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Blockchain Is Dangerous Nonsense

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Re: Blockchain Is Dangerous Nonsense

#181

Post by nottorp »

Grustaf wrote: post #122
nottorp wrote: post #91

Earlier quoted context omitted.

> > 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…

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.

> 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 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...

Re: Blockchain Is Dangerous Nonsense

#182

Post by sacrosancty »

> 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."

Re: Blockchain Is Dangerous Nonsense

#183

Post by anonymoushn »

RandomLensman wrote: post #167
anonymoushn wrote: post #157

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 f…

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.

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 :)

Re: Blockchain Is Dangerous Nonsense

#184

Post by [deleted] »

isodev wrote: post #39
Grustaf wrote: post #18

I'm very sceptical of blockchain (though I've been in crypto off and on since 2013) but most of the arguments in this article are non-sensical. For example: > 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…

> 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.

[deleted]

Re: Blockchain Is Dangerous Nonsense

#185

Post by tsimionescu »

mattdesl wrote: post #78
mightyRodri wrote: post #21

Earlier quoted context omitted.

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/

> 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 paym…

> 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?

Re: Blockchain Is Dangerous Nonsense

#186

Post by ohthehugemanate »

pja wrote: post #70
mike_d wrote: post #51

Earlier quoted context omitted.

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.

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.

Re: Blockchain Is Dangerous Nonsense

#187

Post by tromp »

hudon wrote: post #142
Grustaf wrote: post #18

I'm very sceptical of blockchain (though I've been in crypto off and on since 2013) but most of the arguments in this article are non-sensical. For example: > 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…

> 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…

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.

Re: Blockchain Is Dangerous Nonsense

#188

Post by RandomLensman »

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.

Re: Blockchain Is Dangerous Nonsense

#189

Post by dash2 »

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.

Re: Blockchain Is Dangerous Nonsense

#190

Post by anonymoushn »

okintheory wrote: post #55
Grustaf wrote: post #18

I'm very sceptical of blockchain (though I've been in crypto off and on since 2013) but most of the arguments in this article are non-sensical. For example: > 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…

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?

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.
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