4 ms·

But why use a blockchain instead of a SQL database? What concrete benefits does it provide and why do we want those benefits? It's just a data structure, and i

by dsacco 9y ago

But why use a blockchain instead of a SQL database? What concrete benefits does it provide and why do we want those benefits? It's just a data structure, and it's a great one at that, but I really don't see how it fits here.

mrb 9y ago
A blockchain is necessary for decentralization, which brings 3 main benefits: 1 - Censorship resistance. There is what I call big and small censorship. It can be an authoritarian government seizing the bank account of a journal supporting the opposition, or it can take the form of Paypal freezing someone's account for the wrong reasons (a few examples: https://news.ycombinator.com/item?id=1803488 https://news.ycombinator.com/item?id=1803488 or https://www.dailydot.com/layer8/paypal-protonmail-freeze/ https://www.dailydot.com/layer8/paypal-protonmail-freeze/ or https://news.ycombinator.com/item?id=11048131 https://news.ycombinator.com/item?id=11048131). Cryptocurrencies solve this by allowing users to be in absolute control of their cryptocurrency addresses and keys. 2 - Irreversibility of payments. This helps merchants avoid fraudulent credit card chargebacks: once funds are received they are spendable right away. No one can reverse payments. No system other than blockchains offer irreversibility. 3 - Permissionless. You don't need anyone's permission to participate in Bitcoin or other cryptocurrencies. Banks sometimes refuse to let people (especially the poor) open bank accounts. Because they don't have enough for an initial deposit, or have a bad credit history, etc. By contrast, anyone can be a cryptocurrency user as long as they have a $20 Android smartphone.
- jimktrains2 9y ago
  2 - Irreversibility of payments. This helps merchants avoid fraudulent credit card chargebacks: once funds are received they are spendable right away. No one can reverse payments. No system other than blockchains offer irreversibility. Flip side is that customers can't reverse payments when they're victims of fraud.
  - mrb 9y ago
    "customers can't reverse payments when they're victims of fraud" No different from cash, yet we tolerate this aspect.
    - jimktrains2 9y ago
      If we're comparing against cash, then it's difficult to fraud the vendor as well, so the originally mentioned case is moot as well.
      - mrb 9y ago
        Not moot. My point is pretty simple: payers tolerate irreversibility, recipients like irreversibility, hence Bitcoin can (and does) work.
        jimktrains2 9y ago
        You're missing my point. I'm not saying btc won't or doesn't work, but that there is a flip side to the no reversible transactions, and one that merchants already deal with.
  - tehlike 9y ago
    Escrow would kick in here.
- dsacco 9y ago
  > A blockchain is necessary for decentralization. Every blockchain initiative being explored by financial institutions is not decentralized. Unless you're tossing out the banking system to directly transact with other parties using digital currencies, in which case: good luck, I don't have a rebuttal except to say I doubt that will become mainstream enough to be ubiquitous and convenient, but maybe I'm wrong. > 1. Censorship resistance. I don't personally care about this; do you think most people do? > 2. Irreversibility of payments. That's admittedly cool, but I personally don't want that either. Great for vendors I suppose, but I like being able to e.g. issue chargebacks with AmEx when there is legitimate fraud. I don't think there is a technical solution that satisfies both buyers and sellers and mitigates fraud on both sides. > 3. Permissionless. I don't really understand this, I have accounts with several banks that didn't run credit checks before I opened an account. They did an identity verification, but they didn't care about my creditworthiness for a checking account. Moreover, these were national banking chains with online account signup and approval, so it isn't limited to regional availability. Other than that - I agree permissionless is a cool feature, but I don't particularly want to transact with people in a permissionless system. The natural extrapolation of a permissionless system is one in which there are fewer safeguards for e.g. verifying a user's identity, and (speaking as someone who works in cryptography research here), I don't think schemes that enable two parties to transact without mutually trusting each other are a worthwhile problem for a technical solution in the real world.
  - mrb 9y ago
    1 - I think many people care. Maybe you are not considering the other 7 billion people on the planet who have drastically different life situations. I believe it's the key reason why people are so divided about whether cryptocurrencies are useful or not. Just because a feature isn't useful to you doesn't mean it's not useful to others. 2 - Yet you tolerate the irreversibility of cash. So it's probably not such a big deal. Besides, most merchants are honest (the need to charge back a CC transaction is extremely rare.) I also think one of the potential great use cases of Bitcoin is informal person-to-person transactions (paying back lunch money to a friend, giving money to family, etc). Irreversibility is irrelevant, actually desired, in those cases. 3 - Once again I think you are not considering the situation of others. In the US alone, millions are denied banking accounts https://www.fdic.gov/consumers/consumer/news/cnfall13/deniedchecking.html https://www.fdic.gov/consumers/consumer/news/cnfall13/denied... This is severly handicapping them given that a bank account is practically required for participation in the modern economy. Thank you for intelligently and politely discussing. Too many critics of cryptocurrencies are borderline aggressive/insulting and I've never understood why.

by dsacco 9y ago

mrb 9y ago

A blockchain is necessary for decentralization, which brings 3 main benefits: 1 - Censorship resistance. There is what I call big and small censorship. It can be an authoritarian government seizing the bank account of a journal supporting the opposition, or it can take the form of Paypal freezing someone's account for the wrong reasons (a few examples: https://news.ycombinator.com/item?id=1803488 https://news.ycombinator.com/item?id=1803488 or https://www.dailydot.com/layer8/paypal-protonmail-freeze/ https://www.dailydot.com/layer8/paypal-protonmail-freeze/ or https://news.ycombinator.com/item?id=11048131 https://news.ycombinator.com/item?id=11048131). Cryptocurrencies solve this by allowing users to be in absolute control of their cryptocurrency addresses and keys. 2 - Irreversibility of payments. This helps merchants avoid fraudulent credit card chargebacks: once funds are received they are spendable right away. No one can reverse payments. No system other than blockchains offer irreversibility. 3 - Permissionless. You don't need anyone's permission to participate in Bitcoin or other cryptocurrencies. Banks sometimes refuse to let people (especially the poor) open bank accounts. Because they don't have enough for an initial deposit, or have a bad credit history, etc. By contrast, anyone can be a cryptocurrency user as long as they have a $20 Android smartphone.

jimktrains2 9y ago
2 - Irreversibility of payments. This helps merchants avoid fraudulent credit card chargebacks: once funds are received they are spendable right away. No one can reverse payments. No system other than blockchains offer irreversibility. Flip side is that customers can't reverse payments when they're victims of fraud.
- mrb 9y ago
  "customers can't reverse payments when they're victims of fraud" No different from cash, yet we tolerate this aspect.
  - jimktrains2 9y ago
    If we're comparing against cash, then it's difficult to fraud the vendor as well, so the originally mentioned case is moot as well.
    - mrb 9y ago
      Not moot. My point is pretty simple: payers tolerate irreversibility, recipients like irreversibility, hence Bitcoin can (and does) work.
      - jimktrains2 9y ago
        You're missing my point. I'm not saying btc won't or doesn't work, but that there is a flip side to the no reversible transactions, and one that merchants already deal with.
- tehlike 9y ago
  Escrow would kick in here.
dsacco 9y ago
> A blockchain is necessary for decentralization. Every blockchain initiative being explored by financial institutions is not decentralized. Unless you're tossing out the banking system to directly transact with other parties using digital currencies, in which case: good luck, I don't have a rebuttal except to say I doubt that will become mainstream enough to be ubiquitous and convenient, but maybe I'm wrong. > 1. Censorship resistance. I don't personally care about this; do you think most people do? > 2. Irreversibility of payments. That's admittedly cool, but I personally don't want that either. Great for vendors I suppose, but I like being able to e.g. issue chargebacks with AmEx when there is legitimate fraud. I don't think there is a technical solution that satisfies both buyers and sellers and mitigates fraud on both sides. > 3. Permissionless. I don't really understand this, I have accounts with several banks that didn't run credit checks before I opened an account. They did an identity verification, but they didn't care about my creditworthiness for a checking account. Moreover, these were national banking chains with online account signup and approval, so it isn't limited to regional availability. Other than that - I agree permissionless is a cool feature, but I don't particularly want to transact with people in a permissionless system. The natural extrapolation of a permissionless system is one in which there are fewer safeguards for e.g. verifying a user's identity, and (speaking as someone who works in cryptography research here), I don't think schemes that enable two parties to transact without mutually trusting each other are a worthwhile problem for a technical solution in the real world.
- mrb 9y ago
  1 - I think many people care. Maybe you are not considering the other 7 billion people on the planet who have drastically different life situations. I believe it's the key reason why people are so divided about whether cryptocurrencies are useful or not. Just because a feature isn't useful to you doesn't mean it's not useful to others. 2 - Yet you tolerate the irreversibility of cash. So it's probably not such a big deal. Besides, most merchants are honest (the need to charge back a CC transaction is extremely rare.) I also think one of the potential great use cases of Bitcoin is informal person-to-person transactions (paying back lunch money to a friend, giving money to family, etc). Irreversibility is irrelevant, actually desired, in those cases. 3 - Once again I think you are not considering the situation of others. In the US alone, millions are denied banking accounts https://www.fdic.gov/consumers/consumer/news/cnfall13/deniedchecking.html https://www.fdic.gov/consumers/consumer/news/cnfall13/denied... This is severly handicapping them given that a bank account is practically required for participation in the modern economy. Thank you for intelligently and politely discussing. Too many critics of cryptocurrencies are borderline aggressive/insulting and I've never understood why.