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Blockchain-based currencies are not an acceptable replacement for the existing monetary system because of the extreme brittleness of their mechanisms. You reall
by theoh 9y ago
Blockchain-based currencies are not an acceptable replacement for the existing monetary system because of the extreme brittleness of their mechanisms. You really are completely on your own when it comes to things like getting hacked, losing your wallet, etc. And we know that nobody's machine is secure against a persistent attacker.
The social mechanisms (regulatory etc.) around retail banking are a crucial safety measure for individuals in the first instance. Bitcoin discards all that. If you repair the safety net, by creating a web of trust between principals (e.g. banks), proof-of-work becomes an unnecessary nuisance.
From the recent ING paper:
"The average person [...] dislike[s] having no rights, no recourse, no guarantees, no
legal coverage, nothing. They just want secure, reliable and hassle-free access to
their money, and if they forget their password, they want to be able to call their
provider and have the password reset for them. And with reason: recent analysis
suggests that up to about 20% of all Bitcoin in circulation may be lost forever, due to,
for example, misdirected transactions, lost passwords and crashed hard disks. Banks
are the usual providers of custodian functions preventing loss and theft."
It's possible to be anti-Bitcoin while accepting that digital money is the future.
- akira2501 9y ago> because of the extreme brittleness of their mechanisms. On top of all that, we're still entirely unsure how the system is going to function once all bitcoin has been mined and it becomes a pure transaction system.
- prawn 9y agoCould that be solved by some sort of banking layer between such-inclined users and their holdings, without interfering with the core aims of Bitcoin? e.g., an abstraction where the next generation bank provides some extra level of security or recourse. I can't imagine that banks as they are today are brilliantly efficient.
- theoh 9y agoThe ING paper continues "The fact that they [banks] do not (yet) provide custodian functions for Bitcoin (e.g. for regulatory reasons) does not mean that the general public would not need or want those services for cryptocurrency. In fact, many Bitcoin users choose to keep their wallets with online providers – meaning that even in today’s Bitcoin universe, there is a clear role for intermediaries." The Bitcoin/blockchain-agnostic term for the basic abstraction these intermediaries share is "distributed ledger", though that doesn't solve the whole problem. https://en.wikipedia.org/wiki/Distributed_ledger https://en.wikipedia.org/wiki/Distributed_ledger