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They're permissionless, open source, censorship-resistant, borderless, near instant compared to legacy finance, auditable, composeable (can build protocols on t

They're permissionless, open source, censorship-resistant, borderless, near instant compared to legacy finance, auditable, composeable (can build protocols on top of other protocols to extend various financial services), and they enable new capabilities that current system can't do.

toomuchtodo 6y ago
These technologies try to solve for a lack of trust and avoiding regulation. This use case combination is exceptionally rare (as Animats enumerates, drugs, ransoms, and money laundering). As long as you have a functioning legal framework, financial distributed ledgers and smart contracts have very little value (what happens when a judge overrides your smart contract’s evaluation and result? A fork each time? The law supersedes the chain). Instant payments don’t need a blockchain [1]. Avoiding financial regulation sends you to jail [2]. [1] https://en.wikipedia.org/wiki/Instant_payment https://en.wikipedia.org/wiki/Instant_payment [2] https://www.theverge.com/2019/4/9/18302053/bitcoin-dealer-prison-jail-sentence-unlicensed-cryptocurrency-exchange https://www.theverge.com/2019/4/9/18302053/bitcoin-dealer-pr...
- Acrobatic_Road 6y ago
  How is a judge going to override a blockchain state update? He may as well rule the planet to stop spinning.
  - toomuchtodo 6y ago
    People are ultimately responsible, and people are ultimately held accountable. Disrupting nodes or node network traffic, 51% attacks, and proverbial rubber hoses are all options. If Iran, Venezuela, and North Korea can barely avoid sanctions what makes you think a blockchain network can avoid something similar?
    - Acrobatic_Road 6y ago
      How would the authorities know who to look for? Ethereum is becoming increasingly anonymous. While not as good as Monero, it's still trivial to go in and out anonymously.
      - toomuchtodo 6y ago
        By paying technologists to implement the necessary tooling. https://decrypt.co/40284/us-homeland-security-can-now-track-privacy-crypto-monero https://decrypt.co/40284/us-homeland-security-can-now-track-... ("US Homeland Security Can Now Track Privacy Crypto Monero")
- gnarcoregrizz 6y ago
  There is a functional arbitration platform called Kleros. It could be tied in with any contract to have some human “legal” input. In fact, any contract can be admin‘d by one person or a group. See DAO’s - curve.fi and aave are 2 examples, they are both community run where ppl vote on proposals with their shares. As I think you were getting at, there’s enormous systemic risk with hacks and bugs. Now the contract ecosystem is so intertwined that a bug in one can cause a cascading effect. E.g a price feed which powers a DeFi platform could be hacked/attacked. Even a bug in a simple erc20 could have massive consequences since a lot of the contracts are intertwined

toomuchtodo 6y ago

These technologies try to solve for a lack of trust and avoiding regulation. This use case combination is exceptionally rare (as Animats enumerates, drugs, ransoms, and money laundering). As long as you have a functioning legal framework, financial distributed ledgers and smart contracts have very little value (what happens when a judge overrides your smart contract’s evaluation and result? A fork each time? The law supersedes the chain). Instant payments don’t need a blockchain [1]. Avoiding financial regulation sends you to jail [2]. [1] https://en.wikipedia.org/wiki/Instant_payment https://en.wikipedia.org/wiki/Instant_payment [2] https://www.theverge.com/2019/4/9/18302053/bitcoin-dealer-prison-jail-sentence-unlicensed-cryptocurrency-exchange https://www.theverge.com/2019/4/9/18302053/bitcoin-dealer-pr...

Acrobatic_Road 6y ago
How is a judge going to override a blockchain state update? He may as well rule the planet to stop spinning.
- toomuchtodo 6y ago
  People are ultimately responsible, and people are ultimately held accountable. Disrupting nodes or node network traffic, 51% attacks, and proverbial rubber hoses are all options. If Iran, Venezuela, and North Korea can barely avoid sanctions what makes you think a blockchain network can avoid something similar?
  - Acrobatic_Road 6y ago
    How would the authorities know who to look for? Ethereum is becoming increasingly anonymous. While not as good as Monero, it's still trivial to go in and out anonymously.
    - toomuchtodo 6y ago
      By paying technologists to implement the necessary tooling. https://decrypt.co/40284/us-homeland-security-can-now-track-privacy-crypto-monero https://decrypt.co/40284/us-homeland-security-can-now-track-... ("US Homeland Security Can Now Track Privacy Crypto Monero")
gnarcoregrizz 6y ago
There is a functional arbitration platform called Kleros. It could be tied in with any contract to have some human “legal” input. In fact, any contract can be admin‘d by one person or a group. See DAO’s - curve.fi and aave are 2 examples, they are both community run where ppl vote on proposals with their shares. As I think you were getting at, there’s enormous systemic risk with hacks and bugs. Now the contract ecosystem is so intertwined that a bug in one can cause a cascading effect. E.g a price feed which powers a DeFi platform could be hacked/attacked. Even a bug in a simple erc20 could have massive consequences since a lot of the contracts are intertwined