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

Why banks are suddenly closing down customer accounts

nytimes.com

Post reply on HN
Print view View original

891–900 of 901 posts

Re: Why banks are suddenly closing down customer accounts

#891

Post by krupan »

FatalLogic wrote: post #520
krupan wrote: post #335

Earlier quoted context omitted.

How about metrics like answering the question of, "how much of the coin exists?" Or metrics like, "how understandable and simple is the overall protocol and mining scheme?" Or "has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?" Spoiler: Bitcoin wins on all of those. The market cap is better for a reason.

>"has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?" Bitcoin has also done this. You're referring to the $50m DAO smart contract bug (or "hack") early in 2016, when Ethereum had been running for about a year. The Ethereum blockchain was swiftly rolled back. This was achieved by the majority of Ethereum developers agreeing to create an update to Ethereum s…

Thanks for pointing that out, I didn't know that bit of Bitcoin history. I see a big fundamental difference between that chain fork and the ethereum DAO fork. The bitcoin fork was to fix a bug in the bitcoin source code. Without doing that fork, bitcoin would have died. All bitcoin users would have suffered if the fork had not been done. No bitcoin users complained about it.

The ethereum fork was to fix a bug in a smart contract running on top of ethereum. That bug only affected those who were participating in that smart contract (which was code for an investment scheme that a private organization had dreamed up). Lots of ethereum users complained about it.

Can you see the difference?

Re: Why banks are suddenly closing down customer accounts

#892

Post by krupan »

FatalLogic wrote: post #520
krupan wrote: post #335

Earlier quoted context omitted.

How about metrics like answering the question of, "how much of the coin exists?" Or metrics like, "how understandable and simple is the overall protocol and mining scheme?" Or "has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?" Spoiler: Bitcoin wins on all of those. The market cap is better for a reason.

>"has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?" Bitcoin has also done this. You're referring to the $50m DAO smart contract bug (or "hack") early in 2016, when Ethereum had been running for about a year. The Ethereum blockchain was swiftly rolled back. This was achieved by the majority of Ethereum developers agreeing to create an update to Ethereum s…

"Since then, there have been various incidents involving Ethereum and Bitcoin and hacks or smart contract bugs that caused losses of millions or billions"

Sneaky of you to add "Bitcoin" to that sentence, implying that smart contract bugs on Bitcoin, or Bitcoin hacks have cost people millions or billions. That is completely false, but nice try.

Re: Why banks are suddenly closing down customer accounts

#893

Post by FatalLogic »

krupan wrote: post #891
FatalLogic wrote: post #520

Earlier quoted context omitted.

>"has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?" Bitcoin has also done this. You're referring to the $50m DAO smart contract bug (or "hack") early in 2016, when Ethereum had been running for about a year. The Ethereum blockchain was swiftly rolled back. This was achieved by the majority of Ethereum developers agreeing to create an update to Ethereum s…

Thanks for pointing that out, I didn't know that bit of Bitcoin history. I see a big fundamental difference between that chain fork and the ethereum DAO fork. The bitcoin fork was to fix a bug in the bitcoin source code. Without doing that fork, bitcoin would have died. All bitcoin users would have suffered if the fork had not been done. No bitcoin users complained about it. The ethereum fork was to fix a bug in a sm…

>Can you see the difference?

Yes, I do see some differences. It's true that the situations were not identical. Thanks for your interesting reply.

One important difference is that the amount of money lost in the DAO was MUCH larger than the amount lost by the Bitcoin bug (the Bitcoin bug simply lost the total value of all valid Bitcoins, which I guess was only about $1m at that time in 2010, with few individuals holding substantial amounts). This meant that not much money was at stake and fewer people were affected, so the roll back was less contentious.

:

But there's a VERY important similarity between the two events: They were both existential threats to the respective currency.

That existential threat to Bitcoin was obvious. As you have just said, Bitcoin would have died if they did not quickly invalidate the 'faked' Bitcoins, because the quantity completely dwarfed the true Bitcoin money supply. So it was clearly the right thing to do.

The existential threat of the DAO bug to Ethereum was less clear. There was also more time to decide what to do, because the stolen funds had not yet been released from the smart contract, (and I recall the money could be stalled in the contract almost indefinitely by white hat hackers iteratively exploiting the same bug that had created the problem.)

But the consensus at the time, very early in Ethereum's life, was that Ethereum might die if 15% of the entire currency was in a state of limbo, or in the hands of a malicious hacker. This was compounded by the reputational damage and loss of confidence caused by such a huge disaster that directly impacted thousands of the most active Ethereum users, not just a few Ethereum developers.

:

I pointed out that some Ethereum developers lost substantial amounts in the DAO, so I can accept that personal financial loss probably also biased the decisions of some of them to approve a roll back.

But I personally don't believe that personal loss suffered by some Ethereum developers was a very significant factor in the decision to do a roll back of the DAO event. To explain my reasoning: That is why I mentioned the Parity bug.

The Parity bug was an even larger loss in financial terms, but it only affected a very small number of people, who mostly were Ethereum developers. The lost money was destroyed, not stolen. It did not affect the wider community, so it was not seen as an existential threat to Ethereum. So there was no question of a roll back.

:

Possibly the quite acrimonious argument over the DAO fix, which was bad enough to cause a semi-viable hard fork (creating the ETC currency), was an additional factor discouraging the developers and community from accepting a roll back to fix the Parity bug and later incidents.

Edit: Like you've mentioned, another difference is that the Bitcoin issue was a bug in Bitcoin itself. The Ethereum issues were coding bugs in smart contracts. I'm just making an observation about that, not claiming that one currency is better than the other.

Re: Why banks are suddenly closing down customer accounts

#894

Post by Gareth321 »

BobaFloutist wrote: post #860
Gareth321 wrote: post #538

Earlier quoted context omitted.

This was and remains an important USP for cryptocurrencies. Security in one's ability to pay for goods and services is incredibly important for any currency. In Canada, the government effectively de-banked hundreds of people and froze their funds for participating in and donating to the trucker protest. As more and more people experience this loss of liberty, the need for free and secure transaction methods will grow…

Do you really think crypto will become the default currency and governments will take no steps to restrict and regulate transactions in exactly the same way they do with cash?

I don't think it will ever become a default currency for modern nations. I think it will be used for parallel economies, which will expand. People will be able to buy more and more goods and services with crypto. Many more services will be set up to facilitate the conversation from USD, for example, to BTC. The scale of these parallel economies will depend on the lengths to which governments attempt to stifle freedoms. As they become more egregious, more and more people will opt to be paid in cryptocurrencies, and shop at places which accept it. There are many ways governments can and will clamp down on cryptocurrencies, but there are even more ways to achieve circumvention.

Re: Why banks are suddenly closing down customer accounts

#895

Post by Gareth321 »

delfinom wrote: post #776
Gareth321 wrote: post #538

Earlier quoted context omitted.

This was and remains an important USP for cryptocurrencies. Security in one's ability to pay for goods and services is incredibly important for any currency. In Canada, the government effectively de-banked hundreds of people and froze their funds for participating in and donating to the trucker protest. As more and more people experience this loss of liberty, the need for free and secure transaction methods will grow…

>I see cryptocurrencies as inevitable. Eventually cash will be eliminated, and this will only leave cryptocurrencies. Except, unless cryptocurrencies are tied to some brain implant so you cant lose the keys. There will be a need for a custodian for the average joe's key...and banks 2.0 here we come.

I agree, and I think banks 2.0 are already here: exchanges. Some of them offer credit cards, loans, leverage, investing, and savings accounts already. The catch is that they're largely unregulated, so I see a lot of people opting to keep their cryptocurrency in personal wallets. Like cash, if you lose your wallet, you lose your currency. So people might have a hardware wallet at home in a safe, and one which they top up when they do their shopping each day. In fact, wallets are safer than cash because currency can be retrieved if they're well designed. Bitcoin wallets, for example, merely hold a key to one's funds in the cloud. That key can be shared with multiple devices. Many offer retrieval methods using pass-phrases, which can be stored electronically or printed and kept in a safe or deposit box, for example.

I'm not claiming crypto is better or more convenient today than banks. At least not for most people. My premise is that they will become more valuable over time relative to their risks and limitations.

Re: Why banks are suddenly closing down customer accounts

#896

Post by FatalLogic »

krupan wrote: post #892
FatalLogic wrote: post #520

Earlier quoted context omitted.

>"has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?" Bitcoin has also done this. You're referring to the $50m DAO smart contract bug (or "hack") early in 2016, when Ethereum had been running for about a year. The Ethereum blockchain was swiftly rolled back. This was achieved by the majority of Ethereum developers agreeing to create an update to Ethereum s…

"Since then, there have been various incidents involving Ethereum and Bitcoin and hacks or smart contract bugs that caused losses of millions or billions" Sneaky of you to add "Bitcoin" to that sentence, implying that smart contract bugs on Bitcoin, or Bitcoin hacks have cost people millions or billions. That is completely false, but nice try.

Honestly, I'm not trying to be "sneaky". I didn't mean to imply that Bitcoin has suffered from disastrous smart contract bugs like Ethereum has, or that the core Bitcoin or core Ethereum systems had ever been hacked since that time.

The hacks I was talking about were just all the numerous attacks on exchanges and users that have involved BTC or ETH getting stolen.

It's sort of tedious discussing this kind of thing on HN because there will always be some guy who jumps in and says 'Well, ACTUALLY, what about SBF and FTX!!" even though I'm not talking about that. So, I just wanted to admit there had been many other financial losses, to try to avoid all those clever people replying and telling me about MtGox or Tether or something like that, as if I didn't already know about it. Kind of like that other guy who replied to my comment with something mostly irrelevant that he wanted to spout.

I didn't have time to write that all out in such pedantically specific detail - almost nobody is reading this. So, I'm sorry for the misunderstanding that I created. I was not being sneaky. You know: Sometimes, people just don't have time to explain everything in detail.

You seem like someone who is able to see this side of the argument, so thank you again for your comments.

Re: Why banks are suddenly closing down customer accounts

#897

Post by krupan »

FatalLogic wrote: post #893
krupan wrote: post #891

Earlier quoted context omitted.

Thanks for pointing that out, I didn't know that bit of Bitcoin history. I see a big fundamental difference between that chain fork and the ethereum DAO fork. The bitcoin fork was to fix a bug in the bitcoin source code. Without doing that fork, bitcoin would have died. All bitcoin users would have suffered if the fork had not been done. No bitcoin users complained about it. The ethereum fork was to fix a bug in a sm…

>Can you see the difference? Yes, I do see some differences. It's true that the situations were not identical. Thanks for your interesting reply. One important difference is that the amount of money lost in the DAO was MUCH larger than the amount lost by the Bitcoin bug (the Bitcoin bug simply lost the total value of all valid Bitcoins, which I guess was only about $1m at that time in 2010, with few individuals holdi…

Another way of looking at it:

The bitcoin fork was to fix a broken promise. The bug meant that Bitcoin didn't work as promised, the code fix and fork fixed that.

One of Ethereum's promises around smart contracts was, "code is law." The fork broke that promise by circumventing the smart contract code.

It is good that they have never done that again, but they have been making other big changes to the original Ethereum code not to fix bugs and broken promises, but to change the way it works. That, to me, is a concern.

Re: Why banks are suddenly closing down customer accounts

#898

Post by efreak »

MrDrMcCoy wrote: post #882
phil21 wrote: post #742

Earlier quoted context omitted.

That's what folks said about credit and debit cards to the curmudgeony folks like me 30 years ago. Now I can walk to a half dozen places that won't do business with you if you have neither. It would likely be defacto required, just line SSN is today. Sure you can "opt-out" - but at severe expense to your life.

Isn't it the law for a business in the US to accept legal tender?

There is no federal law that says all businesses must accept cash.

https://web.archive.org/web/20220127202620/https://www.treas...

Re: Why banks are suddenly closing down customer accounts

#899

Post by krupan »

decentralised wrote: post #650
krupan wrote: post #335

Earlier quoted context omitted.

How about metrics like answering the question of, "how much of the coin exists?" Or metrics like, "how understandable and simple is the overall protocol and mining scheme?" Or "has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?" Spoiler: Bitcoin wins on all of those. The market cap is better for a reason.

Actually... the account model is much easier to use to get an accurate view of all balances than the UTXO model. As for rollbacks, Bitcoin had one in 2010 ( https://en.bitcoin.it/wiki/Value_overflow_incident ) and a chain fork in 2013 ( https://bitcoin.org/en/alert/2013-03-11-chain-fork ) both decided by those who could make the decision... and accepted by a majority of nodes, same as with the ETH hard fork I'm not s…

Finally looked at both of those bitcoin events that you are attempting to equate to the DAO fork. I commented about the first one elsewhere here. The second one was indeed a chain fork, which is actually a normal and expected event in Bitcoin when miners disagree (for whatever reason) about which blocks are valid or not.

In this case the disagreement happened because of a backwards incompatible change that was accidentally made to the mining software. Nodes running the old software rejected blocks generated by the new software. The bug was fixed and miners happily stopped using the buggy version of code and the chain fork was resolved, just as designed by the Bitcoin protocol. Nodes that never ran the buggy version didn't have to do a thing.

Like my discussion of the other bitcoin fork, this to me looks like an entirely different category of event than the DAO. Bitcoin fixed a broken promise in both cases. Ethereum broke a promise in the DAO fork.

Re: Why banks are suddenly closing down customer accounts

#900

Post by vvpan »

Quindecillion wrote: post #591
vvpan wrote: post #294

Earlier quoted context omitted.

Yeah, to say that "Bitcoin" is the epitome of blockchain technology, an ever-innovating field, is either ignorant or disingenuous.

Can you describe to me what the main point of "blockchain technology" is? What is there to innovate in terms of its core function?

Old thread, I know. But there are a few:

* Transaction throughput.

* Efficiency - allowing small scale players to participate in verification and block production.

* Inter-chain communication - some networks are explicitly designed as connected swarms of chains (Cosmos and polkadot for example) and some evolving into that direction outside of the protocol level (Ethereum). How do execute transactions that span the networks is an ongoing research topic.

* Privacy - how to execute transactions in private. How to attest that something is true, say that you have a certain credential, without exposing your account information. Blockchain has been why zero knowledge (and now homo-morphic encryption it seems) cryptography are becoming an active field of research.

* Identity, authentication, account recovery. - these tie into cryptography but generally research on applied cryptography with good UX. For example the first time I've seen social-recovery accounts with any amount of usage (now a feature in Apple accounts) was in a blockchain application.

* Monetary research - far from everybody involved in crypto believes that a fixed-supply rare item makes for good money. "Fiat" money is basically a "token" with governance attached to it. This has lead to a wave of experimentation with other forms of tokens - ones that are algorithmically tied to other assets, ones that are backed by an organization, local currencies, etc.

* Organizational research - since smart contracts can effectively be transparent community banks there's has been a plethora of experiments with building organizations that manage their own treasuries. Horizontalism, organizational transparency and cooperation is something that's been at the core of many crypto projects, the idea being that something cannot be both a reliable public good and controlled by a single party. It's not an easy task, but some cool organizations have come out of this. For an example look at pocket: https://messari.io/report/governor-note-proof-of-participati...

Post reply on HN