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> The blockchain allows two strangers to interact without needing to trust eachother This is false. It would only be true if said strangers were very skilled p

by bambax 8y ago

> The blockchain allows two strangers to interact without needing to trust eachother This is false. It would only be true if said strangers were very skilled programmers having the time and know-how to audit smart contracts. In practice, cryptocurrencies rely on users trusting the operators and intermediaries and ultimately the state to prevent or at least strongly punish fraud.

DennisP 8y ago
Blockchains don't so much remove trust as distribute it. Instead of trusting one entity that holds my money, I can trust open source code, multiple independent auditors, a bug bounty process, a contract's history of successful use by lots of people, etc. It takes relatively little skill to check for the existence of these things. (It just occurred to me that we probably need independent rating services that do these checks for popular contracts. That could have warned people away from Parity's multisig wallet.)
- notahacker 8y ago
  The theory of blockchains might entail a distribution of trust amongst well-audited third parties. In practice, crypto rely so heavily on centralised intermediaries of dubious quality that at one point 70% of BTC trades went through MtGox, a closed-source platform with well-documented problems with security, payment processors and regulators even before it lost 7% of all Bitcoins.
  - Taek 8y ago
    That's a function of an early industry, and increasingly the trend has been towards decentralization. There are more large exchanges, more small exchanges, and increasingly large parts of the cryptocurrency stack are being further decentralized and open-sourced (a great example is the BTCPay project, which replaced a closed source SAAS API with an open source wrapper around the open source bitcoin client).
    - notahacker 8y ago
      Sure, but if the theory that what people really needed and wanted was the ability to choose and audit providers was true and this alone was sufficient to protect most people, MtGox would never have become the dominant crypto platform. Particularly not at a point when ample evidence that it was utterly terrible already existed, and in an era of early adopters including the small minority of the public actually capable of auditing smart contracts. Since then we've seen more exchanges, but again the largest exchange - Bitfinex - is a project with a history of hacks and auditors walking away, before we even start getting into the "is Tether fraud on a massive scale" debate. If "more large exchanges, more small exchanges" were the solution to the dodgy exchange problem, that wouldn't be the case. It's almost like the distribution of trust isn't remotely close to an adequate substitute for a legal system for the average person
- dingo_bat 8y ago
  > Blockchains don't so much remove trust as distribute it. That's true about govt issued currency too.
- perl4ever 8y ago
  I don't trust any conventional online broker in itself, I trust the regulatory framework that keeps them under control. I'm having increasing anxiety that what I see as the cryptocurrency mental virus, as well as the current US Presidential administration's anti-regulatory tendencies, will undermine conventional finance in some unforeseen way. Especially when I read about Vanguard getting into "blockchain". From articles I've read about Tether,[1] I've become extremely doubtful that the cryptocurrency community has any understanding of what audits really are, and suspect they are completely off in cargo (or other) cult land when it comes to validating "trust". The more "independent rating services" we have, the more we need rating services for the rating services. I feel like the popularity of cryptocurrencies is a harbinger of the financial system unraveling much more than in 2008, and people cheering it on won't benefit like they expect. [1]https://www.reuters.com/article/us-cryptocurrencies-tether/cryptocurrency-firm-tether-releases-law-firm-report-attesting-to-u-s-dollar-reserves-idUSKBN1JG1SB https://www.reuters.com/article/us-cryptocurrencies-tether/c...
  - DennisP 8y ago
    The rating services I'm imagining would provide links to everything: public audits, unit tests, verified source code, bug bounties, contract transaction history, etc. It could write a summary and give a rating, but since everything is public, it'd be more of a convenient time saver than someone you have to trust. It'd focus on public smart contracts, rather than centralized, private, commercial situations like Tether.

by bambax 8y ago

DennisP 8y ago

Blockchains don't so much remove trust as distribute it. Instead of trusting one entity that holds my money, I can trust open source code, multiple independent auditors, a bug bounty process, a contract's history of successful use by lots of people, etc. It takes relatively little skill to check for the existence of these things. (It just occurred to me that we probably need independent rating services that do these checks for popular contracts. That could have warned people away from Parity's multisig wallet.)

notahacker 8y ago
The theory of blockchains might entail a distribution of trust amongst well-audited third parties. In practice, crypto rely so heavily on centralised intermediaries of dubious quality that at one point 70% of BTC trades went through MtGox, a closed-source platform with well-documented problems with security, payment processors and regulators even before it lost 7% of all Bitcoins.
- Taek 8y ago
  That's a function of an early industry, and increasingly the trend has been towards decentralization. There are more large exchanges, more small exchanges, and increasingly large parts of the cryptocurrency stack are being further decentralized and open-sourced (a great example is the BTCPay project, which replaced a closed source SAAS API with an open source wrapper around the open source bitcoin client).
  - notahacker 8y ago
    Sure, but if the theory that what people really needed and wanted was the ability to choose and audit providers was true and this alone was sufficient to protect most people, MtGox would never have become the dominant crypto platform. Particularly not at a point when ample evidence that it was utterly terrible already existed, and in an era of early adopters including the small minority of the public actually capable of auditing smart contracts. Since then we've seen more exchanges, but again the largest exchange - Bitfinex - is a project with a history of hacks and auditors walking away, before we even start getting into the "is Tether fraud on a massive scale" debate. If "more large exchanges, more small exchanges" were the solution to the dodgy exchange problem, that wouldn't be the case. It's almost like the distribution of trust isn't remotely close to an adequate substitute for a legal system for the average person
dingo_bat 8y ago
> Blockchains don't so much remove trust as distribute it. That's true about govt issued currency too.
perl4ever 8y ago
I don't trust any conventional online broker in itself, I trust the regulatory framework that keeps them under control. I'm having increasing anxiety that what I see as the cryptocurrency mental virus, as well as the current US Presidential administration's anti-regulatory tendencies, will undermine conventional finance in some unforeseen way. Especially when I read about Vanguard getting into "blockchain". From articles I've read about Tether,[1] I've become extremely doubtful that the cryptocurrency community has any understanding of what audits really are, and suspect they are completely off in cargo (or other) cult land when it comes to validating "trust". The more "independent rating services" we have, the more we need rating services for the rating services. I feel like the popularity of cryptocurrencies is a harbinger of the financial system unraveling much more than in 2008, and people cheering it on won't benefit like they expect. [1]https://www.reuters.com/article/us-cryptocurrencies-tether/cryptocurrency-firm-tether-releases-law-firm-report-attesting-to-u-s-dollar-reserves-idUSKBN1JG1SB https://www.reuters.com/article/us-cryptocurrencies-tether/c...
- DennisP 8y ago
  The rating services I'm imagining would provide links to everything: public audits, unit tests, verified source code, bug bounties, contract transaction history, etc. It could write a summary and give a rating, but since everything is public, it'd be more of a convenient time saver than someone you have to trust. It'd focus on public smart contracts, rather than centralized, private, commercial situations like Tether.