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> In the cases where that trust breaks down or shouldn't have been given in the first place, it tends to create problems that are astronomically more costly tha

> In the cases where that trust breaks down or shouldn't have been given in the first place, it tends to create problems that are astronomically more costly than if a trustless system was used in the first place. Is this actually true? My mind immediately goes to credit card fraud as an example, which definitely isn't more costly than if a purely trustless system was introduced. The cost of fraud is baked into using a credit card, and credit card vendors have built ever-improving technology to cut down on fraud on their end. How is that more expensive than a trustless system that would require everyone to move to?

googthrowaway42 6y ago
In the example of the credit card system, the misplaced trust I am talking about would be misplaced trust in the payment processing networks themselves (e.g. Visa, Mastercard). This could be fraud (unlikely I think) or pathological behavior such as banning people or organizations from their networks for political reasons (this already happens).
- save_ferris 6y ago
  So organizations shouldn’t be able to remove people’s access to credit or accounts for any reason? If you take that away, you completely remove the ability to police money laundering and other kinds of financial crime (crypto is already a favorite technology of money launderers). Legislation can (and should be IMO) written to provide users of big software systems more rights, but completely removing authority creates conditions for limitless money laundering, no? How does a government govern a blockchain?
  - JoeAltmaier 6y ago
    Part of the digital currency deal is, that kind of privacy. Legislation may have to adapt? 'Money laundering' is avoiding taxes or hiding income. So change the rules about taxing money. Maybe a 'transfer tax' or some such, to take a (very small) cut on every transaction.
    - save_ferris 6y ago
      If cryptocurrencies are private enough to obfuscate transactions to the point that authorities can’t monitor illegal financial activity, how can the system also be transparent enough to effectively tax users? Isn’t taxation a centralized financial construct, in that a central authority (government) assesses taxes? If the coins built today become the mainstays of crypto transactions and don’t have a concept of a transfer tax, how will one ever be added to the system? The entire system seems to be built from the perspective that it’s “our playground, our rules”, but why governments ever allow that?
  - googthrowaway42 6y ago
    I'm not talking about money laundering and financial crime, I'm talking about removing people's access to the banking and credit system due to their political beliefs.
    - save_ferris 6y ago
      It sounds like your solution to the problem is to take away the ability to remove people from the system altogether, no? If that’s the case, then you open up a whole new set of problems. There are far easier and cheaper ways to guarantee legitimate access to banking than rebuilding and migrating the entire system.
      - googthrowaway42 6y ago
        I don't think so. The nature of systems it that they tend to become corrupt if they can be corrupted.
        save_ferris 6y ago
        Cryptocurrencies aren’t exempt from that, the 2018 Bitcoin boom and bust was likely caused by one whale account[0] manipulating Tether. By your argument, Bitcoin will become corrupted because we know it can be corrupted. 0: https://www.google.com/amp/s/www.technologyreview.com/2019/11/04/132066/one-bitcoin-whale-may-have-fueled-the-currencys-price-spike-in-2017/amp/ https://www.google.com/amp/s/www.technologyreview.com/2019/1...
        googthrowaway42 6y ago
        The only way bitcoin can become corrupted is if someone gains control of >50% of the hashing power of the network. I'm talking about the integrity of the system itself, not actors within it. George Soros famously did the same thing with the British Pound but the issue with the British Pound is that it is a fiat currency that can be devalued at the whim of a handful of people controlling the system itself regardless of market forces (aka the participants in the system). When Soros or that bitcoin whale "manipulate the market" they are still acting within the system.

googthrowaway42 6y ago

In the example of the credit card system, the misplaced trust I am talking about would be misplaced trust in the payment processing networks themselves (e.g. Visa, Mastercard). This could be fraud (unlikely I think) or pathological behavior such as banning people or organizations from their networks for political reasons (this already happens).

save_ferris 6y ago
So organizations shouldn’t be able to remove people’s access to credit or accounts for any reason? If you take that away, you completely remove the ability to police money laundering and other kinds of financial crime (crypto is already a favorite technology of money launderers). Legislation can (and should be IMO) written to provide users of big software systems more rights, but completely removing authority creates conditions for limitless money laundering, no? How does a government govern a blockchain?
- JoeAltmaier 6y ago
  Part of the digital currency deal is, that kind of privacy. Legislation may have to adapt? 'Money laundering' is avoiding taxes or hiding income. So change the rules about taxing money. Maybe a 'transfer tax' or some such, to take a (very small) cut on every transaction.
  - save_ferris 6y ago
    If cryptocurrencies are private enough to obfuscate transactions to the point that authorities can’t monitor illegal financial activity, how can the system also be transparent enough to effectively tax users? Isn’t taxation a centralized financial construct, in that a central authority (government) assesses taxes? If the coins built today become the mainstays of crypto transactions and don’t have a concept of a transfer tax, how will one ever be added to the system? The entire system seems to be built from the perspective that it’s “our playground, our rules”, but why governments ever allow that?
- googthrowaway42 6y ago
  I'm not talking about money laundering and financial crime, I'm talking about removing people's access to the banking and credit system due to their political beliefs.
  - save_ferris 6y ago
    It sounds like your solution to the problem is to take away the ability to remove people from the system altogether, no? If that’s the case, then you open up a whole new set of problems. There are far easier and cheaper ways to guarantee legitimate access to banking than rebuilding and migrating the entire system.
    - googthrowaway42 6y ago
      I don't think so. The nature of systems it that they tend to become corrupt if they can be corrupted.
      - save_ferris 6y ago
        Cryptocurrencies aren’t exempt from that, the 2018 Bitcoin boom and bust was likely caused by one whale account[0] manipulating Tether. By your argument, Bitcoin will become corrupted because we know it can be corrupted. 0: https://www.google.com/amp/s/www.technologyreview.com/2019/11/04/132066/one-bitcoin-whale-may-have-fueled-the-currencys-price-spike-in-2017/amp/ https://www.google.com/amp/s/www.technologyreview.com/2019/1...
        googthrowaway42 6y ago
        The only way bitcoin can become corrupted is if someone gains control of >50% of the hashing power of the network. I'm talking about the integrity of the system itself, not actors within it. George Soros famously did the same thing with the British Pound but the issue with the British Pound is that it is a fiat currency that can be devalued at the whim of a handful of people controlling the system itself regardless of market forces (aka the participants in the system). When Soros or that bitcoin whale "manipulate the market" they are still acting within the system.