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In defense of cryptocurrency

blog.cryptographyengineering.com

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Re: In defense of cryptocurrency

#351

Post by shakes_mcjunkie »

abirch wrote: post #331
what-the-grump wrote: post #144

Earlier quoted context omitted.

I’ve seen commercial banks reverse wire transfers within the first 30 days. When you are moving large sums of money between well known institutions the money is very illiquid, mostly to prevent mistakes, fraud, etc. It’s why most fraud that you hear about involves movement of money overseas or into another type of asset or more liquid form, e.g bills, physical goods etc. No one sits their stolen funds at chase bank……

Why didn't Citi reverse this wire? https://www.bloomberg.com/opinion/articles/2021-02-17/citi-c...

The article explains why.

Re: In defense of cryptocurrency

#352

Post by danuker »

lamontcg wrote: post #110

> In other words, transaction reversibility is not about the ledger, but rather about the transaction rules that a currency uses. A reversible currency requires that someone anoint this trusted party (or trusted parties) and that they use their powers to freeze/burn/transact currency in ways that are at odds with the recorded owners’ intentions. once you have a trusted third party, though, you no longer need permissi…

Too bad power corrupts. All fiat currencies so far keep devaluing.

If governments want to spend more than the rest of the economy, they should finance it via taxation, not inflation, which erodes people's savings.

Re: In defense of cryptocurrency

#353

Post by ninkendo »

once_inc wrote: post #349
JackC wrote: post #98

"transaction reversibility is not about the ledger, but rather about the transaction rules that a currency uses. A reversible currency requires that someone anoint this trusted party (or trusted parties) and that they use their powers to freeze/burn/transact currency in ways that are at odds with the recorded owners’ intentions. And indeed, this is a capability that many tokens now possess" I think this is arguing th…

Bitcoin is a base-layer solution. Do you not want to transact on the base layer because of lack of reversibility or fees? Move to a higher layer solution that sacrifices some characteristic of Bitcoin to enable something new. Want to do lots of (micro)transactions? Use LN where this is made possible by sacrificing the ability to be secure offline. Do you want to use DeFi-like solutions with smart contracts? Use RSK.…

The base layer is melting the planet, for one thing.

Re: In defense of cryptocurrency

#354

Post by danuker »

lottin wrote: post #220
randomran01234 wrote: post #102

Earlier quoted context omitted.

This solves inter-bank transfers in EU but does not mean payments going out of, or into, the EU are solved. Crypto takes a different approach: a single protocol that is shared across all countries.

So bitcoin "solves" the problem by being non-compliant with local laws and regulations.

Which regulations? Don't the regulations pertain to transfer of government currency through banks?

Banks have the privilege of being legally required for any transaction greater than 10k euros or such. Therefore it is only fair that they must ensure cheap service.

Re: In defense of cryptocurrency

#355

Post by rvz »

randomran01234 wrote: post #339
lbriner wrote: post #322

Earlier quoted context omitted.

I'm not an expert but I think this is what the original letter authors objected to. If you build these mechanisms on top of a blockchain which is inherently baked in stone, then there is no point in having the blockchain be so strict. In other words, if you allow an organisation to change things like refund you, then they might as well just manage their own leger like they do at the minute.

The goal of modern crypto like Ethereum is to provide a secure, predictable, open source , and decentralized network that many higher-level applications can flourish on top of and co-exist within. USDC exists with reversibility but not all users in the network are forced to use it. There are other protocols like DAI that have different features and considerations. And in many cases these are open source protocols tha…

This probably the likely case of having co-existing protocols like Ethereum, USDC and some Layer 2s.

They don't seem to be ready yet but they look somewhat promising.

Re: In defense of cryptocurrency

#356

Post by senttoschool »

almostkorean wrote: post #81
yadaeno wrote: post #32

You forgot to mention: if you lose your keys, youre fucked. That is, of course unless you trust a centralized unregulated entity to manage them for you.

This is a huge UX issue for anyone that wants to self-custody. In the same spirit as the OP, people are working on solutions for this. Vitalik posted about it last year: https://vitalik.ca/general/2021/01/11/recovery.html . I don't know the technical details, but Coinbase is launching a wallet system where the private key is "split" between the user and Coinbase. After explaining improvements to this specific issue,…

But you're still putting your trust into a centralized organization (Coinbase). So we're back to square one.

Re: In defense of cryptocurrency

#357

Post by danuker »

petmon wrote: post #129
j_walter wrote: post #4

Earlier quoted context omitted.

Not really...the fees for Bitcoin, Ethereum and other L2 options are flat fees and are well under Visa/MC fees most of the time. Might want to look at Western Union and the like too...way way under those fees. Current transaction fee (for 1 cent or a billion dollars) Bitcoin - $1.62 per transaction Ethereum - $3.50 per transaction Ethereum L2 - as low as 12 cents https://l2fees.info/ Here are credit card fees by comp…

The cost of a bitcoin transaction is not adequately captured by transaction fees. There's two alternative ways to look at it: 1. Divide miner revenue (fees + seignorage) by the number of transactions, yielding the total amount that miners extract. It was $34m today, with ~261k transactions, yielding a cost per transaction of $130. [1] 2. Estimate energy cost at 1,173 kWh per transaction [2]. If you assume cheap elect…

I agree, and I think this is the largest problem in BTC.

If the creators had predicted its explosive growth, they would have chosen a faster rate of reward halving, more quickly bringing the transaction fees in line with the externalities.

Perhaps someone could create a "Bitcoin Green" fork which would simply speed up the reward halving to once a year instead of once every 4 years, since by now, everyone has heard of Bitcoin, and only large specialized operations can mine it profitably (thus the reason for its inflation has disappeared).

Re: In defense of cryptocurrency

#358

Post by cinnamonaed »

raverbashing wrote: post #343
cinnamonaed wrote: post #325

It's always interesting to see opinions about crypto currencies by people that actually have no clue where it is about. Just wait until a few years from now when cash money will be phased out and replaced by CBDC's. That's when suddenly all those critics will wake up in horror and realize that money as we know it ceases to exist. What money is CBDC's than? Well, it's credits, social credits to be more precise, contro…

I like this. It's quaint in how they mix and match different dystopias without basis in reality except for what their cryptobros came up with (they can't even tell if 561 is prime or not) "Smart contracts" okay, the cryptobros can't even make smart contracts for bored monkey pictures without shooting themselves in the foot 10 times, why do you think a government will suddenly need one of those to do anything? Why do…

[flagged]

Re: In defense of cryptocurrency

#359

Post by DebtDeflation »

astoor wrote: post #287
JackC wrote: post #98

"transaction reversibility is not about the ledger, but rather about the transaction rules that a currency uses. A reversible currency requires that someone anoint this trusted party (or trusted parties) and that they use their powers to freeze/burn/transact currency in ways that are at odds with the recorded owners’ intentions. And indeed, this is a capability that many tokens now possess" I think this is arguing th…

Transaction irreversability is the whole point of the "peer to peer electronic cash system": "Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments... cutting off the possibility for small casual transactions ... What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two…

>It is now used primarily for large transactions

No it's not. It's now used primarily as a vehicle for speculation.

Re: In defense of cryptocurrency

#360

Post by yellowapple »

nicoburns wrote: post #332
yellowapple wrote: post #318

Earlier quoted context omitted.

Indeed they don't, but even running two database servers (let alone more for e.g. geographic redundancy) is already more resource intensive than running a full node for a proof-of-stake blockchain. You might as well just run that node and get that resiliency basically for free. Not every usecase requires that sort of resiliency, of course, nor does every use case prioritize it above latency and throughput; nobody exc…

> running a full node for a proof-of-stake blockchain Are there any extant proof-of-stake blockchains that achieve the security guarantees necessary to make a currency viable? Last I heard proof-of-stake was still a hypothetical idea, not something that someone had actually managed to make a working currency with, and that all of the cryptocurrencies in common use were still using proof-of-work (which is of course mu…

> Are there any extant proof-of-stake blockchains that achieve the security guarantees necessary to make a currency viable?

Cardano, Solana, and Polkadot seem to be doing quite alright.

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