22 ms·

> Cash transfers and barters are trustless Yes, but they require physical presence. > Wires are trustless (in being reasonably irrevocable) in a manner simila

by 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.)
        darawk 8y ago
        > 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.) Totally agree. In a hypothetical crypto dominated world, most people would still use centralized services to store their money. But they'd have the ability to opt out if and when they choose.
        JumpCrisscross 8y ago
        > In a hypothetical crypto dominated world, most people would still use centralized services to store their money. But they'd have the ability to opt out if and when they choose The problem with this vision is those people using centralized services see no benefit. They are better off sticking with the status quo. Cryptocurrencies make sense for people who wish, for philosophically reasons, to control their own money. That vision doesn't require a "crypto dominated world." It does, however, require shrinking the vision from "re-imaginging the financial system" to "solving a need for a small group of devoted people." That's okay, and if that's how crypto were marketed it would (a) be more honest but (b) come with a lower value.
  - pwinnski 8y ago
    The statement you are defending was "Being able to transfer value between two parties without having to trust anyone has value." Compared to wire transfers, one is required to trust the intermediary in that case. I think at that point it becomes fair to ask: what is the likelihood that I am going to lose money unexpectedly to my credit union, or my recipient to her bank? And then by comparison, what is the likelihood that I or my recipient are going to lose money to coin theft, exchange failures, fluctuation in valuation, or other things inherent to dealing with blockchain transfers? Rightly or wrongly, I think many people would rate potential losses higher with blockchain solutions than with USD wire transfers. I know I would.
    - darawk 8y ago
      > Compared to wire transfers, one is required to trust the intermediary in that case. You're totally right. But let me flip the question around a little bit. What would our financial system look like if we didn't have to place so much trust in our intermediaries? It's not that banks aren't trustworthy. They are. They're extremely good stewards of the public trust, for the most part. But the fact that we place so much trust in them has systemic effects that are stifling to innovation. And I think that's what blockchains may allow us to overcome.
      - kvakva 8y ago
        How exactly blockchains helps with that? It's open protocol which helps but most of the people interact with it through centralized points wallets providers, exchanges etc and we already see classic centralization. It seems to me similar as it is with Facebook which interacts with open protocols but is many people have to go through it and solutions seem to be legislatively rather than technological(although I hope projects like blockstack can help with this)
        darawk 8y ago
        I think the main point is having an open protocol built on top of decentralized, trusted infrastructure. In that way, anyone can start a bank, and get to 'trust scale' immediately.
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.

by darawk 8y ago

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.)
      - darawk 8y ago
        > 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.) Totally agree. In a hypothetical crypto dominated world, most people would still use centralized services to store their money. But they'd have the ability to opt out if and when they choose.
        JumpCrisscross 8y ago
        > In a hypothetical crypto dominated world, most people would still use centralized services to store their money. But they'd have the ability to opt out if and when they choose The problem with this vision is those people using centralized services see no benefit. They are better off sticking with the status quo. Cryptocurrencies make sense for people who wish, for philosophically reasons, to control their own money. That vision doesn't require a "crypto dominated world." It does, however, require shrinking the vision from "re-imaginging the financial system" to "solving a need for a small group of devoted people." That's okay, and if that's how crypto were marketed it would (a) be more honest but (b) come with a lower value.
- pwinnski 8y ago
  The statement you are defending was "Being able to transfer value between two parties without having to trust anyone has value." Compared to wire transfers, one is required to trust the intermediary in that case. I think at that point it becomes fair to ask: what is the likelihood that I am going to lose money unexpectedly to my credit union, or my recipient to her bank? And then by comparison, what is the likelihood that I or my recipient are going to lose money to coin theft, exchange failures, fluctuation in valuation, or other things inherent to dealing with blockchain transfers? Rightly or wrongly, I think many people would rate potential losses higher with blockchain solutions than with USD wire transfers. I know I would.
  - darawk 8y ago
    > Compared to wire transfers, one is required to trust the intermediary in that case. You're totally right. But let me flip the question around a little bit. What would our financial system look like if we didn't have to place so much trust in our intermediaries? It's not that banks aren't trustworthy. They are. They're extremely good stewards of the public trust, for the most part. But the fact that we place so much trust in them has systemic effects that are stifling to innovation. And I think that's what blockchains may allow us to overcome.
    - kvakva 8y ago
      How exactly blockchains helps with that? It's open protocol which helps but most of the people interact with it through centralized points wallets providers, exchanges etc and we already see classic centralization. It seems to me similar as it is with Facebook which interacts with open protocols but is many people have to go through it and solutions seem to be legislatively rather than technological(although I hope projects like blockstack can help with this)
      - darawk 8y ago
        I think the main point is having an open protocol built on top of decentralized, trusted infrastructure. In that way, anyone can start a bank, and get to 'trust scale' immediately.

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.