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In defense of cryptocurrency

blog.cryptographyengineering.com

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Re: In defense of cryptocurrency

#391

Post by once_inc »

ninkendo wrote: post #381
once_inc wrote: post #371

Earlier quoted context omitted.

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…

But we’ve already established that we can do all that without the energy costs if we end up needing a trusted authority anyway. There’s zero need for proof of work if you’re going to trust a central authority to validate the transaction history. What’s the point of such an extremely costly base layer?

I've yet to see a convincing argument why we end up with a trusted authority. Can you point me to which incentive would cause this?

Re: In defense of cryptocurrency

#392

Post by GTP »

yata69420 wrote: post #253
MomoXenosaga wrote: post #202

Earlier quoted context omitted.

This hatred for the government Americans have is frankly unhealthy. Besides replacing it with tech bros and crypto douchebags doesn't seem like much of an improvement.

Please don't confuse my criticism as hatred. Being critical of the government is a proud part of the American tradition. If anything (at the risk of sounding extra American), these threads remind me that the US is still the place to be if you want to build something different. There's a positive side to how the US works too. The few things we really commit to, like building our military, we really are the best at. Al…

> If anything (at the risk of sounding extra American), these threads remind me that the US is still the place to be if you want to build something different.

Interesting, because recently the USA exited Bloomberg's top 10 innovative countries, while if I remember correctly 7/10 where European countries [0]. Sorry guys, you can't stay on top forever.

[0] https://www.bloomberg.com/news/articles/2021-02-03/south-kor...

Re: In defense of cryptocurrency

#393

Post by saalweachter »

lbwtaylor wrote: post #147
dcolkitt wrote: post #127

Earlier quoted context omitted.

Many real world systems are "nearly trustless". Of course you still need some sort of court system if someone decides to break bad. But in the 99%+ of times you're in the happy path, economic transactions occur based on autonomous rules encoded in software. The analogy I like to use is what's harder to buy a $1 million house or $1 million of Microsoft stock? The former process takes weeks, and dozens of man hours fro…

>>The analogy I like to use is what's harder to buy a $1 million house or $1 million of Microsoft stock It's interesting, both have registries, so why is one harder? Is it because the registry is better? No, it's because real property transactions are more complex: - What condition will the property be delivered in and when? - What happens if the condition is not as specified? - what personal property is included in…

Let's also not forget the whole deal with financing.

When you buy a house, for $1 million or $50,000, the normal case being described in yours and the parent post is that you are buying a house on margin while using the house itself as collateral for the loan.

If you show up at a house that is for sale and ready to be sold with a million dollars in cash -- well, a million dollars in easily-authenticated cash equivalent -- and ask to buy the house as-is, no conditions or concerns on your part, you can make a deal happen markedly faster. Not microsecond fast, because why, and the sellers might balk at such a weird transaction or shop around to see if they can get another seller at a higher price, but once you take financing and any sort of buyer-protection out of the equation it basically comes down to registering the sale with the local registry.

Re: In defense of cryptocurrency

#394

Post by Banana699 »

Kbelicius wrote: post #310
eudoxus wrote: post #294

Earlier quoted context omitted.

> I don't see any goalpost moving. PoW is not blockchain. Blockchains are exactly 3 things - A ledger of "things" - Consensus to agree on "things" - A state machine that that transitions based on "things" PoW is how Bitcoin achieves consensus. The brute-force operations that "waste" energy is actually a highly robost leader election algorithm. So sure, "PoW is not a blockchain" is technically accurate, but a useless…

> OP states there is nothing unique or special about blockchains, then notes a unique and special fundamental aspect that enables (some) blockchains. PoW precedes bitcoin by quite some time so the idea that it is a unique and special thing about (some) blockchains is false.

PoW precedes bitcoin but was never used as a distributed consensus algorithm before it, blockchain precedes bitcoin but was never used as a distributed data structure before it, this is all acknowledged in my original comment. Do you argue that innovations composed of several ideas are exactly as novel as those ideas themselves? that would lead you to believe that there is no innovation at all happening in computers and computer science since the 1980s. Neural Networks were invented and reinvented several times since the 1940s, is GPT3 just a boring exercise in implementing common knowledge in your view?

The person I replied to means by the 'it' that they see no novel unique thing about the bitcoin system itself, or perhaps any arbitary cryptocurrency system in general. It's reasonable to assume that in a discussion titled "In defence of cryptocurrency", saying "it" without qualification references the main thing everyone is talking about, not any single part or sub-idea.

But the brilliance of bitcoin is exactly how it merged 2 completely different ideas to obtain a breathtakingly novel 3rd idea that is much more valuable than the sum of its constituents. A centralized blockchain gives you exactly as much trust in its contents as the amount you're willing to put in whoever holds the root hash pointer, a PoW posting/updating algorithm gives you trust that writes by anonymous nodes probably cost that node some amount of computational work (as much trust as the underlying work function has anyway).

On the face of it, those previous 2 things have nothing to do with each other, none of them references (even implicitly) the other in any interesting way. It takes intelligence to look at those 2 things and imagine a distributed append-only database with untrusted unnamed peers, and then come up with the all the rest of details and rules that make it work, and then implement all of this in a (relatively) bug-free open source real system. To the extent that any of this seems obvious or inevitable in retrospect, it's all the more evidence for how genius it is.

It doesn't matter a single gram that the technology later attracted scammers, radicals, and con men who think it's a silver bullet for solving any problem, I can say just as much about OOP. And yet nobody disputes the genius of Alan Kay and the novelty of Smalltalk.

Re: In defense of cryptocurrency

#395

Post by throw0101a »

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…

> allowing any two willing parties to transact directly

And what happens if one of the parties is not willing? If someone's e-wallet gets broken into and funds are transferred? How does any current system handle that situation?

A lot of folks consider irreversibility a feature, when there's a strong case to be made that it is a bug.

Re: In defense of cryptocurrency

#396

Post by Volker_W »

alalv wrote: post #385
Volker_W wrote: post #379

Earlier quoted context omitted.

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.

Do Visa and Mastercard really block porn purchase in the US?

I just checked and they do not block all porn, but the porn that does not fulfill their regulations.

Re: In defense of cryptocurrency

#397

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.)…

The difficult part is not setting up a SQL database, the difficult part are complying with all the banking regulations. If you have a distributed ledger, you do not need to comply with these regulations and everything gets easier.

This is both a good and a bad thing.

Re: In defense of cryptocurrency

#398

Post by throw0101a »

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…

> 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.

The idea that Bitcoin (#23) is worth as much or more as all the economic and general human activity of Poland (25), Thailand (24), or Vietnam (22) is highly suspect:

* https://digiconomist.net/bitcoin-energy-consumption/

Re: In defense of cryptocurrency

#399

Post by m00dy »

maccard wrote: post #315
meowkit wrote: post #279

Earlier quoted context omitted.

A snarky and simplistic question. Here's a simplistic answer: You could program the NFT to not be transferable based on a blockchain datetime or only transferable in an "escrow transaction" with a minimum exchange value (i.e. the market value of the house + some percentage). Or time delayed exchanges for important things like your house NFT.

It's not a snarky question, it's a genuine concern. Telling people to not worry about the details like "what happens in case of fraud" is handwaving away the problem. > (i.e. the market value of the house + some percentage). Where does the market value come from? "Market value" for properties varies wildly, and the number a property does not necessarily track to a fair market value - I might be willing to accept 10%…

Market value comes from a decentralised oracle. I don't want to write here the most famous decentralised oracle, but right now, it provides price information to various defi protocols why not also the market value...

Re: In defense of cryptocurrency

#400

Post by around_here »

lumannnn wrote: post #390
DebtDeflation wrote: post #359

Earlier quoted context omitted.

>It is now used primarily for large transactions No it's not. It's now used primarily as a vehicle for speculation.

You probably should look at different numbers than just the dollar price. Number of nodes is rising, number of wallets is rising, number of hash-power is rising. Also, please look into the "Lightning Network". It's the second layer on top of Bitcoin and that's where the whole ecosystem scales (in terms of numbers of transactions per second). Cheap, scalable and fast transactions. Adoption is happening in many places.

Nodes rise because businesses that want to build on the chains require them unless they want to a pay far too much for a wrapper API. The number of wallets is literally unbounded, and it’s impossible to know precisely how many entities are attached to those wallets. I am one person. My tens of wallets are only for one person. I make a new wallet every time I try new wallet apps. I make new wallets to try new things. “Number of wallets” and “number of nodes” is a bad metric.
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