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> Of course old-school financial institutions get hacked too; blockchains have some features (good cryptography, distributed ledgers) that make them harder to h
by SonOfLilit 10y ago
> Of course old-school financial institutions get hacked too; blockchains have some features (good cryptography, distributed ledgers) that make them harder to hack, and some features (anonymity, irreversibility) that make them easier to hack. But I've said before that the main advantage of the blockchain over other ways to store financial information is not so much technological as sociological: It's not that it was technologically impossible to quickly settle financial transactions using shared computer databases before; it's that no one cared enough to do the work of coordinating a bunch of banks to set up the databases. The word "blockchain" has managed to make that boring back-office coordination work sexy, which means that it might actually get done.
Matt Levine, https://www.bloomberg.com/view/articles/2016-07-11/executive-pay-and-blood-trouble https://www.bloomberg.com/view/articles/2016-07-11/executive...
- bogomipz 10y ago>"and some features (anonymity, irreversibility) that make them easier to hack" Can you explain how the property or "irreversibility" makes something easier to hack?
- wolf550e 10y agoIf someone socially engineers a bank employee to transfer money in a bank's computer, the transaction can be reversed if the bank decides it was fraudulent. You can't reverse blockchain transactions without one of: (1) the other party agrees to return the money or (2) a majority of the people controlling the blockchain agree to fork the blockchain.
- alexeldeib 10y agoWouldn't a bank be able to do a hard fork a la ethereum? Since it would be a completely private system, they would have total control and it seems this would fulfill (2) in your comment. Or am I confusing the purpose of the technology?
- wolf550e 10y agoI don't know how they plan to run this thing. If it's owned and operated by a single bank and just acts as an API to the bank, they can hard-fork it every day. But that doesn't seem useful. If they plan to create a system where they don't own a majority, they lose the ability to hard-fork.
- wlesieutre 10y agoWhen someone empties your bank account there's no way to reverse the transaction. Maybe "easier to hack" isn't the best description, but security-wise it means if there's a successful attack by any method, you can't exactly restore your money from a backup.
- SonOfLilit 10y agoWhat my siblings said, or in short, "easier to profit from hacking". See also the DAO debacle.