In defense of cryptocurrency • Hacker News Board

Re: In defense of cryptocurrency

#451

Post by mirceal » Fri, Jun 10, 2022, 2:28 PM UTC

Olreich wrote: post #446

lumannnn wrote: post #390

Earlier quoted context omitted.

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.

Lightning network pulls transactions off-chain, thus relying on trusting someone (either the person you transact with or some third party acting as escrow for the funds). By adding in trust, you can mitigate the primary bottleneck caused by proof-of-work consensus methods. But if you have people you can trust to transact with, there's no point in interfacing with Bitcoin at all, just make a micro-payment network with…

That's not how lightning works. While it's true that the transactions are off-chain there is no trust element involved.

A channel between 2 entities is backed by real bitcoin and a scheme to manage the ledger based on bitcoin primitives (multisignature).

Lightning is just a series of channels + routing, so in effect it's a path of channels between you and the party you are transacting with + ledgers of those channels updating with the value that is being moved. At any point in time you can close any channel and materialize however bitcoin you have on your side.

Re: In defense of cryptocurrency

#452

Post by kingaillas » Fri, Jun 10, 2022, 2:30 PM UTC

yata69420 wrote: post #275

Nursie wrote: post #248

Earlier quoted context omitted.

Your response is so full of gaping holes it's kinda crazy. I'm not sure I can even begin to address them. > I think you've overlooked this in the grandparent, because you've probably never had the experience of going to a low-tech county property registrar's office to pull a record. No, I haven't overlooked this at all, in fact it's bang on with what I'm trying to get you to understand - that pulling a record can be…

You are vastly over-estimating the scale at which local government operates and I'm not saying this is 100% about signing. Searching, pulling GIS files, whatever, it's all essentially the same problem. Your argument is akin to being anti-Twitter because the local government could build a notification system just as well. Maybe San Francisco could, but most of America cannot. Twitter's core function is that it lets yo…

>I was listening to NPR a while ago and they had story on about governments that paid for ransomware attacks so they could access critical records. That's where we're at today.

Was that before or after listening to NPR and their story about private companies that paid for ransomeware attacks (https://www.npr.org/transcripts/1003972313, many many others)?

Re: In defense of cryptocurrency

#453

Post by kelseyfrog » Fri, Jun 10, 2022, 2:32 PM UTC

yellowapple wrote: post #286

kelseyfrog wrote: post #194

Earlier quoted context omitted.

The general form is that crypto can't do X. The response is that an obscure implementation Y does do X. The problem is that Y, while existing, largely doesn't address X in practice because Y's trading volume and/or market cap is insignificant. I guess to your point. How much corruption is avoided, and how much wealth is being saved that would otherwise be locked out? Without the means to quantify it, it feels like an…

> The general form is that crypto can't do X. The response is that an obscure implementation Y does do X. The problem is that Y, while existing, largely doesn't address X in practice because Y's trading volume and/or market cap is insignificant. Sure, but this presupposes that Y's trading volume and/or market cap are indeed actually insignificant. A lot of people make that presupposition, but it's often about as accu…

Cool. What percent of market cap and trading volume do they sum to?

Re: In defense of cryptocurrency

#454

Post by kkielhofner » Fri, Jun 10, 2022, 2:32 PM UTC

Dylan16807 wrote: post #91

bowsamic wrote: post #83

Earlier quoted context omitted.

Is this supposed to be a critique of all financial investment or speculation? I'm not sure what else I'm supposed to take from this. Also talk about moving the goalposts, we've gone from "no one knows about crypto or cares about if its good or bad" to "they don't really use it they just trade it"

Whether the goalposts have moved depends on whether you consider speculative investment to matter for whether something is "irrelevant". I think you could reasonably read that post as a critique of speculative investment in assets. With the conclusion that if that's the only meaningful activity with cryptocurrencies then they're not doing very well. Investing in companies or in future production is a different matter…

I think we're in agreement here but I want to be clear.

I'm talking about blockchain explorers. Use of the actual networks and technology. Trading on crypto exchanges does not utilize blockchain in any fashion.

Given that this is HN I would think the focus would lean towards the underlying technology. That said one of the things I appreciate about HN is the wealth of knowledge and conversation about things other than technology.

I suppose there's a valid debate to be had in terms of what constitutes "use" but my focus and emphasis on actual network activity as seen in blockchain explorers refers to use of the network/technology/blockchain for some purpose. I don't care what that use/purpose is as long as it actually uses the technology (which is on network and reflected in explorers).

As we both acknowledge, blockchain explorers representing the reality of blockchain network activity provide an abysmal view of the adoption of that technology relative to historical technology platforms 13 years after release.

Re: In defense of cryptocurrency

#455

Post by Olreich » Fri, Jun 10, 2022, 2:41 PM UTC

yellowapple wrote: post #234

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.)…

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…

> They're much more likely to do that than to try to run an equivalently fault-tolerant and accessible-to-the-public SQL database themselves (and absolutely more likely to do even that than to trust some entity outside their legal jurisdiction to do that, barring outright state/federal mandates to do so).

No they aren't. They are already running public SQL databases (with limited query access) for managing property changes. And they already have a set of processes and employees to manage real estate transactions and taxes. If a blockchain startup wants to try to get a local government office to let them run it on a blockchain, they will need to prove that the taxes always settle, and that fraud can be reversed. These are both important parts of the system for the local government.

I suspect that there is a granule of use in the idea, and that's that you can farm off the infrastructure for your real-estate management onto third parties and ensure they give you your taxes and respect your authority. But that's not really what people think of when they say "blockchain" with dollar signs in their eyes. The incentives for the people running the infrastructure go out the window too, because the profits are modulated by the government, and it's way easier to just sell them software directly that only has to claim to be effective, and rarely has to deliver on it.

Re: In defense of cryptocurrency

#456

Post by hnthrow1010 » Fri, Jun 10, 2022, 2:42 PM UTC

cy_overlord wrote: post #342

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.)…

"I suspect that legacy industry and regulators have smothered two generations of technological improvement, largely (I suspect) by building a (mostly) closed and permissioned financial system." It's technically possible to replace any blockchain with a database but where are you going to host it and who is the trusted central authority? Blockchain might not the solution but it shows us an alternative to trusting some…

>It's technically possible to replace any blockchain with a database but where are you going to host it and who is the trusted central authority?

Who is hosting the blockchain? Who is the trusted authority over the maintenance of the protocol that implements the blockchain, that all miners must use if they want to participate in the system? Who is it you're trusting not to organize a malicious 51% attack against the system, when it has already happened several times to quite a few blockchains? It is a blatant falsehood that blockchains don't have any trusted authorities. They actually require trusted authorities to function. You're not trusting "emotionless code" as the code is well known to have these flaws even by the admission of its own designers; what you're actually trusting is some game theory laid out by programmers you trust, that says the miners won't do bad things because they're getting paid. But in several cases we've seen that they actually will do bad things! And that's not even considering all the other bad things like fraud and ransomware that happens on blockchains that the operators seemingly just throw their hands up and don't do anything about. They don't even consider that to be their problem.

I hate, hate, hate that this line is used so often in discussion of cryptocurrency. It makes no sense at all. In order to have any kind of real discussion around this, the crypto community needs to move past these thought-terminating cliches.

Re: In defense of cryptocurrency

#457

Post by boughtahouse » Fri, Jun 10, 2022, 2:49 PM UTC

maccard wrote: post #445

boughtahouse wrote: post #435

Earlier quoted context omitted.

One of my property purchases was in the UK for me as well. The system is horrid. Blind bidding and behind-closed-doors conversations is common in the UK, and often buyers will end up over-bidding since it favours the selling agent’s commission fee. Depending on how well you know your agent and how much they are willing to hint at, you may be in a better position than another bidder. To make things worse, the UK has l…

> Blind bidding and behind-closed-doors conversations is common in the UK. There's nothing about blind bidding that is solved by crypto in any shape or form. Moving to a blockchain approach for bids doesn't guarantee that you have opened bids, you can still allow people outside of the ecosystem to bid externally. > The fact that a screenshot of a bank website or PDF passes as proof of funds for a 6 or 7 figure cash b…

> There's nothing about blind bidding that is solved by crypto in any shape or form. Moving to a blockchain approach for bids doesn't guarantee that you have opened bids, you can still allow people outside of the ecosystem to bid externally.

If all parties agree that the smart contract is what settles the auction, then yes it could be superior in some ways, and inferior in others. Bids would be transparently recorded for all parties to see, perhaps held in escrow or using zk-proof to accept each bid, and accounts could be shielded to provide privacy. Accepting a new bid outside of this smart contract auction or after this auction settles would be a violation of the agreement. It also means the auction can be performed through an automated system, without a listing agent facilitating it via emails and phone calls, which is significant as that same agent stands to benefit if all parties bid higher than they really need to.

> For transactions under 250k faster payments guarantees transactions in under 2 hours, and anecdotally when sending my deposit for my last purchase, it was confirmed in about 15 minutes. For transactions over 250k, SWIFT transfers take a couple of days _because of regulation_, not because of technical problems. They're subject to AML checks.

Not all buyers have this smooth of an experience. I'm not disagreeing with you, the UK has good banking infrastructure and if every country in the world could send value through Faster Payments to every other country in the entire world, there would probably be less need for crypto. It is a pretty good model for how financial systems can be improved to facilitate most average use cases.

We are approaching this from different points of view and with different shared experiences around how smoothly our first-world home purchases and bidding processes have been, and that's OK. The fact that you think a PDF or screenshot of a website frontend is "acceptable" proof of 6- or 7-figure cash bid is probably enough of an indicator that we should just agree to disagree and move on with our day.

Re: In defense of cryptocurrency

#458

Post by BearsEatBeats » Fri, Jun 10, 2022, 2:50 PM UTC

dcolkitt wrote: post #127

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…

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…

> "You can sell your house atomically and instantly to anyone in the world with no lawyers or escrow agents. You can pledge it as collateral and borrow against it. You can fractionalize it and sell a portion."

Who enforces seizure when lendee defaults but the lender is "anyone in the world"?

Re: In defense of cryptocurrency

#459

Post by AlexandrB » Fri, Jun 10, 2022, 2:52 PM UTC

shakes_mcjunkie wrote: post #345

invasivemullet wrote: post #235

Earlier quoted context omitted.

[dead]

Hilariously sad to see this, where crypto has gone from an idea of economic freedom to economic handcuffs. Imagine the even more nightmarish world where a person on welfare has their entire economic life controlled by a completely faceless, heartless algorithm.

Despite the rhetoric, most of crypto subtly pushes for handcuffs of some kind. Consider how during the NFT craze some crypto proponents were claiming that, in the future, browsers will enforce NFT ownership so you can't copy/paste their apes. A lot of crypto seems to be about taking resources that are abundant and making them scarce. This even bleeds over into the real world, where crypto helped keep graphics cards a scarce commodity for years now.

Crypto seems like a financial industry wet dream that pretends it exists to help the little guy.

Re: In defense of cryptocurrency

#460

Post by cableshaft » Fri, Jun 10, 2022, 2:54 PM UTC

mckmk wrote: post #417

cableshaft wrote: post #284

Earlier quoted context omitted.

Considering it's a physical house they sould be able to do more than they can when someone steals bitcoin. So I imagine they can either legal pressure on the illegitimate owner to transfer the NFT to the other owner (which has worked with some bitcoin transactions in the past), or if that doesn't work, then the system of smart contracts created for something like houses would most likely have something in it that all…

>Barring all that, they could just not recognize the owner and send police to physically remove someone who thinks they own it because the have the NFT. That's one reason why some people like bitcoin so much, the government can't (easily) take it from you by force (because there's no physical aspect to it) like they can a home or gold. If this were to happen and the blockchain and the physical world diverge, how woul…

You could check if the NFT was still valid by calling the smart contract directly if they provide public functions for it. No need for a published list by a centralized authority (beyond whatever you're using to call functions on a smart contract, like I'd probably use Etherscan if it's an ETH contract).

And calling read-only functions (doesn't write anything to the blockchain) doesn't cost anything.

I didn't think of this with my original post, but there are NFTs that are used for access to things that people already say "don't buy these on the secondary market, legacy, no longer used". Not too dissimilar of an idea. Those NFTs are still in those people's wallets but it no longer provides the benefits associated with it.

Like the old Premint pass, which gives you access to tools to help launch NFT projects. The description for the old pass says "DO NOT BUY THIS PASS. This pass has been replaced with the PREMINT Creator Key" and the banner image says "THIS PASS IS NO LONGER VALID": https://opensea.io/collection/premint