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Trust and the Viability of Cryptocurrency

jordanugalde.substack.com

11–12 of 12 posts

Re: Trust and the Viability of Cryptocurrency

#11
post #2

I've said it before, and I'll say it again. Blockchain and decentralization does not produce trust and integrity. In this article the author gives a statistic: that fewer than 1/3 of Americans trust the financial system. And yet 95% of American households have bank accounts, thereby relying on it and giving it trust their trust through their actions. The key advantage of the current financial system is that there is…

I touch on a lot of issues you mentioned in the last third of the article. I agree that decentralization removes accountability, protections, and the associated trust.

Moreover, with crypto, we are trusting the developers of the underlying software rather than government institutions for fiat. I would argue there isn't a compelling reason developers should be seen as more trustworthy.

To be honest, I went into researching for this article with a bias against cryptocurrency, but ended with a belief that there is possibly an opportunity for fiat + crypto to form a more trustworthy system where transactions + the creation of new currency was logged where everyone can see. However, to actually realize this would require a lot of changes in current crypto architecture (particularly around the consensus algorithm and its current computation cost).

Re: Trust and the Viability of Cryptocurrency

#12
At this point it doesn’t matter if the average person trusts bitcoin. It matters if the billionaires, banks, and clearing houses trust bitcoin. I think the compromise will be that there will be a wealth tax on bitcoin. Government taxes property, income. It taxes cash with inflation. And it taxes gold and silver with pumps and dumps.
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