5 ms·

Technically correct. Practically misleading.

by b_tterc_p 8y ago

hanniabu 8y ago
I'm not seeing how it's misleading, can you expand on that?
- freefal 8y ago
  You agree to sell me some Bitcoin. I send you USD on PayPal and you send me Bitcoin. I later dispute the charge on PayPal. Your Bitcoin payment can't be similarly disputed. Now I have both my original USD and your Bitcoin. This happened all the time in the early days of Bitcoin. The Bitcoin network worked as expected, but by most normal definitions of fraud, I've defrauded you.
  - LyndsySimon 8y ago
    Fraud occurred, but it was not a fraudulent Bitcoin transaction. There is a big difference - though, I understand that the difference is likely lost on the average person, and that the average person places more value on centralized authority in financial matters.
- b_tterc_p 8y ago
  Let's assume the average reader knows nothing about cryptocurrency besides it being 'digital money' nor do they care about the technical details. Telling people there have been no fraudulent transactions in the history of the currency is disingenuous. There have been numerous instances in which A's money moved to B without A's consent. Technically writing that off as non-fraudulent might be correct, in that it abides by the rules of the system, but it is likely not what the average reader is using to interpret it. The nature of the system is that it is more vulnerable to fraud than in traditional banking systems, and worse, when you are defrauded in most conventional banking systems, there are remedies you can seek. You get nothing with crypto. There are of course things you can do to avoid most of the gaping security holes many people have fallen into but that misses the point for the mass market and does nothing to address certain edge cases, e.g. robber hitting you with a wrench and demanding a private key. To hit the whole article more generally, the author claims that men with guns can't guarantee fiat currency remains valid. True. But if men with guns say your crypto is now illegal, the utility of crypto for the common individual is now (value - expected cost of committing a felony on a public ledger). You might still find a use for it, but the majority of layperson use cases to mitigate hyperinflation just went down the toilet.
  - decentralised 8y ago
    Maybe I'm misreading, but can you give one "instance in which A's money moved to B without A's consent."? I suppose you mean phishing attacks or some form of hack on an exchange or end user.
    - b_tterc_p 8y ago
      Sure. Those qualify. I also like to highlight the opportunity for violent physical crime. I have no idea if this story is true but it is at least representative. http://altdigitalcurrency.com/police-arrest-gang-that-kidnapped-wealthy-bitcoin-holders/ http://altdigitalcurrency.com/police-arrest-gang-that-kidnap... I'd bet that the police were unable to recover anything that the gang members robbed. Crypto introduces a weird situation in which you either: A - keep all of your private keys at home which is effectively just like keeping all of your cash at home, but in easily distributable packages or B - trust some third party entity to hold and protected your assets from what looks like fraudulent transactions. I would imagine a world in which everyone has crypto as their currency would have a lot more physical crime, home break ins, and robberies.
      - decentralised 8y ago
        Those would not qualify actually. IMHO, the class of attacks on humans is never solvable at protocol layer and the statement you made that funds from A can be moved without A's action is both technically and practically incorrect. I come from a family of policemen and consider that cryptocurrency adoption will lead us to a scenario where your assets can't be taken away from you because they can't be linked to your physical identity in the first place. The idea that others will protect your personal property on your behalf actually puts you and your assets at danger in more sinuous and violent ways, either by theft or injunction or even by clerical mistake.
        b_tterc_p 8y ago
        They are already solved, or at least safeguarded against to a highly useful degree. If you try to withdraw all of your money at an ATM, the ATM will say "no, that looks fraudulent." If you try to transfer your savings account to an unknown individual, the bank will say "no, that looks fraudulent". At worst, bank transfers are sent to people with verified identities, which makes crime hard. If you do this with crypto, it will say "ok". If crypto is the main currency then it will be tied to your physical identity, because you will "use" it- and whatever medium you're using to convey that payment, be it a QR code on a physical card or a phone app, has significantly increased risk if lost or stolen or forcibly abused. Much of the benefits of crypto for non major financial transactions can be solved with cash and a shady hoody. But laypeople still use banks, because what they really want is risk reduction, and for 99% of the population, banks provide that.

Technically correct. Practically misleading.

hanniabu 8y ago

I'm not seeing how it's misleading, can you expand on that?

freefal 8y ago
You agree to sell me some Bitcoin. I send you USD on PayPal and you send me Bitcoin. I later dispute the charge on PayPal. Your Bitcoin payment can't be similarly disputed. Now I have both my original USD and your Bitcoin. This happened all the time in the early days of Bitcoin. The Bitcoin network worked as expected, but by most normal definitions of fraud, I've defrauded you.
- LyndsySimon 8y ago
  Fraud occurred, but it was not a fraudulent Bitcoin transaction. There is a big difference - though, I understand that the difference is likely lost on the average person, and that the average person places more value on centralized authority in financial matters.
b_tterc_p 8y ago
Let's assume the average reader knows nothing about cryptocurrency besides it being 'digital money' nor do they care about the technical details. Telling people there have been no fraudulent transactions in the history of the currency is disingenuous. There have been numerous instances in which A's money moved to B without A's consent. Technically writing that off as non-fraudulent might be correct, in that it abides by the rules of the system, but it is likely not what the average reader is using to interpret it. The nature of the system is that it is more vulnerable to fraud than in traditional banking systems, and worse, when you are defrauded in most conventional banking systems, there are remedies you can seek. You get nothing with crypto. There are of course things you can do to avoid most of the gaping security holes many people have fallen into but that misses the point for the mass market and does nothing to address certain edge cases, e.g. robber hitting you with a wrench and demanding a private key. To hit the whole article more generally, the author claims that men with guns can't guarantee fiat currency remains valid. True. But if men with guns say your crypto is now illegal, the utility of crypto for the common individual is now (value - expected cost of committing a felony on a public ledger). You might still find a use for it, but the majority of layperson use cases to mitigate hyperinflation just went down the toilet.
- decentralised 8y ago
  Maybe I'm misreading, but can you give one "instance in which A's money moved to B without A's consent."? I suppose you mean phishing attacks or some form of hack on an exchange or end user.
  - b_tterc_p 8y ago
    Sure. Those qualify. I also like to highlight the opportunity for violent physical crime. I have no idea if this story is true but it is at least representative. http://altdigitalcurrency.com/police-arrest-gang-that-kidnapped-wealthy-bitcoin-holders/ http://altdigitalcurrency.com/police-arrest-gang-that-kidnap... I'd bet that the police were unable to recover anything that the gang members robbed. Crypto introduces a weird situation in which you either: A - keep all of your private keys at home which is effectively just like keeping all of your cash at home, but in easily distributable packages or B - trust some third party entity to hold and protected your assets from what looks like fraudulent transactions. I would imagine a world in which everyone has crypto as their currency would have a lot more physical crime, home break ins, and robberies.
    - decentralised 8y ago
      Those would not qualify actually. IMHO, the class of attacks on humans is never solvable at protocol layer and the statement you made that funds from A can be moved without A's action is both technically and practically incorrect. I come from a family of policemen and consider that cryptocurrency adoption will lead us to a scenario where your assets can't be taken away from you because they can't be linked to your physical identity in the first place. The idea that others will protect your personal property on your behalf actually puts you and your assets at danger in more sinuous and violent ways, either by theft or injunction or even by clerical mistake.
      - b_tterc_p 8y ago
        They are already solved, or at least safeguarded against to a highly useful degree. If you try to withdraw all of your money at an ATM, the ATM will say "no, that looks fraudulent." If you try to transfer your savings account to an unknown individual, the bank will say "no, that looks fraudulent". At worst, bank transfers are sent to people with verified identities, which makes crime hard. If you do this with crypto, it will say "ok". If crypto is the main currency then it will be tied to your physical identity, because you will "use" it- and whatever medium you're using to convey that payment, be it a QR code on a physical card or a phone app, has significantly increased risk if lost or stolen or forcibly abused. Much of the benefits of crypto for non major financial transactions can be solved with cash and a shady hoody. But laypeople still use banks, because what they really want is risk reduction, and for 99% of the population, banks provide that.