The Non-Innovation of Cryptocurrency

Yes but we know that technology can improve over time. Given the amount of capital being poured into cryptocurrency, it is reasonable to expect that cryptocurrency technology could get better at achieving its stated goals. It could get dramatically better. The technology is based on cryptography and open source code, trying to ban it would be like trying to ban drugs or guns (good luck).

Right. So expecting a social informal construct to be enforced in an automated way is, to put it mildly, difficult.

> Sure, it may be difficult, in some situations, to prove ownership of the stolen cash or to recover it.

How do you exactly prove ownership of money? It seems a bit more than "difficult" to me.

> maybe this explains why many people seem to prefer electronic payments over cash

And just as many people prefer cash over electronic payments. It still doesn't mean that cash is, in any way, fatally flawed.

> It might indicate that indeed cash is perceived as being less safe.

Well... different people have different opinions and perceptions. Just because most people use electronic payments (let's assume) doesn't mean that cash is useless or fatally flawed as a medium of exchange. And just because most people use cash rather than blockchain thingies also doesn't mean that these are necessarily fatally flawed.

> Now, back to blockchains. Blockchains are very inefficient and expensive to run. This is so, because they have to do a whole lot of extra work in order to avoid relying on a central authority that ultimately has the final say on who owns what.

Sure.

> If blockchain users have to go to court to have property rights enforced,

Of course they have to go to court to see their property rights enforced. Rights/laws are always enforced by humans, not by automated systems.

> that means that the courts do have the final say on who owns what, and so the entire purpose of the blockchain, which was to avoid a central authority, is defeated.

Not really, since courts do not have global jurisdiction. If I steal your crypto-assets and we're both in the same country (and you have some proof of ownership and whatnot), then you can go to a court and get your assets back. If we're not in the same country, you probably won't be able to.

The same way that, if someone steals my money (or any other asset) and flees to another jurisdiction, I probably won't be able to do much.

If entities A and B are in the same jurisdiction, then courts can compel A to give something (that was stolen) back to B; if they are not, probably not.

Either way, even a court can't force a (distributed, non-centralized) blockchain to assign ownership of something to a entity B: it has to first find entity A and compel/force them to deliver the keys that control the assets, through the use of force.

> So the courts would be powerless to enforce anything on a blockchain, even if they wanted.

Even if that was the case (and, as I pointed out, it's not clear that it is the case... a court can always compel a person to give out their keys under the threat of force, as long as that person is within their jurisdiction, regardless of blockchain magic sprinkles), that would make blockchain assets more valuable (since that means they can't be easily seized from you against your will), and not less.

> In short, blockchains are designed in a manner that makes them antithetical to property rights.

[citation needed]

As far as I can tell, nothing in blockchains prevents courts from exerting their power within their jurisdiction. In fact, in some sense, it might make it even easier to do so: remember that transactions are irreversibly recorded (i.e. if the courts needs evidence against you, you would be better off having used cash than any blockchain asset).

> I think most people want property rights and therefore will steer clear of blockchains.

Blockchains don't remove or restrict your property rights; they just don't enforce or explicitly encode it, just like any other formal system or physical asset: you always have to rely on an external non-automated system of courts and law enforcement to ensure that your property rights. Blockchains don't change that, and are not supposed to change that, or to replace courts and law enforcement. So-called "smart contracts" are not actual legal contracts and shouldn't be seen as such. Etc.

TL;DR: It seems to me like you are postulating that blockchains need a feature that no other asset or medium of exchange has (i.e. automated enforcement of property laws, without having a court and a judge involved), otherwise it's not useful. If you apply that same threshold of usefulness to other classes of assets, then most (if not all) assets are useless (since they don't encode and can't enforce your property rights over it).

If you are not within the court's jurisdiction, then it is powerless, yes. But that applies equally to cash, blockchain assets or any asset, really.

> The issue isn't that blockchains lack an automated enforcement of property rights, but that property rights are not enforceable at all (either by an automated system or by courts of justice). Why? Because in order to enforce property rights it is necessary that some authority have the power to seize assets from one person and hand them to another person. Blockchains are designed specifically to prevent that.

Blockchains are not designed specifically for that, it's just part of the feature set (if they are decentralized): things cannot be arbitrarily seized. It's a feature, not a bug. The court can seize the assets, but they have to get to the person that has the assets in their posession (through a key), just like for any other asset (i.e. they have to find the asset/key first, or the person that knows where the asset is).

Also, note that blockchains can't prevent a court from jailing you until you "cough up" the assets you stole, if you are within the court's jurisdiction, just like it works for any other asset.

> Cash doesn't have this problem, because it's a physical object and physical objects can be seized.

Yes, and physical objects can also be hidden. How do you seize the thief's loot, then, if it's hidden? Well.. you put him in jail until he coughs up where he hid the loot. Same with crypto assets: "until you cough up the key, you'll be in jail, and your own assets will be liquidated to cover your theft". Simple. How does a blockchain prevent that?

> You seem to be making the point that because sometimes cash is stolen and courts aren't unable to recover it this means that somehow property rights don't apply to cash?

You seem to be making the point that, because sometimes it might be difficult for a court to recover "crypto assets" from a thief, somehow property rights stop existing and don't apply to such assets, and courts become powerless (because "blockchain magic sprinkles"?). Many "crypto people" would like that to be true, but it really isn't.

Blockchains may complicate the work of courts and law enforcement (the same way that the use of cash in drug transactions complicates the work of courts and law enforcement), but that's not the same as saying that "property rights/laws" don't apply to "blockchain assets" (or cash).

EDIT: And, furthermore, because the fact that "blockchain transactions" are permanently recorded and readily available, unlike "cash transactions", it might even be easier to prove the theft in court. How would you prove to a court that the money that is in someone's posession has been pickpocketed from you? Seems more complicated to me, when there probably isn't going to be any register of it (assuming there's no CCTV around).

EDIT2: Also, note that some blockchain assets can be (and have been) centrally and arbitrarily seized by (e.g.) US courts, if they want, as long as the entity that controls the token is within US jurisdiction. Here's an example of Coinbase/Centre, which is within US jurisdiction, blacklisting (i.e. seizing, effectively) 100 000 USDC (i.e. ~100 000 USD) from a thief/hacker, due to a court order or some collaboration with law enforcement: https://cryptobriefing.com/100000-usdc-blacklisted-highlight...

I don't think that's true. Someone asking to be paid in cash is inherently suspicious (at a minimum they're probably evading tax, if not an outright scammer).

> Of course they have to go to court to see their property rights enforced. Rights/laws are always enforced by humans, not by automated systems.

Right, which eliminates the big selling point of bitcoin. Code isn't and can't be law, because law enforcement will enforce the actual law rather than the code.

> Even if that was the case (and, as I pointed out, it's not clear that it is the case... a court can always compel a person to give out their keys under the threat of force, as long as that person is within their jurisdiction, regardless of blockchain magic sprinkles), that would make blockchain assets more valuable (since that means they can't be easily seized from you against your will), and not less.

I don't think that's true. If things are difficult to protect from theft then that makes them less valuable, e.g. a second-hand bicycle in a high-crime city is worth less than the same bicycle in a country that has bicycle registration and strong law enforcement. Decent people generally prefer to live under a legal system that returns stolen property to its rightful owners rather than "possession is the whole of the law"; yes, there is a risk that the courts might wrongly decide that my property was stolen from someone else and take it from me and give it to them, but you have to weigh that against the risk of my property actually being stolen by someone else.