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In many (most) parts of the world the legal system for enforcing contracts isn't all that reliable and trustworthy. An Etheruem-based contract is a big improve

In many (most) parts of the world the legal system for enforcing contracts isn't all that reliable and trustworthy. An Etheruem-based contract is a big improvement over a traditional contract enforceable only by a slow, corrupt court. Pretty much all technology increases the surface area for fraud. However, the benefits usually outweigh that increase. Blockchains are no different. But the benefit is likely to accrue more to people in less developed countries.

candiodari 9y ago
Okay ... let me put it this way. 4 years back I transferred a number of bitcoin, in the low 3 digits, to tradehill, in order to explore this whole finance thing and trading. We all know how tradehill, and mt. Gox, and ... ended, so can you explain to me how this works better without the option to go to a court ?
- skewart 9y ago
  Sure, don't use shady exchanges. Using a regular old currency you could end up being ripped off by some fraudster, take them to court and lose the case. The non-cryptocurrency world isn't 100% safe and guaranteed to be protect you from fraud either. It would be foolish to suggest that there will never be any fraud in the blockchain world. The risks are just different. For some people in some places the risks are probably a lot higher than the fiat currency status quo. But there are also plenty of people in places where enforcing a contract by code could be a lot less risky and a lot more appealing. Also, I should add, just to clarify, I think we're watching the very early days of blockchains. Things are still pretty rough. I'm not especially optimistic about any one of the current crop of cryptocurrencies. But I am optimistic about the underlying ideas over the next, say, five to twenty years.
  - candiodari 9y ago
    > Sure, don't use shady exchanges. Neither TradeHill nor Mt. Gox were considered shady exchanges, at any point when they were used. But you do realize that the standards for this are somewhat low. E.g. both the owner of bloomberg.com and the owner of businessinsider.com are convicted of securities fraud (in fact businessinsider.com was extremely likely started exactly because Henry Blodget was convicted of fraud). At the time, the owner of Tradehill was not convicted of fraud, and while he is now, and yet he's still running a bitcoin exchange. However, the people defrauded by both of these individuals in "fiat-world" saw 80%+ (Blodget) or 100% (Bloomberg) of their money back. As far as I know, nobody saw their Tradehill money back. > It would be foolish to suggest that there will never be any fraud in the blockchain world. Are you seriously naive or misinformed enough to believe this ? Fraud, law breaking and tax evasion are the main, almost the only, reason bitcoin is being used at all. You have heard of Silk Road, right ? I've seen numbers suggesting that Silk Road was responsible for 70%+ of all bitcoin transaction at one time, and this isn't even counting the many other kinds of fraud and crime, like data ransoms, actual ransoms, money laundering (esp. out of China, in fact most miners are money laundering operations according to many sources)

candiodari 9y ago

Okay ... let me put it this way. 4 years back I transferred a number of bitcoin, in the low 3 digits, to tradehill, in order to explore this whole finance thing and trading. We all know how tradehill, and mt. Gox, and ... ended, so can you explain to me how this works better without the option to go to a court ?

skewart 9y ago
Sure, don't use shady exchanges. Using a regular old currency you could end up being ripped off by some fraudster, take them to court and lose the case. The non-cryptocurrency world isn't 100% safe and guaranteed to be protect you from fraud either. It would be foolish to suggest that there will never be any fraud in the blockchain world. The risks are just different. For some people in some places the risks are probably a lot higher than the fiat currency status quo. But there are also plenty of people in places where enforcing a contract by code could be a lot less risky and a lot more appealing. Also, I should add, just to clarify, I think we're watching the very early days of blockchains. Things are still pretty rough. I'm not especially optimistic about any one of the current crop of cryptocurrencies. But I am optimistic about the underlying ideas over the next, say, five to twenty years.
- candiodari 9y ago
  > Sure, don't use shady exchanges. Neither TradeHill nor Mt. Gox were considered shady exchanges, at any point when they were used. But you do realize that the standards for this are somewhat low. E.g. both the owner of bloomberg.com and the owner of businessinsider.com are convicted of securities fraud (in fact businessinsider.com was extremely likely started exactly because Henry Blodget was convicted of fraud). At the time, the owner of Tradehill was not convicted of fraud, and while he is now, and yet he's still running a bitcoin exchange. However, the people defrauded by both of these individuals in "fiat-world" saw 80%+ (Blodget) or 100% (Bloomberg) of their money back. As far as I know, nobody saw their Tradehill money back. > It would be foolish to suggest that there will never be any fraud in the blockchain world. Are you seriously naive or misinformed enough to believe this ? Fraud, law breaking and tax evasion are the main, almost the only, reason bitcoin is being used at all. You have heard of Silk Road, right ? I've seen numbers suggesting that Silk Road was responsible for 70%+ of all bitcoin transaction at one time, and this isn't even counting the many other kinds of fraud and crime, like data ransoms, actual ransoms, money laundering (esp. out of China, in fact most miners are money laundering operations according to many sources)