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Bruce's take can be summarized like this: with a blockchain, you're choosing to trust code and cryptography instead of a person. And when immutable code does th

Bruce's take can be summarized like this: with a blockchain, you're choosing to trust code and cryptography instead of a person. And when immutable code does the wrong thing, you can't trust them to fix it like you could a person. This is a good take, and underappreciated - but there's a larger point being missed. In high-social-trust situations, there are fewer benefits to blockchains. In low-social-trust situations, people aren't a good option. Bockchains provide an entirely new and welcome option for that scenario. Relatedly, there are different kinds of distrust: mistakes and attacks are one, but platform risk is another that blockchains can alleviate. Putting it another way: I trust Twitter/YouTube/PayPal to generally work without issues, but I don't trust them not to change their offering in an exploitative way or become rent-seekers.

louwrentius 6y ago
> In high-social-trust situations, there are fewer benefits to blockchains. In low-social-trust situations, people aren't a good option. Bockchains provide an entirely new and welcome option for that scenario. How does this actually work in practice? I've never seen an actual non-convoluted / non-far-fetched case where this would apply.
- meowface 6y ago
  For one: irreversible payment. Dealing with lots of scammers as a seller? They can PayPal dispute. They can chargeback. But if they send you cryptocurrency, the money is guaranteed. This doesn't prevent scams in the other direction, but it's something. This is a common problem many independent sellers face when doing legal and legit business.
  - louwrentius 6y ago
    > This doesn't prevent scams in the other direction Which is probably the majority of the actual scam cases. Sellers scamming buyers. So I don't think this is a good case at all.
    - seibelj 6y ago
      I could not disagree more, as someone who operates a niche ecommerce business. The longer I exist, the more reputation I have. But every single customer I sell to is a new risk, and the credit card companies fob all the risk onto me. Crypto payments (which I accept as an option) are great because I have no risk of a charge back a month after I shipped. The risk of being scammed is so much more about anonymous customers than it is of businesses, who need repeat business and word of mouth.
      - throwawaywrench 6y ago
        The problem is that the risk is borne by honest business owners and honest customers. Scammers exist in both directions and the scammers typically bear none of the risk. Regarding businesses specially, someone operating one or more scam online retailers is actively trying to suppress word of mouth. They also don't care about repeat business because their profit margin is so high. Their process may even specifically include periodically cutting ties with their previous name, websites, vendor accounts etc when victim ill becomes unmanageable.
        seibelj 6y ago
        If you choose to purchase from sketchy merchants, you have all sorts of risks regardless of what payment infrastructure is used. As a business that wants to last a long time and attract customers, reputation is everything. People buy from large, established companies for this reason. Crypto payments help all sellers by eliminating an enormous problem of scam buyers using stolen credit cards.
    - stale2002 6y ago
      Well, it is a good case for an honest merchant, that is dealing with people trying to scam them.
    - meowface 6y ago
      I don't know if that's true at all, and I suspect it's false. While both types are not uncommon, I think sellers being scammed is the more common scenario. Even if it wasn't, though, how can you say this isn't useful? Even if 99% of scams were from sellers, the fact that this trivially and provably solves scamming from buyers is amazing. Saying this isn't a good case because cryptocurrency doesn't miraculously universally eliminate the possibility of any fraud from any party in any scenario is really setting a very high bar. And with things like Ethereum smart contracts, you theoretically can prevent fraud from all parties in some cases, and defer all risk to the implementation of the contract. Or do you consider this a bad case as well, because a contract could possibly be flawed and "the majority of fraud isn't actually due to human deceit"?
  - projektfu 6y ago
    I remember when eBay operated on people sending checks to each other. Good times.
  - jayd16 6y ago
    So it solves this by superseding consumer protections? What does blockchain add here over direct payments, or cash, or even some payment broker with more seller friendly terms? I can't help but assume that regulation will reinforce these protections. Essentially, crypto's major benefit is skirting regulation because its new and that can't last forever.
    - meowface 6y ago
      How do you propose a direct payment or cash without giving a buyer your bank account number or address, which you may not necessarily want to do for privacy and security reasons? And mailing cash isn't very efficient or practical. Payment brokers are always going to be a point of failure. But also, it's about pragmatism: can you name an existing payment broker that fits the criteria? If not, what option are they left with other than to use cryptography as their broker? But, yes, it's often about avoiding certain kinds of regulation. Regulation isn't inherently good or bad. Some regulation is good in some contexts and some is bad in some contexts. Cryptocurrency lets you enforce your own absolute regulation for cases where legal regulation isn't able to easily help you (like in this scenario).
- koolba 6y ago
  Blockchain partially solves the problem of laundering illicit funds. The most popular use case I’ve seen is receiving ransoms.
  - louwrentius 6y ago
    My bad. I've should have added non-criminal. I'm sorry.
    - nwah1 6y ago
      A criminal use is still a use. Some percent of gun sales are for criminal purposes. This counts as market demand just the same as any other sale. Precisely measuring how valuable this is to criminal enterprise is an interesting question. My main area of skepticism regarding this proposed use case is that a blockchain is an immutable public ledger, and thus with enough sleuthing, it is probably quite traceable. Indeed many criminals have later been apprehended through monitoring bitcoin transactions.
    - bawolff 6y ago
      If it is a non criminal situation, you can generally use traditional methods to establish trust, such as using courts to sue people who rip you off, or using escrow agents, etc. The world has had thousands of years to come up with solutions to trust problems during transactions. They are solutions that work. They work for criminals too, but its a lot harder to use them, especially over the internet, because everyone providing the services goes to jail if they are transacting with criminals.
      - Semaphor 6y ago
        > such as using courts to sue people who rip you off, Unless the whole transaction is anonymous, you can do the same with bitcoin. > or using escrow agents Which costs you extra. Not making a value judgement, just pointing things out.
        bawolff 6y ago
- halfFact 6y ago
  Voting and currency are 2 real world situations. Bitcoin isn't convoluted or far fetched even if you really want to disagree. It's nuclear chemistry proof (unlike gold), and outside the reach of government.
  - jayd16 6y ago
    Its no more outside the reach of government than you are.
  - bawolff 6y ago
    Voting sounds like a terrible use case for traditional bitcoin style blickchain. Am i missing something?
arcticbull 6y ago
> In low-social-trust situations, people aren't a good option. Bockchains provide an entirely new and welcome option for that scenario. We've been handling these set-ups very well for millennia. You find a trusted intermediary. These days, for better or worse, globalization has created more and more of them.
- cortesoft 6y ago
  There is even a word for it: escrow
  - arcticbull 6y ago
    Indeed, the process is quite simple. You want to do business with Steve, but you don't trust Steve. Cool. Do you and Steve mutually trust someone? Awesome, you've found an escrow. If you can't find someone who trusts both you and Steve, that's a great sign you shouldn't do business with Steve. No amount of magic Blockchain pixie dust is going to change that there are bad actors out there.
    - naveen99 6y ago
      It’s more for when you already trust Steve, but you don’t trust your national currency, the credit card companies, and other available “escrows”. Why force use of an escrow when you trust your counterparty ?
      - arcticbull 6y ago
        > Why force use of an escrow when you trust your counterparty ? Why use a trustless payment method when you trust your counterparty and waste a month's worth of electricity?
        naveen99 6y ago
        Because my counterparty may not be able to spend my IOU elsewhere.
noneckbeard 6y ago
I believe he’s saying the opposite - that people like to think of blockchain as trust in technology, but in reality you are still trusting in people. Any evaluation of the security of the system has to take the whole socio-technical system into account. Too many blockchain enthusiasts focus on the technology and ignore the rest.
- louwrentius 6y ago
  Spot on.
PopeDotNinja 6y ago
I found the value of blockchain in a low trust setting easier to understand after reading up on the Byzantine Generals Problem fault tolerant distributed systems.
627467 6y ago
While I agree with Bruce assessment that a lot of Blockchain evangelists push the whole "decentralized trust" or "trustless" or "in code we trust" ideas, I actually think you don't need to buy these ideas to see some hope in how things may work "better" if the promises of Blockchain materialize: I agree entirely that we would need still be trusting humans even with Blockchain (shifting trust around). But I do see us gaining something with Blockchain: standardization. Rather than having multi-national and multi-lingual team of lawyers and diplomats to establish contracts and rules and how to interpret it and enforce them we can (try to) standardize all in code. We would all still need to trust our lawyer/engineers, but now they don't need to trust some intermediary, translator/etc to get things done.
- bawolff 6y ago
  People think lawyers are just about making sure there are no loop holes, but its really not that. Lots of it is about making sure that two parties really agree on something including in the fine details. Blockchain isn't going to magically solve the problem of having to figure out what the two sides actually want.
  - 627467 6y ago
    It won't, I agree. but won't it help auditing compliance and enforcement after agreement has reached?
    - bawolff 6y ago
      Maybe if everything the agreement is about is on the blockchain. However i cant think of a non-contrived example where that is true. Real agreements involve real things in the real world, outside of the reach of automated compliance checking, and you're back at square one. Perhaps you could say that the formalized computer language helps disagreements, but lawyers already have formalized language for this, and i suspect legaleze is better for making human-agreements than some turing complete language ever would be.
rstuart4133 6y ago
> Bruce's take can be summarized like this: with a blockchain, you're choosing to trust code and cryptography instead of a person. And when immutable code does the wrong thing, you can't trust them to fix it like you could a person. Maybe Bruce hasn't heard of the Ethernum DAO fork [0], or the two subsequent forks. The immutable block chain seals a bad decision, then suddenly it wasn't so immutable any more. Just like someone paying you via direct bank transfer is irreversible, right up the money they are transferring was stolen from the bank - then it turns out it's real easy to reverse. Crypto currencies are the tools of people, not the other way round. If we, or in the particular case the miners decide they want the block chain to be mutable, then that is what happens. [0] https://en.wikipedia.org/wiki/Ethereum#The_DAO_event https://en.wikipedia.org/wiki/Ethereum#The_DAO_event
- morceauxdebois 6y ago
  "the people" don't kid yourself for a second that cryptocurrencies aren't the purest form of plutarchy. Who owns all the mining power?
Droobfest 6y ago
No one ever seems to address the fact that Blockchain still doesn't magically provide trust at all. It still needs people to participate for that and provide their resources (miners). And for people to participate they need some incentive or reward. So how do you ever motivate enough people to participate in your distributed ledger? You can give them blockchain tokens of course, but now you've created a new currency again with all its associated problems. Hardly a solution for your original problem of low trust.
edoloughlin 6y ago
Bruce's take can be summarized like this: with a blockchain, you're choosing to trust code and cryptography instead of a person It can't be summarised like that. He explicitly says: "Any evaluation of the security of the system has to take the whole socio-technical system into account". His issues revolve around the fact that blockchain ecosystems have become centralised: "Just about everyone using bitcoin has to trust one of the few available wallets and use one of the few available exchanges. People have to trust the software and the operating systems and the computers everything is running on. And we've seen attacks against wallets and exchanges. We’ve seen Trojans and phishing and password guessing. Criminals have even used flaws in the system that people use to repair their cell phones to steal bitcoin".
r2b2 6y ago
This is why the Stellar blockchain looks promising. On the Stellar blockchain, you put your trust in anchors and issuers (human entities) and each blockchain-subset (roughly the trust-union of specific-token issuers and specific-token anchors you choose) can create a highly distributed / decentralized blockchain from each users perspective, depending on how many anchors and issuers you are willing to trust. It's a wonderful hybrid of "high-social-trust" networks run by humans (banks, governments) and distributed trust via code / your choice.
qudat 6y ago
> with a blockchain, you're choosing to trust code and cryptography instead of a person. And when immutable code does the wrong thing, you can't trust them to fix it like you could a person. There are soft and hard forks that do change the behavior of blockchains so I'm not sure I entirely agree with the premise of this argument. Help me out, what am I missing?

louwrentius 6y ago

> In high-social-trust situations, there are fewer benefits to blockchains. In low-social-trust situations, people aren't a good option. Bockchains provide an entirely new and welcome option for that scenario. How does this actually work in practice? I've never seen an actual non-convoluted / non-far-fetched case where this would apply.

meowface 6y ago
For one: irreversible payment. Dealing with lots of scammers as a seller? They can PayPal dispute. They can chargeback. But if they send you cryptocurrency, the money is guaranteed. This doesn't prevent scams in the other direction, but it's something. This is a common problem many independent sellers face when doing legal and legit business.
- louwrentius 6y ago
  > This doesn't prevent scams in the other direction Which is probably the majority of the actual scam cases. Sellers scamming buyers. So I don't think this is a good case at all.
  - seibelj 6y ago
    I could not disagree more, as someone who operates a niche ecommerce business. The longer I exist, the more reputation I have. But every single customer I sell to is a new risk, and the credit card companies fob all the risk onto me. Crypto payments (which I accept as an option) are great because I have no risk of a charge back a month after I shipped. The risk of being scammed is so much more about anonymous customers than it is of businesses, who need repeat business and word of mouth.
    - throwawaywrench 6y ago
      The problem is that the risk is borne by honest business owners and honest customers. Scammers exist in both directions and the scammers typically bear none of the risk. Regarding businesses specially, someone operating one or more scam online retailers is actively trying to suppress word of mouth. They also don't care about repeat business because their profit margin is so high. Their process may even specifically include periodically cutting ties with their previous name, websites, vendor accounts etc when victim ill becomes unmanageable.
      - seibelj 6y ago
        If you choose to purchase from sketchy merchants, you have all sorts of risks regardless of what payment infrastructure is used. As a business that wants to last a long time and attract customers, reputation is everything. People buy from large, established companies for this reason. Crypto payments help all sellers by eliminating an enormous problem of scam buyers using stolen credit cards.
  - stale2002 6y ago
    Well, it is a good case for an honest merchant, that is dealing with people trying to scam them.
  - meowface 6y ago
    I don't know if that's true at all, and I suspect it's false. While both types are not uncommon, I think sellers being scammed is the more common scenario. Even if it wasn't, though, how can you say this isn't useful? Even if 99% of scams were from sellers, the fact that this trivially and provably solves scamming from buyers is amazing. Saying this isn't a good case because cryptocurrency doesn't miraculously universally eliminate the possibility of any fraud from any party in any scenario is really setting a very high bar. And with things like Ethereum smart contracts, you theoretically can prevent fraud from all parties in some cases, and defer all risk to the implementation of the contract. Or do you consider this a bad case as well, because a contract could possibly be flawed and "the majority of fraud isn't actually due to human deceit"?
- projektfu 6y ago
  I remember when eBay operated on people sending checks to each other. Good times.
- jayd16 6y ago
  So it solves this by superseding consumer protections? What does blockchain add here over direct payments, or cash, or even some payment broker with more seller friendly terms? I can't help but assume that regulation will reinforce these protections. Essentially, crypto's major benefit is skirting regulation because its new and that can't last forever.
  - meowface 6y ago
    How do you propose a direct payment or cash without giving a buyer your bank account number or address, which you may not necessarily want to do for privacy and security reasons? And mailing cash isn't very efficient or practical. Payment brokers are always going to be a point of failure. But also, it's about pragmatism: can you name an existing payment broker that fits the criteria? If not, what option are they left with other than to use cryptography as their broker? But, yes, it's often about avoiding certain kinds of regulation. Regulation isn't inherently good or bad. Some regulation is good in some contexts and some is bad in some contexts. Cryptocurrency lets you enforce your own absolute regulation for cases where legal regulation isn't able to easily help you (like in this scenario).
koolba 6y ago
Blockchain partially solves the problem of laundering illicit funds. The most popular use case I’ve seen is receiving ransoms.
- louwrentius 6y ago
  My bad. I've should have added non-criminal. I'm sorry.
  - nwah1 6y ago
    A criminal use is still a use. Some percent of gun sales are for criminal purposes. This counts as market demand just the same as any other sale. Precisely measuring how valuable this is to criminal enterprise is an interesting question. My main area of skepticism regarding this proposed use case is that a blockchain is an immutable public ledger, and thus with enough sleuthing, it is probably quite traceable. Indeed many criminals have later been apprehended through monitoring bitcoin transactions.
  - bawolff 6y ago
    If it is a non criminal situation, you can generally use traditional methods to establish trust, such as using courts to sue people who rip you off, or using escrow agents, etc. The world has had thousands of years to come up with solutions to trust problems during transactions. They are solutions that work. They work for criminals too, but its a lot harder to use them, especially over the internet, because everyone providing the services goes to jail if they are transacting with criminals.
    - Semaphor 6y ago
      > such as using courts to sue people who rip you off, Unless the whole transaction is anonymous, you can do the same with bitcoin. > or using escrow agents Which costs you extra. Not making a value judgement, just pointing things out.
      - bawolff 6y ago
halfFact 6y ago
Voting and currency are 2 real world situations. Bitcoin isn't convoluted or far fetched even if you really want to disagree. It's nuclear chemistry proof (unlike gold), and outside the reach of government.
- jayd16 6y ago
  Its no more outside the reach of government than you are.
- bawolff 6y ago
  Voting sounds like a terrible use case for traditional bitcoin style blickchain. Am i missing something?

arcticbull 6y ago

> In low-social-trust situations, people aren't a good option. Bockchains provide an entirely new and welcome option for that scenario. We've been handling these set-ups very well for millennia. You find a trusted intermediary. These days, for better or worse, globalization has created more and more of them.

cortesoft 6y ago
There is even a word for it: escrow
- arcticbull 6y ago
  Indeed, the process is quite simple. You want to do business with Steve, but you don't trust Steve. Cool. Do you and Steve mutually trust someone? Awesome, you've found an escrow. If you can't find someone who trusts both you and Steve, that's a great sign you shouldn't do business with Steve. No amount of magic Blockchain pixie dust is going to change that there are bad actors out there.
  - naveen99 6y ago
    It’s more for when you already trust Steve, but you don’t trust your national currency, the credit card companies, and other available “escrows”. Why force use of an escrow when you trust your counterparty ?
    - arcticbull 6y ago
      > Why force use of an escrow when you trust your counterparty ? Why use a trustless payment method when you trust your counterparty and waste a month's worth of electricity?
      - naveen99 6y ago
        Because my counterparty may not be able to spend my IOU elsewhere.

noneckbeard 6y ago

I believe he’s saying the opposite - that people like to think of blockchain as trust in technology, but in reality you are still trusting in people. Any evaluation of the security of the system has to take the whole socio-technical system into account. Too many blockchain enthusiasts focus on the technology and ignore the rest.

louwrentius 6y ago
Spot on.

PopeDotNinja 6y ago

I found the value of blockchain in a low trust setting easier to understand after reading up on the Byzantine Generals Problem fault tolerant distributed systems.

627467 6y ago

While I agree with Bruce assessment that a lot of Blockchain evangelists push the whole "decentralized trust" or "trustless" or "in code we trust" ideas, I actually think you don't need to buy these ideas to see some hope in how things may work "better" if the promises of Blockchain materialize: I agree entirely that we would need still be trusting humans even with Blockchain (shifting trust around). But I do see us gaining something with Blockchain: standardization. Rather than having multi-national and multi-lingual team of lawyers and diplomats to establish contracts and rules and how to interpret it and enforce them we can (try to) standardize all in code. We would all still need to trust our lawyer/engineers, but now they don't need to trust some intermediary, translator/etc to get things done.

bawolff 6y ago
People think lawyers are just about making sure there are no loop holes, but its really not that. Lots of it is about making sure that two parties really agree on something including in the fine details. Blockchain isn't going to magically solve the problem of having to figure out what the two sides actually want.
- 627467 6y ago
  It won't, I agree. but won't it help auditing compliance and enforcement after agreement has reached?
  - bawolff 6y ago
    Maybe if everything the agreement is about is on the blockchain. However i cant think of a non-contrived example where that is true. Real agreements involve real things in the real world, outside of the reach of automated compliance checking, and you're back at square one. Perhaps you could say that the formalized computer language helps disagreements, but lawyers already have formalized language for this, and i suspect legaleze is better for making human-agreements than some turing complete language ever would be.

rstuart4133 6y ago

> Bruce's take can be summarized like this: with a blockchain, you're choosing to trust code and cryptography instead of a person. And when immutable code does the wrong thing, you can't trust them to fix it like you could a person. Maybe Bruce hasn't heard of the Ethernum DAO fork [0], or the two subsequent forks. The immutable block chain seals a bad decision, then suddenly it wasn't so immutable any more. Just like someone paying you via direct bank transfer is irreversible, right up the money they are transferring was stolen from the bank - then it turns out it's real easy to reverse. Crypto currencies are the tools of people, not the other way round. If we, or in the particular case the miners decide they want the block chain to be mutable, then that is what happens. [0] https://en.wikipedia.org/wiki/Ethereum#The_DAO_event https://en.wikipedia.org/wiki/Ethereum#The_DAO_event

morceauxdebois 6y ago
"the people" don't kid yourself for a second that cryptocurrencies aren't the purest form of plutarchy. Who owns all the mining power?

Droobfest 6y ago

No one ever seems to address the fact that Blockchain still doesn't magically provide trust at all. It still needs people to participate for that and provide their resources (miners). And for people to participate they need some incentive or reward. So how do you ever motivate enough people to participate in your distributed ledger? You can give them blockchain tokens of course, but now you've created a new currency again with all its associated problems. Hardly a solution for your original problem of low trust.

edoloughlin 6y ago

Bruce's take can be summarized like this: with a blockchain, you're choosing to trust code and cryptography instead of a person It can't be summarised like that. He explicitly says: "Any evaluation of the security of the system has to take the whole socio-technical system into account". His issues revolve around the fact that blockchain ecosystems have become centralised: "Just about everyone using bitcoin has to trust one of the few available wallets and use one of the few available exchanges. People have to trust the software and the operating systems and the computers everything is running on. And we've seen attacks against wallets and exchanges. We’ve seen Trojans and phishing and password guessing. Criminals have even used flaws in the system that people use to repair their cell phones to steal bitcoin".

r2b2 6y ago

This is why the Stellar blockchain looks promising. On the Stellar blockchain, you put your trust in anchors and issuers (human entities) and each blockchain-subset (roughly the trust-union of specific-token issuers and specific-token anchors you choose) can create a highly distributed / decentralized blockchain from each users perspective, depending on how many anchors and issuers you are willing to trust. It's a wonderful hybrid of "high-social-trust" networks run by humans (banks, governments) and distributed trust via code / your choice.

qudat 6y ago

> with a blockchain, you're choosing to trust code and cryptography instead of a person. And when immutable code does the wrong thing, you can't trust them to fix it like you could a person. There are soft and hard forks that do change the behavior of blockchains so I'm not sure I entirely agree with the premise of this argument. Help me out, what am I missing?