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Facebook Libra Is Architecturally Unsound

stephendiehl.com

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Re: Facebook Libra Is Architecturally Unsound

#241

Post by the_gastropod »

kragen wrote: post #166
rossdavidh wrote: post #116

Earlier quoted context omitted.

Blockchain gives the impression that the primary threat it is designed to defend against, is a government deciding (like Germany between world wars) to inflate their currency for whatever reason. So, not surprisingly, in order to defend a currency against being decreased in value by a central authority, it is vulnerable to all of the threats that a central monetary authority might help you with. Which of these threat…

Right, here in Argentina our currency has lost more than half its value this year, and the US dollar has lost 96% of its value since the end of the gold standard in 1973. I carry a Zimbabwe 100 trillion dollar bill in my wallet to remind people what real hyperinflation is. I don't think that's the main threat Bitcoin is designed to defend against, though; I think there's a whole spectrum of confiscation threats, rang…

> the US dollar has lost 96% of its value since the end of the gold standard in 1973

And Bitcoin lost over 90% of its value in just under 2 years. Where are you going with this, council?

Re: Facebook Libra Is Architecturally Unsound

#242

Post by notahacker »

harikb wrote: post #98
__MatrixMan__ wrote: post #62

Earlier quoted context omitted.

Yeah, for now it's all we have, so I guess the juice is worth the squeeze. But in a world where our cryptocurrencies are a bit more mature I think we can stop being reactive by reversing transactions and start being preventative by using their structure to build chains and webs of trust that make fraud harder to commit up front, rather than just making it harder to get away with.

There are generally 3 kinds of fraud 1. A scammer cheating someone out of their life savings through social engineering 2. A central bank "unjustly" inflating currency and giving the newly printed money to specific industry/people etc 3. A person paying for merchandise with a stolen credit card or refusing payment after services/good is delivered. Fiat solves 1 and 3 (recovery) does not think 2 is a problem. Crypto s…

The logical followup question would be which problem is actually the most serious?

It's difficult to argue that low and predictable rates of USD inflation has had more of an adverse impact on holders of USD over the last few years than crypto fraud on holders of crypto.

Indeed, given that most cryptoassets have actually lost significant amounts of value against the USD since the end of 2017, it's difficult even to argue that the crypto world has adequately solved 2

Re: Facebook Libra Is Architecturally Unsound

#243

Post by woah »

forgotmyhnacc wrote: post #152

I'm confused about this article. I've read it, and it's skeptical of libra (which is fine) but makes handwavy and non concrete arguments about it's soundness. Can anyone tell me why it's so popular, besides just bashing Facebook?

It's bashing both Facebook AND blockchains using handwavy faux-intellectual arguments, and is thus in the exact sweet spot of Hacker News upvotability.

Re: Facebook Libra Is Architecturally Unsound

#244

Post by Nursie »

rusk wrote: post #223
Nursie wrote: post #101

Earlier quoted context omitted.

> Yeah, but it's not being deployed at consumer level, nor are the savings being passed on. It absolutely is, not sure where you're getting your ideas from here. > Risky, yeah. Like any new technology. But transaction cost is cheaper. It's not risky because it's new technology, it's risky because you've passed all the risk to the end user and their opsec. The cost per transaction of something like the VISA network is…

> it's risky because you've passed all the risk to the end user and their opsec. This was exactly my point. With pervasive crypto end users can assume this to a greater degree, whether you believe that appropriate or not. Visa e.g. requires specialist terminal equipment, complicated issuer and acquirer and banking relationships and is heavily dependent on legal enforcement wherever you use it. Try using mastercard or…

>This was exactly my point.

It's not a point you made before this, you just said it was "more secure" and "cheaper" without qualification. Now you're just trotting out 'coiner memes about the third world and Western Union.

(You can use Visa in 200 countries by the way)

Have a nice evening, I'm done here.

Re: Facebook Libra Is Architecturally Unsound

#245

Post by yungcoder »

> The overhead from the consensus algorithm serves no purpose and will only limit throughput of the whole system, and appears to be there here no reason other than apparently cargo culting public blockchain technology which is not designed for this use case.

I may be behind on Libra news, but my understanding was that the permissioned blockchain governance model would only exist during the bootstrapping phase to launch Libra and would eventually evolve into a public blockchain once it reaches some arbitrary point of stability. If that is still the case, then wouldn't Byzantine fault tolerance be required from the get-go, assuming Facebook wants to avoid a hard fork of Libra?

Re: Facebook Libra Is Architecturally Unsound

#246

Post by kragen »

the_gastropod wrote: post #241
kragen wrote: post #166

Earlier quoted context omitted.

Right, here in Argentina our currency has lost more than half its value this year, and the US dollar has lost 96% of its value since the end of the gold standard in 1973. I carry a Zimbabwe 100 trillion dollar bill in my wallet to remind people what real hyperinflation is. I don't think that's the main threat Bitcoin is designed to defend against, though; I think there's a whole spectrum of confiscation threats, rang…

> the US dollar has lost 96% of its value since the end of the gold standard in 1973 And Bitcoin lost over 90% of its value in just under 2 years. Where are you going with this, council?

> And Bitcoin lost over 90% of its value in just under 2 years.

When do you mean? Right now Bitcoin is US$9400, which is almost exactly half of its all-time high value of US$19891 (in 2017). There are several times it has lost more than half of its value, but I don't remember a time when it has lost 90% of its value.

The reason the dollar inflates and never deflates is that it's designed to inflate. On purpose. The underlying Keynesian monetary theory is a radical experiment in stimulating economic activity by maintaining the proper level of unemployment — when unemployment is "too low", central banks raise interest rates (in effect, printing less money), while dropping them when unemployment is "too high". Of course, deliberate inflation of coins by governments has a much longer history than Keynesian monetary theory or fiat currencies — not only did Song China experience it when it introduced paper "representative money", but it's also a well-attested phenomenon in Roman commodity money and later coinages (there known as "debasement", in a technical sense different from its metaphorical use in literary English to describe degradation.) But Keynesian monetary theory, which might be correct, provides a theoretical justification for believing that inflation is good under some circumstances and bad under others, and since 1973 we are all, for better or worse, participating in a radical large-scale experiment to test this hypothesis.

Bitcoin is, in significant part, a dissident response from a group of eccentric intellectuals looking for a way to opt out of that radical experiment. Consequently it is designed to make inflation (of Bitcoin) infeasibly difficult — the existing Bitcoin supply increases asymptotically toward a fixed quantity, known in advance. So, although Bitcoin's value will fluctuate, sometimes wildly, it doesn't have the secular inflation trend designed into the dollar's governance mechanism.

Re: Facebook Libra Is Architecturally Unsound

#247

Post by j_shi »

littlestymaar wrote: post #231
nighthawk24 wrote: post #137

Earlier quoted context omitted.

Bitcoin Cash adoption is growing around the world for restaurants https://map.bitcoin.com/

I've always been puzzled when I heard about shops accepting bitcoin: how to they deal with double spending?

Wait for enough confirmations where the payment becomes unlikely to reverse, which of course takes time and that's the more practical blocker for regular shops to accept Bitcoin.

Re: Facebook Libra Is Architecturally Unsound

#248

Post by dmoy »

kragen wrote: post #234
dmoy wrote: post #225

Earlier quoted context omitted.

> the US dollar has lost 96% of its value since the end of the gold standard in 1973 It is more like 80-85%, not 96%. $1 in 1972 is $6-$6.5 in 2019. A 96% loss of value would mean $1 in 1972 is more like $25 in 2019, which is not the case. Also to phrase it in context you should probably say "the US dollar has had an average annual inflation rate of 4% per year over the last 5 decades". Also for additional context yo…

It depends on which particular data series you use for deflation. There are definitely things for which US$1 in 1972 is more like US$25 in 2019, such as gold and energy. To take one example among many, oil cost US$3 per barrel at the beginning of 1973, and despite the fracking boom in the US, it costs US$63 today, 21× as much. And, as you yourself point out, you need over US$100 today to buy shares of stock that cost…

Certain things outpace inflation, yes. Certain things are drastically cheaper. That's why we use an inflation measure that's sort of an aggregate, not pinned to one or two commodities. You don't spend 100% of your money on oil and gold.

Oil now is 3x more expensive even after a more average inflation of ~4% compared to the bottom of 1973 (though in the mid 90s it wasn't so bad). Energy as a whole though, is not 3x more expensive. Petrol is only about a third of energy consumption. Consumer electricity prices for instance are relatively constant from the 70s through now. Slight increase in the 80s, slight decrease in the 00s, but within say I'm not making assertions about the change to bond markets (which I agree are historically fascinating, and will continue to be so in the future too).

Re: Facebook Libra Is Architecturally Unsound

#249

Post by phlip9 »

I strongly agree with him on transaction privacy, though not for the reasons he lists.

Some issues, however:

1. His argument against BFT is "legal systems are efficient" (lmao). Also, the whole point of HotStuff (vs. PBFT etc...) is linear O(N) communication complexity outside of cascading proposer failures...

2. He clearly didn't investigate move bytecode-verifier, which asserts linearity.

3. Strong disagree on the untested crypto-primitives argument. curve25519-dalek is audited (x2) and written in Rust; simple and minimal; not a bloated, unauditable mess like TLS.

4. Consumer protection can be built on top via the wallet providers.

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