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Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. > Hon

by lawn 8y ago

Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. > Honestly, cryptocurrencies are useless. Honestly, he makes some good points but this is ignorant. For example: * Uncensorable donations to wikileaks * Avoid having PayPal or other payment processors freeze your merchant account for X months, on a whim * Avoid the risk of charge back fraud for online payments * Ability for weed shops and porn sites to accept digital payments * Fleeing Venezuela with your wealth intact * Send money to and from countries where no banks or western union operate. * Financial privacy for everyone not just the ultra rich (lookup Monero before commenting) Cryptocurrencies have some very good features. There are issues of course, but how can you claim all these are useless? > For bitcoin, that's the cost of the additional bitcoin mined No, that's the cost of securing the network to prevent double spends.

schmichael 8y ago
> Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. You still need to trust a wallet, nodes, and miners to perform a transaction. While attacks on nodes and miners have been rare so far, wallets have been a weak link in the trust chain. Some are malware, some have vulnerabilities, some are targeted by malware, some just have such terrible UX it's difficult to perform your intended transaction correctly. Even if the transaction is performed on the blockchain correctly, unless it's a donation or governed purely by a smart contract, you need to trust the other party to perform the appropriate action based on your transaction (eg mail you goods)
- yarrel 8y ago
  These are problems rather than mysteries in comparison to the intrusion of "trusted third parties" as intermediaries in transactions. Which is to say they are nice problems to be able to have.
Zaskoda 8y ago
> Honestly, cryptocurrencies are useless. Cryptocurrencies are essential. I don't see this mentioned often enough: We've had distributed systems for a long while before Bitcoin showed up. One of the most significant problems with any distributed system is incentivizing people to run nodes. Cryptocurrency solved this by providing a way to give value back to people who support the network.
johnwheeler 8y ago
I can think of counterpoints: > * Uncensorable donations to wikileaks Untraceable theft from your wallet > * Avoid having PayPal or other payment processors freeze your merchant account for X months, on a whim Unregulated merchants who aren't incentivized to play by the rules > * Avoid the risk of charge back fraud for online payments No third-party intermediary in the event you get ripped off. > * Ability for weed shops and porn sites to accept digital payments Ability for weed shops and porn sites to accept digital payments (This depends on your stance on these issues. Not everyone feels the same as you). > * Fleeing Venezuela with your wealth intact Fair enough > * Send money to and from countries where no banks or western union operate. Indeed this is useful, but seems like a small use case relative to the hype around the tech > * Financial privacy for everyone not just the ultra rich (lookup Monero before commenting) If you buy something on ebay, ebay and the credit card company have a record of your purchase. If you buy something from a bitcoin merchant, they will have a record of your purchase. How is that different?
- dfischer 8y ago
  Regarding your last point: it’s different because it’s relatively trivial to create as many wallets as you want and or use a form of ring sharing. That allows an individual to express financial visibility and transparency in the way they see fit.
  - johnwheeler 8y ago
    Thank you. Assuming you buy something that requires shipping, there would still be some sort of paper trail though, right? If so, this assertion would only stand when the goods were digital or counterparties were physically present and wearing masks.
    - dfischer 8y ago
      Even if it was physical you wouldn’t tie the financial picture to the user. The wallet I purchase the physical good with tied to my address may only show $50 worth of coin for example. Compared to my entire net worth.
antocv 8y ago
> It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. Uh huh, so when in 2017 I wanted to send my bitcoins to exchanges to sell them, I could not, since the miners did not increase the block-size. How is that for removing trust? This happened to me thrice during 2017, bitcoins were not spendable. In particular around May 2017, I needed to pay for a VPS, a small amount about €5 worth. The transaction fee of bitcoin to get the transaction processed would have been more valued than the "pay for VPS". Useless is a compliment.
- jancsika 8y ago
  One only needs a single instance where Bitcoin worked when other payment processors did not. Wikileaks fulfills that example. Sci-hub is one more example than I need. Piling on a thousand other obvious cases where cryptocurrencies are useless doesn't change those edge cases. Just to get another example where this logic plays out: I'd bet the vast majority of cases where people are using GPG, the feature of "irrefutability" isn't needed. There are probably also cases where the user doesn't realize that is a feature, as well as cases where it's dangerous to have that feature. But I'm not prepared to call that feature useless, and if I claimed that it was it would only take a single edge-case from a contrarian to prove me wrong.
- chrisco255 8y ago
  They were still spendable, you just had to wait longer for transactions to go through at the smaller fee. At any rate, Lightning network, the tier 2 solution for scalability in Bitcoin, has improved dramatically in the past year. There's also alternative crypto, like Ethereum, that never had such a back log of transactions.
- lawn 8y ago
  I mean obviously you have to trust that the Bitcoin network works as it should. And you're right, Bitcoin is broken. It's only an implementation of a cryptocurrency though and using it to dismiss cryptocurrencies in general isn't right. See for example Bitcoin Cash (BCH) which isn't artificially crippled like Bitcoin (BTC).
- sygma 8y ago
eridius 8y ago
> Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. I'm not sure what you mean by this. In a "normal" system, you don't trust third parties to create transactions to begin with. Third parties use a centralized system to create the transactions and you trust that centralized system. The fundamental premise of cryptocurrencies is decentralization, although in practice it turns out to not really work that well. Most uses of blockchains end up not actually being decentralized, or not gaining any benefit from being decentralized (and definitely being less efficient than a centralized system). And you end up with situations like the DAO hack where this supposedly-decentralized system still ended up with a centralized governing body deciding to roll it back (and yeah, it was forked because some people disagreed with this, and it's kinda neat that that was even possible, but Etherium Classic currently has a market cap worth 3% of Etherium so it doesn't seem to have been very effective). > Uncensorable donations to wikileaks This is one of the few actual genuine use-cases for cryptocurrencies, though even here it doesn't actually work that well because most cryptocurrencies that claimed to be untraceable are in fact traceable. If you don't care about tracing, well ok, but unless you're living in an all-cryptocurrency world (which pretty much nobody is) you still have to convert to/from fiat, and that conversion point is where governments can apply pressure if they decide to act. Though maybe one of the rare cryptocurrencies that seem to actually have genuine untraceable transactions might become popular, who knows? > Avoid having PayPal or other payment processors freeze your merchant account for X months, on a whim This didn't go away, just replace PayPal with "cryptocurrency exchanges". Maybe they're not freezing your merchant account but they're causing other problems. > Avoid the risk of charge back fraud for online payments At the cost of being unable to initiate a chargeback if you're the buyer and got defrauded. The chargeback mechanism exists for a reason. > Financial privacy for everyone not just the ultra rich (lookup Monero before commenting) This really only applies if you're actively trying to lie to the government (i.e. if you're doing illegal transactions and don't want them to know). Using cryptocurrency doesn't absolve you of the need to pay taxes, so for most people the idea of "financial privacy" doesn't really matter because they have to tell the government anyway.
- lawn 8y ago
  > In a "normal" system, you don't trust third parties to create transactions to begin with. Third parties use a centralized system to create the transactions and you trust that centralized system. For example as a merchant you don't have to trust PayPal with your money and trust them to process credit cards from the buyer and then send it to you. You can just accept payments digitally directly like if they gave you cash in person. > This really only applies if you're actively trying to lie to the government I value my privacy and I don't want my transaction history to be sold to advertisement companies and the like.
Legogris 8y ago
> Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. I'd like to add the trust in the issuance of the currency. A change in the issuance of Bitcoin will be an incompatible hard fork. For fiat, you trust the decisions of central banks and oversight of private banks. Fractional reserve banking could very well be coming to Bitcoin (and we might already be seeing this to some extent on exchanges), but at least it would be opt-in.
- lawn 8y ago
  Good point.
Pharmakon 8y ago
Fleeing Venezuela with your wealth intact Do you have real world examples of this? The only ones I’ve found involve literal fistfuls of American dollars, not crypto. I remember a play on the “crypto for Venezuela” argument was that it worked as a better currency than the Venezuelan currency, but of course it turned out that they were just using dollars then too.
- chrisco255 8y ago
  I'm not sure if you realize how dangerous it is to carry around cash in Venezuela. It has an extremely high crime rate and in many cases carrying around that much cash would simply get you killed. It is very hard to get USD in Venezuela. Are there black markets for USD? Of course, but you have to go through all the shady dealers you can imagine to get it.
  - XorNot 8y ago
    Who are you going to sell Venezualean currency to in exchange for bitcoin?
    - chrisco255 8y ago
      https://surbitcoin.com/ https://surbitcoin.com/ https://www.coindesk.com/bitcoin-atm-crypto-venezuela-tokens https://www.coindesk.com/bitcoin-atm-crypto-venezuela-tokens

by lawn 8y ago

schmichael 8y ago

> Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. You still need to trust a wallet, nodes, and miners to perform a transaction. While attacks on nodes and miners have been rare so far, wallets have been a weak link in the trust chain. Some are malware, some have vulnerabilities, some are targeted by malware, some just have such terrible UX it's difficult to perform your intended transaction correctly. Even if the transaction is performed on the blockchain correctly, unless it's a donation or governed purely by a smart contract, you need to trust the other party to perform the appropriate action based on your transaction (eg mail you goods)

yarrel 8y ago
These are problems rather than mysteries in comparison to the intrusion of "trusted third parties" as intermediaries in transactions. Which is to say they are nice problems to be able to have.

Zaskoda 8y ago

> Honestly, cryptocurrencies are useless. Cryptocurrencies are essential. I don't see this mentioned often enough: We've had distributed systems for a long while before Bitcoin showed up. One of the most significant problems with any distributed system is incentivizing people to run nodes. Cryptocurrency solved this by providing a way to give value back to people who support the network.

johnwheeler 8y ago

I can think of counterpoints: > * Uncensorable donations to wikileaks Untraceable theft from your wallet > * Avoid having PayPal or other payment processors freeze your merchant account for X months, on a whim Unregulated merchants who aren't incentivized to play by the rules > * Avoid the risk of charge back fraud for online payments No third-party intermediary in the event you get ripped off. > * Ability for weed shops and porn sites to accept digital payments Ability for weed shops and porn sites to accept digital payments (This depends on your stance on these issues. Not everyone feels the same as you). > * Fleeing Venezuela with your wealth intact Fair enough > * Send money to and from countries where no banks or western union operate. Indeed this is useful, but seems like a small use case relative to the hype around the tech > * Financial privacy for everyone not just the ultra rich (lookup Monero before commenting) If you buy something on ebay, ebay and the credit card company have a record of your purchase. If you buy something from a bitcoin merchant, they will have a record of your purchase. How is that different?

dfischer 8y ago
Regarding your last point: it’s different because it’s relatively trivial to create as many wallets as you want and or use a form of ring sharing. That allows an individual to express financial visibility and transparency in the way they see fit.
- johnwheeler 8y ago
  Thank you. Assuming you buy something that requires shipping, there would still be some sort of paper trail though, right? If so, this assertion would only stand when the goods were digital or counterparties were physically present and wearing masks.
  - dfischer 8y ago
    Even if it was physical you wouldn’t tie the financial picture to the user. The wallet I purchase the physical good with tied to my address may only show $50 worth of coin for example. Compared to my entire net worth.

antocv 8y ago

> It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. Uh huh, so when in 2017 I wanted to send my bitcoins to exchanges to sell them, I could not, since the miners did not increase the block-size. How is that for removing trust? This happened to me thrice during 2017, bitcoins were not spendable. In particular around May 2017, I needed to pay for a VPS, a small amount about €5 worth. The transaction fee of bitcoin to get the transaction processed would have been more valued than the "pay for VPS". Useless is a compliment.

jancsika 8y ago
One only needs a single instance where Bitcoin worked when other payment processors did not. Wikileaks fulfills that example. Sci-hub is one more example than I need. Piling on a thousand other obvious cases where cryptocurrencies are useless doesn't change those edge cases. Just to get another example where this logic plays out: I'd bet the vast majority of cases where people are using GPG, the feature of "irrefutability" isn't needed. There are probably also cases where the user doesn't realize that is a feature, as well as cases where it's dangerous to have that feature. But I'm not prepared to call that feature useless, and if I claimed that it was it would only take a single edge-case from a contrarian to prove me wrong.
chrisco255 8y ago
They were still spendable, you just had to wait longer for transactions to go through at the smaller fee. At any rate, Lightning network, the tier 2 solution for scalability in Bitcoin, has improved dramatically in the past year. There's also alternative crypto, like Ethereum, that never had such a back log of transactions.
lawn 8y ago
I mean obviously you have to trust that the Bitcoin network works as it should. And you're right, Bitcoin is broken. It's only an implementation of a cryptocurrency though and using it to dismiss cryptocurrencies in general isn't right. See for example Bitcoin Cash (BCH) which isn't artificially crippled like Bitcoin (BTC).
sygma 8y ago

eridius 8y ago

> Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. I'm not sure what you mean by this. In a "normal" system, you don't trust third parties to create transactions to begin with. Third parties use a centralized system to create the transactions and you trust that centralized system. The fundamental premise of cryptocurrencies is decentralization, although in practice it turns out to not really work that well. Most uses of blockchains end up not actually being decentralized, or not gaining any benefit from being decentralized (and definitely being less efficient than a centralized system). And you end up with situations like the DAO hack where this supposedly-decentralized system still ended up with a centralized governing body deciding to roll it back (and yeah, it was forked because some people disagreed with this, and it's kinda neat that that was even possible, but Etherium Classic currently has a market cap worth 3% of Etherium so it doesn't seem to have been very effective). > Uncensorable donations to wikileaks This is one of the few actual genuine use-cases for cryptocurrencies, though even here it doesn't actually work that well because most cryptocurrencies that claimed to be untraceable are in fact traceable. If you don't care about tracing, well ok, but unless you're living in an all-cryptocurrency world (which pretty much nobody is) you still have to convert to/from fiat, and that conversion point is where governments can apply pressure if they decide to act. Though maybe one of the rare cryptocurrencies that seem to actually have genuine untraceable transactions might become popular, who knows? > Avoid having PayPal or other payment processors freeze your merchant account for X months, on a whim This didn't go away, just replace PayPal with "cryptocurrency exchanges". Maybe they're not freezing your merchant account but they're causing other problems. > Avoid the risk of charge back fraud for online payments At the cost of being unable to initiate a chargeback if you're the buyer and got defrauded. The chargeback mechanism exists for a reason. > Financial privacy for everyone not just the ultra rich (lookup Monero before commenting) This really only applies if you're actively trying to lie to the government (i.e. if you're doing illegal transactions and don't want them to know). Using cryptocurrency doesn't absolve you of the need to pay taxes, so for most people the idea of "financial privacy" doesn't really matter because they have to tell the government anyway.

lawn 8y ago
> In a "normal" system, you don't trust third parties to create transactions to begin with. Third parties use a centralized system to create the transactions and you trust that centralized system. For example as a merchant you don't have to trust PayPal with your money and trust them to process credit cards from the buyer and then send it to you. You can just accept payments digitally directly like if they gave you cash in person. > This really only applies if you're actively trying to lie to the government I value my privacy and I don't want my transaction history to be sold to advertisement companies and the like.

Legogris 8y ago

> Cryptocurrencies doesn't remove all trust. It's about removing trust in third parties to send and receive transactions. That's it. And that's a big deal. I'd like to add the trust in the issuance of the currency. A change in the issuance of Bitcoin will be an incompatible hard fork. For fiat, you trust the decisions of central banks and oversight of private banks. Fractional reserve banking could very well be coming to Bitcoin (and we might already be seeing this to some extent on exchanges), but at least it would be opt-in.

lawn 8y ago
Good point.

Pharmakon 8y ago

Fleeing Venezuela with your wealth intact Do you have real world examples of this? The only ones I’ve found involve literal fistfuls of American dollars, not crypto. I remember a play on the “crypto for Venezuela” argument was that it worked as a better currency than the Venezuelan currency, but of course it turned out that they were just using dollars then too.

chrisco255 8y ago
I'm not sure if you realize how dangerous it is to carry around cash in Venezuela. It has an extremely high crime rate and in many cases carrying around that much cash would simply get you killed. It is very hard to get USD in Venezuela. Are there black markets for USD? Of course, but you have to go through all the shady dealers you can imagine to get it.
- XorNot 8y ago
  Who are you going to sell Venezualean currency to in exchange for bitcoin?
  - chrisco255 8y ago
    https://surbitcoin.com/ https://surbitcoin.com/ https://www.coindesk.com/bitcoin-atm-crypto-venezuela-tokens https://www.coindesk.com/bitcoin-atm-crypto-venezuela-tokens