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> how superior centralized systems are Tell us? Because around here, I saw a huge number of bank fraud basically unpunished. "Yes those guys duplicated your SI

> how superior centralized systems are Tell us? Because around here, I saw a huge number of bank fraud basically unpunished. "Yes those guys duplicated your SIM and stole all your funds. Too bad for you since we're not going to even try to catch them." Centralized systems might be efficient but the rule is, they don't care about you, so it's not your problems that they're going to solve. At least I can have some faith in the code, which is the final law.

mark_edward 10y ago
Code is law until well connected people need a bailout
- guard-of-terra 10y ago
  Law is code until well connected people need a bailout.
brilliantcode 10y ago
For one, a theft on banks is extremely hard and rest of the system hums along. Mt Gox and DAO however resulted in catastrophic failure where everyone was collectively punished. On a personal level, there are good channels to get your money back where in a decentralized market, there's zero chance. It's better to have other humans keeping check on each other than code watching other code because it will not take into account the "spirit of contract".
- guard-of-terra 10y ago
  In a centralized system, sometimes people can help you get your money back, but it is also possible that they'll help taking money away from you. "Spirit of contract" is usually taking money from less well-connected and awarding it to more well-connected. Have zero faith in it in XXI century.
- mrb 10y ago
  "a theft on banks is extremely hard and rest of the system hums along. Mt Gox and DAO however resulted in catastrophic failure where everyone was collectively punished." Not "everyone" was punished. Only users of Mt Gox. And only investors of the DAO. Also both Bitcoin and Ethereum survived these incidents very well. With legacy financial systems (banks, cash) there are plenty of scenarios where you may never get your money back, eg.: lose your wallet/cash, 2016 Bangladesh Bank SWIFT hack where $60M was never recovered, etc.
rtpg 10y ago
wait a sec. Someone steals my credit card, and if I notice within 2 months, I can get everything back. Another advantage is that it doesn't take several hours (and huge amounts of wasted electricity) for a transaction to go through. My bank hasn't been siphoning my funds either. I wouldn't trust any cryptocurrency exchange with holding even 10% of my monthly salary. Sure, governments can get my bank records. But my bank records aren't literally inscribed on a public ledger! I don't have to make a bunch of fake bank accounts to protect my privacy from the random data scientist with the blockchain, because if I use my main account and my identity gets leaked from some random service I used, then now everyone knows who I am. It doesn't matter if they don't care about me. Nobody cares about me. But the incentives are partially aligned: systems with higher trust require less friction. And things like credit cards prove that you can build protections. And "code is law" is not really extendable across society. We have contracts, of course. But almost all contracts include a "Use common sense"-style clause, which is the whole point lawyers and judges exist in the first place. How can you build "force majeur" clauses into code without some third party arbitrator? Of course, having a decentralized backbone is neat. A long time ago, anyone could make gold coins! It wasn't like some evil cabal was like "Oh, we shall unify all the currencies and CONTROL EVERYTHING!" Centralization happened because it was kinda useful. Half of cryptocurrency stories are "techies discover why banks do the things they do". For example: I imagine more and more exchanges will partner up to do off-chain transactions. At one point, a lot of stuff will happen off-chain. Question: what do you think Visa does? I do not see a decentralized currency ever becoming big enough to be a real fraction of economic transactions without it becoming what most of what we have. Competition is good! But I think some cryptocurrency enthusiasts are in for disappointment if they want critical mass
- guard-of-terra 10y ago
  Someone steals the control of your banking account, they take everything and there's no way of getting those money back. Credit cards are peculiar in this regard.
  - rtpg 10y ago
    I am not 100% sure, but my understanding is that the bank is liable for those losses unless they can prove gross negligence on your part. I've heard that legal argument, at least. [0] Though this is not worse from your cryptocurrency. If they get a hold of your private keys, you lose everything. At least in the classical banking system you have some legal recourse. [0]: I might just be thinking of this comedy sketch though: https://www.youtube.com/watch?v=CS9ptA3Ya9E https://www.youtube.com/watch?v=CS9ptA3Ya9E
obstinate 10y ago
At least in the US, you cannot lose much money because of fraudulent electronic funds transfers, unless you ignore the fraud for more than sixty days. https://www.federalreserve.gov/boarddocs/supmanual/cch/efta.pdf https://www.federalreserve.gov/boarddocs/supmanual/cch/efta.... See section V "Consumer Liability and Error Resolution."

mark_edward 10y ago

Code is law until well connected people need a bailout

guard-of-terra 10y ago
Law is code until well connected people need a bailout.

brilliantcode 10y ago

For one, a theft on banks is extremely hard and rest of the system hums along. Mt Gox and DAO however resulted in catastrophic failure where everyone was collectively punished. On a personal level, there are good channels to get your money back where in a decentralized market, there's zero chance. It's better to have other humans keeping check on each other than code watching other code because it will not take into account the "spirit of contract".

guard-of-terra 10y ago
In a centralized system, sometimes people can help you get your money back, but it is also possible that they'll help taking money away from you. "Spirit of contract" is usually taking money from less well-connected and awarding it to more well-connected. Have zero faith in it in XXI century.
mrb 10y ago
"a theft on banks is extremely hard and rest of the system hums along. Mt Gox and DAO however resulted in catastrophic failure where everyone was collectively punished." Not "everyone" was punished. Only users of Mt Gox. And only investors of the DAO. Also both Bitcoin and Ethereum survived these incidents very well. With legacy financial systems (banks, cash) there are plenty of scenarios where you may never get your money back, eg.: lose your wallet/cash, 2016 Bangladesh Bank SWIFT hack where $60M was never recovered, etc.

rtpg 10y ago

wait a sec. Someone steals my credit card, and if I notice within 2 months, I can get everything back. Another advantage is that it doesn't take several hours (and huge amounts of wasted electricity) for a transaction to go through. My bank hasn't been siphoning my funds either. I wouldn't trust any cryptocurrency exchange with holding even 10% of my monthly salary. Sure, governments can get my bank records. But my bank records aren't literally inscribed on a public ledger! I don't have to make a bunch of fake bank accounts to protect my privacy from the random data scientist with the blockchain, because if I use my main account and my identity gets leaked from some random service I used, then now everyone knows who I am. It doesn't matter if they don't care about me. Nobody cares about me. But the incentives are partially aligned: systems with higher trust require less friction. And things like credit cards prove that you can build protections. And "code is law" is not really extendable across society. We have contracts, of course. But almost all contracts include a "Use common sense"-style clause, which is the whole point lawyers and judges exist in the first place. How can you build "force majeur" clauses into code without some third party arbitrator? Of course, having a decentralized backbone is neat. A long time ago, anyone could make gold coins! It wasn't like some evil cabal was like "Oh, we shall unify all the currencies and CONTROL EVERYTHING!" Centralization happened because it was kinda useful. Half of cryptocurrency stories are "techies discover why banks do the things they do". For example: I imagine more and more exchanges will partner up to do off-chain transactions. At one point, a lot of stuff will happen off-chain. Question: what do you think Visa does? I do not see a decentralized currency ever becoming big enough to be a real fraction of economic transactions without it becoming what most of what we have. Competition is good! But I think some cryptocurrency enthusiasts are in for disappointment if they want critical mass

guard-of-terra 10y ago
Someone steals the control of your banking account, they take everything and there's no way of getting those money back. Credit cards are peculiar in this regard.
- rtpg 10y ago
  I am not 100% sure, but my understanding is that the bank is liable for those losses unless they can prove gross negligence on your part. I've heard that legal argument, at least. [0] Though this is not worse from your cryptocurrency. If they get a hold of your private keys, you lose everything. At least in the classical banking system you have some legal recourse. [0]: I might just be thinking of this comedy sketch though: https://www.youtube.com/watch?v=CS9ptA3Ya9E https://www.youtube.com/watch?v=CS9ptA3Ya9E

obstinate 10y ago

At least in the US, you cannot lose much money because of fraudulent electronic funds transfers, unless you ignore the fraud for more than sixty days. https://www.federalreserve.gov/boarddocs/supmanual/cch/efta.pdf https://www.federalreserve.gov/boarddocs/supmanual/cch/efta.... See section V "Consumer Liability and Error Resolution."