An engineer's observations on Web3 and its possibilities

I'm saying "the system" doesn't work because it doesn't serve its purpose and on a deeper level it is inherently based on imagination.

Politicians and the financial system are not entities that can isolated from each other. The financial system is in of itself a form of trade regulation: to make rules about what costs what, who owes who, what can be traded how and so on. Finance is the bureaucracy of trade. It is failing because it shifted its purpose from regulation and quantification of value to a life of its own and has become in large parts speculative and non-proportional. Even some of the most libertarian thinkers like Adam Smith have warned us about this.

A crypto market is one such thing, but not only is it already disjoint from its purpose, which is enumerating value, credit and regulating trade. The speculative and volatile nature of crypto markets show that. But it also doesn't enable the use of a safety break - that has been used time and time again in larger history but also in smaller interactions - to repair the economy from becoming fantastical to real again. Crypto has also no alternative solution of doing that.

What happens when you don't do that for long enough is that the people will do it for you. They will at some point burn it all down. Debt and profits that are disjoint from actual value and become more so through financial mechanisms erode trust. And currently that is exactly what you can see happening since a few years. People are quitting their jobs, joining protests, unions and so on because they intuitively understand that they are being screwed.

I partially agree. Bitcoin is a failure and it's pretty sad that so much energy is being spent mining it. I wouldn't mind that same amount of energy being spent on Monero though.

It would also be nice if we could use the heat generated by computers for something instead of dissipating it all into the air. That way the energy wouldn't actually be wasted.

>> 1. Existing payment systems expose your entire financial history to the service provider (e.g.: your bank, your credit card company etc.). I don't understand how people can complain about surveillance and data collection by tech companies, and then be perfectly fine with consumer finance companies doing the same thing.

Generally people have choices in how they handle their finances: you can choose which financial institutions you use and how you want to pay most of the time. If you don't want to be tracked, you can get cash and pay with cash.

However, some of the tracking can be to your benefit. Most banks and credit card companies offer some degree of fraud protection / prevention and if you have a good credit history and want to take out a loan, they will happily give you the money. It requires a real-life trust relationship where the bank / finance company is a trusted business partner and not an untrustworthy predator.

If you find the relationship with your bank or credit card provider it not to your liking, you can choose a different bank or credit card provider that offers more favorable terms.

>> 2. What is legal is not what is moral. E.g., outlawing sex work, which results in SWers in even Western countries getting kicked off traditional payment systems, or having SW forums taken down (e.g. backpage). Having a decentralized and censorship-resistant infrastructure for these essential utilities is vital, and blockchains can be a key component of that infrastructure.

I disagree here. I personally do not think that sex work is moral or 'an essential utility'. If a payment provider does not want to offer payments for illegal or immoral products or services that is their choice. Some payment providers might still be willing to, but no one can really stop cash payments.

You do have a point here though, no one can stop blockchain-based payment systems and they have been instrumental in the recent increases in malware and ransomware.

>> 3. As a cryptographer, PKC and digital signatures have thoroughly failed to provide a decentralized and secure P2P communications infrastructure. (And no, Signal doesn't count: it's fantastic, but it's run by a benevolent operator.)

PKC and digital signatures don't provide infrastructure. They provide tools to be used at endpoints. You can use freely available cryptography tools such as OpenPGP (https://www.openpgp.org/software/) to generate your own keys and securely communicate with someone else over existing communication infrastructure.

"If my grandmother had wheels she would have been a bike"

> Smart contracts are deployed once and run forever; their code cannot be changed. The software development industry has literally zero experience with such a deployment model.

Programmers for cartridge-based game systems and many other embedded devices with no connectivity have decades of experience with this.