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> That's simply not what currency is. Currency is an transferable i.o.u. worth whatever the creditor says it's worth. The most pervasive currency is currently t

by kanzure 11y ago

> That's simply not what currency is. Currency is an transferable i.o.u. worth whatever the creditor says it's worth. The most pervasive currency is currently the greenback. Every additional party or layer between you and the U.S. government increases credit risk and transaction costs everytime you make a transaction outside the pay network your currency is held in. The root problem with traditional currency is all the trust required to make it work. -- Not that justified trust is a bad thing, but trust makes systems brittle, opaque, and costly to operate. Trust failures result in systemic collapses, trust curation creates inequality and monopoly lock-in, and naturally arising trust choke-points can be abused to deny access to due process. Through the use of cryptographic proof and decentralized networks there is a way to minimize and replace these trust costs. (Just something that's been floating around in my head lately... Carry on.)

oneJob 11y ago
The cryptographic proof strictly verifies whether or not the currency is authentic or counterfeit. There is no implicit value in the proof. In fact, there is a cost to calculating the proof. The value is in the willingness of the person holding the i.o.u. to honor that i.o.u. A "perfect" cryptocurrency provides two of the three requirements of currency (a means of transferring value, and a unit of measurement of that value) but it does not (as no tangible or conceptual thing ever will) provide intrinsic value for the exchange. Value is subjective. Gold is useful today, not so much tomorrow. Gunpowder is useful to you, but not so much to me. Given that it has been debunked that currency arose out of trade and barter (i.e. currency with intrinsic value has replaced items with trade specific value so as to be more fungible), well, where is the value then? Trust is the value. You trust you can, once your currency is verified, exchange it for something you value from someone. If that person does not trust that the currency you are offering will be able to be tendered elsewhere,,, then no exchange, because the currency is of no value to them. What if everyone stops using U.S. dollar bills tomorrow? Does my bank account morph into some other value that I can use? Is it tied up in some vault of gold at the US Treasury? No. It becomes a worthless number on a register somewhere. But, the bartender at my local watering hole might vouch for me that I had that much or that I made that much money or that my credit was good. Trust = Credit Without trust there is only trade and barter. Without the ability to trust that the future will have value in it, I'm only going to go with what is right in front of me right now. And a proof, it's interesting (I loves me some math), but, most of the time, I'm not going to say it has some sort of intrinsic worth that I'd trade, say, you a burrito for it.
TeMPOraL 11y ago
I disagree. Trust is what makes systems efficient and effective. People who trust each other can cooperate together without expending resources on protecting themselves. Consider Bitcoin - the cost of that trustless system that barely works is mind-boggling waste of electricity. Or look at layers and layers of bureaucracy people create; a lot of it exists to mitigate the problems of lack of trust by creating a system that doesn't depend on actors to be benevolent. It's true that systems based on trust are fragile - malicious actors can abuse them, and if there are enough of them, the public trust will collapse and the system will go to hell. But that's only an argument for why should we fight for ensuring trust. Why we should punish defectors - the liars, the cheaters, the abusers. Because we need this to be efficient.
- kanzure 11y ago
  > People who trust each other can cooperate together without expending resources on protecting themselves. This is not how security works. You need to consider the adversarial case, not the average case. > Consider Bitcoin - the cost of that trustless system that barely works is mind-boggling waste of electricity The "waste" is actually for the purpose of putting a floor on the cost to trick someone into believing a non-consensus history.

by kanzure 11y ago

oneJob 11y ago

The cryptographic proof strictly verifies whether or not the currency is authentic or counterfeit. There is no implicit value in the proof. In fact, there is a cost to calculating the proof. The value is in the willingness of the person holding the i.o.u. to honor that i.o.u. A "perfect" cryptocurrency provides two of the three requirements of currency (a means of transferring value, and a unit of measurement of that value) but it does not (as no tangible or conceptual thing ever will) provide intrinsic value for the exchange. Value is subjective. Gold is useful today, not so much tomorrow. Gunpowder is useful to you, but not so much to me. Given that it has been debunked that currency arose out of trade and barter (i.e. currency with intrinsic value has replaced items with trade specific value so as to be more fungible), well, where is the value then? Trust is the value. You trust you can, once your currency is verified, exchange it for something you value from someone. If that person does not trust that the currency you are offering will be able to be tendered elsewhere,,, then no exchange, because the currency is of no value to them. What if everyone stops using U.S. dollar bills tomorrow? Does my bank account morph into some other value that I can use? Is it tied up in some vault of gold at the US Treasury? No. It becomes a worthless number on a register somewhere. But, the bartender at my local watering hole might vouch for me that I had that much or that I made that much money or that my credit was good. Trust = Credit Without trust there is only trade and barter. Without the ability to trust that the future will have value in it, I'm only going to go with what is right in front of me right now. And a proof, it's interesting (I loves me some math), but, most of the time, I'm not going to say it has some sort of intrinsic worth that I'd trade, say, you a burrito for it.

TeMPOraL 11y ago

I disagree. Trust is what makes systems efficient and effective. People who trust each other can cooperate together without expending resources on protecting themselves. Consider Bitcoin - the cost of that trustless system that barely works is mind-boggling waste of electricity. Or look at layers and layers of bureaucracy people create; a lot of it exists to mitigate the problems of lack of trust by creating a system that doesn't depend on actors to be benevolent. It's true that systems based on trust are fragile - malicious actors can abuse them, and if there are enough of them, the public trust will collapse and the system will go to hell. But that's only an argument for why should we fight for ensuring trust. Why we should punish defectors - the liars, the cheaters, the abusers. Because we need this to be efficient.

kanzure 11y ago
> People who trust each other can cooperate together without expending resources on protecting themselves. This is not how security works. You need to consider the adversarial case, not the average case. > Consider Bitcoin - the cost of that trustless system that barely works is mind-boggling waste of electricity The "waste" is actually for the purpose of putting a floor on the cost to trick someone into believing a non-consensus history.