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Society doesn't really "need" blockchain technologies... That is, until the government screws up the economy and something like hyperinflation occurs. Or some

Society doesn't really "need" blockchain technologies... That is, until the government screws up the economy and something like hyperinflation occurs. Or some system gets hacked, and information or money gets leaked/lost. The appeal in Bitcoin/crypto isn't capacity or speed, its security (from the state, from bad actors, etc.) That has a very high-value proposition and is worth investing in. In time, I think scaling solutions will make crypto much more practical.

fastdev 9y ago
> Or some system gets hacked, and information or money gets leaked/lost. I am not sure how blockchain/decentralized technologies allow protecting from hacks or money loss. They seem to be as susceptible to hacks as non-decentralized systems (e.g. the DAO) and lots of crypto money was lost in many different ways. > its security (from the state, from bad actors, etc.) This is right. Decentralized systems should give more security, but what about a cryptocurrency like NEO? It is significantly faster, but many criticize it because it is somewhat centralized (selected nodes voting for transactions instead of mining). Does it provide less security than Ethereum? If yes, in what cases is this difference critical? > I think scaling solutions will make crypto much more practical. This is true as well. But it seems that no-so-decentralized crypto (NEO, Ripple) can give practical benefits and provide higher performance. If Ethereum can scale, cryptocurrencies like NEO can scale as well. Are there any practical cases when using these solutions would be not enough, and developers would have to resort to a potentially slower but fully decentralized network?
- coralreef 9y ago
  RE: decentralized network security The 51% attack, or control over the network by a state or group of actors, basically destroys the integrity of the blockchain, as this group can now decide to move money from any account, restrict transactions, etc. The more likely a 51% attack can occur (via centralized systems) then the less secure we can call that network.
  - hobofan 9y ago
    > as this group can now decide to move money from any account That's not accurate. They can double-spend, which can have equally bad effects, but without a way to forge transaction signatures (which is only possible with a broken cryptohash function), they can't just drain accounts.
- threeseed 9y ago
  > They seem to be as susceptible to hacks as non-decentralized systems Actually far more so. Banks can afford to spend whatever it takes to secure their infrastructure. Open source projects can't. Likewise banks and other financial services are subject to (at least in most countries) stringent regulations. Open source projects aren't. And in countries in Australia we have consumer protections which protect the consumer in the event of fraud, theft or security beach (irrespective of who is at fault). Unlike say Bitcoin where we have seen staggering amounts of money, "go missing".
  - coralreef 9y ago
    Banks can afford to spend whatever it takes to secure their infrastructure. Open source projects can't. Isn't that a benefit of the blockchain? Since its inception in 2008, Bitcoin's database has never been hacked. They don't need to spend money on security, because mathematics is the security. The chain's integrity is powered by decentralized nodes and proof of work. At scale, while Proof of Work is increasing in cost, it is still probably cheaper and more secure than the aggregate cost of securing money at banks, servers, overhead, etc. And there are opportunities to make it cheaper through concepts like Proof of Stake.
    - fooker 9y ago
      You are comparing apples to oranges. Plenty (all?) bitcoin exchanges have been hacked and their coins never recovered. You do not need to 'hack' the blockchain to steal bitcoins.
      - coralreef 9y ago
        A bitcoin exchange is not a decentralized system. It is a centralized one. We are discussing the security of decentralized systems, aka the blockchain.
        fooker 9y ago
        If only such decentralized systems could exist in vacuum! The thing about security is that you just need to exploit one weak link in the chain.
- ploxiln 9y ago
  The security situation is inverted. For a typical bank account, the security is up to the Bank and the Government, and there's nothing you can do about it. For a crypto-currency wallet, the security is up to you. Some people are dismayed that the common person is enabled to fuck it up - gamble, invest in ponzi schemes, leave control of their wallet to a sketchy third-party. Some people are very excited that they're finally able to take control of their own accounts and make their own security guarantees, and not worry about identity theft, paypal policies, FBI or IRS freezing accounts due to a bureaucratic mix-up, etc.
  - zaarn 9y ago
    In a cryptocurrency wallet the security is up to you and the developers of the wallet and the developers of the blockchain. If you run some chain like IOTA then chances are you get hacked despite doing the best security possible under the circumstances because the underlying chain sucks.
FLUX-YOU 9y ago
>Or some system gets hacked, and information or money gets leaked/lost. Blockchain is worse for theft because someone can't arbitrarily pull money from a bad account and put it back. The amount of security you also need to take on to protect your private key is a vast increase from what you need to currently do for banks.
- coralreef 9y ago
  Well, depends on the context of "theft". A government could freeze your bank account and seize your assets quite easily, with no recourse. They can't do that with crypto. But yeah, the immutability of the blockchain has its tradeoffs.
  - threeseed 9y ago
    Sure but most people aren't getting their assets seized. And in that situation even if you had your assets in Bitcoins the government can still seize them if you've kept a record or wallet somewhere. Likewise if you're a person who is in the business of getting your assets seized then money is probably the least of your worries i.e. you're quite likely to be facing jail time.
    - coralreef 9y ago
      Most people aren't getting their assets seized, that is until a national crisis occurs, ex. Greece: https://www.youtube.com/watch?v=9gW2UnmVuwI https://www.youtube.com/watch?v=9gW2UnmVuwI
    - woah 9y ago
      PayPal is one of the few centralized ways to receive money over the internet, and the web overflows with stories of people who have had large sums frozen for a very long time.

fastdev 9y ago

> Or some system gets hacked, and information or money gets leaked/lost. I am not sure how blockchain/decentralized technologies allow protecting from hacks or money loss. They seem to be as susceptible to hacks as non-decentralized systems (e.g. the DAO) and lots of crypto money was lost in many different ways. > its security (from the state, from bad actors, etc.) This is right. Decentralized systems should give more security, but what about a cryptocurrency like NEO? It is significantly faster, but many criticize it because it is somewhat centralized (selected nodes voting for transactions instead of mining). Does it provide less security than Ethereum? If yes, in what cases is this difference critical? > I think scaling solutions will make crypto much more practical. This is true as well. But it seems that no-so-decentralized crypto (NEO, Ripple) can give practical benefits and provide higher performance. If Ethereum can scale, cryptocurrencies like NEO can scale as well. Are there any practical cases when using these solutions would be not enough, and developers would have to resort to a potentially slower but fully decentralized network?

coralreef 9y ago
RE: decentralized network security The 51% attack, or control over the network by a state or group of actors, basically destroys the integrity of the blockchain, as this group can now decide to move money from any account, restrict transactions, etc. The more likely a 51% attack can occur (via centralized systems) then the less secure we can call that network.
- hobofan 9y ago
  > as this group can now decide to move money from any account That's not accurate. They can double-spend, which can have equally bad effects, but without a way to forge transaction signatures (which is only possible with a broken cryptohash function), they can't just drain accounts.
threeseed 9y ago
> They seem to be as susceptible to hacks as non-decentralized systems Actually far more so. Banks can afford to spend whatever it takes to secure their infrastructure. Open source projects can't. Likewise banks and other financial services are subject to (at least in most countries) stringent regulations. Open source projects aren't. And in countries in Australia we have consumer protections which protect the consumer in the event of fraud, theft or security beach (irrespective of who is at fault). Unlike say Bitcoin where we have seen staggering amounts of money, "go missing".
- coralreef 9y ago
  Banks can afford to spend whatever it takes to secure their infrastructure. Open source projects can't. Isn't that a benefit of the blockchain? Since its inception in 2008, Bitcoin's database has never been hacked. They don't need to spend money on security, because mathematics is the security. The chain's integrity is powered by decentralized nodes and proof of work. At scale, while Proof of Work is increasing in cost, it is still probably cheaper and more secure than the aggregate cost of securing money at banks, servers, overhead, etc. And there are opportunities to make it cheaper through concepts like Proof of Stake.
  - fooker 9y ago
    You are comparing apples to oranges. Plenty (all?) bitcoin exchanges have been hacked and their coins never recovered. You do not need to 'hack' the blockchain to steal bitcoins.
    - coralreef 9y ago
      A bitcoin exchange is not a decentralized system. It is a centralized one. We are discussing the security of decentralized systems, aka the blockchain.
      - fooker 9y ago
        If only such decentralized systems could exist in vacuum! The thing about security is that you just need to exploit one weak link in the chain.
ploxiln 9y ago
The security situation is inverted. For a typical bank account, the security is up to the Bank and the Government, and there's nothing you can do about it. For a crypto-currency wallet, the security is up to you. Some people are dismayed that the common person is enabled to fuck it up - gamble, invest in ponzi schemes, leave control of their wallet to a sketchy third-party. Some people are very excited that they're finally able to take control of their own accounts and make their own security guarantees, and not worry about identity theft, paypal policies, FBI or IRS freezing accounts due to a bureaucratic mix-up, etc.
- zaarn 9y ago
  In a cryptocurrency wallet the security is up to you and the developers of the wallet and the developers of the blockchain. If you run some chain like IOTA then chances are you get hacked despite doing the best security possible under the circumstances because the underlying chain sucks.

FLUX-YOU 9y ago

>Or some system gets hacked, and information or money gets leaked/lost. Blockchain is worse for theft because someone can't arbitrarily pull money from a bad account and put it back. The amount of security you also need to take on to protect your private key is a vast increase from what you need to currently do for banks.

coralreef 9y ago
Well, depends on the context of "theft". A government could freeze your bank account and seize your assets quite easily, with no recourse. They can't do that with crypto. But yeah, the immutability of the blockchain has its tradeoffs.
- threeseed 9y ago
  Sure but most people aren't getting their assets seized. And in that situation even if you had your assets in Bitcoins the government can still seize them if you've kept a record or wallet somewhere. Likewise if you're a person who is in the business of getting your assets seized then money is probably the least of your worries i.e. you're quite likely to be facing jail time.
  - coralreef 9y ago
    Most people aren't getting their assets seized, that is until a national crisis occurs, ex. Greece: https://www.youtube.com/watch?v=9gW2UnmVuwI https://www.youtube.com/watch?v=9gW2UnmVuwI
  - woah 9y ago
    PayPal is one of the few centralized ways to receive money over the internet, and the web overflows with stories of people who have had large sums frozen for a very long time.