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Cryptocurrencies indeed move the trust from a centralized accountant to a distributed system guarded by both code and math. Instead of trusting a mostly anonymo

Cryptocurrencies indeed move the trust from a centralized accountant to a distributed system guarded by both code and math. Instead of trusting a mostly anonymous group of people that stand to gain from abusing that trust and have done so in the past without punishment, crypto replaces that trust with user-controlled software and verifiable algorithms. Any transaction between fiat and crypto requires a modicum of trust, in the same sense that buying something with a credit card requires some trust. Once you are inside the crypto bubble, that trust is no longer required.

pjc50 9y ago
Yes, you've moved the trust to the user's computer. Now the question becomes "which would you trust with a large chunk of money, a regulated financial institution or the information security of a personal computer", which for me would be the institution. For most people I know, it would definitely be the institution, because personal computer security is terrible.
littlestymaar 9y ago
> Instead of trusting a mostly anonymous group of people that stand to gain from abusing that trust and have done so in the past without punishment, crypto replaces that trust with user-controlled software and verifiable algorithms. This used to be true in the beginning of Bitcoin (when CPU mining on your desktop was OK) but it's not true anymore. The integrity of the ledger is guaranteed by the miners, and now the miners are not individuals but companies with ASIC farms. You have basically no guaranties that these companies aren't going to plot against you to tamper with the ledger. Of course at the moment it would be a terrible idea because it would destroy the confidence in Bitcoin (and that would destroy them) but it's not that different from what stops a central banker to print a huge amount of money.
- pjc50 9y ago
  Tampering with the ledger is sufficiently difficult that it's not a real risk in cryptocurrency. There are plenty of other real risks that are far more relevant.
  - littlestymaar 9y ago
    If a cartel controls more than 50% of the mining power, it's not difficult : they make authority on the ledger. (IIRC you don't even need 50% of the mining power to control the ledger in practice but it's not as straightforward).

pjc50 9y ago

Yes, you've moved the trust to the user's computer. Now the question becomes "which would you trust with a large chunk of money, a regulated financial institution or the information security of a personal computer", which for me would be the institution. For most people I know, it would definitely be the institution, because personal computer security is terrible.

littlestymaar 9y ago

> Instead of trusting a mostly anonymous group of people that stand to gain from abusing that trust and have done so in the past without punishment, crypto replaces that trust with user-controlled software and verifiable algorithms. This used to be true in the beginning of Bitcoin (when CPU mining on your desktop was OK) but it's not true anymore. The integrity of the ledger is guaranteed by the miners, and now the miners are not individuals but companies with ASIC farms. You have basically no guaranties that these companies aren't going to plot against you to tamper with the ledger. Of course at the moment it would be a terrible idea because it would destroy the confidence in Bitcoin (and that would destroy them) but it's not that different from what stops a central banker to print a huge amount of money.

pjc50 9y ago
Tampering with the ledger is sufficiently difficult that it's not a real risk in cryptocurrency. There are plenty of other real risks that are far more relevant.
- littlestymaar 9y ago
  If a cartel controls more than 50% of the mining power, it's not difficult : they make authority on the ledger. (IIRC you don't even need 50% of the mining power to control the ledger in practice but it's not as straightforward).