Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

In defense of cryptocurrency

blog.cryptographyengineering.com

Post reply on HN
Print view View original

311–320 of 578 posts

Re: In defense of cryptocurrency

#311

Post by [deleted] »

SkyMarshal wrote: post #201
denkmoon wrote: post #169

Earlier quoted context omitted.

I would argue that the decentralised nature is a crucial aspect of the value proposition. It's part of the mythos of why crypto is valuable/worth investing in/going to the moon. The way it's actually used completely destroys that part of its value, but don't let reality get in the way of a good investment opportunity. I think if you set up a coin that doesn't use a distributed ledger, and instead uses an SQL database…

> I would argue that the decentralized nature is a crucial aspect of the value proposition. I would go so far as to argue it's the entire aspect of the value proposition. Take away decentralization and all you've got is a poorly architected, inefficient, unwieldy PayPal.

[deleted]

Re: In defense of cryptocurrency

#312

Post by maccard »

boughtahouse wrote: post #241
e63f67dd-065b wrote: post #149

Earlier quoted context omitted.

Tell me you’ve never bought a house without telling me you’ve never bought a house. Buying houses are expensive because: - Realtors are a state-sanctioned monopoly for real estate transactions and suck up a % of the costs. They also provide the necessary service of aggregating information about the market and negotiating on your behalf - Due diligence on the state of the property. This means inspecting that there’s n…

I have bought two properties in two different first-world countries and also bought NFTs with Ethereum. The idea of houses on a blockchain are pretty much a pipe dream. But there are a lot of systems in traditional house buying that could be made easier with crypto-like ideas. Saying “real estate should be on-chain” should be read as asking for more NFT-like features in how real estate is transacted. - as a cash bidd…

I live in the UK (scotland specifically, where the process is different here). The house buying process here _is_ essentially decentralized but it's not trusting potential adversories by default. I don't think that many of your suggestions of crypto like improvements will help though.

> as a cash bidder you need to provide proof of funds to the estate agent,

Here, you don't provide them to the seller, you provide them to the solicitor acting on your behalf. Even if we removed that person from the chain, they are required to perform KYC on these transactions, so for regulatory reasons I still need to provide proof of those funds.

> blind bidding process is usually opaque and broken,

As much as I hate this, that's a (design) feature not a bug. Blind bidding doesn't exist in a vacuum, a seller is perfectly able to accept a bid from a party. Blind bidding is what a seller would use in a competitive market to extract the highest possible bid. If they wanted to accept a lower bid they could, by e.g. accepting their favourite bid at the second highest offered price.

> settlement times are extremely long in the order of months, not seconds.

This isn't because of transactions though, this is because mortgages take _weeks_ to come through, solicitors and agents take time to communicate/juggle multiple accounts/offers, and frankly they're still working with paper documents and off of the "who shouts the loudest gets service" system.

> - escrow and exchange of funds in some cases could in theory happen with smart contracts where both parties sign a message to perform the exchange,

The problem with using trustless currency for physical goods is that you need to trust the other party. If they just walk away without providing the keys or clearing the house out, it doesn't matter what it says digitally, you have a problem.

> which would reduce the significant commissions and fees.

On my past property purchase, I paid ~6% of the value in a transaction tax to the government, and ~£1000 in other "legal" fees. Meanwhile the actual transfer of funds cost me £0, (thanks faster payments - free almost immediate transactions up to £250k), and if I was a cash buyer, a bank transfer would have cost me £35. The fees are negligible even today.

I've been banging this drum for years now, the problems you're outlining are not technical, they're policy and regulatory. You can solve all of the above problems with regulation, like we've done in the UK. That said:

> - the process feels archaic compared to buying most other types of property.

Couldn't agree more. It feels like being dragged back to the stone age.

Re: In defense of cryptocurrency

#313

Post by tsimionescu »

nftbuy wrote: post #265
egeozcan wrote: post #230

I really don't want to be a downer but all I read in pro cryptocurrency posts are: It's still new! It needs time! You need to follow the latest developments! It has a lot of potential! It's time already that someone shows some of that potential and it better not be something like NFTs!

NFT is quite a novel and interesting application on its own. For an application of NFT, see Tezos Domains and ENS (Ethereum). Aside from NFT, stablecoins like USDC and DAI are also quite novel and interesting applications. These applications are providing value and utility to those using them, and could potentially improve other parts of the world’s payment systems by providing a decentralized option alongside centra…

None of your examples are good ideas though. DNS requires proof of identity and a mechanism for settling disputes (e.g. so you can't buy google.com if you're not named Google; and also can't buy g0ogle.com, gooogle.com, gOogle.com etc) to be a useful system. Minting NFTs simply can't give you that, and once you involve a party that can settle disputes, all advantages of NFTs disappear.

Not to mention, most NFTs as used in reality are 100% vapourware. As the owner of an NFT, you sometimes don't even have the right to reproduce the thing the NFT signs yourself (as in the case of the NBA moments NFTs).

Even when you do, you typically have no official ownership of the thing - for example, if you buy a Bored Ape NFT from someone else (not Yuga Labs directly), you'll likely have no legal standing to sue Yuga Labs if they later decide to delete the Ape you bought the NFT for (sinec you have no commercial relationship with them, and the NFT itself is just an NFT, it's not a contract).

Re: In defense of cryptocurrency

#314

Post by m00dy »

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…

thank you for writing this.

Re: In defense of cryptocurrency

#315

Post by maccard »

meowkit wrote: post #279
xthrowawayxx wrote: post #263

Earlier quoted context omitted.

What happens if you get hacked and someone steals your house NFT? Have a trusted third party transfer it back to you? Or give up your house to the hacker?

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% under market value to someone who is a cash buyer because I need a quick sale, or I might be in a ripping hot property market where properties are selling for 20+% over their market valuations

> time delayed exchanges

That's all well and good if everyone involved is digitally contactable for the entire duration of the process, but if I'm ill for a period of time, or otherwise vulnerable, it doesn't matter whether the delay is 2 days or 2 months. The advantage the current system has is that there is inherently a central organisation that says "yes you own this" and they handle disputes. If you have an actual problem of suspected fraud (say your car catches fire with all of your ID in it), you can go to a government office, sign some legal documents, and get new ID and continue. Similarly, if someone impersonates you there are legal protections that can and are enforced.

Re: In defense of cryptocurrency

#316

Post by yellowapple »

tsimionescu wrote: post #301
yellowapple wrote: post #234

Earlier quoted context omitted.

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…

> I disagree with the article on this point. No reasonable person expects to be able to reverse a cash transaction; What gave you this idea? If I have proof that I paid you cash for a service, and then proof you didn't provide that service, I absolutely expect to be able to reverse that transaction, via the legal system. > A blockchain is much more resilient; the equivalent would be to have hundreds or thousands of r…

> If I have proof that I paid you cash for a service, and then proof you didn't provide that service, I absolutely expect to be able to reverse that transaction, via the legal system.

That's very different from what's meant by "reversible transactions" in the context of other payment systems. If the legal system can dictate the reversal of a cash transaction, then it can do so for a crypto transaction - without either needing to have some explicit protocol to do so.

> That level of resilience is completely unnecessary

That's just, like, your opinion, man.

> And who will hold these NFTs?

The owners of the properties they represent.

> And where will the data the NFTs sign be stored?

NFTs can store arbitrary data.

> If they want to distribute the NFTs to the current owners of the houses, than they now need to establish an Ethereum/Cardano/[...] wallet for each person who owns a house in their district

Which is many orders of magnitude easier than the current system.

Besides, it doesn't have to be all or nothing; a gradual opt-in transition would be perfectly doable.

> If they want to make them part of the NFTs and store them on-chain, then minting the NFTs will be exorbitant

On just about anything noteworthy that's not Ethereum, the cost is on the scale of cents. Wow, such unaffordable, many expensive.

And no, you don't need physical scans of the original documents. A transcription will do fine.

Re: In defense of cryptocurrency

#317

Post by mywaifuismeta »

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.)…

That's how you end up with Google, Apple, and Facebook, Twitter, etc. They may start out as providing a service that works, but over time as they get bigger the incentive structure pushes them towards monetizing your data, locking you in, building boundaries around who can access what (e.g.Twitter APIs), and sharing data with parties you don't want to share it with.

One way to avoid this lock-in is to change the underlying incentive structure. That's what the blockchain does. The fundamental difference is not about centralized vs. decentralized, it's about the incentives that are a result of centralization vs decentralization.

Re: In defense of cryptocurrency

#318

Post by yellowapple »

sime2009 wrote: post #260
yellowapple wrote: post #234

Earlier quoted context omitted.

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…

> 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. Technically true, but also completely pointless. An organisation running an SQL database doesn't need hundreds or thousands of redundant SQL nodes/copies to reach the level of robustness required.

Indeed they don't, but even running two database servers (let alone more for e.g. geographic redundancy) is already more resource intensive than running a full node for a proof-of-stake blockchain. You might as well just run that node and get that resiliency basically for free.

Not every usecase requires that sort of resiliency, of course, nor does every use case prioritize it above latency and throughput; nobody except the truly deranged are asserting that a blockchain could or should replace every SQL database out there. For those who do need that sort of resiliency, though, a public blockchain is much more cost-effective.

Re: In defense of cryptocurrency

#319

Post by zoigdev »

I did not see any real pro crypto argument in this text. Nothing is really proven in practice and everything is in ideas. Meanwhile scammers are taking money from enthusiasts and existing blockchains are burning up a huge amount of energy.

Re: In defense of cryptocurrency

#320

Post by shreyshnaccount »

mellavora wrote: post #254
shreyshnaccount wrote: post #171

Earlier quoted context omitted.

Makes no sense. Microsoft stock and houses are very different. I can run an illegal alligator fighting ring in one and not the other.

Bannon? Is that you?

Touché but I'm not wrong am I?
Post reply on HN