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In defense of cryptocurrency

blog.cryptographyengineering.com

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Re: In defense of cryptocurrency

#371

Post by once_inc »

ninkendo wrote: post #353
once_inc wrote: post #349

Earlier quoted context omitted.

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.

Bitcoin mining isn't melting the planet. It's not even using more energy than Christmas lights or wash dryers. The comparisons made with [insert random country here] is dumb, because any worldwide phenomenon has a large chance to use more energy than [insert same random country here].

Even if the base layer of Bitcoin is using energy, one can argue that the functionality it offers (trustless, borderless, permissionless, programmable, digitally-native money) is worth the energy cost.

Re: In defense of cryptocurrency

#372

Post by yellowapple »

ufo wrote: post #324
yellowapple wrote: post #234

Earlier quoted context omitted.

It wouldn't be better "in every way", though. A blockchain is much more resilient; the equivalent would be to have hundreds or thousands of redundant SQL databases around the world and somehow keep them all in sync. By the time you've done that, you've very likely reinvented a blockchain, at many times the cost of just using an already-existing public blockchain. > monitoring and reversing payment transactions I disa…

Making backups of a centralized database is not reinventing a blockchain, it is much cheaper than the wasteful process of crypto mining.

> Making backups of a centralized database is not reinventing a blockchain

Maintaining read replicas and coordinating writes across all of them starts to look a lot like one after a certain point.

> it is much cheaper than the wasteful process of crypto mining.

It almost as if not all blockchains involve mining.

Re: In defense of cryptocurrency

#374

Post by danuker »

SilverBirch wrote: post #363

I think an interesting feature of defences of cryptocurencies is that they are similar in their composition as a block chain. In a block chain you have a cryptographically secure summary of the previous block in your current block - but you don't actually know what's in that previous block. Similarly in the arguments defending cryptocurrencies at the top of the article you have the description of the advantages of cr…

> and still have the view that there's any of the original value proposition left.

While not usable as currency, cryptocurrency is still an asset crucial for holding government accountable for its spending. Government can dilute fiat currency, but not Bitcoin for instance.

Re: In defense of cryptocurrency

#375

Post by once_inc »

bromuro wrote: post #362
once_inc wrote: post #347

Earlier quoted context omitted.

I defense of those existing blockchains: the annual worldwide energy usage of blockchain technology is roughly equal to the annual US energy waste from machines plugged in while in standby mode. It is also significantly lower than the annual worldwide usage of Christmas lights, and wash dryers.

https://www.bbc.com/news/technology-56012952 “Bitcoin consumes 'more electricity than Argentina'”

"Christmas lights consume more electricity than Argentina."

"Wash dryers consume more electricity than Argentina."

"Steel foundries consume more electricity than Argentina."

What is the point? Comparing global electricity usage of a single sector and comparing it to the usage of a whole country is meaningless.

Re: In defense of cryptocurrency

#376

Post by GTP »

cy_overlord wrote: post #334
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…

The argument made was that it's not about the technology itself but the transaction rules. If money are stolen from banks in a specific way (withdrawn into prepaid cards), banks will not and cannot reverse these transactions. Banks do have some rules like chargeback however to reverse legitimate transactions or delayed transactions. The same rules can be converted into Smart Contracts which governs the transaction of…

The problem that I see here, is that with the "code is law" approach if there's a bug in the smart contract that is supposed to protect you then you're screwed without recourse.

In a traditional system, if there is a bug in your bank's software that makes you loose money, you can ask the bank to give you the money back. If they refuse, you can take them to court. If instead the smart contract has a bug, there's no one you can appeal to to get your money back. So I think that having humans-in-the-loop is still important, at least for big transactions.

As others pointed out, this problems are much smaller for small transaction so maybe there could be some use there. But I have to think better about this use case.

Re: In defense of cryptocurrency

#377

Post by danuker »

LatteLazy wrote: post #373

I find people's response to crypto really odd. It's either the messiah or the ultimate evil. There seems to be no in between in people's opinions...

I hold an in-between opinion.

I believe cryptocurrency is one asset (of multiple ones including gold) that can not be debased by the government, and as such forces the government to be financially accountable (I include central banks under "government").

I also believe lots of them offer a wasteful amount of security - for instance, Bitcoin secures almost $1.2M per hour against double-spending: https://www.crypto51.app/

I also think Bitcoin's inflation should be curbed. Only specialized mining operations benefit from the inflationary mining subsidy. Once inflation is reduced, miners will be limited to spending from transaction fees, not from the future.

Re: In defense of cryptocurrency

#378

Post by Volker_W »

skybrian wrote: post #162
evouga wrote: post #152

This article doesn’t address the main objection I have about the practical value of cryptocurrency, namely, why I can’t take such an application, replace the distributed ledger with a SQL database, and get a solution that’s better in every way. As soon as you have a trusted central authority (monitoring and reversing payment transactions, interacting with government agencies to execute real estate transaction, etc.)…

Ideally you'd have a SQL database and something like a certificate transparency log as a guard against shenanigans. Also, a bunch of regulatory procedures like DNS registrars have to follow.

The problem with transparency logs is that you can see that they are doing shenanigans, but not necessarily stop it.

Re: In defense of cryptocurrency

#379

Post by Volker_W »

evouga wrote: post #152

This article doesn’t address the main objection I have about the practical value of cryptocurrency, namely, why I can’t take such an application, replace the distributed ledger with a SQL database, and get a solution that’s better in every way. As soon as you have a trusted central authority (monitoring and reversing payment transactions, interacting with government agencies to execute real estate transaction, etc.)…

Are you aware of any project using a SQL database that allows someone to purchase legal porn or donate to legal far right organizations? Mastercard, Visa and Paypal lock such accounts. SEPA (luckily) does not.

This is the only advantage of bitcoin I see.

Re: In defense of cryptocurrency

#380

Post by dmitriid »

once_inc wrote: post #371
ninkendo wrote: post #353

Earlier quoted context omitted.

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

Bitcoin mining isn't melting the planet. It's not even using more energy than Christmas lights or wash dryers. The comparisons made with [insert random country here] is dumb, because any worldwide phenomenon has a large chance to use more energy than [insert same random country here]. Even if the base layer of Bitcoin is using energy, one can argue that the functionality it offers (trustless, borderless, permissionle…

> because any worldwide phenomenon has a large chance to use more energy than

It's not a worldwide phenomenon. There are orders of magnitude more Christmas lights and wash dryers than mining servers. And yet...

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