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I'm not sure what the author wants bitcoin to be. They are correct in pointing out the various scams that litter bitcoin, but they also seem to want to shut out

by goatsi 9y ago

I'm not sure what the author wants bitcoin to be. They are correct in pointing out the various scams that litter bitcoin, but they also seem to want to shut out crime (silkroad et al) with better analysis tools and centralization. Without the various scams pumping the price criminals are the only ones who would be using bitcoin, as they are locked out of the much simpler & easier to use alternatives that any normal person will use.

StavrosK 9y ago
> they also seem to want to shut out crime (silkroad et al) Is there much actual crime being facilitated by Bitcoin? I mean apart from the "things that are illegal now but they're going to be legal in a few years because one country started a misguided effort that everyone else blindly followed" crime.
- throwaway613834 9y ago
  > Is there much actual crime being facilitated by Bitcoin? How about all the ransomware(s?) that spread globally and affect businesses, hospitals, etc.?
- goatsi 9y ago
  Ransomware seemly pretty solidly illegal. It existed before bitcoin (mainly using ucash/paysafe/greendot codes) but bitcoin is what enabled it to scale.
wmf 9y ago
I suspect the author thinks Bitcoin should not exist. If you could "fix" all these complaints there would be nothing left.
- pfraze 9y ago
  From the article's final remarks section: > The empirical data and stories above do not mean that investors should stop trading all cryptocurrencies or pass on investing in blockchain-related products and services. > To the contrary, the goal of this article is to elevate awareness that this industry lacks even the most basic safeguards and independent voices that would typically act as a counterbalance against bad actors. In this FOMO atmosphere investors need to be on full alert of the inherent risks of a less than transparent market with less than accurate information from companies and even news specialists. > Cryptocurrencies aren’t inherently good or bad. In a single block, they can be used as a means to reward an entity for securing transactions and also a payment for holding data hostage.
ballenf 9y ago
While he may be correct, he's trying to shove bitcoin into one a few predefined ideas about what a currency needs to be. And most, if not all, of his complaints revolve around bitcoin's design of being untethered from judicial systems or purview. No one has figured out, even theoretically, how to have our cake and eat it too. It seems pretty clear that his wish is a fundamental contradiction and one must choose between the two. The 'bad' actors he talked about can all be investigated in the same way a bank heist or computer hack can be, and if successful, the perpetraters punished (as have some of them). It's like saying 'people who use dollars aren't going to tell you how the Federal Reserve invents millions or billions of dollars of currency out of thin air every year.' No, they won't, but as of now we consider that a feature not a bug (not all do, but most mainstream do). Even though it means the dollar you 'buy' today will be worth slightly less tomorrow.
aianus 9y ago
Actually there are quite a few legal applications that are well-served by irreversible internet cash. Things like porn, sex toys, gambling in many jurisdictions, selling expensive items like gold bars or cash online, selling cross-border to sketchy areas like Nigeria or Romania, etc. Traditional reversible payment methods are very expensive or unavailable for these applications because the chargeback rates are off the charts.
- prostoalex 9y ago
  > selling expensive items like gold bars or cash online So as a consumer I finally have the opportunity to buy an expensive item over the Internet, get swindled by an unscrupulous seller sending me an empty box (if anything), and have absolutely no recourse? Is that the value proposition here?
  - aianus 9y ago
    Yes, you have an additional opportunity. You don't have to use it if you're not comfortable with the seller or the chance of being swindled. However, reputation systems seem to work alright, as evidenced by silk road where you really had no recourse but orders did come through. You could also use an escrow service.
    - jmcqk6 9y ago
      Not the commenter you're replying to, but I have to add this. I'm sure there's been a lot of analysis done with regards to the actual amount of fraud on Silk Road (and it's various incarnations and similar services), right? There's no way that criminals with even lower oversight behave better. The idea that you could have an environment where you lack the fraud protections you have in other environments leads to lower fraud rates is absurd, and would require a lot of evidence to demonstrate. An appeal to reputation systems doesn't cut it.
      - aianus 9y ago
        > There's no way that criminals with even lower oversight behave better. There are no bigger criminals with lower oversight than anonymous drug sellers on silk road, and yet most people did get their orders. That was my point. > The idea that you could have an environment where you lack the fraud protections you have in other environments leads to lower fraud rates is absurd It's not absurd at all. For example, if you are a legitimate gold seller and you accept credit cards orders with shipping addresses in Romania you will get destroyed by fraud from buyers. An alternate system where payments are made in Bitcoin results in zero buyer fraud and a reputation system a la Silk Road (plus the ability to sue the non-anonymous seller in court) can reduce the potential for seller fraud to a point where it's worth taking the risk to save X% on the price of your gold.

by goatsi 9y ago

StavrosK 9y ago

> they also seem to want to shut out crime (silkroad et al) Is there much actual crime being facilitated by Bitcoin? I mean apart from the "things that are illegal now but they're going to be legal in a few years because one country started a misguided effort that everyone else blindly followed" crime.

throwaway613834 9y ago
> Is there much actual crime being facilitated by Bitcoin? How about all the ransomware(s?) that spread globally and affect businesses, hospitals, etc.?
goatsi 9y ago
Ransomware seemly pretty solidly illegal. It existed before bitcoin (mainly using ucash/paysafe/greendot codes) but bitcoin is what enabled it to scale.

wmf 9y ago

I suspect the author thinks Bitcoin should not exist. If you could "fix" all these complaints there would be nothing left.

pfraze 9y ago
From the article's final remarks section: > The empirical data and stories above do not mean that investors should stop trading all cryptocurrencies or pass on investing in blockchain-related products and services. > To the contrary, the goal of this article is to elevate awareness that this industry lacks even the most basic safeguards and independent voices that would typically act as a counterbalance against bad actors. In this FOMO atmosphere investors need to be on full alert of the inherent risks of a less than transparent market with less than accurate information from companies and even news specialists. > Cryptocurrencies aren’t inherently good or bad. In a single block, they can be used as a means to reward an entity for securing transactions and also a payment for holding data hostage.

ballenf 9y ago

While he may be correct, he's trying to shove bitcoin into one a few predefined ideas about what a currency needs to be. And most, if not all, of his complaints revolve around bitcoin's design of being untethered from judicial systems or purview. No one has figured out, even theoretically, how to have our cake and eat it too. It seems pretty clear that his wish is a fundamental contradiction and one must choose between the two. The 'bad' actors he talked about can all be investigated in the same way a bank heist or computer hack can be, and if successful, the perpetraters punished (as have some of them). It's like saying 'people who use dollars aren't going to tell you how the Federal Reserve invents millions or billions of dollars of currency out of thin air every year.' No, they won't, but as of now we consider that a feature not a bug (not all do, but most mainstream do). Even though it means the dollar you 'buy' today will be worth slightly less tomorrow.

aianus 9y ago

Actually there are quite a few legal applications that are well-served by irreversible internet cash. Things like porn, sex toys, gambling in many jurisdictions, selling expensive items like gold bars or cash online, selling cross-border to sketchy areas like Nigeria or Romania, etc. Traditional reversible payment methods are very expensive or unavailable for these applications because the chargeback rates are off the charts.

prostoalex 9y ago
> selling expensive items like gold bars or cash online So as a consumer I finally have the opportunity to buy an expensive item over the Internet, get swindled by an unscrupulous seller sending me an empty box (if anything), and have absolutely no recourse? Is that the value proposition here?
- aianus 9y ago
  Yes, you have an additional opportunity. You don't have to use it if you're not comfortable with the seller or the chance of being swindled. However, reputation systems seem to work alright, as evidenced by silk road where you really had no recourse but orders did come through. You could also use an escrow service.
  - jmcqk6 9y ago
    Not the commenter you're replying to, but I have to add this. I'm sure there's been a lot of analysis done with regards to the actual amount of fraud on Silk Road (and it's various incarnations and similar services), right? There's no way that criminals with even lower oversight behave better. The idea that you could have an environment where you lack the fraud protections you have in other environments leads to lower fraud rates is absurd, and would require a lot of evidence to demonstrate. An appeal to reputation systems doesn't cut it.
    - aianus 9y ago
      > There's no way that criminals with even lower oversight behave better. There are no bigger criminals with lower oversight than anonymous drug sellers on silk road, and yet most people did get their orders. That was my point. > The idea that you could have an environment where you lack the fraud protections you have in other environments leads to lower fraud rates is absurd It's not absurd at all. For example, if you are a legitimate gold seller and you accept credit cards orders with shipping addresses in Romania you will get destroyed by fraud from buyers. An alternate system where payments are made in Bitcoin results in zero buyer fraud and a reputation system a la Silk Road (plus the ability to sue the non-anonymous seller in court) can reduce the potential for seller fraud to a point where it's worth taking the risk to save X% on the price of your gold.