7 ms·

If you're a technical person, you don't need to trust Blockchain technology; you can verify that it works on your own. If you're not a technical person, you can

If you're a technical person, you don't need to trust Blockchain technology; you can verify that it works on your own. If you're not a technical person, you can find independent technical experts to verify it for you. Much of the value of a cryptocurrency can be attributed to the fact that it's difficult to coordinate a large number of people to agree on changes. Also, because most blockchains are public ledgers; it's impossible to manipulate them behind the scenes without raising alarms. On the other hand, fiat money is constantly being secretly manipulated. There is very little transparency and much of the new fiat money which flows into the system has to pass through big financial firms/gatekeepers who get their cut of the new money supply. Big finance firms have had many decades to figure out how to game the fiat system and there is no doubt that they've been successful at it. Cryptocurrencies have the potential to greatly improve the financial system by making it simpler, fairer and more transparent. When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations.

cphoover 8y ago
"If you're a technical person, you don't need to trust Blockchain technology; you can verify that it works on your own. If you're not a technical person, you can find independent technical experts to verify it for you." That holds for Proof-of-work based currencies... It seems like it's trickier than that for proof-of-stake, as these have to be trustful systems.
- baby 8y ago
  Indeed, the proof-of-work of bitcoin is way easier to understand than the byzantine agreements used by other cryptocurrencies.
- jameslevy 8y ago
  Because exit scams are a thing, it may be difficult to prove that a proof of stake blockchain will always be trustworthy, but it should be possible to verify that historic proof of stake records are accurate. I'd expect we will see some independent auditing tools of this type for monitoring PoS blockchains.
- cphoover 8y ago
  I'm not sure why having trusted actors is necessarily a bad thing. DNS Authorities, and Certificate authorities are both examples of decentralized systems with trusted entities.
james_s_tayler 8y ago
Blockchain's trust model is broken anyhow because it seems whoever is managing the tokens used by the system keeps losing them. The way the tokens are handled at the edge where layer 8 is involved to some degree is the weakest link and it has proven itself not to be trustworthy.
baby 8y ago
Actually, if you look at encrypted blockchains (Zcash, Monero, Dash, Quisquis, Grin, etc.) there are real and similar dangers here. It is very hard to monitor money, and see when fraud happens. Some kind of fraud, not up for ethical debate, is the creation of money out of thin air. Zcash actually just caught one such bug[1] and there has been others in the past. [1]: https://z.cash/blog/zcash-counterfeiting-vulnerability-successfully-remediated/ https://z.cash/blog/zcash-counterfeiting-vulnerability-succe...
XMPPwocky 8y ago
> When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations. You can borrow cryptocurrency. You can invest cryptocurrency with terms that are bad for the business you invest in. Corporations can use cryptocurrency. What, exactly, have you changed?
- legionof7 8y ago
  You are correct with borrowing, I'm not sure what that's about, happy to be enlightened by OP though. Not sure about investments, haven't done too much research into the benefits of ICOs and letting more people invest. I think corporations are a good point though. If more companies became DAOs, we'd have much better checks and balances and transparency for corporations.
  - verdverm 8y ago
    Or do DOAs become more like our current political conundrum, where it's a popularity contest full of opinionated misinformation with people who don't have the expertise or time to become sufficiently informed. With a DAG based voting proxy, there may be interesting applications within a business. Like putting support behind higher ups or something like support for RFCs. I'd expect anything applied to the wide population to be manipulated.
    - legionof7 8y ago
      Yep, that's definitely a concern. There are different voting mechanisms/design systems that help deal with this. Definitely a work in progress though.
      - verdverm 8y ago
        You could totally build a DOA framework / platform without a blockchain though. (added it to the endless todo list... ;)
  - 8y ago
jayd16 8y ago
>On the other hand, fiat money is constantly being secretly manipulated. Crypto can be secretly manipulated in the exact same way fiat can. The only thing different about crypto is that there's no central bank that can literally print money. Instead we get defacto authority with no legal framework in place.
- dragontamer 8y ago
  > The only thing different about crypto is that there's no central bank that can literally print money Satoshi's pile of ~1 Million bitcoins disagrees with you. The entire BTC economy innately trusts Satoshi to not ruin the fun for them. If Satoshi decides to liquidate his holdings of BTC, it would crash the market harder than the next 10-years worth of mining. Satoshi's pile of 1-million bitcoins acts as a centralized bank, whether he likes it or not. Satoshi realizes this fact, and that's why Satoshi has ensured that his BTC has never moved.
  - jayd16 8y ago
    We're saying the same thing. Satoshi is a defacto central bank. The main difference is the money is already printed but that fact is essentially irrelevant.
    - blotter_paper 8y ago
      I don't see how that fact is irrelevant. In one case, an upper limit of how much currency can enter the marketplace is known. In the other, it can keep being printed indefinitely. That doesn't seem like a trivial difference. This is basic inflation/deflation we're talking about, and while deflation isn't popular among modern economists it certainly isn't seen as irrelevant. Satoshi has no magical powers, only a stash of coins that could have easily been mined by other early adopters.
      - jayd16 8y ago
        I simply mean a large amount approaches infinity. In Satoshi's case he owns 5% of all bitcoin that will ever be and almost certainly much more in terms of what is in circulation. This amount of power is akin to that of a central bank for the purposes of this discussion.
joe_the_user 8y ago
If you're a technical person, you don't need to trust Blockchain technology; you can verify that it works on your own. If you're not a technical person, you can find independent technical experts to verify it for you. Not really. Just as an example, the only people who expect to verify encryption algorithms all on their own are those incompetent at it. The competent take the "best of breed", note what other experts say, keep an eye on bulletins and so-forth. If you think you can verify the functioning of bitcoin personally, you probably shouldn't be trusted for other things either. On the other hand, fiat money is constantly being secretly manipulated. The supply of fiat money can be increased. Markets can be manipulated too - but fiat money markets are many times more transparent than bitcoin markets. When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations. This claim makes no sense.
- blotter_paper 8y ago
  >fiat money markets are many times more transparent than bitcoin markets. Absolutely not. USD is purposefully manipulated by an organization that doesn't want their decisions to be known too far in advance. If inflation is about to increase, only a small cabal is supposed to know before the official announcement. For a decision like this to be made in Bitcoin, it would take lengthy discussion to get enough nodes on board. Even segwit caused a fork, the old Bitcoin (BCH now) is still around. Inflation can't be manipulated by a central organization that makes secret plans in advance using special powers. Whether or not that's a desirable quality is up for debate, but to act like the USD market is more transparent is absurd.
- jondubois 8y ago
  >> but fiat money markets are many times more transparent than bitcoin markets. How so? When the Fed creates money out of nothing and engages in so-called 'open market operations': - Who brokers these deals? - Do they get a commission on those deals? What percentage? - When the Fed buys bonds/debt from the government through those brokers, who gets their hands on the credit when the government spends it? Is it the same corporations who get all the big government contracts (e.g. Palantir, IBM, Oracle...)? - What do the corporations who get all the big government contracts and subsidies do with that money? Stock buybacks? If so, isn't this the same as if the government just gave the money to corporate shareholders directly? I don't think I've ever met someone who could answer these questions. Certainly less than 0.1% of the holders of the currency can so how can we say that it's transparent?
oarabbus_ 8y ago
>Cryptocurrencies have the potential to greatly improve the financial system by making it simpler, fairer and more transparent. When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations. When "anyone will be able to launch their own cryptocurrency" it will become completely useless. This is what many technical folks who don't understand economics don't see. The utility of fiat is twofold - first of all, real guns, missiles, tanks, and planes are protecting your fiat dollars. Technical cryptobulls (and non-technical crypto mega-bulls) seem to miss this point entirely. A corollary to this is a world with only cryptocurrency invites chaos. If we're all being paid in crypto, and crypto is anonymous, what incentive does one have to pay taxes to the government? No one will pay. Or some might, but others won't, and it will be the burden of the few taxpayers to subsidize the taxes of the many who skip out. >chance to free ourselves from the coercive influences of debt, venture capital and corporations. Yes, you'll also be freeing yourself from the influences of public roads, highways, and public schools. You'll free yourselves from the coercive influence of venture capital and corporations and governments/banks (latter is implied) and we'll free ourselves straight into an anarchic/chaotic society. Second, a central entity (or a few entities) determining an agreed-upon exchange rate between various fiat currencies keeps the system running without severe loss of efficiency. We already see highly illiquid, inefficient markets in cryptospace. Sure, people should be able to launch their own toy cryptocurrencies for fun purposes, but it will have zero utility. This will not be fixed by adding MORE cryptocurrencies - it will only exacerbate the problem. This will be fixed by adding more users to a basket of existing cryptocurrencies. Crypto/blockchain certainly have powerful use cases but to decry fiat as some extraordinary evil which should be 100% supplanted by cryptocurrency is, quite frankly, a display of a lack of understandings of economics, sociology, civics, and what have you.
- tim333 8y ago
  Anyone can launch their own currency. I have some Timcoin I can sell you if you are interested. In spite of that bitcoin retains some value. Most of the value of any currency comes from the social network of people who use it.
verdverm 8y ago
As a technical person I do need to trust the technology, because I'm not going to spend the time understanding the math and code in a language I don't use. It's a highly complex system that extends and is impacted by social, economic, and human decisions. Not only do I need to trust the blockchain technology, I also need to trust every piece of technology around it. Phones, emails, the Linux kernel, TLS, browsers ... and all the people building this technology. Look at the recent NPM exploit, or the Crypto exchange CEO who died without a plan for his password. Because the blockchain doesn't get hacked, it's the tech and humans around it that gets exploited.
muttled 8y ago
When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations That's the goal with my side project https://coinpress.cc https://coinpress.cc
atq2119 8y ago
> On the other hand, fiat money is constantly being secretly manipulated. Let's assume for a moment that this is both true and relevant. Why should reinventing the wheel be the correct response? I feel like this is simply yet another example of the rather common bias of tech folks (not excluding myself here) where we too easily believe that a social problem can be fixed with technology. You see this kind of logic all the time when it comes to surveillance and censorship overreach as well. We know technology, and believe we can control it, and so think that all these social issues can somehow be fixed with clever anti-censorship or surveillance-proof technology. More often than not, these attempts fail entirely or become last-resort fallbacks at best. This has played out fairly well with Bitcoin as well. Over time, people realized that almost all the complex stuff that the fiat money system does is actually useful, and is damned hard or impossible to reproduce in a crypto currency pretty much by design. Meanwhile, the existing fiat money system could also be made transparent etc., if a political movement was formed to push for that. So now we're back where we started, with a social problem.

cphoover 8y ago

"If you're a technical person, you don't need to trust Blockchain technology; you can verify that it works on your own. If you're not a technical person, you can find independent technical experts to verify it for you." That holds for Proof-of-work based currencies... It seems like it's trickier than that for proof-of-stake, as these have to be trustful systems.

baby 8y ago
Indeed, the proof-of-work of bitcoin is way easier to understand than the byzantine agreements used by other cryptocurrencies.
jameslevy 8y ago
Because exit scams are a thing, it may be difficult to prove that a proof of stake blockchain will always be trustworthy, but it should be possible to verify that historic proof of stake records are accurate. I'd expect we will see some independent auditing tools of this type for monitoring PoS blockchains.
cphoover 8y ago
I'm not sure why having trusted actors is necessarily a bad thing. DNS Authorities, and Certificate authorities are both examples of decentralized systems with trusted entities.

james_s_tayler 8y ago

Blockchain's trust model is broken anyhow because it seems whoever is managing the tokens used by the system keeps losing them. The way the tokens are handled at the edge where layer 8 is involved to some degree is the weakest link and it has proven itself not to be trustworthy.

baby 8y ago

Actually, if you look at encrypted blockchains (Zcash, Monero, Dash, Quisquis, Grin, etc.) there are real and similar dangers here. It is very hard to monitor money, and see when fraud happens. Some kind of fraud, not up for ethical debate, is the creation of money out of thin air. Zcash actually just caught one such bug[1] and there has been others in the past. [1]: https://z.cash/blog/zcash-counterfeiting-vulnerability-successfully-remediated/ https://z.cash/blog/zcash-counterfeiting-vulnerability-succe...

XMPPwocky 8y ago

> When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations. You can borrow cryptocurrency. You can invest cryptocurrency with terms that are bad for the business you invest in. Corporations can use cryptocurrency. What, exactly, have you changed?

legionof7 8y ago
You are correct with borrowing, I'm not sure what that's about, happy to be enlightened by OP though. Not sure about investments, haven't done too much research into the benefits of ICOs and letting more people invest. I think corporations are a good point though. If more companies became DAOs, we'd have much better checks and balances and transparency for corporations.
- verdverm 8y ago
  Or do DOAs become more like our current political conundrum, where it's a popularity contest full of opinionated misinformation with people who don't have the expertise or time to become sufficiently informed. With a DAG based voting proxy, there may be interesting applications within a business. Like putting support behind higher ups or something like support for RFCs. I'd expect anything applied to the wide population to be manipulated.
  - legionof7 8y ago
    Yep, that's definitely a concern. There are different voting mechanisms/design systems that help deal with this. Definitely a work in progress though.
    - verdverm 8y ago
      You could totally build a DOA framework / platform without a blockchain though. (added it to the endless todo list... ;)
- 8y ago

jayd16 8y ago

>On the other hand, fiat money is constantly being secretly manipulated. Crypto can be secretly manipulated in the exact same way fiat can. The only thing different about crypto is that there's no central bank that can literally print money. Instead we get defacto authority with no legal framework in place.

dragontamer 8y ago
> The only thing different about crypto is that there's no central bank that can literally print money Satoshi's pile of ~1 Million bitcoins disagrees with you. The entire BTC economy innately trusts Satoshi to not ruin the fun for them. If Satoshi decides to liquidate his holdings of BTC, it would crash the market harder than the next 10-years worth of mining. Satoshi's pile of 1-million bitcoins acts as a centralized bank, whether he likes it or not. Satoshi realizes this fact, and that's why Satoshi has ensured that his BTC has never moved.
- jayd16 8y ago
  We're saying the same thing. Satoshi is a defacto central bank. The main difference is the money is already printed but that fact is essentially irrelevant.
  - blotter_paper 8y ago
    I don't see how that fact is irrelevant. In one case, an upper limit of how much currency can enter the marketplace is known. In the other, it can keep being printed indefinitely. That doesn't seem like a trivial difference. This is basic inflation/deflation we're talking about, and while deflation isn't popular among modern economists it certainly isn't seen as irrelevant. Satoshi has no magical powers, only a stash of coins that could have easily been mined by other early adopters.
    - jayd16 8y ago
      I simply mean a large amount approaches infinity. In Satoshi's case he owns 5% of all bitcoin that will ever be and almost certainly much more in terms of what is in circulation. This amount of power is akin to that of a central bank for the purposes of this discussion.

joe_the_user 8y ago

If you're a technical person, you don't need to trust Blockchain technology; you can verify that it works on your own. If you're not a technical person, you can find independent technical experts to verify it for you. Not really. Just as an example, the only people who expect to verify encryption algorithms all on their own are those incompetent at it. The competent take the "best of breed", note what other experts say, keep an eye on bulletins and so-forth. If you think you can verify the functioning of bitcoin personally, you probably shouldn't be trusted for other things either. On the other hand, fiat money is constantly being secretly manipulated. The supply of fiat money can be increased. Markets can be manipulated too - but fiat money markets are many times more transparent than bitcoin markets. When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations. This claim makes no sense.

blotter_paper 8y ago
>fiat money markets are many times more transparent than bitcoin markets. Absolutely not. USD is purposefully manipulated by an organization that doesn't want their decisions to be known too far in advance. If inflation is about to increase, only a small cabal is supposed to know before the official announcement. For a decision like this to be made in Bitcoin, it would take lengthy discussion to get enough nodes on board. Even segwit caused a fork, the old Bitcoin (BCH now) is still around. Inflation can't be manipulated by a central organization that makes secret plans in advance using special powers. Whether or not that's a desirable quality is up for debate, but to act like the USD market is more transparent is absurd.
jondubois 8y ago
>> but fiat money markets are many times more transparent than bitcoin markets. How so? When the Fed creates money out of nothing and engages in so-called 'open market operations': - Who brokers these deals? - Do they get a commission on those deals? What percentage? - When the Fed buys bonds/debt from the government through those brokers, who gets their hands on the credit when the government spends it? Is it the same corporations who get all the big government contracts (e.g. Palantir, IBM, Oracle...)? - What do the corporations who get all the big government contracts and subsidies do with that money? Stock buybacks? If so, isn't this the same as if the government just gave the money to corporate shareholders directly? I don't think I've ever met someone who could answer these questions. Certainly less than 0.1% of the holders of the currency can so how can we say that it's transparent?

oarabbus_ 8y ago

>Cryptocurrencies have the potential to greatly improve the financial system by making it simpler, fairer and more transparent. When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations. When "anyone will be able to launch their own cryptocurrency" it will become completely useless. This is what many technical folks who don't understand economics don't see. The utility of fiat is twofold - first of all, real guns, missiles, tanks, and planes are protecting your fiat dollars. Technical cryptobulls (and non-technical crypto mega-bulls) seem to miss this point entirely. A corollary to this is a world with only cryptocurrency invites chaos. If we're all being paid in crypto, and crypto is anonymous, what incentive does one have to pay taxes to the government? No one will pay. Or some might, but others won't, and it will be the burden of the few taxpayers to subsidize the taxes of the many who skip out. >chance to free ourselves from the coercive influences of debt, venture capital and corporations. Yes, you'll also be freeing yourself from the influences of public roads, highways, and public schools. You'll free yourselves from the coercive influence of venture capital and corporations and governments/banks (latter is implied) and we'll free ourselves straight into an anarchic/chaotic society. Second, a central entity (or a few entities) determining an agreed-upon exchange rate between various fiat currencies keeps the system running without severe loss of efficiency. We already see highly illiquid, inefficient markets in cryptospace. Sure, people should be able to launch their own toy cryptocurrencies for fun purposes, but it will have zero utility. This will not be fixed by adding MORE cryptocurrencies - it will only exacerbate the problem. This will be fixed by adding more users to a basket of existing cryptocurrencies. Crypto/blockchain certainly have powerful use cases but to decry fiat as some extraordinary evil which should be 100% supplanted by cryptocurrency is, quite frankly, a display of a lack of understandings of economics, sociology, civics, and what have you.

tim333 8y ago
Anyone can launch their own currency. I have some Timcoin I can sell you if you are interested. In spite of that bitcoin retains some value. Most of the value of any currency comes from the social network of people who use it.

verdverm 8y ago

As a technical person I do need to trust the technology, because I'm not going to spend the time understanding the math and code in a language I don't use. It's a highly complex system that extends and is impacted by social, economic, and human decisions. Not only do I need to trust the blockchain technology, I also need to trust every piece of technology around it. Phones, emails, the Linux kernel, TLS, browsers ... and all the people building this technology. Look at the recent NPM exploit, or the Crypto exchange CEO who died without a plan for his password. Because the blockchain doesn't get hacked, it's the tech and humans around it that gets exploited.

muttled 8y ago

When anyone will be able to launch their own cryptocurrency, we will have a chance to free ourselves from the coercive influences of debt, venture capital and corporations That's the goal with my side project https://coinpress.cc https://coinpress.cc

atq2119 8y ago

> On the other hand, fiat money is constantly being secretly manipulated. Let's assume for a moment that this is both true and relevant. Why should reinventing the wheel be the correct response? I feel like this is simply yet another example of the rather common bias of tech folks (not excluding myself here) where we too easily believe that a social problem can be fixed with technology. You see this kind of logic all the time when it comes to surveillance and censorship overreach as well. We know technology, and believe we can control it, and so think that all these social issues can somehow be fixed with clever anti-censorship or surveillance-proof technology. More often than not, these attempts fail entirely or become last-resort fallbacks at best. This has played out fairly well with Bitcoin as well. Over time, people realized that almost all the complex stuff that the fiat money system does is actually useful, and is damned hard or impossible to reproduce in a crypto currency pretty much by design. Meanwhile, the existing fiat money system could also be made transparent etc., if a political movement was formed to push for that. So now we're back where we started, with a social problem.