A better title would be Ledgers in historical perspective. The hypothetical he ends with (what if ledgers could be decentralised) is a classic example of blockchains looking for a problem. In recent history have there been examples of banks changing their own ledgers? As a civilisation we have already solved the problem of trust in a much more efficient way.
> As a civilisation we have already solved the problem of trust in a much more efficient way.
Lol. Yeah, trust in the bankers is at a civilization high /s
In any case, block-lattice crypto is at least an order of magnitude more efficient than Mastercard et al. And it can be genuinely decentralized.
BTC and Ether were the first of their kind - but not the best, and certainly not the most efficient. Yet they get used as the bar for comparison to traditional banking and money, by people who really ought to know better.
That wasn't a change in the ledger - it was the misselling and fraudulent opening of accounts. And it was remediated, there was a change in the leadership and settlements to the victims. You're proving my point, as a system we do a decent job of enforcing good behaviour.
I'm sorry, aren't the balance of accounts the key component of the ledger? So wouldn't fraudulently changing account data would pretty much be the definition of altering the ledger? What kind of thing to you would constitute "changing the ledger"?
Youre joking right? Aside from the massive well know scandals, I find it extremely hard to believe you havent personally experienced sameone fudging numbers to your detriment
Imagine a world where the web is controlled by a single entity, say Facebook. They get to decide who is allowed to create a website. They get to decide how much it cost. If they're not happy with the site's content, they can take it offline. Do you believe that would be a better world to live in?
- trustless: I trust the companies I use, it works
That's because there's usually no alternative. But when there's a trustless alternative, you may find that it is less risky or costly. Many people chose e2e encrypted messengers because they don't trust a third party with their private messages.
- censure resistance: OK, fringe case for most
"[...] Then they came for me—and there was no one left to speak for me."
It may be fringe but it's a massive issue for those who are censored. It's also not that uncommon. It is estimated that there are over 1 billion unbanked people worldwide. Also, try "PayPal horror stories" on Google.
- pseudonymous: why do I want anyone to be able to see my transaction history?
What parent meant is you can transact with people without knowing their real identity. I could send you a BTC tip on HN without knowing your name or address. Regarding your concern about privacy, no one can really determine your transaction history by looking at the blockchain. It's possible to do some guessing but all you really see are transactions going from opaque addresses to other opaque addresses with no attached identity information. Also, this can be further solved with CoinJoin[0].
> you may find that it is less risky or costly. Many people chose e2e encrypted messengers because they don't trust a third party with their private messages
Private messages are not money. Example: you ordered some goods and those arrived in bad shape. What's your recourse in the trustless world?
What do you mean by that? I don't see why there couldn't be a centralized service offering payment dispute arbitration on top of Bitcoin (this is what I meant by building "trustful" systems being built on top of trustless foundations).
> why there couldn't be a centralized service offering payment dispute arbitration on top of Bitcoin
What exactly does Bitcoin provide in this case?
> this is what I meant by building "trustful" systems being built on top of trustless foundations
So, a service that exists outside bitcoin, has a trust system built entirely outside bitcoin and only doing something with bitcoin because reasons... is "building trustful systems on top of trustless systems".
I don't think you know what "building on top" means.
There are many centralized services that do dispute arbitration on top of USD. Those systems are built entirely outside of USD. PayPal for example doesn't have an account at the Federal reserve nor does it handle physical cash. They are effectively "off-chain" payment systems for USD.
So I guess your question is, what are the advantages of BTC over a fiat currency like USD. The answer is two folds:
1) BTC has an open network (the Bitcoin blockchain) allowing users to exit payment systems for the purpose of self-custody or for interconnecting with other payment systems. There's no equivalent system with fiat. Self-custody of USD literally requires transporting and storing pieces of paper. You also can't directly transfer USD from PayPal to say, CashApp.
2) BTC has a predictable money supply. Fiat currency doesn't: money supply can be arbitrarily inflated.
In addition to the above, Bitcoin enables the creation of payment systems that are more tightly built on top of it, like the Lightning network, which preserves many of the properties of Bitcoin (e.g. trustless). You could also build a dispute arbitration system where the arbiter just needs to be semi-trusted (e.g. there are schemes that can cryptographically prevent the arbiter from stealing escrowed funds, etc.).
> So I guess your question is, what are the advantages of BTC over a fiat currency like USD.
No. The question is: what does the trustless blockchain offer when you still have to rely on a centralised trusted entity.
> BTC has a predictable money supply. Fiat currency doesn't: money supply can be arbitrarily inflated.
Which immediately means that whoever got in early and got the first initial supply is at great advantage compared to anyone who got in later. For example compared to any people born 20 years from now.
> You could also build a dispute
Could. Maybe. Should. Perhaps. That's all you can ever hear from crypto proponents.
I was asking about fiat because many of your criticisms equally apply to fiat.
> No. The question is: what does the trustless blockchain offer when you still have to rely on a centralised trusted entity.
I answered that multiple times already.
> Which immediately means that whoever got in early and got the first initial supply is at great advantage compared to anyone who got in later. For example compared to any people born 20 years from now.
That's, unfortunately, the case for almost anything of value.
> Could. Maybe. Should. Perhaps. That's all you can ever hear from crypto proponents.
I'm not sure I would consider myself a crypto proponent, I was trying my best to answer your questions as objectively as possible.
But it seems you are very emotionally invested in this for some reason... Did you have a bad experience with crypto?
> I was asking about fiat because many of your criticisms equally apply to fiat.
They... don't.
> I answered that multiple times already.
You haven't. All you're saying "o let's have this centralised trusted entity that does something with blockchain because blockchain".
> That's, unfortunately, the case for almost anything of value.
If bitcoin is a currency as you would have us believe, then this is not what a currency should be.
> But it seems you are very emotionally invested in this for some reason...
Ah yes. There are only a few ways crypto discussions go: problems are dismissed out of hand and/or "have you had bad experience with crypto" (often in the form "you're just sad that you didn't get in on it early").
I didn't dismiss anything out of hand, I replied to all your questions as objectively as possible, but you just pretend that I didn't. I also would not have you believe anything, I am not trying to sell you anything here. I just answered your questions because I believed they were genuine questions. I am now starting to question that...
My question to you: what is your alternative? USD has many of the problems you mentioned and more. Transactions happen "off-chain", monetary inflation largely benefits the wealthy, etc.
Pretending you’re not a crypto proponent is funny while trying to imply the other person isn’t genuine.
They already said fiat doesn’t have close to the same issues as crypto. The monetary inflation benefits to the wealthy are nowhere near the same for Bitcoin or any crypto. It’s a fraction of how bad Bitcoin is. They also basically said that multiple times too.
They have answered the rest too. Being on chain isn’t an issue for fiat because they aren’t trying to be on chain. They aren’t trying to shoehorn in blockchain.
Now they have turned to acting like you aren’t genuine in their next reply, haha. When they actually tried to pull a “I don’t know if I’m a crypto proponent”
> The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.
> Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.
Right, which is why we have regulations on reserve requirements for banks, as well as things like FDIC insurance that guarantees your money in a bank account.
>The root problem with conventional currency is all the trust that's required to make it work.
Surely this is a joke? Most currencies enjoy a high degree of trust until they collapse due to structural reasons that have nothing to do with trust whatsoever.
The euro zone and the dollar show that there is practically no shortage of trust whatsoever.
Seriously, this dude is supposed to liberate us from the evils of money?
How did it come to this? The root problem with currency is the zero lower bound of interest and liquidity preference which both combined result in permanently positive interest rates. When you refuse to pay interest, the economy stagnates and it can result in mass unemployment. This has nothing to do with trust. The Bitcoin economy is plagued with mass unemployment. The insanity of unemployment is a consequence of the insanity of non neutral money.
Alternatively, you can pay interest, however this means you must perpetually borrow more money, e.g. Keynesian fiscal stimulus, notice that the insanity originates in money itself, not in the political response, the political response must be at least as insane as the money system, no less and it collapses. Now, there is a third way, QE aka not bothering to ask people whether they want to lend their money out, however, due to liquidity preference, the additionally created money will stagnate somewhere, meaning you can't ever stop QE. Again, in this case the insanity is a structural property of the currency, the monetary intervention has to be as insane as the money system and no less.
The apparent untrustworthiness of politicians is the result of the insanity of money, not the other way around. If money worked properly, you wouldn't need politicians to mess with it, you wouldn't even consider trust to be the problem because the amount needed would be so miniscule as to never matter in the grand scheme of things.
It is really strange to me, that people notice a constant problem with money and yet they still come up with the same conclusion "you're holding it wrong", what if it is impossible to hold it properly? What if permanent money is irreparably broken and forces its own debasement and all the other problems?
Due to blockchain's architectural shortcomings, you need to do the transactions off chain. Fine...
But crypto-"currencies" are actually highly speculative assets (as South Africa declared today [1]). No bro will spend them - the ideology is to HODL for 100k remember [2]? Earnest patron saints like Laszlo Hanyecz bought two papa john’s pizzas in 2010 for what would be worth today roughly $200,000,000 [3]. They wanted a new currency, but today the purpose is speculation. The whole point is not to be the greater fool.
Bitcoin was never meant to be gold, it was meant to be spent. But that hasn't happened.
what's wrong with this comment?! that it's anti-crypto? currency needs to be a medium of exchange, unit of account, and store of value. Given its volatility, Bitcoin could only ever realistically be useful for the latter, and only then as a risky speculation.
A "store of value" when talking about the properties of a useful currency implies that the value is largely stable so that it can be "stored" over the medium- and long-term. So that's actually the property BTC is worst at due of its volatility. Actually, no, 4 transactions per second globally means "medium of exchange" is the property of money BTC is worse at.
Your point that BTC was supposed to be a currency and has turned into a speculative asset is true though, and BTC proponents often dislike it when someone points that out. LN is just an attempt to make BTC better as a "medium of exchange" which is fine, but it still doesn't address the fact that BTC is a terrible store of value, it just reduces the volatility of the transaction fee (in theory).
nice rebuttal - but the "profitable and stable flower industry" is the trade of an underlying commodity with utility value i.e. the flowers. there is no such underlying asset with crypto. the part that is parallel is the rife speculation that left many bust.
Flowers were not a commodity before there was a market for them. Internet did not have commercial value before the speculative wave, in fact very little profits were made even by the end of the dot com boom. Agree there is rife speculation in crypto, but rife speculation does not prove that there won't be future sustained value. When dot com boom imploded it was because people similarly thought there was no value in the internet.
Flowers are used for decoration, dies, teas, scents. Sometimes they may be overvalued.
Crypto doesn't have any underlying value. It's just greater fool investing, there is no underlying cashflow, asset or company. Future cash flow comes from greater fools buying in.
When you say "the internet" I think you mean the wave of web1 companies? Same as flowers above, there are real uses and value creation, which can be priced in many ways.
In 1999, what web1 companies had cash flows or even a business model that could become profitable? In hindsight it is obvious because we know that things worked out, but at the time it was just speculation, and the crash was the market calling it worthless. Similar objections then around what underlying value is and how the tech was useless. The ways to monetize often were invented much later (eg search ads).
If you were a middle age farmer, sure you might like to look at or smell a flower but you would be crazy to say stop growing wheat and plant tulips. But as society advances markets can emerge to serve needs of people that were not possible before.
I agree crypto tokens is just speculative investing. But that doesn't imply that the value doesn't stick-- it doesn't have to either collapse to zero or go up forever. Monetary premium is a real thing and necessary for humans to transact. You can't predict what money we will use in the future.
it does imply that the value doesn't stick - in fact that's exactly what I'm saying. there is no value beyond the expectation that another greater fool will buy it from you in future.
I don't follow the automatic assumption that giving the info to centralised entity like a bank is bad? What is that you are fearing? And why is that more likely than Crypto sinking or going to zero, you losing your wallet key or someone hacking your wallet? Code is law - so you're left with nothing.
My point is that the current financial system is not secure in any sense. Why would i have to give you my entire credit card information to make a payment. Why are you 'pulling' money from my account instead of me sending it to you. Why have we failed to implement a public/private key relationship with our financial data?
>giving the info to centralised entity like a bank is bad?
Well my first and prime example would be to talk to any greek citizen during 2008. The goverment took a percent of all the citizens money to pay their debts. Countless credit card scams have happened because i am trusting all of my data on the cybersecurity of (Upwork, linkedin, outlook, google, tinder, etc. etc.) as you go down the list of entities with your full name, address, & credit card information you start to realize that you have lost control of your financial self-sovernty.
I've played this game with my friends and it's a fun one; Give me your full name and i can buy your information on the darknet, including current/ past credit card info, Social Security number, past addresses, past-employers, tax information, etc.
My question to you is: what's the problem? On the few times I've lost money to online fraud, the bank returned it to me.
Why does having a huge public web of transactions on the slowest ledger ever created help? What happens to your "sovereignty" when everyone can see your purchases patterns? What happens when grandma loses her wallet key?
top comment:
"How fantastic to let this man expose how incredibly dangerous governments are, without him even realizing [he's] doing it."
Also, the entire time he seems to conflate crypto with CBDC which are nothing alike.
>what's the problem? On the few times I've lost money to online fraud, the bank returned it to me.
How is that not a problem?! I really don't understand this sentiment. There is hundreds of millions of fraud occuring on these systems that employ thousands of people for flagging, eliminating, and reimbursing people due to it being a fundamentlly flawed system. Pull vs. Push here is an important distinction. Having a public private key, even within the current financial system (Not talking crypto here) would be an order of magnitude improvement and would eliminate all of this.
I think you're right about online fraud being much reduced with public private key tech, but if it's such a good idea why has no one been able to do it?
the IMF has no incentive to change the way it's doing things & would require a 'rewrite' of the current infrastracture. Also, public/ private key encryption is not quantum-safe, so eventually we need another way. (There is ton of research being done on quantum-safe cryptographic proofs)
History shows systems rarely 'change'. More likely than not they are replaces. That's what BTC is an attempt at.
The centralized nature of these oligopolies is a property of capitalism, i.e. capital consolidates power. You are saying that search, storage etc are centralised because of the tech? Why are they any more centralised than the other (pre-internet) examples I mentioned?
ahh, i was looking at those company's 'as tech'. In the sense of technology, not internet company's we see today.
To be honest I think we agree, we are just getting caught up in semantics. Whether it is capitalism or tech that's doing it is irrelevant because we have the development of technology in a capitalistic world order. In other words, it is impossible to differentiate when the two are so intertwined.
https://www.mollywhite.net/annotations/latecomers-guide-to-c...
It seems as if NYT have a couple of relatively pro-crypto (or just naive) writers.