identity.
"Transacting digital assets on a particular market (be it a single blockchain or Steam or the WoW Auction House) is a solved problem"
1 of those things is not like the other. The blockchain isn't "a market", it's an economy. An economy with multiple markets... and it's your choice. Steam is a single market, and I have no choices.
If your assets are on the Avalanche blockchain (that's the avax I keep talking about) you can choose to use Trader Joes (https://traderjoexyz.com/trade#/) Pangolin (https://app.pangolin.exchange/#/swap) Sushiswap (https://app.sushi.com/swap) or one of the hundred other choices. If you want to buy items you can use NFT Trade (https://nftrade.com/) Kalao (https://marketplace.kalao.io/) or one of the other hundred choices popping up. It's an economy with choices and competition. Steam is a centralized market that sets the rules, and you either have to take it or leave it. They get to charge a premium for that privledge, and there's no possibility of competition to check that privledge.
Saying you prefer steam, is like saying you'd prefer to buy popcorn from a movie theatre over a grocery store.
> The game should be integrated with the blockchain directly, if I was unclear I apologize.
But it could just as easily be integrated with a non-blockchain central authority.
And you are still trusting their code to integrate it, so you haven't solved any trust issue. Nothing stops their code from saying "asset transferred" when the asset wasn't actually transferred.
Blockchain solves nothing here. All of this could be accomplished just as well or better without it.
But it could just as easily be integrated with a non-blockchain central authority.
And you are still trusting their code to integrate it, so you haven't solved any trust issue. Nothing stops their code from saying "asset transferred" when the asset wasn't actually transferred.
Blockchain solves nothing here. All of this could be accomplished just as well or better without it.
"But it could just as easily be integrated with a non-blockchain central authority."
Sure, you could. But then you'e in a feudal arrangement instead of a free economy.
"And you are still trusting their code to integrate it, so you haven't solved any trust issue"
The tokens are trustless, the transaction of those tokens are trustless. How the are tokens used has nothing to do with my ability to freely trade the tokens.
"Blockchain solves nothing here. All of this could be accomplished just as well or better without it."
Well, perhaps you're just not trying to have a good faith discussion. Because I pointed out what it solves, and you keep ignoring it. The blockchain creates the ability to have a free market with many participants without having to be under the control of a central authority. Free markets are unquestionably better, and so I'd say "accomplished just as well or better" is just flat out wrong. A centralized service is not better unless you disagree that a free market economy is superior to feudalism.
Sure, you could. But then you'e in a feudal arrangement instead of a free economy.
"And you are still trusting their code to integrate it, so you haven't solved any trust issue"
The tokens are trustless, the transaction of those tokens are trustless. How the are tokens used has nothing to do with my ability to freely trade the tokens.
"Blockchain solves nothing here. All of this could be accomplished just as well or better without it."
Well, perhaps you're just not trying to have a good faith discussion. Because I pointed out what it solves, and you keep ignoring it. The blockchain creates the ability to have a free market with many participants without having to be under the control of a central authority. Free markets are unquestionably better, and so I'd say "accomplished just as well or better" is just flat out wrong. A centralized service is not better unless you disagree that a free market economy is superior to feudalism.
> The tokens are trustless, the transaction of those tokens are trustless. How the are tokens used has nothing to do with my ability to freely trade the tokens.
The point of the transaction is to use the item, not to own the token. If the item can't be used, then you paid money for nothing (since obviously no one else is going to buy it off you either).
The point of the transaction is to use the item, not to own the token. If the item can't be used, then you paid money for nothing (since obviously no one else is going to buy it off you either).
Don't sell illegal drugs?
Sure there are countries with no functioning legal systems and extreme levels of corruption but most people affected by that would probably have a hard time using blockchain technologies directly and would have to rely on 3rd parties anyway.
Sure there are countries with no functioning legal systems and extreme levels of corruption but most people affected by that would probably have a hard time using blockchain technologies directly and would have to rely on 3rd parties anyway.
So you're claiming this is a rare case for which Blockchain is useful, but outside this rare, niche case normal banking is better?
When you rig the questionnaire to arrive at the exact answer you were looking for to begin with...
When you use bitcoin, you actually rely on a third party to validate your transaction. A banking organisation can also be a third party.
It is the people, not the technology.
It is about money and getting rich.
Whichever problem a certain blockchain is supposed the solve, the main reason for its existence is that the people who create it want to get rich, fabulously rich and fast.
Besides getting rich, majority of these projects are solutions to non-existent or solved problems, which use a very complicated distributed immutable database that very few investors actually understand.
If it's complicated and convoluted, then it must be the future.
Fabulously rich is hypnotising and it can easily become the most important thing in someone's life.
They're betting a lot on being right.
Others, who see the side effects of these people's mission in life, try to wake them up from this hypnosis, but that's impossible.
And so far, they have been right and many got rich.
But I have yet to see a project that solved a real problem (besides dark markets and the ones that enable crypto)
The side effects are not negligible though, they really affect others - scams, ransomware, energy use, etc ..
So it's going to stay polarized.
It is about money and getting rich.
Whichever problem a certain blockchain is supposed the solve, the main reason for its existence is that the people who create it want to get rich, fabulously rich and fast.
Besides getting rich, majority of these projects are solutions to non-existent or solved problems, which use a very complicated distributed immutable database that very few investors actually understand.
If it's complicated and convoluted, then it must be the future.
Fabulously rich is hypnotising and it can easily become the most important thing in someone's life.
They're betting a lot on being right.
Others, who see the side effects of these people's mission in life, try to wake them up from this hypnosis, but that's impossible.
And so far, they have been right and many got rich.
But I have yet to see a project that solved a real problem (besides dark markets and the ones that enable crypto)
The side effects are not negligible though, they really affect others - scams, ransomware, energy use, etc ..
So it's going to stay polarized.
> I really don't ever remember a technology that has created such a visceral reaction from people.
I don't remember a technology that has attracted such an incredibly irritating fanbase. Twitter is unusable because of crypto shills. Even someone genuinely curious about crypto is probably going to assume that it's all a dumpster fire because of the absolute scum on Twitter that spam every thread with crypto nonsense.
If it weren't for those people, I can guarantee the technology itself would not have broken through to mainstream consciousness. In and of itself, it's not a particularly polarizing thing.
Of course, the outrage of the original cryptocurrency (Bitcoin) essentially being "proof of burning fossil fuels" isn't helping either.
I don't remember a technology that has attracted such an incredibly irritating fanbase. Twitter is unusable because of crypto shills. Even someone genuinely curious about crypto is probably going to assume that it's all a dumpster fire because of the absolute scum on Twitter that spam every thread with crypto nonsense.
If it weren't for those people, I can guarantee the technology itself would not have broken through to mainstream consciousness. In and of itself, it's not a particularly polarizing thing.
Of course, the outrage of the original cryptocurrency (Bitcoin) essentially being "proof of burning fossil fuels" isn't helping either.
Bitcoin has two innovations in my view:
1. Technological innovation: distributed ledger with trust-less consensus. However, that innovation is largely unnecessary for almost all practical purposes, and it leads to resource use that is about a billion times higher than without that innovation (due to duplicated work and Proof of Waste).
2. Legal/process/social innovation: circumvention of rules and regulations, like Uber. Some people love that innovation, some people think it is rather harmful.
Personally, I think encrypted and uncensorable flow of information is a net positive, and should be retained. Encrypted and uncensorable flow of money, not so sure.
1. Technological innovation: distributed ledger with trust-less consensus. However, that innovation is largely unnecessary for almost all practical purposes, and it leads to resource use that is about a billion times higher than without that innovation (due to duplicated work and Proof of Waste).
2. Legal/process/social innovation: circumvention of rules and regulations, like Uber. Some people love that innovation, some people think it is rather harmful.
Personally, I think encrypted and uncensorable flow of information is a net positive, and should be retained. Encrypted and uncensorable flow of money, not so sure.
It seems more rich/poor from where I'm sitting haha. I'd love to have cashed in on the crypto too, I just couldn't afford to get in
An internet with a door fee is a failed internet, I hope the web3 bubble bursts before we lose anything
An internet with a door fee is a failed internet, I hope the web3 bubble bursts before we lose anything
It's not just the computers coming to agreement, a majority of participants in a network (by control weight) can decide to ignore the conclusion the computers came to and do something else.
And of course it has happened.
And of course it has happened.
I think it is the concept of “trust-less” itself. You replace trust in people and institutions with trust in technology. I think that rubs some people the wrong way.
That's the world we live in. Nobody can stay in the middle, people either hate it or love it, it's either black or white. Nobody can do pros/cons on everything, specially giving valid criticism to improve an idea.
> That's the world we live in. Nobody can stay in the middle, people either hate it or love it, it's either black or white.
This is an illusion created by spending time online. The loudest people are polarized, but the majority of people are still in the middle somewhere, sometimes in a very ambivalent state.
A great example of this is Elon Musk. Online (Twitter, reddit, etc.) people worship him or loathe him. But the average person rarely thinks about him at all and doesn't care that much about him. They certainly don't have a strong opinion.
If you look at research (I read a lot of Pew surveys), this is true for most topics. There are 5-25% of people on the extremes, and everyone else can be said to be "not extreme" about the topic in some way (either ambivalent or just not knowledgeable enough to give a response).
This is an illusion created by spending time online. The loudest people are polarized, but the majority of people are still in the middle somewhere, sometimes in a very ambivalent state.
A great example of this is Elon Musk. Online (Twitter, reddit, etc.) people worship him or loathe him. But the average person rarely thinks about him at all and doesn't care that much about him. They certainly don't have a strong opinion.
If you look at research (I read a lot of Pew surveys), this is true for most topics. There are 5-25% of people on the extremes, and everyone else can be said to be "not extreme" about the topic in some way (either ambivalent or just not knowledgeable enough to give a response).
Yeah that makes sense. We're listening too much to the extremes, they're louder after all. Sadly I don't see this changing in the near future...
> How that is put to use in practicality maybe debatable. But I think arguments like this tend to just throw the baby out with the bathwater.
Maybe is that why companies like Stripe are still using it then for crypto payouts? [0]
What is nonsense is totally thinking that it is going to go away 100% due to the scam projects, fraud, etc like what the author has said AND totally thinking ever project is going to survive or go for mass adoption.
This is where you get complete nonsense [0] from HN users who reply back and have admitted they have not read the article and scream 'CrYPtO IS SCaM' and either cannot answer basic questions or reply back with another question without given a concrete answer to the first.
Perhaps there is a reason why in particular Stripe ignored everyone and looked at a select few cryptocurrencies / blockchain technologies again despite all the other scams going on.
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
[1] https://news.ycombinator.com/item?id=31132996
Maybe is that why companies like Stripe are still using it then for crypto payouts? [0]
What is nonsense is totally thinking that it is going to go away 100% due to the scam projects, fraud, etc like what the author has said AND totally thinking ever project is going to survive or go for mass adoption.
This is where you get complete nonsense [0] from HN users who reply back and have admitted they have not read the article and scream 'CrYPtO IS SCaM' and either cannot answer basic questions or reply back with another question without given a concrete answer to the first.
Perhaps there is a reason why in particular Stripe ignored everyone and looked at a select few cryptocurrencies / blockchain technologies again despite all the other scams going on.
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
[1] https://news.ycombinator.com/item?id=31132996
Obviously with the nonsense replies being here: https://news.ycombinator.com/item?id=31133074 of course.
Many of the people controlling the narrative have realised recently what a threat decentralisation is. They are pushing extremely hard to make everyone think this is some evil useless force that is only used for scamming people. It's the same way protecting the children is used by people in power to take away your privacy.
Blockchains and cryptos are innovative tools. They can be used for good and bad, but they are an interesting development.
It's really sad how many on HN have fallen for this black and white thinking.
Blockchains and cryptos are innovative tools. They can be used for good and bad, but they are an interesting development.
It's really sad how many on HN have fallen for this black and white thinking.
I am a huge proponent of decentralization. You could distill my philosophy down to this: the concentration of power into a single person is always dangerous. This is why I support democracies and breaking up monopolistic companies, among other things.
I have also spent years trying to figure out a use-case for blockchain that is not solved by some other technology with less risk, and I can't figure one out.
I have also spent years trying to figure out a use-case for blockchain that is not solved by some other technology with less risk, and I can't figure one out.
Decentralization does not require bitcoin. There are trust-based decentralized payment networks much older than the transistor. These could be digitized as well, but computing circles have relatively little interest in decentralization+trust.
> The idea to get rid of having to trust centralized organizations might sound tempting, but it doesn’t work: Blockchains don’t get rid of “trust”, they just change, who has to be trusted.
> More precisely: The trust in institutions controlled by humans and bound by established laws and rules is instead replaced — by unconditional trust in the infallibility of code (“in code we trust” is a popular phrase in the scene). As code is written by humans, it’s seldom actually infallible.
> But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.
https://en.wikipedia.org/wiki/Nirvana_fallacy
"The perfect solution fallacy is a related informal fallacy that occurs when an argument assumes that a perfect solution exists or that a solution should be rejected because some part of the problem would still exist after it were implemented"
> More precisely: The trust in institutions controlled by humans and bound by established laws and rules is instead replaced — by unconditional trust in the infallibility of code (“in code we trust” is a popular phrase in the scene). As code is written by humans, it’s seldom actually infallible.
> But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.
https://en.wikipedia.org/wiki/Nirvana_fallacy
"The perfect solution fallacy is a related informal fallacy that occurs when an argument assumes that a perfect solution exists or that a solution should be rejected because some part of the problem would still exist after it were implemented"
As explained in the text: the point isn't that these problems aren't solved by blockchain, they're amplified. E.g.: scams existed without blockchain, but now they're forever and permanently engraved into the blockchain. Code was always flawed, but now a bug isn't just a bug, it's a bug in a smart contract with potentially disastrous consequences that can never be properly fixed.
This is almost a political argument. Because it's the same argument about free speech.
In the end, you either believe in the individual's choice, and individuals will do really stupid and bad stuff, and they will also fall for scams, but do you give the individual freedom of choice to fall for scams and speak freely?
This is a high risk option, perhaps. But it is also likely to be most effective at delivering progress to humanity, considering the difference between innovation over the last 200 years, has it happened in places with more freedom or less?
On the other hand, you have the crowd obsessed with control, obsessed with how the idiot needs to be protected from their own stupidity, and the crowd needs to be protected from the speech of the idiot. But somehow when you control things, in the end they start being used by those in power to cement their power, and suddenly you have less freedom, less creativity, and more suffering. But it's nice for some, because everything is under control.
Make your choice which side you are on.
In the end, you either believe in the individual's choice, and individuals will do really stupid and bad stuff, and they will also fall for scams, but do you give the individual freedom of choice to fall for scams and speak freely?
This is a high risk option, perhaps. But it is also likely to be most effective at delivering progress to humanity, considering the difference between innovation over the last 200 years, has it happened in places with more freedom or less?
On the other hand, you have the crowd obsessed with control, obsessed with how the idiot needs to be protected from their own stupidity, and the crowd needs to be protected from the speech of the idiot. But somehow when you control things, in the end they start being used by those in power to cement their power, and suddenly you have less freedom, less creativity, and more suffering. But it's nice for some, because everything is under control.
Make your choice which side you are on.
> But it is also likely to be most effective at delivering progress to humanity
How so? So far, crypto seems to amplify its worst trait: greed. It takes its destructive properties to new levels.
> you have the crowd obsessed with control
These controls are there for a reason. Controls create trust, and trust removes friction. Creating a stable currency and protecting people's money from scammers has nothing to do with censoring speech. It's a false equivalence.
> you have less freedom, less creativity, and more suffering
You also get this in an environment where the slightest mishap can irreversibly empty your savings account.
> used by those in power to cement their power
That's a problem with capital, not the currency with which it's expressed.
How so? So far, crypto seems to amplify its worst trait: greed. It takes its destructive properties to new levels.
> you have the crowd obsessed with control
These controls are there for a reason. Controls create trust, and trust removes friction. Creating a stable currency and protecting people's money from scammers has nothing to do with censoring speech. It's a false equivalence.
> you have less freedom, less creativity, and more suffering
You also get this in an environment where the slightest mishap can irreversibly empty your savings account.
> used by those in power to cement their power
That's a problem with capital, not the currency with which it's expressed.
Every innovation has had this pattern of behaviour. Steam railways, dotcom bubble etc.
Part of new technology is many scammers entering it and exploiting the situation. Of course in many cases this isn't actually planned scamming, just taking risks in a new market and losing money.
What most here in this thread are basically arguing is blockchain is evil and shouldn't exist. Well, then neither should the internet or steam railways. It's shows a complete lack of understanding of human behaviour and history.
Really sad to see from the HN crowd. They are falling for the narrative built by people threatened by crypto, which is basically the people in power currently. Of course these are also the people against free speech. It's not an accident this is happening.
Part of new technology is many scammers entering it and exploiting the situation. Of course in many cases this isn't actually planned scamming, just taking risks in a new market and losing money.
What most here in this thread are basically arguing is blockchain is evil and shouldn't exist. Well, then neither should the internet or steam railways. It's shows a complete lack of understanding of human behaviour and history.
Really sad to see from the HN crowd. They are falling for the narrative built by people threatened by crypto, which is basically the people in power currently. Of course these are also the people against free speech. It's not an accident this is happening.
There's nothing about railways or the dot com bubble that facilitate scams. New frontiers attract greedy people. Greedy people attract scammers.
However these eventually become regulated. Lawlessness was a bug that was progressively fixed. In the case of crypto, it's a feature.
> Of course these are also the people against free speech
Leave those strawmen alone. Be the HN user you want HN to have.
However these eventually become regulated. Lawlessness was a bug that was progressively fixed. In the case of crypto, it's a feature.
> Of course these are also the people against free speech
Leave those strawmen alone. Be the HN user you want HN to have.
> But it is also likely to be most effective at delivering progress to humanity, considering the difference between innovation over the last 200 years, has it happened in places with more freedom or less?
It has happened in places with just enough freedom. The Wild West wasn't exactly known for its great pace of technological innovation. On the other hand, China today is a major innovator (e.g. in solar tech), and it is a much less free country than, say, Indonesia, which is not nearly as innovative.
In particular, legislation and enforcement against fraud are extremely necessary for a functioning system. Fraud directly keeps resources away from innovators (since people who thought they were investing into/buying an innovative solution are giving money to a fraudster instead); and it also indirectly dis-incentivizes belief in innovation, as someone who has been burned by a fraudster will be less inclined to believe the next innovator.
It has happened in places with just enough freedom. The Wild West wasn't exactly known for its great pace of technological innovation. On the other hand, China today is a major innovator (e.g. in solar tech), and it is a much less free country than, say, Indonesia, which is not nearly as innovative.
In particular, legislation and enforcement against fraud are extremely necessary for a functioning system. Fraud directly keeps resources away from innovators (since people who thought they were investing into/buying an innovative solution are giving money to a fraudster instead); and it also indirectly dis-incentivizes belief in innovation, as someone who has been burned by a fraudster will be less inclined to believe the next innovator.
You're making the fallacy of conflating two unrelated concepts and drawing conclusions from that.
I've laid out how they are linked. Please debate my points rather than saying it's a fallacy, which adds nothing to the conversation and is basically an ad hominem attack like this (see, I can use these debating words too!)
I'm not sure why smart contracts don't come with signature (or just an address) - this way they can be updated by authorizing party but nobody else. By a transaction involving a contractcoin perhaps.
You surely can't expect to author perfect code and set it in stone.
You surely can't expect to author perfect code and set it in stone.
If it's immutable, it only needs to be audited once.
This is not necessarily a flaw in the technology, it's just one way in which it differs from what we are used to.
I think most coiners, who skew strongly libertarian, would argue that it's up to you to make sure your smart contracts work.
I think most coiners, who skew strongly libertarian, would argue that it's up to you to make sure your smart contracts work.
> I think most coiners, who skew strongly libertarian, would argue that it's up to you to make sure your smart contracts work.
Ah yes, it's up to the user to review and debug code written in an esoteric programming language to make sure that it works... When even creators of said contracts can't find bugs in their code and fall prey to mistakes (sometimes after multiple audits)
Ah yes, it's up to the user to review and debug code written in an esoteric programming language to make sure that it works... When even creators of said contracts can't find bugs in their code and fall prey to mistakes (sometimes after multiple audits)
That's correct. Smart contracts are absolutely bleeding edge features that work on top of an Ethereum-like chain which by itself doesn't mind advancing the roadmap even if something breaks. People should be advised about that before participating in smart contracts, which unfortunately doesn't always happen due to greed and hype.
It doesn't mean however that we should just throw everything blockchain cryptocurrency related into the same sack and say its nonsense.
It doesn't mean however that we should just throw everything blockchain cryptocurrency related into the same sack and say its nonsense.
Yes exactly.
"This is not necessarily a flaw in technology".
When is the last time you needed to debug the contract when you buy coffee?
When is the last time you needed to debug the contract when you buy coffee?
Why would you need to involve a smart contract to buy coffee?
Coffee is just an extreme example.
The actual example I usually go for is selling/buying an apartment. I'm currently in Sweden, and I've gone through the process twice now. The contracts were several pages if clear text that even I, with my rudimentary knowledge of Swedish could understand. Good luck checking that everything is correct with a "smart contract" version.
The actual example I usually go for is selling/buying an apartment. I'm currently in Sweden, and I've gone through the process twice now. The contracts were several pages if clear text that even I, with my rudimentary knowledge of Swedish could understand. Good luck checking that everything is correct with a "smart contract" version.
I've also bought property in Sweden, it's very simple. No need to involve a lawyer even.
So where do smart contracts come in? Who would want to use a smart contract to buy an apartment? Unless possible the apartment deed was stored on the blockchain or something, but that is highly unlikely. Real estate is a very poor fit, since it's very heavily regulated in numerous ways. It's not just about ownership, and anonymous ownership of real estate is definitely a non-goal. It's an anti-goal.
So where do smart contracts come in? Who would want to use a smart contract to buy an apartment? Unless possible the apartment deed was stored on the blockchain or something, but that is highly unlikely. Real estate is a very poor fit, since it's very heavily regulated in numerous ways. It's not just about ownership, and anonymous ownership of real estate is definitely a non-goal. It's an anti-goal.
So, you keep coming up with "smart contracts are not a good fit for anything".
Which really doesn't invalidate my original point.
Which really doesn't invalidate my original point.
I mean I'm not a smart contract evangelist, I'm just replying to your point that they are risky, that you need to understand them before using them. You do, that's why most people shouldn't.
As to use cases, you only proposed two things, coffee and real estate. Those examples are both silly, for different reasons. I think in general it very seldom would make sense to use smart contracts for real assets.
The only real use cases I can think of are financial derivatives with crypto assets as underlying, and various decision making mechanisms that govern processes that are controlled by code. As soon as you need to cross into the physical world, it's hard to see how it would work. Then you need a centralised institution that people trust, which mostly defeats the purpose.
As to use cases, you only proposed two things, coffee and real estate. Those examples are both silly, for different reasons. I think in general it very seldom would make sense to use smart contracts for real assets.
The only real use cases I can think of are financial derivatives with crypto assets as underlying, and various decision making mechanisms that govern processes that are controlled by code. As soon as you need to cross into the physical world, it's hard to see how it would work. Then you need a centralised institution that people trust, which mostly defeats the purpose.
> Then you need a centralised institution that people trust, which mostly defeats the purpose.
However, even with "purely digital assets" you will end up needing to trust people and exactly for the reason I outlined: unless you're able to read and debug code written in esoteric programming languages, you trust the creator of the contract not to screw you over. And even creators of contracts themselves can't find mistakes in their own code and have all their money drained or locked [1]
[1] Just this week, https://web3isgoinggreat.com/?id=akudreams-earns-34-million-...
"The contract suffered from several flaws, however. The first allowed an exploiter to stop all refunds and withdrawals from the contract... not so lucky with the second issue. A bug in the code failed to account for users minting multiple NFTs in a single transaction... the team can never withdraw the 11,539 ETH ($34 million) earned from the NFT sales—it is stuck there forever"
However, even with "purely digital assets" you will end up needing to trust people and exactly for the reason I outlined: unless you're able to read and debug code written in esoteric programming languages, you trust the creator of the contract not to screw you over. And even creators of contracts themselves can't find mistakes in their own code and have all their money drained or locked [1]
[1] Just this week, https://web3isgoinggreat.com/?id=akudreams-earns-34-million-...
"The contract suffered from several flaws, however. The first allowed an exploiter to stop all refunds and withdrawals from the contract... not so lucky with the second issue. A bug in the code failed to account for users minting multiple NFTs in a single transaction... the team can never withdraw the 11,539 ETH ($34 million) earned from the NFT sales—it is stuck there forever"
The blockchain is relying on the perfect solution fallacy. It tries to solve a problem that is mostly theoretical, does a very incomplete job and creates bigger problems than it is ever able to solve. The 'redeeming' factor is that on the way it makes some people rich.
Not sure if that fallacy applies, given that we have found ways to combat scams, fraud, etc. with the existing solutions (which are also not perfect, but at least make an attempt to cater to the fallibility of humans). In that regard, blockchain is a step backwards.
Whether "do not require trust in a centralized authority" (with caveats regarding the protocol itself set aside) is more important than "useful for humans conducting human business" (without extra layers that re-introduce centralized authority) is up to everyone to decide themselves.
Whether "do not require trust in a centralized authority" (with caveats regarding the protocol itself set aside) is more important than "useful for humans conducting human business" (without extra layers that re-introduce centralized authority) is up to everyone to decide themselves.
The post points out several shortcomings of a system that is objectively worse in almost every aspect than the existing alternatives.
Calling this a Nirvana fallacy borders on bad faith.
Calling this a Nirvana fallacy borders on bad faith.
If they argued that Blockchain is not mature, and so (from a personal cost benefit analysis) is inferior to centralized systems, they would be on point. There is a difference between straight up pseudo science and novel developments. Conflating the two is nothing new.
[deleted]
The perfect is the enemy of the good.
Terrible is also the enemy of good.
Yep. That would be the legacy (predatory, inflationary) financial system.
As opposed to Bitcoin, whose money supply grows with over 1.7% a year currently, giving miners around $50m a day to burn coal with.
Limited and deflationary currency is a good thing, because it limits power and disincentivises impulsive decisions.
An umlimited supply of currency like that underpinning our current financial system is hugely predatory and benefits only those in power and those closest to them.
Fiat incentivises huge environemntal destruction, you can just print more money and allocate it to those closest to you, who are inventivised to spend it as quickly as possible because it is always losing value. This encourages short term thinking and quick turnarounds, which results in mass produced crap that is horrible for the environment, or long drawn out wars that are even worse for it. At the bottom of the pyramid, rampant consumerism is caused by this same reason.
A rational, limited digital currency is a miracle. It will incentivise the opposite. Because you can't just "print more" and watch its value halve over your lifetime, you'll be much more careful in how it is spent. Look at how many shoddy products there are now, and how much consumer habits have changed since currencies moved off the gold standard. I loathe having my finances tied up in such a mess. We have a chance to right this wrong with all the benefits of an open and distributed system. That's the promise of BTC.
An umlimited supply of currency like that underpinning our current financial system is hugely predatory and benefits only those in power and those closest to them.
Fiat incentivises huge environemntal destruction, you can just print more money and allocate it to those closest to you, who are inventivised to spend it as quickly as possible because it is always losing value. This encourages short term thinking and quick turnarounds, which results in mass produced crap that is horrible for the environment, or long drawn out wars that are even worse for it. At the bottom of the pyramid, rampant consumerism is caused by this same reason.
A rational, limited digital currency is a miracle. It will incentivise the opposite. Because you can't just "print more" and watch its value halve over your lifetime, you'll be much more careful in how it is spent. Look at how many shoddy products there are now, and how much consumer habits have changed since currencies moved off the gold standard. I loathe having my finances tied up in such a mess. We have a chance to right this wrong with all the benefits of an open and distributed system. That's the promise of BTC.
Blockchains are cool. Very, very cool. Merkle trees on their own are pretty cool, and blockchains are just a Merkle tree hashed into a chain-like structure to create work for decentralized verification. This is a very clever concept, and it is the only known solution to the Byzantine Generals problem that doesn't involve a centralized authority (that I'm aware of).
What about this is intrinsically "dangerous nonsense"? Honestly, the "bitcoin bad" crowd so often loses me by conflating cryptocurrency - a ledger built on blockchain - with blockchain itself. Personally, I can see all the challenges faced by cryptocurrency and understand the skepticism, but these takes that write off blockchain due to cryptocurrencies' problems exhibit a sort of surface-level perspective that I can't take very seriously. And the fact that such shallow takes keep climbing to the top of HN is shameful, to say the least.
What about this is intrinsically "dangerous nonsense"? Honestly, the "bitcoin bad" crowd so often loses me by conflating cryptocurrency - a ledger built on blockchain - with blockchain itself. Personally, I can see all the challenges faced by cryptocurrency and understand the skepticism, but these takes that write off blockchain due to cryptocurrencies' problems exhibit a sort of surface-level perspective that I can't take very seriously. And the fact that such shallow takes keep climbing to the top of HN is shameful, to say the least.
> I can see all the challenges faced by cryptocurrency and understand the skepticism, but these takes that write off blockchain due to cryptocurrencies' problems exhibit a sort of surface-level perspective that I can't take very seriously
I would agree, if there were any use for the blockchain or PoW.
It's dangerous nonsense because it's an industry consisting entirely of producing scams, with huge impact to the environment, availability of graphics cards, hard drives (thanks Bram Cohen), and free tiers of everything[1].
Even bandwidth has been turned into a get-rich-quick scheme! Waste bandwidth for coins! (Obvious result: increase in use of ISP transfer caps, and/or just a congested Internet for us all)
It's one stop short of "mine my new cryptocurrency by throwing away food". People will start stealing your food deliveries in order to throw them in the trash, for money.
That's the equivalent of what's happening whenever some blockchain-buzzword new scam is created, but in internet form.
So the fact that it ruins everything is why it's dangerous. It only creates problems, and only "solves" problems by the definition of "when I want to break the law then it's a problem that I'm not allowed to". That's why it's nonsense.
[1] You can't launch a free tier turing complete anything today without having ALL your resources be taken by freeloading cryptojerks. Like if your free online puzzle game was accidentally turing complete (or less, since that's not even a hard requirement) then someone somewhere will start burning all your quota and money calculating hashes.
Like if you make "the game of life" processed server side I'm sure someone will turn it into a bitcoin miner.
I would agree, if there were any use for the blockchain or PoW.
It's dangerous nonsense because it's an industry consisting entirely of producing scams, with huge impact to the environment, availability of graphics cards, hard drives (thanks Bram Cohen), and free tiers of everything[1].
Even bandwidth has been turned into a get-rich-quick scheme! Waste bandwidth for coins! (Obvious result: increase in use of ISP transfer caps, and/or just a congested Internet for us all)
It's one stop short of "mine my new cryptocurrency by throwing away food". People will start stealing your food deliveries in order to throw them in the trash, for money.
That's the equivalent of what's happening whenever some blockchain-buzzword new scam is created, but in internet form.
So the fact that it ruins everything is why it's dangerous. It only creates problems, and only "solves" problems by the definition of "when I want to break the law then it's a problem that I'm not allowed to". That's why it's nonsense.
[1] You can't launch a free tier turing complete anything today without having ALL your resources be taken by freeloading cryptojerks. Like if your free online puzzle game was accidentally turing complete (or less, since that's not even a hard requirement) then someone somewhere will start burning all your quota and money calculating hashes.
Like if you make "the game of life" processed server side I'm sure someone will turn it into a bitcoin miner.
You've set yourself up for a question: Please give an example, with a deeper-lever perspective, of a real-world use-case for (non-crypto) blockchain that isn't better solved with non-blockchain technology.
Edit to answer this question:
> What about this is intrinsically "dangerous nonsense"?
The article isn't about the tech itself, it's about the interfaces of the tech and the real world. The problems there are shameless shilling, deception & efficiency problems.
Edit to answer this question:
> What about this is intrinsically "dangerous nonsense"?
The article isn't about the tech itself, it's about the interfaces of the tech and the real world. The problems there are shameless shilling, deception & efficiency problems.
And you've set yourself up for an answer;)
I think any adversarial system has something to gain from blockchain. When participants of a system are naturally pitted against one another due to being competitors (a la engaging in a zero-sum game), the solution is usually to agree to auditing by a third-party. However, this method is easily corruptible by replacing the auditors with biased parties[1]. This is not an uncommon problem. Try searching "biased auditors", and you'll get a wealth of literature and perspectives on the issue.
A lot of blockchain proponents are majorly against the idea of "private blockchains", but I'm not. I believe private blockchains hold a lot of promise as a way of auditing an adversarial system, in place of a corruptible third-party. Plus, auditors don't amount to much more than middle-men, and thus add an additional layer of complexity to the system, meaning more can go wrong. Redirecting the cost of auditors to maintaining a system hosted by the adversaries would result in a more lean system (by less nodes) with little chance of bias corrupting the audit process (because you can't inject former employees into a blockchain). Instead of the SEC having to oversee both the members of the network and the auditors to prevent trusts from forming, they would just need to monitor the blockchain updates.
What the technical implementation of this would look like would vary wildly by industry, and thus would require some brainstorming to ensure feasibility, but no such brainstorming would ever begin if the members of an adversarial system are convinced that blockchains are "dangerous nonsense".
Of course, such a technology would take a massive chunk from a very profitable industry, so I expect a lot of people (employed auditors) to be averse to the idea, but maybe those people need to do some soul-searching. When your job depends on the continued existence of a problem, you aren't really incentivized to diminish the problem. Rape-whistle companies sell less rape-whistles if people rape less.
[1] https://www.nasdaq.com/articles/ernst-young-auditors-to-pay-...
I think any adversarial system has something to gain from blockchain. When participants of a system are naturally pitted against one another due to being competitors (a la engaging in a zero-sum game), the solution is usually to agree to auditing by a third-party. However, this method is easily corruptible by replacing the auditors with biased parties[1]. This is not an uncommon problem. Try searching "biased auditors", and you'll get a wealth of literature and perspectives on the issue.
A lot of blockchain proponents are majorly against the idea of "private blockchains", but I'm not. I believe private blockchains hold a lot of promise as a way of auditing an adversarial system, in place of a corruptible third-party. Plus, auditors don't amount to much more than middle-men, and thus add an additional layer of complexity to the system, meaning more can go wrong. Redirecting the cost of auditors to maintaining a system hosted by the adversaries would result in a more lean system (by less nodes) with little chance of bias corrupting the audit process (because you can't inject former employees into a blockchain). Instead of the SEC having to oversee both the members of the network and the auditors to prevent trusts from forming, they would just need to monitor the blockchain updates.
What the technical implementation of this would look like would vary wildly by industry, and thus would require some brainstorming to ensure feasibility, but no such brainstorming would ever begin if the members of an adversarial system are convinced that blockchains are "dangerous nonsense".
Of course, such a technology would take a massive chunk from a very profitable industry, so I expect a lot of people (employed auditors) to be averse to the idea, but maybe those people need to do some soul-searching. When your job depends on the continued existence of a problem, you aren't really incentivized to diminish the problem. Rape-whistle companies sell less rape-whistles if people rape less.
[1] https://www.nasdaq.com/articles/ernst-young-auditors-to-pay-...
1. How do you solve the oracle problem? Blockchain can only deal with things that are on the blockchain already. Any interface to the real world suffers the trust and bias issues you described. You're just shifting the problem ever so slightly. (That's why the only real application is crypto currencies so far, because those can be realised wholly within the blockchain.)
2. How do you incentivise expending the PoW work without cryptocurrencies?
3. Why not have one central/permissioned authority issue chains of blocks, and everyone that wants can verify them cheaply? That is millions of times more efficient than PoW.
2. How do you incentivise expending the PoW work without cryptocurrencies?
3. Why not have one central/permissioned authority issue chains of blocks, and everyone that wants can verify them cheaply? That is millions of times more efficient than PoW.
All great questions, and I'll preface my response to saying that the true answers to these problems would have to be addressed in the "industry-specific brainstorming" that I mentioned. The results could look wildly different based on the problem the blockchain is addressing.
That said, the movement of "tangible assets" to "blockchain assets" is without a doubt a huge challenge for blockchains, but usually only when dealing with "real things" vs "systemic things", eg exchanging fiat for cryptocurrency. Integration into a private blockchain can be wholly systemic (so system-to-system vs reality-to-system). Integrating a new company into the system could be done by a joint effort between the members of private blockchain (who are all incentivized to help, because it's in their interest to ensure that no member of their industry goes unchecked.)
The economic incentive to commit to PoW is intrinsic to the adversarial network itself - basically, the desire of a company to survive the zero-sum game (success in such is typically measured by market share.)
To revert to a centralized authority is not an invalid approach, and may very well be the "happy medium" that allows this concept to solidify into something feasible. However, it is a "half-in, half-out" solution and is still vulnerable to corruption.
This is -of course - all speculative, but my overall point is that the discussion to reach solutions to these challenges will not be had if blockchains are written off as "dangerous nonsense".
That said, the movement of "tangible assets" to "blockchain assets" is without a doubt a huge challenge for blockchains, but usually only when dealing with "real things" vs "systemic things", eg exchanging fiat for cryptocurrency. Integration into a private blockchain can be wholly systemic (so system-to-system vs reality-to-system). Integrating a new company into the system could be done by a joint effort between the members of private blockchain (who are all incentivized to help, because it's in their interest to ensure that no member of their industry goes unchecked.)
The economic incentive to commit to PoW is intrinsic to the adversarial network itself - basically, the desire of a company to survive the zero-sum game (success in such is typically measured by market share.)
To revert to a centralized authority is not an invalid approach, and may very well be the "happy medium" that allows this concept to solidify into something feasible. However, it is a "half-in, half-out" solution and is still vulnerable to corruption.
This is -of course - all speculative, but my overall point is that the discussion to reach solutions to these challenges will not be had if blockchains are written off as "dangerous nonsense".
Short comment to say I appreciate the thoughtful response here, and that implications of public vs private blockchains in real world contexts is something I've not given enough thought to - thanks for the homework :)
"it is the only known solution to the Byzantine Generals problem that doesn't involve a centralized authority"
Did you skip that one on purpose? How do non-blockchain technologies solve the the Byzantine General's problem without relying on a (corrupt) central authority? Address this before you make more demands.
Did you skip that one on purpose? How do non-blockchain technologies solve the the Byzantine General's problem without relying on a (corrupt) central authority? Address this before you make more demands.
How does blockchain solve the Byzantine General's problem without relying on a (corrupt) central authority?
Math or not, police & courts overrule them.
Actually, blockchain isn't even mathematically a solution to BGP, is it? You need to define your actors better, here.
A 51% attack means communication can be denied. And there's still the question of how does A know that B has seen that A has seen, that B has seen…
Am I missing something?
The fact that communication happens on the blockchain doesn't mean it's not communication.
I just read a couple of articles about blockchain and BGP, and I think they all misunderstood what BGP is.
I'm A, and see that B is "committed on the blockchain to attack, assuming A is too". I can then add my block that says "I see B commits to attack. I agree let's both do this. I'll attack if you attack".
Ok. So now B sees that. Do they attack?
If you think the answer here is clear, then you've misunderstood BGP.
Math or not, police & courts overrule them.
Actually, blockchain isn't even mathematically a solution to BGP, is it? You need to define your actors better, here.
A 51% attack means communication can be denied. And there's still the question of how does A know that B has seen that A has seen, that B has seen…
Am I missing something?
The fact that communication happens on the blockchain doesn't mean it's not communication.
I just read a couple of articles about blockchain and BGP, and I think they all misunderstood what BGP is.
I'm A, and see that B is "committed on the blockchain to attack, assuming A is too". I can then add my block that says "I see B commits to attack. I agree let's both do this. I'll attack if you attack".
Ok. So now B sees that. Do they attack?
If you think the answer here is clear, then you've misunderstood BGP.
Good attempt at a deflection, I won't casually solve the very thing that is a great example of blockchain being a solution looking for a problem.
But, given the 'real world' context I tried to stress, do you think blockchain is a good solution to the variations of that problem in real world contexts?
But, given the 'real world' context I tried to stress, do you think blockchain is a good solution to the variations of that problem in real world contexts?
You think that you're onto something but your rhetoric and arguments honestly make me cringe.
People are increasingly aware that governments/authorities do not deserve the trust that they have been given + the opaque nature of the system only allows authorities to abuse their power. Thus the technology you love to hate so much does in fact serve "real world" problems and is more trusted, so much so that Ethereum for instance processes 4.5x more transactions than Visa [0].
There are many more arguments how this technology delivers real value to real people NOW, but I have no interest in entertaining more of this kind of bad faith discussions. The better technology will survive and eventually dominate, with or without you.
[0]: https://www.investing.com/news/cryptocurrency-news/ethereum-...
People are increasingly aware that governments/authorities do not deserve the trust that they have been given + the opaque nature of the system only allows authorities to abuse their power. Thus the technology you love to hate so much does in fact serve "real world" problems and is more trusted, so much so that Ethereum for instance processes 4.5x more transactions than Visa [0].
There are many more arguments how this technology delivers real value to real people NOW, but I have no interest in entertaining more of this kind of bad faith discussions. The better technology will survive and eventually dominate, with or without you.
[0]: https://www.investing.com/news/cryptocurrency-news/ethereum-...
I don't hate blockchain - the technology - it's really interesting.
Something I dislike though is that so many conversations that enquire roughly 'why not use a more traditional technology' end up with rant about not trusting governments - that is 'cringe'.
Something I dislike though is that so many conversations that enquire roughly 'why not use a more traditional technology' end up with rant about not trusting governments - that is 'cringe'.
It does not solve the Byzantine Generals problem... This has been apparent since Satoshi had to fly in to communicate from a place of authority how the protocol should be fixed to address bugs. This happened again after Satoshi's departure in 2013 [0] where the Byzantine Generals had to meet in a chatroom and be the "trusted central party" that the rest of the stakeholders followed. Without the leaders of the space being able to communicate directly on the Internet, Bitcoin would be a confused mess, since it's never clear when the longest chain should be abandoned given the ambiguous nature of bugs/features.
[0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...
[0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...
I don't consider forking to be a problem, though it very frequently gets treated like it's some silver bullet to the blockchain concept. Forking is the democratic nature of the system at work. A few key players in the system are not the only "Generals" - everybody acting as a verification node is a General, and which fork they choose to follow is still a decision that they hold. Bitcoin being young and having hiccups prompted people to listen to the "expert generals", but this isn't a function of blockchains, just society overall. Collectively choosing to abandon a long chain in favor of a short chain based on the opinions of experts is a great solution to the permanence of blockchains, which poses its own challenges. Before this incident, it was believed that a blockchain had to be 100% correct upon initialization, and any software developer should realize how much of a pipe-dream that is.
The author doesn't understand the value of distributed censorship resistant consensus that's secured by energy.
Also the author fails to consider the situation of 80% of humanity who live in countries that experience hyperinflation frequently. https://bitcoinmagazine.com/culture/check-your-financial-pri...
Also the author fails to consider the situation of 80% of humanity who live in countries that experience hyperinflation frequently. https://bitcoinmagazine.com/culture/check-your-financial-pri...
I don't think Bitcoin is a global solution for hyperinflation. It just makes it worse. If the value of your money doesn't fluctuate with your, net exports, you'd better have a very cheap industrial apparel.
You can send dollars and euros on Ethereum as well.
Proof of Work is only as good as the assumption that CPU power and energy are guaranteed to be equally distributed, also everyone must have equal access on the network. Which we've seen is not the case.
No, Proof of Work does not need to be equally distributed. Even if just one entity does all the work it is incentivized that its blocks are accepted by the community otherwise all the work was for nothing and the miner makes a loss.
People need to fix their societies and address the root causes of hyperinflation,
not tinker around the edges with blockchain etc.
The main reason for the virulent spread of blockchain is the rapid expansion of distrust in government and other regulated institutions like banks, starting from the housing crisis and accelerated through CoVid. People now more and more clearly see that all of these institutions are designed to serve themselves and the richest and the regular people are only an after thought.Block chain provides a hedge that cannot be controlled and manipulated by these institutions.
>The idea to get rid of having to trust centralized organizations might sound tempting, but it doesn’t work: Blockchains don’t get rid of “trust”, they just change, who has to be trusted.
I see this argument against crypto a lot. It's valid, but it's also missing a very very important point. With crypto, practically, you still have to trust external entities. However, you can choose who you trust. You can choose to trust entities far beyond the reach of your corrupt local government, or you can choose which financial institutions you entrust. You can distribute your trust among multiple entities. You're in control.
This isn't the case with the traditional financial system where you're pretty much forced into trusting a specific pre-selected set of options that are all substantially identical.
I see this argument against crypto a lot. It's valid, but it's also missing a very very important point. With crypto, practically, you still have to trust external entities. However, you can choose who you trust. You can choose to trust entities far beyond the reach of your corrupt local government, or you can choose which financial institutions you entrust. You can distribute your trust among multiple entities. You're in control.
This isn't the case with the traditional financial system where you're pretty much forced into trusting a specific pre-selected set of options that are all substantially identical.
>The idea to get rid of having to trust centralized organizations might sound tempting, but it doesn’t work: Blockchains don’t get rid of “trust”, they just change, who has to be trusted.
More people need to read this. Developers can betray trust too, and I'm a little tired of reading "In a shocking turn of events, new cryptocurrency previously supported by Seemingly Trustworthy Source is actually a pump-and-dump. More news at 11."
(A nonexhaustive list of examples: Save The Kids, Tether, Safemoon)
More people need to read this. Developers can betray trust too, and I'm a little tired of reading "In a shocking turn of events, new cryptocurrency previously supported by Seemingly Trustworthy Source is actually a pump-and-dump. More news at 11."
(A nonexhaustive list of examples: Save The Kids, Tether, Safemoon)
The classic crypto phrase "choose the team".
When the team consists of one person with a monkey as their profile picture and no other details other than he's rich, another is a 20year old 10x dev who's been creating smart contracts "for years", one's the cool looking marketing genius who posts on twitter a 1000 times per hour and the rest is made up of stock imagery of middle age white men who are the "advisory board"
When the team consists of one person with a monkey as their profile picture and no other details other than he's rich, another is a 20year old 10x dev who's been creating smart contracts "for years", one's the cool looking marketing genius who posts on twitter a 1000 times per hour and the rest is made up of stock imagery of middle age white men who are the "advisory board"
Not sure that holds. By that logic, Bitcoin (based on the idea of an anonymous dude no longer contactable) and Ethereum (which has split into Ethereum and Ethereum classic and has a documented history of going back on things that have been promised) are out.
Can you be a bit more specific about what it means to "choose the team" according to best practices?
Can you be a bit more specific about what it means to "choose the team" according to best practices?
Also there is a short list of ERC20 tokens that are not pump and dumps.
You know, there's credible and rational claims one can make to justify an overall negative perception of "crypto". To be skeptical of it, at the very least.
It is however concerning how of all people, a computer science student at a technical university is so closed minded, emotional, and primitive in their conclusions.
Blockchains are insecure because I say they are. Scams and stuff. I've Googled for 3 scam cases so it's only scams. Let me link you further into 3 other crypto hate blogs as "research".
Every new crypto project is useless nonsense. I've actually never used a single one of them, don't have any idea what they're about or how any of them works, but they're useless.
It's not that any of these sweeping conclusions are fully false. And with proper research one might come to similar yet probably more nuanced conclusions, the issue is that no case is made at all. It's a narrative with zero substance. If you're going to do that, at least be efficient about it: just write "crypto sucks" as headline and publish.
It is however concerning how of all people, a computer science student at a technical university is so closed minded, emotional, and primitive in their conclusions.
Blockchains are insecure because I say they are. Scams and stuff. I've Googled for 3 scam cases so it's only scams. Let me link you further into 3 other crypto hate blogs as "research".
Every new crypto project is useless nonsense. I've actually never used a single one of them, don't have any idea what they're about or how any of them works, but they're useless.
It's not that any of these sweeping conclusions are fully false. And with proper research one might come to similar yet probably more nuanced conclusions, the issue is that no case is made at all. It's a narrative with zero substance. If you're going to do that, at least be efficient about it: just write "crypto sucks" as headline and publish.
i am so sick and tired of hackernews upvoting every single "blockchain bad" article to the top that contains non-sensical and wrong information
Yep, I think it's because the HN archetype is a person who held the moral high ground on early crypto being a "scam" for normies, despite understanding it fundamentally, and those same folks are now feeling upset they didn't "get in" in time.
At least I get to see quite clearly how and why people differ. And it looks irreconcilable to me, and based on deep political and civic values.
I wish these authors would define exactly "which blockchain" they hate.
https://en.wikipedia.org/wiki/Blockchain
"A blockchain is a growing list of records, called blocks, that are securely linked together using cryptography."
So, yeah, git and mercurial are "dangerous nonsense".
But of course they're really talking about cryptocurrencies and smart contracts, right?
So why not put that in the title?
https://en.wikipedia.org/wiki/Blockchain
"A blockchain is a growing list of records, called blocks, that are securely linked together using cryptography."
So, yeah, git and mercurial are "dangerous nonsense".
But of course they're really talking about cryptocurrencies and smart contracts, right?
So why not put that in the title?
If you want to be pedantic, git isn't a block-chain so much as a tree.
But more importantly, git isn't what people usually think about when they hear block-chain. The irony is that it's probably a good example of how such systems can contribute value to society through decentralisation.
Normally, when people hear "block-chain", they think of the bitcoin-flavoured public append-only ledger where forking and merging aren't a thing, conflicts get resolved via proof of work with some built-in cryptocurrency. Those are, almost exclusively, "dangerous nonsense"
But more importantly, git isn't what people usually think about when they hear block-chain. The irony is that it's probably a good example of how such systems can contribute value to society through decentralisation.
Normally, when people hear "block-chain", they think of the bitcoin-flavoured public append-only ledger where forking and merging aren't a thing, conflicts get resolved via proof of work with some built-in cryptocurrency. Those are, almost exclusively, "dangerous nonsense"
Bitcoin is a block-tree as well, you can have diverging branches. It's just that branches are usually very short-lived due to the incentives designed into the system.
Although the summery description would seem to apply to git and mercurial, the detailed description under “structure” lists a number of features not present in those, like a PoW/PoS consensus mechanism.
"Blockchain" is an append only ledger. It has nothing to do with proof of $foo.
Certificate Transparency is a blockchain that your browser queries for every website you visit.
Certificate Transparency is a blockchain that your browser queries for every website you visit.
We’re ultimately arguing semantics, but I think this is a pretty clear case where both conventional and academic usage of “blockchain” implies a consensus mechanism in addition to an append-only data structure. Certificate chains and Merkle trees existed long before the term blockchain was popularized.
You are conflating definitions to dismiss an otherwise useful, and at this point foundational, technology.
If you just don't like the name blockchain, we can call it Fluffernutterstructures.
If you just don't like the name blockchain, we can call it Fluffernutterstructures.
This is a problem of how exactly you define the word "blockchain" - you can meaningfully define it to I either include Git (as the first proposition on Wikipedia does) or to exclude it (e.g. by adding a consensus mechanism to the definition, which excludes Git but keeps Bitcoin, Ethereum, Ethereum PoS etc).
The important thing is that the article is very clearly referencing the concept of a blockchain used as a permission-less DB, which Git clearly isn't. None of the arguments in the article apply to Git, and saying "Well, but Git is a block chain" would not make the article moot - the author at best needs to clarify that they are talking about a blockchain + consensus mechanism.
I'd also note that Git and Hg predate the first use of the term "Block chain" (2011, according to Merriam-Webster) by 6 years, and their design was in turn inspired by even older systems.
The Merkle tree or Hash tree data structure that underlies the design was invented in 1979, and also fits the definition of "block chain" on Wikipedia.
The important thing is that the article is very clearly referencing the concept of a blockchain used as a permission-less DB, which Git clearly isn't. None of the arguments in the article apply to Git, and saying "Well, but Git is a block chain" would not make the article moot - the author at best needs to clarify that they are talking about a blockchain + consensus mechanism.
I'd also note that Git and Hg predate the first use of the term "Block chain" (2011, according to Merriam-Webster) by 6 years, and their design was in turn inspired by even older systems.
The Merkle tree or Hash tree data structure that underlies the design was invented in 1979, and also fits the definition of "block chain" on Wikipedia.
First time I've seen anyone call git and mercurial a blockchain.
The basic definition of a blockchain covers the implementation of git.
https://stackoverflow.com/a/67090776
> Why is Git not considered a "block chain"?
> ....
> And this is what Git does, and hence Git is a blockchain, or works as one, if you prefer.
> To close the circle, let's ask again: Why is Git not considered a “block chain”? It could be because many people, perhaps even a large majority, do not focus on the essence of a concept but on blinking accidents.
I guess, as the question/answer implies, ultimately, it's personal opinion.
I look at Git and other DVCSs implementations and see that they match the definition of blockchain.
> A blockchain is a growing list of records, called blocks, that are securely linked together using cryptography.[1][2][3][4] Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leafs).
https://en.wikipedia.org/wiki/Blockchain (and... 'see also Version Control' on the same page...)
https://stackoverflow.com/a/67090776
> Why is Git not considered a "block chain"?
> ....
> And this is what Git does, and hence Git is a blockchain, or works as one, if you prefer.
> To close the circle, let's ask again: Why is Git not considered a “block chain”? It could be because many people, perhaps even a large majority, do not focus on the essence of a concept but on blinking accidents.
I guess, as the question/answer implies, ultimately, it's personal opinion.
I look at Git and other DVCSs implementations and see that they match the definition of blockchain.
> A blockchain is a growing list of records, called blocks, that are securely linked together using cryptography.[1][2][3][4] Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leafs).
https://en.wikipedia.org/wiki/Blockchain (and... 'see also Version Control' on the same page...)
Interesting. So the one useful application of blockchain technology is the one application that's not commonly called blockchain.
Perhaps? I think so, but I appreciate other people clearly have different (strong!) opinions on it.
Coming from academia, I take the definition in the wiki page (I keep quoting, sorry), and for me, that neatly defines, most modern DVCSs.
Coming from academia, I take the definition in the wiki page (I keep quoting, sorry), and for me, that neatly defines, most modern DVCSs.
Yes, same. Probably some bad digestion ongoing.
Because only the crypto scams use blockchain for their marketing.
Blockchains have blocks, with some distributed consensus mechanism to decide which chain of blocks is trusted most.
Please run this article through a spellcheck. There are just about 1-2 typos per paragraph through the piece, and it's extremely distracting.
Example of two typos in two consecutive sentences:
>Blinded by the shine of the *enrmous* revenues of the crypto bubble, a lot of companies and government organizations look over that. *Everbody* wants a piece of the tasty blockchain cake and tries to shove a little blockchain into something, anything.
Example of two typos in two consecutive sentences:
>Blinded by the shine of the *enrmous* revenues of the crypto bubble, a lot of companies and government organizations look over that. *Everbody* wants a piece of the tasty blockchain cake and tries to shove a little blockchain into something, anything.
You're right, sorry. Most typos should be fixed now. I made the translation into English in a rush and didn't think of running it through a spellcheck beforehand. Thanks for reminding me!
It's interesting how the radicalisation of crypto-advocates seems to be radicalising the critics just as much.
I see this in myself too: I used to be very sceptical of cryptocurrencies, but generally liked the idea as a concept. I used to think of it as a technology in need of some more smart ideas before it could eventually become very stable.
But with time, and specially with the appearance of NFTs (which, let's be clear about it, are nothing more than a scam in 99% of cases), as well as the incredibly bullshit I heard from some web3 advocates, I ended up hating anything crypto, including cryptocurrencies, which I objectively find to be one very useful application of public append-only ledgers.
So here's the thing: I think at some point, the bubble will burst. It has to, at some point; that's just inevitable for a bubble of this size. NFTs will crash and be forgotten for a few years until some legitimate applications start to show up.
Web3 will either be talked about until web4 comes around (whatever unfounded hype that will be about) and quickly forgotten, or it will stay around long enough to show to the world how utterly pointless the whole idea really is. In either case, it isn't here to stay.
Bitcoin will probably stay around for a while, constantly increasing in value as wallets continue to be lost until at some point it is accepted that it simply isn't sustainable anymore. At that point, people will probably jump over to some newer cryptocurrency, hopefully a more reasonable one without too much bullshit built in.
I see this in myself too: I used to be very sceptical of cryptocurrencies, but generally liked the idea as a concept. I used to think of it as a technology in need of some more smart ideas before it could eventually become very stable.
But with time, and specially with the appearance of NFTs (which, let's be clear about it, are nothing more than a scam in 99% of cases), as well as the incredibly bullshit I heard from some web3 advocates, I ended up hating anything crypto, including cryptocurrencies, which I objectively find to be one very useful application of public append-only ledgers.
So here's the thing: I think at some point, the bubble will burst. It has to, at some point; that's just inevitable for a bubble of this size. NFTs will crash and be forgotten for a few years until some legitimate applications start to show up.
Web3 will either be talked about until web4 comes around (whatever unfounded hype that will be about) and quickly forgotten, or it will stay around long enough to show to the world how utterly pointless the whole idea really is. In either case, it isn't here to stay.
Bitcoin will probably stay around for a while, constantly increasing in value as wallets continue to be lost until at some point it is accepted that it simply isn't sustainable anymore. At that point, people will probably jump over to some newer cryptocurrency, hopefully a more reasonable one without too much bullshit built in.
Blockchain is a perfect example, how tech folks want resolve humanitarians problems/issues with _tech_ solution.
(Spoiler)
It doesn't work
I was able to buy a tshirt I wanted using Ethereum as the only two options were PayPal (which is blocked from use in my country) and crypto.
I was also able to donate money to Ukrania in war literally in a Sunday night in 30 seconds, again with Ethereum.
Yeah, "dangerous nonsense".
I was also able to donate money to Ukrania in war literally in a Sunday night in 30 seconds, again with Ethereum.
Yeah, "dangerous nonsense".
> The idea to get rid of having to trust centralized organizations might sound tempting, but it doesn’t work: Blockchains don’t get rid of “trust”, they just change, who has to be trusted.
What if a group of trusted organizations run a blockchain together?
What if a group of trusted organizations run a blockchain together?
Plenty of people trying to sell private blockchain snake-oil for precisely that purpose.
It’s all rubbish, just use a database.
Certificate transparency is a permissioned blockchain (a merkle hash tree), ran by a group of trusted organizations and observed by third party monitors ("validators"). Your browser probably queried that blockchain when you opened hackernews.
It's a Merkle hash tree.
You can call that a blockchain if you want, but we already have a much older and more specific term for it: Merkle hash tree.
You can call that a blockchain if you want, but we already have a much older and more specific term for it: Merkle hash tree.
Sure, I just wanted to point out that building merkle hash trees, or blockchains, or whatever you want to call it, isn't "all rubbish". There are some valid use cases.
My point was that people who talk about blockchain typically refer to something other than a Merkle hash tree - they refer to a hash tree plus some consensus mechanism for trustless addition. I don't know of a term other than "blockchain" that can be used to refer to this concept.
It doesn’t even have to be trustless, some of this crap is using RAFT (for speed), the assumption being that the participants are all trusted.
the blockchain is just a database. a database timed and validated by block.
After all a database has advantages / constraints.
They could also just run a SQL database together and it'd be much less complicated and more efficient.
Certificate transparency logs are essentially a blockchain. Would you prefer Google and the other stakeholders to run an SQL database instead, containing these logs?
To be honest I don't know anything about certificate transparency logs. Maybe they should be on a blockchain. It doesn't mean money should be on a blockchain.
I mean this is just a dumb argument. Who hosts the database? How do you trust them? It's as if people are being wilfully ignorant when they use this as a line of attack. Go learn about Byzantine fault tolerance and think a bit about what problems it attempts to solve
Then it'll automatically be seen as an attempt to build a cartel and keep competition out of the particular domain they operate in.
These kind of networks exist. Not all of them rely on a blockchain datastructure. In general, they are thousands of times more efficient than a system like bitcoin, and require no mining, however, are subject to the whims of the various political jurisdictions that those organizations exist under.
[deleted]
Like the one for Certificate Transparency: https://certificate.transparency.dev/logs/
Then it's just a regular network, hence why permissioned / private blockchains are a lies to crypto enthusiasts
Nothing new. Waste of time!
Lot of Strawman fallacies
Strange that the article doesn't mention the dangerous nonsense regarding the impact on energy consumption (and impact on climate), and impact on parts availability (or lack thereof, eg. graphic cards), with absolutely zero benefit.
Blockchains should be banned and be considered pyramid-scheme fraud. Trading or paying with blockchain-based currency should be forbidden.
Blockchains should be banned and be considered pyramid-scheme fraud. Trading or paying with blockchain-based currency should be forbidden.
The main benefit of cryptocurrency is you cannot be prevented from transacting by governments. This is also a big downside as it provides a mechanism for all kinds of crime we would rather not encourage.
But crypto brings too many other problems: climate change; local pollution; scams; gambling addiction; sucks up tech talent that could be working on something else;
But crypto brings too many other problems: climate change; local pollution; scams; gambling addiction; sucks up tech talent that could be working on something else;
> “trust in institutions controlled by humans and bound by established laws and rules is instead replaced — by unconditional trust in the infallibility of code“
No, it’s not just trust in code, you’re also trusting the people that wrote the crypto coin client apps and operate the crypto exchanges. Sketchy crypto apps and exchanges already have made off with clients’ coins. That’s not a blockchain vulnerability, rather that’s a vulnerability in every market where you transact through brokers - you’re implicitly trusting your brokers.
A Blockchain is just a linked list of records with accumulative crypto signatures, which gives a you a crypto-verifiable indelible ledger. To make it a trusted financial ledger you just need to have trust in everyone involved between the finance clients and the ledger.
No, it’s not just trust in code, you’re also trusting the people that wrote the crypto coin client apps and operate the crypto exchanges. Sketchy crypto apps and exchanges already have made off with clients’ coins. That’s not a blockchain vulnerability, rather that’s a vulnerability in every market where you transact through brokers - you’re implicitly trusting your brokers.
A Blockchain is just a linked list of records with accumulative crypto signatures, which gives a you a crypto-verifiable indelible ledger. To make it a trusted financial ledger you just need to have trust in everyone involved between the finance clients and the ledger.
Block lattice > Blockchain, and anyone who write a long-ass article about how pointless/dangerous/dumb cryptocurrencies are without mentioning block lattice is about 6 years behind the times.
The fact that so far this has been the case for every ranticle I've seen on HN the past 6 years would suggest that we aren't as quick to recognise new tech as we'd like to think - not by a long, long long shot.
This probably sounds like a pitch, because I'm not a marketer, but the facts are the facts. Block lattice outperforms blockchain on every metric, and never gets talked about here.
The fact that so far this has been the case for every ranticle I've seen on HN the past 6 years would suggest that we aren't as quick to recognise new tech as we'd like to think - not by a long, long long shot.
This probably sounds like a pitch, because I'm not a marketer, but the facts are the facts. Block lattice outperforms blockchain on every metric, and never gets talked about here.
What a nothing burger of an article.
The author cannot see value in self-sovereign, censorship resistant, permission-less monetary systems, fine, however, to claim "crypto" is dangerous nonsense because "fraud" is ridiculous.
> As code is written by humans, it’s seldom actually infallible.
Absolutely true, it doesn't have to be perfect, it has to be good enough. With over a decade as a high value target, most serious crypto projects have proved their code is the latter.
The author cannot see value in self-sovereign, censorship resistant, permission-less monetary systems, fine, however, to claim "crypto" is dangerous nonsense because "fraud" is ridiculous.
> As code is written by humans, it’s seldom actually infallible.
Absolutely true, it doesn't have to be perfect, it has to be good enough. With over a decade as a high value target, most serious crypto projects have proved their code is the latter.
How does this even get upvoted..
> Blockchains don’t get rid of “trust”, they just change, who has to be trusted.
I don't trust this author for a start
I think one of the biggest use cases for blockchains is missing: getting investment into technology approved by sprinkling in some DLT. Doesn't have to matter really (i.e., private permissioned "DLT" in some corner) but gets funds flowing in quite a few organizations.
I like these articles as they will probably bring blockchain to a better state
Even if we all know knifes are dangerous
Probably in the future most enterprise applications will have some sort of transaction blockchain for auditing
Even if we all know knifes are dangerous
Probably in the future most enterprise applications will have some sort of transaction blockchain for auditing
If I want a transaction to be guaranteed by a third party, I still can with blockchain. I can send the funds to them and let them manage. If I don’t want, I send them directly to the addressee. At least I have a choice. On the contrary, today any transaction has to pass through a government controlled currency, and any significant amount via a bank.
Saying that X is made of code that may have errors so it's not useful, is a ridiculous argument. The person saying this is gaining attention posting things on a platform that is made of code that has a chance of errors.
They should write down their anger on calf skin parchment delivered by hand by a hundred centuries old post system, to be coherent.
The future is elsewhere, that past is already gone.
Saying that X is made of code that may have errors so it's not useful, is a ridiculous argument. The person saying this is gaining attention posting things on a platform that is made of code that has a chance of errors.
They should write down their anger on calf skin parchment delivered by hand by a hundred centuries old post system, to be coherent.
The future is elsewhere, that past is already gone.
I'm a blockchain sceptic but I think this is too harsh. The arguments are mostly taken from Bruce Schneier's (better) article, available here: https://www.schneier.com/blog/archives/2019/02/blockchain_an.... There, he says:
> Honestly, cryptocurrencies are useless. They’re only used by speculators looking for quick riches, people who don’t like government-backed currencies, and criminals who want a black-market way to exchange money.
and he points out that many forms of trust provided by e.g. credit cards or currencies are non-technical and not solved by blockchain. For example, they allow you to cancel a transaction you made by mistake, or to prevent someone stealing your card.
This is fair, but note:
(1) we use cash, and sensible people don't want to abolish cash, even though it has the same problems as bitcoin (e.g., if you lose your wallet, you lose your money; someone can steal it from you) (2) services can be layered upon bitcoin, just as they can be layered upon cash. For example, if someone steals your cash, you can go to the police. And if someone steals your bitcoin, you can go to the police. (I appreciate that if "someone" is in Russia, you're out of luck as of 2022.) Similarly, an honest retailer will refund your cash for a mistaken transaction, and they could do the same for bitcoin. (3) The set of "people who don’t like government-backed currencies" is quite large, and it is not limited to libertarian ideologues. Especially, many people in developing countries would like their savings to be safe from government-caused inflation and/or from "financial repression" where interest rates are kept artificially low to support favoured borrowers.
This suggests that cryptocurrency has at least one valid use: an alternative to gold. I don't know if there are any others.
> Honestly, cryptocurrencies are useless. They’re only used by speculators looking for quick riches, people who don’t like government-backed currencies, and criminals who want a black-market way to exchange money.
and he points out that many forms of trust provided by e.g. credit cards or currencies are non-technical and not solved by blockchain. For example, they allow you to cancel a transaction you made by mistake, or to prevent someone stealing your card.
This is fair, but note:
(1) we use cash, and sensible people don't want to abolish cash, even though it has the same problems as bitcoin (e.g., if you lose your wallet, you lose your money; someone can steal it from you) (2) services can be layered upon bitcoin, just as they can be layered upon cash. For example, if someone steals your cash, you can go to the police. And if someone steals your bitcoin, you can go to the police. (I appreciate that if "someone" is in Russia, you're out of luck as of 2022.) Similarly, an honest retailer will refund your cash for a mistaken transaction, and they could do the same for bitcoin. (3) The set of "people who don’t like government-backed currencies" is quite large, and it is not limited to libertarian ideologues. Especially, many people in developing countries would like their savings to be safe from government-caused inflation and/or from "financial repression" where interest rates are kept artificially low to support favoured borrowers.
This suggests that cryptocurrency has at least one valid use: an alternative to gold. I don't know if there are any others.
A little off topic, are there any research on political tendencies/alignments of people who are defending or criticising block chain or crypto currency technology?
This is such a poorly written and nonsensical article. I get the hate for blockchain but please at least share something that makes sense.
Recently on Odd Lots, SBF offered to race to transfer $100,000 to the person sitting at the next desk over. The opponent could use tools such as wire transfers or checks or walking to a bank to ask to withdraw 1,000 $100 bills to send dollars, and SBF would use USDC. The person whose recipient receives the $100,000 earlier would win the race. A variation of this exercise where the money must be sent to someone in a foreign country was also proposed.
Is winning such races at all valuable?
Is winning such races at all valuable?
Depending where you live, can do that in traditional banking mobile phone apps pretty fast. The instant transfers with the European SEPA are up to €100k, I think, and they need maybe a few seconds (max. 10s AFAIK).
Not sure what the use cases for high frequency cash transfer in sub second space are.
Not sure what the use cases for high frequency cash transfer in sub second space are.
Unfortunately the podcast was recorded in the US. For people sending money domestically in the US, like SBF was proposing, it's more likely to be 1-2 business days of latency (so add 2-3 days to that if you happen to try to send it on the last weekday of the week, naturally) and consumer banks commonly prevent such transactions from occurring at all. For example they may impose much smaller limits on the daily amount transferred, so the client must make phone calls and pay fees on many different business days.
The situation is a bit worse for US people living outside the US. My baseline experience for cash transfers between my own accounts involves about 1 week of latency and some phone calls at like 2 in the morning :)
The situation is a bit worse for US people living outside the US. My baseline experience for cash transfers between my own accounts involves about 1 week of latency and some phone calls at like 2 in the morning :)
US banking/payment system just seems so broken from across the pond... Account to account transfers are just super normal where I live (not always using the instant method, because no need...).
There are usually lower limits on daily transfer here as well, but you can change them. I think €100k is more a system limit, but I might be wrong.
There are usually lower limits on daily transfer here as well, but you can change them. I think €100k is more a system limit, but I might be wrong.
> Blockchain doesn’t solve anything
Blockchains solve state-machine replication in a distributed, permissionless, partially synchronous setting with Byzantine fault tolerance. This is a fundamental breakthrough in distributed systems. It's up to us to figure out what to do with it.
Blockchains solve state-machine replication in a distributed, permissionless, partially synchronous setting with Byzantine fault tolerance. This is a fundamental breakthrough in distributed systems. It's up to us to figure out what to do with it.
Tell me you have not used Defi without telling you have not used Defi.
See you in 10 years
> A recent example for this insanity from here in Germany is the development of the digital vaccination certificate in early 2021. In the beginning it was planned to use blockchain technology. In this specific case they wanted to use not only one, but five. Why? Nobody knew exactly and after massive criticism from the public the plan was dropped and replaced by a simpler architecture without blockchains, that’s still in use now.
Just because some people are using the wrong tool for the job does not make a blockchain "nonsense" for all jobs.
Bitcoin does provide a lot of value for me as a currency. A credit card payment processor once chose to disable the company's account I worked for [1]. Bitcoin enabled us to not having to immediately let go members of our team. I'm actually glad that there are so many people out there in the tech community who are happy to pay with Bitcoin.
I don't see any value in all the alt coins though. Most of the crypto purchases at the SaaS were made with Bitcoin. All those alt coins with their own blockchain are just made for junkies for love trading by charts. Just pure speculation and the side with more liquidity wins. Furthermore, the only application of blockchains which I have seen as a value creation tool is the application as the public ledger in Bitcoin.
Also, let me quote Hal Finney why alt coins don't work: "Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won't happen again?
Rebooting now may benefit a few thousand early adopters. What happens when hundreds of millions use Bitcoin 2? They'll be just as jealous and envious of you as you are of others. Given the precedent you want to set, how will you argue against yet another reboot?" [2]
[1] https://news.ycombinator.com/item?id=30632086
[2] https://bitcointalk.org/index.php?topic=10666.msg152988#msg1...
Just because some people are using the wrong tool for the job does not make a blockchain "nonsense" for all jobs.
Bitcoin does provide a lot of value for me as a currency. A credit card payment processor once chose to disable the company's account I worked for [1]. Bitcoin enabled us to not having to immediately let go members of our team. I'm actually glad that there are so many people out there in the tech community who are happy to pay with Bitcoin.
I don't see any value in all the alt coins though. Most of the crypto purchases at the SaaS were made with Bitcoin. All those alt coins with their own blockchain are just made for junkies for love trading by charts. Just pure speculation and the side with more liquidity wins. Furthermore, the only application of blockchains which I have seen as a value creation tool is the application as the public ledger in Bitcoin.
Also, let me quote Hal Finney why alt coins don't work: "Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won't happen again?
Rebooting now may benefit a few thousand early adopters. What happens when hundreds of millions use Bitcoin 2? They'll be just as jealous and envious of you as you are of others. Given the precedent you want to set, how will you argue against yet another reboot?" [2]
[1] https://news.ycombinator.com/item?id=30632086
[2] https://bitcointalk.org/index.php?topic=10666.msg152988#msg1...
> Text explains why a thing is generally bad
> Text gives an example of said thing being used
> Comment points out how the example doesn't prove the thing is bad
Congratulations, you've almost figured out how examples work.
> Text gives an example of said thing being used
> Comment points out how the example doesn't prove the thing is bad
Congratulations, you've almost figured out how examples work.
Have you read the whole article? The author claims that "Neither I or anybody I know has ever heard of any usage of blockchain that’s in any way useful".
Well, I'm just trying to say that Bitcoin is actually useful, but the other applications are not :)
Well, I'm just trying to say that Bitcoin is actually useful, but the other applications are not :)
>Also, let me quote Hal Finney why alt coins don't work: "Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won't happen again?
Under this logic, Geocities must be the predominant social media service today. Because if MySpace were able to replace it, how would investors know the same could not later happen to MySpace with Facebook, etc.?
Under this logic, Geocities must be the predominant social media service today. Because if MySpace were able to replace it, how would investors know the same could not later happen to MySpace with Facebook, etc.?
I don't think you can compare a deflationary currency with an actual service.
Look, a social media service has way more features and works in a completely different way than transferring wealth from Alice to Bob.
Look, a social media service has way more features and works in a completely different way than transferring wealth from Alice to Bob.
it amazes me how this type of garbage gets upvoted on HN just because it signals "Blockchain Bad!!"
Let's catch some low hanging fruit:
"blockchains can’t do anything against ... plain old typos in a coin transfer."
It is difficult to use properly crafted software and form a tx to a non-existent address on Bitcoin. It is not impossible, but not easy. The typical consumer is not meant to use layer-1 finance tools in any digital domain, modern, traditional, or blockchain based. Its not that hard to conceive of Bitcoin banks which have the same protections whilst offering currency sovereignty impossible in status quo finance.
https://www.reddit.com/r/Bitcoin/comments/26s1i5/can_you_los...
"However, in the world of blockchain there is no human supervisory authority."
There certainly are. One of the biggest hacks in history was reverted by human supervisory authority and community migration. This is an extremely unlikely method to help individuals who make some any mistakes on layer-1, however.
"The absolutely perverted energy usage in times of climate change is only one of those (this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency)."
This is a 'using energy bad' argument. With this logic we can also write off automobiles, smart-phones, artificial intelligence, hamburgers; if you do not quantify the value vs. the cost you cannot make an argument. Crypto skeptics are usually incapable of steelmanning the value proposition of crypto and make circular arguments like "crypto is not valuable because it uses so much energy," or appeals to their own ignorance.
You can't say Bitcoin is inefficient if you don't understand (or demonstrate that you understand) what it does. Somehow skeptics believe the proper response to pointing this out is to retort "I know what Bitcoin does, it uses energy to promote gambling!" That is not the response of a tech literate critic.
"this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency"
Proof of work is intensely 'out of style' even in the crypto space and sans Bitcoin and its much smaller forks (which almost invariably use mere fractions of Bitcoin's energy) there are only a few new, layer-1, relevant projects sticking to proof of work. Equating the number of tokens which exist on smart contract languages to the amount of energy used by proof of work is deceptive.
"(By the way: some of the advantages promised by blockchains, but without the nonsense, is implemented by Merkle trees 9. They already exist since 1979 and blockchains build on their technology. But please don’t also start trying to use Merkle trees for stuff it’s not useful for.)"
This is nonsense. It's like saying you have all the advantages of a cart or carriage by simply removing everything but the wheels.
"The main objective of blockchain is to decentralize trust and consent (even that it doesn’t do well, as explained"
This was not explained (you only need read a few paragraphs to prove this), and the author failed to state the view they are claiming to lampoon therefore have not demonstrated they understand what they are critiquing.
Let's acknowledge what the blog post gets correct:
There was, and still is to a lesser extent, an epidemic of trying to solve problems by engineering a blockchain solution. The absolute culling of anything spurious from the last market cycle has greatly decreased those endeavors and most money is in tokens on existing layer-1 protocols at this point. Skeptics and believers alike appreciate that mentality being ousted. Decentralizing services doesn't require a new chain for every new use innovation. Most of the important decentralization can be done off chain since most data isn't so important as Bitcoin account balances.
There is a large number of speculative 'scams,' or more realistically failed projects up-selling their potential. The likelihood of one's success investing in crypto without having done significant research or access to a trusted person who has is low. If a team has found genuine innovation the messaging around it will immediately be co-opted competent and incompetent, honest and malicious teams. You cannot determine which teams are competent and honest from their messaging alone, it takes digging. It is not a welcome or recommended place for anyone who cannot do and understand the results of serious digging.
Take it from someone who believes in the value of blockchain tech and has undoubtedly spent more time than the author listening to other 'believers:' most people bullish on crypto share the same valid complaints the skeptics make (this author makes all the cliche mistakes on top of the valid ones).
Not only that, but those serious in the space welcome critiques of the technology. Blog posts like this which are largely fueled by emotion and ignorance are denounced by dogmatic believers and scammers for bad reasons, but they are also ignored by honest believers for good reasons. Honest believers are receptive to competent feedback but this blog post is more of the same ignorance.
"blockchains can’t do anything against ... plain old typos in a coin transfer."
It is difficult to use properly crafted software and form a tx to a non-existent address on Bitcoin. It is not impossible, but not easy. The typical consumer is not meant to use layer-1 finance tools in any digital domain, modern, traditional, or blockchain based. Its not that hard to conceive of Bitcoin banks which have the same protections whilst offering currency sovereignty impossible in status quo finance.
https://www.reddit.com/r/Bitcoin/comments/26s1i5/can_you_los...
"However, in the world of blockchain there is no human supervisory authority."
There certainly are. One of the biggest hacks in history was reverted by human supervisory authority and community migration. This is an extremely unlikely method to help individuals who make some any mistakes on layer-1, however.
"The absolutely perverted energy usage in times of climate change is only one of those (this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency)."
This is a 'using energy bad' argument. With this logic we can also write off automobiles, smart-phones, artificial intelligence, hamburgers; if you do not quantify the value vs. the cost you cannot make an argument. Crypto skeptics are usually incapable of steelmanning the value proposition of crypto and make circular arguments like "crypto is not valuable because it uses so much energy," or appeals to their own ignorance.
You can't say Bitcoin is inefficient if you don't understand (or demonstrate that you understand) what it does. Somehow skeptics believe the proper response to pointing this out is to retort "I know what Bitcoin does, it uses energy to promote gambling!" That is not the response of a tech literate critic.
"this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency"
Proof of work is intensely 'out of style' even in the crypto space and sans Bitcoin and its much smaller forks (which almost invariably use mere fractions of Bitcoin's energy) there are only a few new, layer-1, relevant projects sticking to proof of work. Equating the number of tokens which exist on smart contract languages to the amount of energy used by proof of work is deceptive.
"(By the way: some of the advantages promised by blockchains, but without the nonsense, is implemented by Merkle trees 9. They already exist since 1979 and blockchains build on their technology. But please don’t also start trying to use Merkle trees for stuff it’s not useful for.)"
This is nonsense. It's like saying you have all the advantages of a cart or carriage by simply removing everything but the wheels.
"The main objective of blockchain is to decentralize trust and consent (even that it doesn’t do well, as explained"
This was not explained (you only need read a few paragraphs to prove this), and the author failed to state the view they are claiming to lampoon therefore have not demonstrated they understand what they are critiquing.
Let's acknowledge what the blog post gets correct:
There was, and still is to a lesser extent, an epidemic of trying to solve problems by engineering a blockchain solution. The absolute culling of anything spurious from the last market cycle has greatly decreased those endeavors and most money is in tokens on existing layer-1 protocols at this point. Skeptics and believers alike appreciate that mentality being ousted. Decentralizing services doesn't require a new chain for every new use innovation. Most of the important decentralization can be done off chain since most data isn't so important as Bitcoin account balances.
There is a large number of speculative 'scams,' or more realistically failed projects up-selling their potential. The likelihood of one's success investing in crypto without having done significant research or access to a trusted person who has is low. If a team has found genuine innovation the messaging around it will immediately be co-opted competent and incompetent, honest and malicious teams. You cannot determine which teams are competent and honest from their messaging alone, it takes digging. It is not a welcome or recommended place for anyone who cannot do and understand the results of serious digging.
Take it from someone who believes in the value of blockchain tech and has undoubtedly spent more time than the author listening to other 'believers:' most people bullish on crypto share the same valid complaints the skeptics make (this author makes all the cliche mistakes on top of the valid ones).
Not only that, but those serious in the space welcome critiques of the technology. Blog posts like this which are largely fueled by emotion and ignorance are denounced by dogmatic believers and scammers for bad reasons, but they are also ignored by honest believers for good reasons. Honest believers are receptive to competent feedback but this blog post is more of the same ignorance.
They are absolutely not nonsense. As a citizen living in a thirld-world country, with a very authoritarian government that seizes property and confiscates goods, I can tell you that Bitcoin is the ONLY method I have to transfer value in and out of the country. I don't save money or treat it like stocks, I just transfer money.
Bitcoin works, in the real world. It has worked flawlessly for over 10 years. Whether people speculate on its value, whether there are unrelated scams that use the word 'blockchain', whether people mistakenly write the address and lose money, or whether transactions have 'no refunds', that doesn't take any of the value. It was a known danger from the very beginning.
This article, on the other hand, is complete nonsense. Same as most takes that conflate Bitcoin with blockchain with NFTs with pyramid schemes and throwing them all into one big bag.
PS: I can only speak for the Bitcoin (proof of work) blockchain. It's innovative, it passed the test of time, and it's secure due to how strengthened it is.
Bitcoin works, in the real world. It has worked flawlessly for over 10 years. Whether people speculate on its value, whether there are unrelated scams that use the word 'blockchain', whether people mistakenly write the address and lose money, or whether transactions have 'no refunds', that doesn't take any of the value. It was a known danger from the very beginning.
This article, on the other hand, is complete nonsense. Same as most takes that conflate Bitcoin with blockchain with NFTs with pyramid schemes and throwing them all into one big bag.
PS: I can only speak for the Bitcoin (proof of work) blockchain. It's innovative, it passed the test of time, and it's secure due to how strengthened it is.
The first argument boils down to "I need a central entity to fix mistakes". That does not necessarily apply to everything.
An immutable ledger sounds like something that could be useful. Myself I can't think of any uses besides crypto, but the fact that I can't find any use for a technology myself doesn't turn it into "dangerous nonsense"
An immutable ledger sounds like something that could be useful. Myself I can't think of any uses besides crypto, but the fact that I can't find any use for a technology myself doesn't turn it into "dangerous nonsense"
In quite a lot of cases it's because we need someone to take responsibility for the actions of an entity, or the blame when something goes wrong. In cases like that the blockchain won't really change much, and it ends up being another technology/process that is available.
That being said, I'm sure there are other cases where the blockchain can be used. The problem is that it's currently used as the proverbial hammer, making every problem look like a nail.
That being said, I'm sure there are other cases where the blockchain can be used. The problem is that it's currently used as the proverbial hammer, making every problem look like a nail.
Oh, you're about to enter the world of wonders: https://ethereum.org/en/dapps/#explore
I found a use for it: Doxxing.
> Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans.
Why do people keep repeating this obviously false idea? Fraud happens with bank transfers all the time and banks don't reverse them. There are humans reviewing it, and they say "hmm, looks like the money's gone, sorry."
Why do people keep repeating this obviously false idea? Fraud happens with bank transfers all the time and banks don't reverse them. There are humans reviewing it, and they say "hmm, looks like the money's gone, sorry."
Next time please write hacker news is dangerous it promotes nonsense articles.
I think everyone who upvoted this post didnt even read the article
The article says that the trust is being shifted from humans to code, ("in code we trust"),
However, that's NOT true with blockchains.
For public blockchains, the trust is still with humans. The only difference is that there are many more humans who are looking after the open-sourced code, verifying the databases, checking the transactions. Participation is opt-in, and anyone can look in, and since there are many humans participating in it, it is very hard to change something.
Therefore, we do not simply trust the code. We put trust in decentralization, and make sure that power is not concentrated by just a few humans.
In contrast, our legacy financial system is mostly digital now, and it's a giant back box. All of the code is closed source, we can never review it, yet we are forced to participate in it. The data of our legacy financial system is stored in centralized databases that only a few unelected officials control and gate-keep.
Decentralization is the main feature.
However, that's NOT true with blockchains.
For public blockchains, the trust is still with humans. The only difference is that there are many more humans who are looking after the open-sourced code, verifying the databases, checking the transactions. Participation is opt-in, and anyone can look in, and since there are many humans participating in it, it is very hard to change something.
Therefore, we do not simply trust the code. We put trust in decentralization, and make sure that power is not concentrated by just a few humans.
In contrast, our legacy financial system is mostly digital now, and it's a giant back box. All of the code is closed source, we can never review it, yet we are forced to participate in it. The data of our legacy financial system is stored in centralized databases that only a few unelected officials control and gate-keep.
Decentralization is the main feature.
> But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.
Nirvana fallacy. Bitcoin allows people to control their own money, if they decide to give it to scammers, it's not Bitcoins fault.
> The absolutely perverted energy usage in times of climate change is only one of those (this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency). [8]
Bitcoin provides truly self-custodial, borderless money to the world and only causes <0.1% of CO2. Crypto donations to Ukraine worked flawlessly in the current time of war in which national banks are not fully operational. Refugees are able to travel with their funds simply by remembering a few words.
I would not call that "perverted energy usage".
Video streaming, video games, porn, dryers are causing similar or higher CO2 emissions. Wasted foods alone cause 6% of CO2. Calling these emissions useful but at the same time denying unbanked people access to financial services reeks of financial privilege.
Also the cited source [8] is an employee of the dutch central bank which is probably as opposed to Bitcoin and cryptocurrency as you can possibly get.
The rest of the article cites several projects which use the blockchain label to generate publicity. While this criticism is warranted, it should be directed at the projects, not at blockchain tech in general.
Nirvana fallacy. Bitcoin allows people to control their own money, if they decide to give it to scammers, it's not Bitcoins fault.
> The absolutely perverted energy usage in times of climate change is only one of those (this is mainly caused by proof-of-work, still used by all relevant public blockchains, and general inefficiency). [8]
Bitcoin provides truly self-custodial, borderless money to the world and only causes <0.1% of CO2. Crypto donations to Ukraine worked flawlessly in the current time of war in which national banks are not fully operational. Refugees are able to travel with their funds simply by remembering a few words.
I would not call that "perverted energy usage".
Video streaming, video games, porn, dryers are causing similar or higher CO2 emissions. Wasted foods alone cause 6% of CO2. Calling these emissions useful but at the same time denying unbanked people access to financial services reeks of financial privilege.
Also the cited source [8] is an employee of the dutch central bank which is probably as opposed to Bitcoin and cryptocurrency as you can possibly get.
The rest of the article cites several projects which use the blockchain label to generate publicity. While this criticism is warranted, it should be directed at the projects, not at blockchain tech in general.
> if they decide to give it to scammers
"Decide" is an interesting choice of word.
"Decide" is an interesting choice of word.
[deleted]
> But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.
I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument.
> Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans. However, in the world of blockchain there is no human supervisory authority.
This is a well-known, probably inevitable effect of what is probably the main point of using blockchains. Clearly people feel it is a price worth paying.
I do agree that 99% of blockchain usage is pointless at best, but that is really a different question. It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea.