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> There is a lot of trust involved in a cryptocurrency transfer. You have to trust your technical competence to have securely mounted your wallet. You have to t

by darawk 8y ago

> There is a lot of trust involved in a cryptocurrency transfer. You have to trust your technical competence to have securely mounted your wallet. You have to trust the wallet you're sending money to is the wallet it's supposed to go to. You have to trust the person you're sending money to will do what you're paying them to do. You have to trust the network to maintain the value of the currency you're sending and receiving. Et cetera, et cetera That's clearly not the point. The transfer itself does not require trust. That's the value.

JumpCrisscross 8y ago
> The transfer itself does not require trust Cash transfers and barters are trustless. Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing). Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk.
- darawk 8y ago
  > Cash transfers and barters are trustless Yes, but they require physical presence. > Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing). Irrevocability is not the same as trustlessness. Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise. > Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk. I think I agree with this statement literally. The question is what price are we paying for that reliability? And does blockchain offer an alternative tradeoff that we might like better?
  - JumpCrisscross 8y ago
    > Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise The frequency of each of coins being stolen from wallets, being lost by exchanges or pilfered by ICO frauds is far, far higher than anything happening at proper banks. Blockchains are a neat technology which should have never been marketed as a currency.
    - darawk 8y ago
      > The frequency of each of coins being stolen from wallets, being lost by exchanges or pilfered by ICO frauds is far, far higher than anything happening at proper banks. What does that have to do with what we're talking about?
      - JumpCrisscross 8y ago
        > What does that have to do with what we're talking about? Generally speaking, if my things get stolen, "it was stolen by X and not Y" is not a value-adding rebuttal. It is actually counterproductive if X (e.g., a cryptocurrency thief) is harder to gain recourse against than Y (e.g. an FDIC-insured bank).
        darawk 8y ago
        > Generally speaking, if my things get stolen, "it was stolen by X and not Y" is not a value-adding rebuttal. It is actually counterproductive if X (e.g., a cryptocurrency thief) is harder to gain recourse against than Y (e.g. an FDIC-insured bank). That's certainly true. But the issues around people losing their coins and having their keys stolen can be solved by better UX and application security. Essentially crypto transmutes the problem domain, from a people problem to an application design problem. It's still a problem. It still needs to be solved, but the domain-transfer allows it to be solved cheaply at scale in a way that the human one can't be. In other words, i'm making the claim that the issues you cited are not essential properties of blockchains, merely transient properties of their present implementations and UX. If you want to make the case that they are in fact central, i'd be happy to listen to that though.
        JumpCrisscross 8y ago
        > If you want to make the case that they are in fact central End financial services users repeatedly choose convenience and risk guarantees over self-management. This isn't something which can be papered over with a saucy UI, particularly when the tangible benefit is difficult to describe. ("Decentralization" isn't a benefit, it's an attribute.)
  - CaptainZapp 8y ago
    Irrevocability is not the same as trustlessness. Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise. Personally I trust those entities much more than some shlocky fly-by-night crypto exchange. To each his own, I guess.
    - darawk 8y ago
      > Personally I trust those entities much more than some shlocky fly-by-night crypto exchange. You aren't trusting an exchange when you send a transaction on the blockchain.
      - funfunfunction 8y ago
        > You aren't trusting an exchange when you send a transaction on the blockchain. This is true, but exchanges have become the de facto on/off ramp for cryptos. If I want to acquire bitcoin without mining, how am I going to do it other than buying from a centralized entity? Edit: As I post this I remembered that Paradex, a decentralized exchange for ERC20 tokens built on 0x, was recently acquired by Coinbase[1], the largest centralized crypto exchange, who in turn might soon be acquired by Facebook[2] 1. https://www.reuters.com/article/crypto-currencies-coinbase/coinbase-acquires-cryptocurrency-trading-platform-paradex-idUSL2N1SU1KK https://www.reuters.com/article/crypto-currencies-coinbase/c... 2. https://www.independent.co.uk/life-style/gadgets-and-tech/news/facebook-cryptocurrency-ban-coinbase-bitcoin-exchange-a8418841.html https://www.independent.co.uk/life-style/gadgets-and-tech/ne...
        darawk 8y ago
        > This is true, but exchanges have become the de facto on/off ramp for cryptos. If I want to acquire bitcoin without mining, how am I going to do it other than buying from a centralized entity? Sure, that's true. But once you own them, they're yours to do with as you please. You can also buy them from someone peer to peer if you really want to onramp in a 'decentralized' way.
        8y ago
  - s73v3r_ 8y ago
    "And does blockchain offer an alternative tradeoff that we might like better?" Why do I care about limiting the options to blockchain?
  - jonhendry18 8y ago
    "Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise." They have a strong business interest in not doing so. Because the identity of the entity is known, and thus subject to reputation loss.
- perl4ever 8y ago
  Cash and barter require trust that your counterparty won't club you and take your stuff, since you have to be physically present.
deleted 8y ago
[deleted]
mehrdadn 8y ago
> The transfer itself does not require trust. That's the value. Don't you need to trust nodes that they'll pass down and/or include process your transaction, and that they'll do so in a timely fashion? Which seems just like trusting that, say, your bank or the Mastercard servers will process your transaction properly? Not to mention the more mundane aspects like the fact that you still need to trust that your ISP won't cut off your access to the network, etc... To me the value seems to be that nobody can forge a transaction based on your currency (or whatever it is you have), not the idea that you somehow don't need to trust anyone when you do transfer value.
- darawk 8y ago
  > Don't you need to trust nodes that they'll pass down and/or include process your transaction, and that they'll do so in a timely fashion? Yes, but their incentives are structured to align with yours in that scenario. You are trusting them to act in their own interest.
  - mehrdadn 8y ago
    Isn't that the same with credit cards, wires, etc.? They make money from your transactions too.
    - darawk 8y ago
      That's true, but the degrees of freedom are different. The node processing your transaction cannot steal your money in crypto. It can only choose not to broadcast your transaction, and they are also in perfect competition with all the other nodes. Which means that if one node chooses not to process your tx, another will soon.
      - mehrdadn 8y ago
        > That's true, but the degrees of freedom are different. The node processing your transaction cannot steal your money in crypto. It can only choose not to broadcast your transaction, and they are also in perfect competition with all the other nodes. Which means that if one node chooses not to process your tx, another will soon. Hence we circle back to exactly what I said in the last line of my comment: https://news.ycombinator.com/item?id=17493508 https://news.ycombinator.com/item?id=17493508

by darawk 8y ago

JumpCrisscross 8y ago

> The transfer itself does not require trust Cash transfers and barters are trustless. Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing). Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk.

darawk 8y ago
> Cash transfers and barters are trustless Yes, but they require physical presence. > Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing). Irrevocability is not the same as trustlessness. Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise. > Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk. I think I agree with this statement literally. The question is what price are we paying for that reliability? And does blockchain offer an alternative tradeoff that we might like better?
- JumpCrisscross 8y ago
  > Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise The frequency of each of coins being stolen from wallets, being lost by exchanges or pilfered by ICO frauds is far, far higher than anything happening at proper banks. Blockchains are a neat technology which should have never been marketed as a currency.
  - darawk 8y ago
    > The frequency of each of coins being stolen from wallets, being lost by exchanges or pilfered by ICO frauds is far, far higher than anything happening at proper banks. What does that have to do with what we're talking about?
    - JumpCrisscross 8y ago
      > What does that have to do with what we're talking about? Generally speaking, if my things get stolen, "it was stolen by X and not Y" is not a value-adding rebuttal. It is actually counterproductive if X (e.g., a cryptocurrency thief) is harder to gain recourse against than Y (e.g. an FDIC-insured bank).
      - darawk 8y ago
        > Generally speaking, if my things get stolen, "it was stolen by X and not Y" is not a value-adding rebuttal. It is actually counterproductive if X (e.g., a cryptocurrency thief) is harder to gain recourse against than Y (e.g. an FDIC-insured bank). That's certainly true. But the issues around people losing their coins and having their keys stolen can be solved by better UX and application security. Essentially crypto transmutes the problem domain, from a people problem to an application design problem. It's still a problem. It still needs to be solved, but the domain-transfer allows it to be solved cheaply at scale in a way that the human one can't be. In other words, i'm making the claim that the issues you cited are not essential properties of blockchains, merely transient properties of their present implementations and UX. If you want to make the case that they are in fact central, i'd be happy to listen to that though.
        JumpCrisscross 8y ago
        > If you want to make the case that they are in fact central End financial services users repeatedly choose convenience and risk guarantees over self-management. This isn't something which can be papered over with a saucy UI, particularly when the tangible benefit is difficult to describe. ("Decentralization" isn't a benefit, it's an attribute.)
- CaptainZapp 8y ago
  Irrevocability is not the same as trustlessness. Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise. Personally I trust those entities much more than some shlocky fly-by-night crypto exchange. To each his own, I guess.
  - darawk 8y ago
    > Personally I trust those entities much more than some shlocky fly-by-night crypto exchange. You aren't trusting an exchange when you send a transaction on the blockchain.
    - funfunfunction 8y ago
      > You aren't trusting an exchange when you send a transaction on the blockchain. This is true, but exchanges have become the de facto on/off ramp for cryptos. If I want to acquire bitcoin without mining, how am I going to do it other than buying from a centralized entity? Edit: As I post this I remembered that Paradex, a decentralized exchange for ERC20 tokens built on 0x, was recently acquired by Coinbase[1], the largest centralized crypto exchange, who in turn might soon be acquired by Facebook[2] 1. https://www.reuters.com/article/crypto-currencies-coinbase/coinbase-acquires-cryptocurrency-trading-platform-paradex-idUSL2N1SU1KK https://www.reuters.com/article/crypto-currencies-coinbase/c... 2. https://www.independent.co.uk/life-style/gadgets-and-tech/news/facebook-cryptocurrency-ban-coinbase-bitcoin-exchange-a8418841.html https://www.independent.co.uk/life-style/gadgets-and-tech/ne...
      - darawk 8y ago
        > This is true, but exchanges have become the de facto on/off ramp for cryptos. If I want to acquire bitcoin without mining, how am I going to do it other than buying from a centralized entity? Sure, that's true. But once you own them, they're yours to do with as you please. You can also buy them from someone peer to peer if you really want to onramp in a 'decentralized' way.
        8y ago
- s73v3r_ 8y ago
  "And does blockchain offer an alternative tradeoff that we might like better?" Why do I care about limiting the options to blockchain?
- jonhendry18 8y ago
  "Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise." They have a strong business interest in not doing so. Because the identity of the entity is known, and thus subject to reputation loss.
perl4ever 8y ago
Cash and barter require trust that your counterparty won't club you and take your stuff, since you have to be physically present.

deleted 8y ago

[deleted]

mehrdadn 8y ago

> The transfer itself does not require trust. That's the value. Don't you need to trust nodes that they'll pass down and/or include process your transaction, and that they'll do so in a timely fashion? Which seems just like trusting that, say, your bank or the Mastercard servers will process your transaction properly? Not to mention the more mundane aspects like the fact that you still need to trust that your ISP won't cut off your access to the network, etc... To me the value seems to be that nobody can forge a transaction based on your currency (or whatever it is you have), not the idea that you somehow don't need to trust anyone when you do transfer value.

darawk 8y ago
> Don't you need to trust nodes that they'll pass down and/or include process your transaction, and that they'll do so in a timely fashion? Yes, but their incentives are structured to align with yours in that scenario. You are trusting them to act in their own interest.
- mehrdadn 8y ago
  Isn't that the same with credit cards, wires, etc.? They make money from your transactions too.
  - darawk 8y ago
    That's true, but the degrees of freedom are different. The node processing your transaction cannot steal your money in crypto. It can only choose not to broadcast your transaction, and they are also in perfect competition with all the other nodes. Which means that if one node chooses not to process your tx, another will soon.
    - mehrdadn 8y ago
      > That's true, but the degrees of freedom are different. The node processing your transaction cannot steal your money in crypto. It can only choose not to broadcast your transaction, and they are also in perfect competition with all the other nodes. Which means that if one node chooses not to process your tx, another will soon. Hence we circle back to exactly what I said in the last line of my comment: https://news.ycombinator.com/item?id=17493508 https://news.ycombinator.com/item?id=17493508