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> Economics. Blockchain technologists seem to overestimate the extent to which new insights in economics are needed to understand cryptocurrencies and blockchai
by darawk 8y ago
> Economics. Blockchain technologists seem to overestimate the extent to which new insights in economics are needed to understand cryptocurrencies and blockchains, as opposed to applying basic principles from economics and game theory. For example, a recent paper shows that thinking about miners and attackers in terms of stock and flow exposes important limitations of the security of Proof of Work. [1] I learnt of many other such examples at a recent conference on the economics of blockchains. [2] So I think a lot of the "cryptoeconomics" hype is misplaced.
Are people suggesting that new economics are needed? I don't think most people are suggesting that. They are suggesting that blockchains allow you to implement economic incentive schemes that weren't previously feasible.
> Privacy. It's often taken for granted that decentralized architectures will improve privacy. This seems obvious given everything we've learnt about Facebook, but a better way to think about it is that decentralized systems exchange one set of privacy problems with another. I coauthored a paper a few years ago skeptical of the "decentralization ==> privacy" story in the context of social networks [3], but I think many of the arguments in that paper apply to blockchain/dApps that are being built today.
Nobody serious says that decentralization == privacy. However, decentralization does allow you to to implement strong privacy systems, like Monero/Zcash.
- NikolaNovak 8y agoTo a certain degree, like with many wildly held beliefs, dispelling biggest cryptocurrency zealotry becomes a whack-a-mole game: of the thousand disprovable beliefs, any given person presented with any given disproof will claim "Well I certainly don't believe that, so you've not done anything against my specific (possibly shifting) 17 beliefs". In particular, re: "Nobody serious says that decentralization == privacy" -- this is presented as tautology on regular basis, by people that certainly hold themselves as serious and I'm willing to take as such, on Hacker News and other IT-related forums, as well as many other venues. "Are people suggesting that new economics are needed? I don't think most people are suggesting that" - a lot of more zealous cryptocurrency supporters are very much on the "this is like nothing we've ever seen before" bandwagon, and/or are explicitly desiring as a goal/hope a massive disruption of economic and financial systems. Just like, if there are N Christians, there are in my experience N+1 Christian belief systems, so it appears to be the case for cryptocurrencies. People more patient than myself are trying to make a dent by tackling those N+1 arguments, hopefully cognizant that for any set of believes P, they'll be presented with those exclaiming set of beliefs Q which obviously has nothing to do with P, those people into P are deluded/irrelevant, and they would never agree with them (unless it offered them temporary advantage:).
- darawk 8y ago> In particular, re: "Nobody serious says that decentralization == privacy" -- this is presented as tautology on regular basis, by people that certainly hold themselves as serious and I'm willing to take as such, on Hacker News and other IT-related forums, as well as many other venues. I think maybe you're reading them uncharitably. Decentralization does enable privacy. But it isn't identical and equivalent to it.
- michaelchisari 8y agoAre people suggesting that new economics are needed? That's a mantra I've heard non-stop for as long as I've been paying attention to cryptos. To be fair, though, I hear it almost exclusively from the evangelists and traders, who have an economic interest in pushing that narrative.
- darawk 8y agoI don't think those people are saying a new economics is needed. I think they're saying that crypto allows you to do new things, many of which traditional economics would have liked to have done, but didn't have the technical tools to do. Though maybe we're listening to different people.