Why “blockchain” is BS in 4 slides

Forget the actual argument being made here, Can we all agree this is a garbage presentation? Every college student half paying attention knows this is a terrible power point. It's a power POINT not a power essay. This guy thinks he's awesome for fitting everything into 4 slides. Meanwhile the whole audience will miss everything he says out loud. They will be too busy reading & copying the massive amount of text in the sldies. This would be much better if he spread it out over more slides. Absolute Bush league power point skills.

The difference is that if there is an error, I can unwind the error with the counterparty's cooperation or without it.

A bit harder to do that when someone deprives me of bitcoin by theft or fraud.

I am familiar with compensating transactions. Ledgers are a necessary mechanism, but they are not a sufficient mechanism to safeguard against theft, fraud and error. These systems work because of multiple overlapping defences and they still fail.

I find that I tense up at the strong strain of technoutopianism that runs through bitcoin and cryptocurrency circles.

You're asking the rest of us to bet everything on block. I don't trust anyone to not make a mistake and I don't believe in single lines of defence, no matter how computationally intractable they are on paper.

Since we started intercoin.org I thought I would go through point by point and see how it applies to our project. It’s true that his points apply to many projects.

1) Two conversion steps - since Intercoin is designed to be used as actual currency and not just a store of value, people can pay each other anytime with zero fees. Given enough adoption, people stop cashing out (think PayPal, Venmo etc.) and just pay each other in that economy. They do this to save fees and time.

2) Entity to convert currency: Actually this entity can be a simple market maker on an exchange. Within its economy, Intercoin has sidechains for each community and deterministic pricing, with no market makers. And you don’t have to worry about eg PayPal or Cyprus banks freezing your money.

3) A “private blockchain” requires far more than that if it is to be used for crypto-currency. The main guarantee is that there are no forks of the log, aka double-spends. Intercoin lets every community run their own distributed ledger, so you don’t need to search the whole world for double-spends. That makes it so efficient you can even do micropayments (Netflix, Basic Attention Token etc.)

4) Proof of Work/Stake/blah. Intercoin letting communities run their own ledger the way Wordpress lets them run a blog, it comes with its own set of challenges as small communities can have very few computers. It has to be secure like your end-to-end encrypted email when you get on someone’s wifi. So we can’t use the traditional stuff. https://intercoin.org/technology.pdf

5) Lottery-based systems create mining pools: yep and in fact any kind of proof of stake creates centralization, while any kind of proof of work creates an arms race that leads to centalization. Intercoin takes inspiration more from XRP consensus protocol and SAFE network design.

6) “Code developers can and do act like central authorities.” If this refers to issuing the Unique Node List like Ripple, or reverting transactions like ETH etc. then that’s not good. If this means putting out a new client of server software and having decentralized adoption then that’s inevitable. Otherwise you get fragmentation like Linux. And even then, there are only a few major Linux distributions. I happen to prefer collaboration on a centralized codebase in this case, but decentralization in everything else. (eg I would be totally OK with WebKit being overseen by the W3C consortium and have new ideas begin as extensions that are finally adopted into the main codebase - think of all the wasted web developer man hours since multiple browsers launched).

7) Protection limited to money wasted - not sure what that means. A person knows their money can’t be stolen. In Intercoin our priorities are A) the overall network must never be corrupted, B) no one can steal your money C) no one can freeze your money permanently, in that order.

8) Transactions vs Capacity. VERY good points here, and all global networks are susceptible to this, as are public facing websites (DDOS etc.) This is why Intercoin is designed to be like the original Internet, with each community able to run its own network and set its own policies. That allows a theoretically UNLIMITED number of transactions per second, not 7 or 1000. Usually each validator includes a free tier for the first X transactions per day, to known members of the network. Networks run their own computers and the consensus algorithm is much cheaper and doesn’t waste half the world’s electricity to work. The validators - being off the shelf computers run by random people — fund themselves through the currency. But they earn money for actually processing transactions, not a lottery.

9) Bad economics - yes this is rampant in cryptocurrency circles (eg people including Satoshi thought Bitcoin being deflationary “sound money” will make people want to spend it, when the opposite is true). Intercoin has among its advisors world-famous economists from diff schools like MMT (Walter Mosler) and Austrian School, Chicago school, precisely for this reason. We want to let communities issue their own currencies and implement UBI on a community level through entirely voluntary means. It brings together people on the left and right.

10) “All ICOs are securities being sold fraudulently” - Intercoin Inc. has raised money through exemptions with the SEC (Regulations D and S) and is now working on registering Intercoin tokens with the SEC as securities ahead of a public offering. Not everyone shirks the law. In fact, we consider tech to be only one of the services we provide for communities. The others are turnkey solutions for regulations (securities, money transmission) and taxes (501c3 for UBI donations, capital losses etc.) so communities can install their currencies as easily as Stripe Atlas lets you open a company.

I hope this addresses it point by point.

I'm confused by this, as well as by your parent comment. Could you make your claims more directly so I can understand them?

*Git already did it. GitHub is just a site running a Git server for people to use.