10 ms·

Blockchain Is Not Decentralised

50 points by leventov 5y ago

Synaesthesia 5y ago
Bitcoin isn't really decentralised, in all kinds of ways. Look at the ownership of bitcoin, a handful of people have the majority. It's totally an elite phenomenon. But even within the elite it's a tiny amount. IMO we need something far more well distributed.
- trident5000 5y ago
  So like every asset in existence?
etrabroline 5y ago
>Even if the US government would try to “cancel” some country by severing it from all major exchange infra such as SWIFT, Visa, Mastercard, etc., the central bank of that country can decide to convert all US dollar accounts in the local banks into the local currency. But even 1,000,000 Zimbabwe dollars is not the same as 1 US dollar. International trade requires USD. The US can basically wipe out an entire country's saved wealth by flipping a switch in a computer. That can't happen with the decentralized nature of Bitcoin. This entire article is undefendable sophistry. >However, from the global system perspective, creating such unstoppable systems is dangerous because at the root of the complex system evolution and stability is that the agents (subsystems) in the environment can die and give way for newer, better things. Bitcoin was intended as an alternative to USD. USD has proven to be a tool of wall street to impose US imperialism on the third world, and on its own citizens. Obviously cryptocurrencies have proven way more opportunities for "giving way for newer better things" than the US banking system has. EDIT: Here is the US using the dollar to mess with countries it had a beef with. https://www.rferl.org/a/explainer_how_does_swift_ban_hurt_iran/24518153.html https://www.rferl.org/a/explainer_how_does_swift_ban_hurt_ir... https://www.theguardian.com/us-news/2019/aug/06/trump-freezes-all-venezuelan-government-assets-in-us https://www.theguardian.com/us-news/2019/aug/06/trump-freeze...
- lottin 5y ago
  The US doesn't have a switch to "turn off" a country's reserves of US dollars, I don't know where you get this notion from.
  - merth 5y ago
    correct me if I am wrong but, they don't have actually currency. they have an IOU, which is a promise that I will pay you back X amount of service/products. the moment US says I changed my mind, is "turning off" a switch.
    - lottin 5y ago
      No, this is a misconception. Fiat currency is not a IOU. An IOU is redeemable, fiat currency is not—you can't take one USD to the Federal Reserve and have it redeemed for some amount of something. (This was true in the past, when, at least theoretically, USD was redeemable for gold, but not any more).
      - zhdc1 5y ago
        I don't understand this argument. US dollars are legal currency, so all you have to do to redeem the underlying value is purchase something with it (or, if you want to be pedantic, use them to cover a public or private debt). Of course, the underlying value of what you can get in exchange for them can change, but that's true for every medium of exchange in the first place. There's nothing magical about gold, silver, or any other commodity, nor is there anything special about tying a piece of paper to a commodity. If the government doesn't want you to use it or any derivative products as a currency, like what happened in the US with the 1933 Coinage Act, you're pretty much out of luck.
        lottin 5y ago
        Legal currency simply means that a payment in that currency is considered, by courts of law, to extinguish a debt. (So a creditor can't demand to be paid in diamonds, for example. As long as the debtor pays in legal currency, the debt is considered extinguished.) On the other hand, a redeemable currency is a currency which the issuer promises to redeem for a certain amount of some commodity. This is independent from the fact that such a currency might (or might not) be accepted as payment in private transactions. The US dollar is legal currency, but is not redeemable.
vmception 5y ago
there are degrees of decentralization, but mostly people are just allergic to the word trust minimized is valid as well doesn't really matter. in less theoretically secure networks, validators don't reverse transactions because doing so deters commerce to their network. it works well enough, the market can bear it. a state that disagrees with it would still have trouble coercing all of the validators, and the state can buy up all the tokens with public money to try to become the majority of the validators... be my guest, I would call that success because its a moon cannon. All the holders get rich because a silly government agency pumped the coin to try and take over a network.
- politician 5y ago
  When 65% of the currency is mined in China, that's not exactly decentralized. Folks long BTC are exposed to the risk that the CCP will weaponize their mining share into a 51% attack. [1] https://cbeci.org/mining_map https://cbeci.org/mining_map
  - etrabroline 5y ago
    Why not the US? Or Russia? It would be easy for a large state to dwarf the hash rate of the network if they wanted to sabotage it.
  - vmception 5y ago
    theoretically less secure networks and the nomenclature around "validators" refers to Proof of Stake networks and Delegated Proof of Stake networks, of which bitcoin is neither. so this discussion isn't about Bitcoin but I can understand how that might not have been clear. I'm not saying these points don't also apply to bitcoin in some degree, this thread just wasn't about it.
    - politician 5y ago
      Fair point.
  - zhdc1 5y ago
    I doubt this would happen, but I could very well see the CCP cracking down on coin mining for host of different reasons.
kybernetikos 5y ago
> I’d say that the blockchain developers are at least as likely to become corrupt, coerced, or influenced Some think that has already happened in the case of at least one major cryptocurrency, but what happens if a system is changed to depart from the core values that the users care about? Those users create and adopt new systems. Many of the other criticisms are sort-of true, but not in a way that I think is particularly concerning. It is true that currently people lose money when they lose their keys, and that most implementations of blockchain systems don't have the ability to recover mistaken or fraudulent transactions. However, these are true because of the interests of the people using and leading development on blockchains at the moment. If we start to prioritise UX, or decide to create systems with some sort of authority to determine fraudulence (maybe government?), fixing these problems is not outside the realms of a smart contract system or a new blockchain system. The broad technology is very flexible, and could even be adapted to incorporate government actions etc if that's what the developers and users want (so far it seems not to be). For me, the aspect that I'm interested in is that with blockchain there are no gatekeepers that stop you creating software that does interesting things with value. This is still not true with the fiat ecosystem - even the OpenBanking API, forced on the banks by governments is not a great system for democratising algorithmic access to money, and for me that's the most exciting thing about decentralised money.
adenverd 5y ago
> developers control the cryptocurrency issuance because despite the issuance is (usually) determined algorithmically, developers have the power to change these algorithms...If we compare this system with the US dollar system governed by the Federal Reserve, the Supreme Court of the US, the Congress, and the US government (in different ways), I’d say that the blockchain developers are at least as likely to become corrupt, coerced, or influenced by the system beneficiaries than the Fed and the Government officers and judges because the latter are 1) older on average, and more senior people tend to act more independently; 2) much better protected, physically and financially. Don't miners and nodes then have to adopt those algorithmic changes though? It's essentially voting by adoption - if a majority of miners/nodes don't adopt a set of changes (e.g. increasing the supply cap or rate), then they aren't propagated to the blockchain. This seems a lot more decentralized than the US/Fed monetary system that the article compares it to, where citizens have effectively zero influence on policy.
- jayd16 5y ago
  >It's essentially voting by adoption Unlike democratic policy, the votes for bitcoin policy are not 1 citizens 1 vote. You can claim that citizens have effectively no control (although they clearly do have some control). If you're not a miner you have absolutely no control. Even if you are a miner, your control is some function of your hash power.
  - flotzam 5y ago
    > If you're not a miner you have absolutely no control. The economic majority of Bitcoin users ultimately decides what "Bitcoin" even means and can enforce that against miners with e.g. a User Activated Soft Fork: https://uasf.co https://uasf.co
    - georgyo 5y ago
      I disagree. As a user, I have no real say. What ever the miners and exchanges decide if what I must use. And for the vast majority of users just don't care about which fork should be considered the true path. As a user, I have about as much control over US currency. I can be very vocal, protest, and raise awareness for what I think is correct, but ultimately almost all decisions happen with governing bodies. And in the case of Bitcoin, the governing bodies are the miners and exchanges, which have very different incentives than the users.
yourabstraction 5y ago
I don't think this author really understands how Bitcoin development and upgrades work. There's Bitcoin the software, of which there can be any number of implementations, and then there's Bitcoin the network, of which there is only one. Miners and full nodes on the network have full control over which implementation/version of the Bitcoin software they choose to run. So sure, in theory people could be corrupted into for example changing the code that controls the monetary policy in the reference client, but you still need to get miners and full nodes to run your new version of the software. This is what makes it so hard to make any changes to Bitcoin, and forms the stability that many feel is one of its key strengths.
- ptudan 5y ago
  Even if miners and devs do try to screw people over, it's always possible to fork from a certain blockheight.
  - hellajeff 5y ago
    Yep. This is why you don't keep your coins on an exchange. If there's another fork like BCH or ETC you might be screwed.
    - viraptor 5y ago
      What do you mean? On every exchange I'm aware of, you ended up with both BTC and BCH accounts. Did some of them completely ignore the fork?
      - hellajeff 5y ago
        BCH and ETC aren't the only forks. Take a look at cheapETH. I bet the exchange you're on didn't give you any of those!
  - logifail 5y ago
    > it's always possible to fork from a certain blockheight So looking back at the 2016 hard fork of Ethereum after the DAO thing[0], is it a feature that "the community"[1] can choose to hard fork to revert transactions that are "bad"[2], or is it a bug? [0] https://blog.ethereum.org/2016/07/20/hard-fork-completed/ https://blog.ethereum.org/2016/07/20/hard-fork-completed/ [1] I'm not sure who defines this [2] I'm also not sure who defines this
mdoms 5y ago
> A second component is decentralized cryptographic truth. With cryptocurrency, it is now possible for an Israeli and a Palestinian, a Chinese person, a Japanese person, a Democrat and a Republican to all agree on the state of the Bitcoin blockchain. Does this guy know that there are already multiple forks with competing communities in Bitcoin?
micropresident 5y ago
I can attest to the headline of this article. I am one of the developers who helped launch Bitcoin Cash, and worked on the Bitcoin ABC client. I was in charge of building, signing, and releasing the software for a little over a year. And, I can attest to the fact that someone needs to build the code and release it. The developers can change that code at will. However, there are a number of things right, and a number of things wrong in this article. I will use my experience as an example. But note, while I use Bitcoin Cash as an example for my response, I do not ideologically support it for a number of reasons outlined in this article. Although, I do still hold Bitcoin Cash for the time being. > Who governs the blockchain system and issuance? > Usually this is an open-source community of developers. Note that I say that developers control the cryptocurrency issuance because despite the issuance is (usually) determined algorithmically, developers have the power to change these algorithms. This is completely true. However, they still only release code/binaries. The users must run these binaries, and there is no "Nakamoto consensus" for doing so. This results in huge internet political battles where people launch propaganda campaigns to vying over whose code is ran. Take Bitcoin Cash as a primary example: The people who moved to Bitcoin Cash from Bitcoin Core are ideologically opposed to the Bitcoin Core Team's roadmap for Bitcoin. There was a huge online propaganda war between r/Bitcoin and r/BTC with large amounts of disinformation being produced on both sides, as well as banning and censorship on these forums. Ultimately the "big blockers" lost and moved over to creating their own blockchain in 2017. This kind of political warfare happened again when Bitcoin SV and nChain's development team was ousted off onto their own blockchain. And then in 2019, when Bitcoin ABC -- the development team who launched Bitcoin Cash in the first place -- decided to change the issuance rules to send themself some funds out of the block reward, they lost the political battle and were kicked off the network generating another fork called Bitcoin ABC. Ultimately the users and exchange determine what code represents the ticker and naming of the coin they trade. This is the stalwart to developer control. > Also, I suspect that most cryptocurrency developers have big portions of their net worth stored in the very currency that they develop. The developers are biased when they make decisions regarding the project because the relative value of the cryptocurrency can change a lot as the result. This is a good thing. It means the developers must be very careful with the thing they work on, and it aligns their incentives. You can see other Bitcoin Cash development groups (such as Bitcoin Unlimited) who do not hold their treasury in Bitcoin Cash constantly propose questionable ideas and attempt to push for them to be included in Bitcoin Cash. > How the agents verify that the their counteragents transferred them some money? This is a valid concern. In fact, Bitcoin Core is largely run by engineers who work for Blockstream. They took VC investment from PayPal and other companies who demand a return-on-investment. The product they pitched is called Liquid. Liquid itself depends on Bitcoin not processing very many transactions on-chain. Common wisdom is that it simply doesn't work to do so. However, A quick look at the contingent of Bitcoiners who launched Bitcoin Cash, and their reasons for doing so will tell you this is false. Bitcoin Cash can easily process hundreds of transactions per second -- and can be scaled up to do quite a bit more -- using almost identical code to Bitcoin Core. We fixed a number of quadratic scalability problems with how BTC operates at the protocol level that enabled this. Why do people still pretend that on-chain scaling doesn't work? > When people say that blockchains are “decentralised”, they often conflate the computing operations structure and the logical structure of the system. Blockchains rely on distributed computation, but they also represent a singular logical stream of transaction history. This is 100% correct, and I have written on it multiple times. There is no such thing as decentralized development. Decentralization is a network topology. > In effect, blockchains are totalitarian algorithmic systems. They anticipate the rule of soulless machines over people described in many dystopias and that can very realistically come true if we as a society keep being as excited and mesmerised by the developments such as cryptocurrencies. 100%. The monetary policies of most cryptocurrencies are antithetical to functioning societies. The wild volatility in cryptocurrencies, in large part, is due to the issuance. Most cryptocurrency enthusiasts are ignorant of how money operates, or are attached to a particular ideology -- completely ignoring modern observations about how money (when functional) as always operated. The volatility makes them useless for denominating business contracts. Ultimately, cryptocurrency is in its infancy. I think that eventually it will "work." But right now, it does not work for what people ultimately need it to be doing. As far as I am concerned, people are currently trading pogs or magic cards.
cejast 5y ago
> One feature that cryptocurrencies gain from their decentralised computing design is that they become very robust to potential attacks from national governments. I was always under the impression that they would be more susceptible to attacks from national governments, since they'll have greater access to the resources needed for a 51% attack.
- gopalv 5y ago
  > more susceptible to attacks from national governments The attacks don't need to be on the currency, it can be on the privacy. The ledger is like a giant warrantless paper-trail of who paid whom. As a side-note, how would I reject a payment that came through bitcoin? If I were an unscrupulous government who wanted to target an individual, I'd just send them some money from a suspicious account and then bring them in for questioning over that payment.
  - TchoBeer 5y ago
    I think both parties have to sign a transaction.
    - sauwan 5y ago
      Maybe my wallet does that automatically, but that has not been my experience.
    - jacoblambda 5y ago
      This is not the case at least on most major networks. On UTxO (Unspent Transaction Output) based networks the transaction is signed by the sender and generates new UTxO for each recipient. The UTxO aren't signed by the recipient but they can be redeemed by the recipient using their private keys (as the UTxO is either signed by or derived from the recipient's public key/address). If you wanted to "return" the funds you'd just create a transaction containing the received UTxO as an input and deduct whatever fees that are used in the Tx from said UTxO. This "returns" the Tx without you spending any funds or having "kept" any amount of their funds. On the Account/Balance model I believe the way it works is similar. The sender signs the Tx with their private key and the receiver signs the Tx with their public key. In this case the "return" Tx is just going to involve sending the fund amount back to the sender since there isn't any separation of Tx outputs in the account balance.
klodolph 5y ago
I see the same issue pop up when people ask about applications for NFTs in video games or similar ideas. The idea is that you use NFTs to represent some kind of in-game capability--whether it's ownership of the game license, ownership of game content, or ownership of an in-game item. The main benefit I can think of that this gets you is the ability to trade the NFT itself on the blockchain, but most the other supposed advantages fall apart under any kind of scrutiny, at least from what I can tell. The key problem here is that the experience or capability that the NFT provides is likely going to be entirely mediated by the game software itself, not by any smart contracts on the blockchain or anything like that. The NFT would most likely be validated by connecting to a server and making an API call... because validating the NFT locally would require downloading the relevant blocks in the blockchain. Since any "promises" about what the NFT are ultimately mediated by the game software, which is entirely controlled by the game developers, there is no real "ownership" in any sense beyond what you could achieve without blockchain... except for the fact that you can trade the NFTs in blockchain transactions.
- cwkoss 5y ago
  If I could buy an NFT that gave the bearer a license to stream a particular movie from any host, and had the ability to resell or transfer it, I would find that significantly more valuable than the license Amazon offers with their "Buy" button. Could be fun to trade. Lots of interesting economic effects would come out of the ability to resell IP at the same market as the author: - if a movie came out, and nobody likes it, they may instantly resell it at a market price after viewing. If it's unpopular enough, perhaps the original creator would only be able to get hundreds of licenses on the market before price to consumer is forcibly reduced against the will of the creator. Bad creators have to compete in price against dissatisfied fans. - Great IP owners will want to carefully manage number of circulating licenses to maximize their overall earnings. A great film will not be resold after viewing, so owner may choose to gradually increase price until sales volume falls off. This invites speculators and enables IP owners to capture the lifetime value of their property more rapidly via effectively selling off future profits. Perhaps let IP owners could 'lock' or declare a frequency limit on license issuance to guarantee a level of scarcity to encourage investment. - Scalpers can try to corner properties, but the IP owner can always issue more licenses to break the corner. It'd be a risky bet. - If all of this lives on a blockchain, it'd make a bunch of cool publicly available metrics to economically quantify the value of IP over time.
mahadeep 5y ago
How about hard fork?
rektide 5y ago
One thing I'd like to see more stress on is that these systems, whatever degree of decentraliation they have, they are highly highly coupled systems, requiring nearly absolute cohesion. These protocols are built to establish consensus, and that almost always requires change to be accepted by a sizable majority. Touched upon in the article: > But in blockchains, we have something almost opposite to that. Since blockchain systems are logically indivisible, and also in many ways more formal and algorithmic than traditional financial systems, blockchains practically defy any authority, even the authority of people over their own accounts. My bias is more towards how adaptable & flexible systems are. There's little loose coupling, little flexibility, it feels like. Sometimes flexibility is engineered in, with smart contracts, but those virtual machines are enormously unadaptable, unflexible systems, by design, and trying to extend or grow or adapt them feels highly unlikely. Governance models for these systems seem rare, and- speaking as an outsider, a not regular user- I rarely if ever come across descriptions of how these blockchains are changing or adapting. It takes many years it feels like to get basic life-preserving measures happen such as the bitcoin block size limits. Decentralized somewhat, but extremely high authority, extremely unadaptable, unchanging. They possess few of what we think of as the general resilliency, adaptability measures that decentralization & distributiziation beget.
aazaa 5y ago
> ... There exists, therefore, an obvious discrepancy between the libertarian vision of Bitcoin as a decentralised infrastructure that cannot be regulated by any third party institution, and the actual governance structure that dictates the technological development of Bitcoin — which, in spite of its open-source nature, is highly centralised and undemocratic. ... I'm a little surprised about the lack of discussion around code forks and hard forks. Thousands upon thousands of networks based on either the actual Satoshi code or the ideas it embodies have been launched over the last ten years. Bitcoin itself sustained one major hard fork that persists to this day (Bitcoin Cash). Each one of those projects represents someone making a choice that the status quo wasn't good enough. Most will die sooner than Bitcoin, but some won't. The result is a kind of decentralization that's very hard to control: hundreds of competing projects, each one trying to be the next X.
- plater 5y ago
  That might be true to some extent, but each of those new projects consist of one or more people at the top controlling the functionality for the rest of the users.
kaliali 5y ago
BLOCKCHAIN IS NOT BITCOIN. Cardano is decentralized. https://pooltool.io/ https://pooltool.io/ With 2,459 active stake pools operating all around the world to process Cardano transactions. You can see the distribution of Cardano in Biggest Groups (Stake) on top left in the link below. https://adapools.org/groups https://adapools.org/groups It would take many many groups getting together to take over 50% of staked Ada in Cardano. Bitcoin on the other hand is not that decentralized Bitcoin Mining Pools 2020 https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fwww.buybitcoinworldwide.com%2Fwp-content%2Fuploads%2F2017%2F02%2Fpools1.png&f=1&nofb=1 https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2F... You can see that if three major mining pools joined together, they could take control of the entire Bitcoin network. Decentralized? - Charles Hoskinson https://youtu.be/0QtQGzqAIiU https://youtu.be/0QtQGzqAIiU China Could Hold 60% of the Residual Bitcoin- Tough Competition for Digital Yuan https://coinpedia.org/news/china-could-hold-60-of-the-residual-bitcoin/ https://coinpedia.org/news/china-could-hold-60-of-the-residu... (March 6, 2021) China Declares War on Bitcoin - China Uncensored (April 19, 2021) After a bitcoin crackdown, China now calls it an ‘investment alternative’ in a significant shift in tone - CNBC https://www.cnbc.com/2021/04/19/china-calls-bitcoin-an-investment-alternative-marking-shift-in-tone.html https://www.cnbc.com/2021/04/19/china-calls-bitcoin-an-inves... I know this is a site where everyone likes to think they are way more informed than the world population but in terms of cryptocurrency, I find the posts here woefully poor in quality and information. ------ And I haven't even started on Cardano's Project Catalyst - their democratic method of funding new cryptocurrency projects/developers and adding projects on the Cardano Network. All decided and controlled by ADA holders and not necessarily IOHK/Cardano Foundation/Emurgo, the organizations who made Cardano. ------ If you have a problem with my statement, then actually challenge what I have to say instead of hiding behind a downvote. Cut the bullshit propaganda and have an actual conversation about it.

50 points by leventov 5y ago

Bitcoin isn't really decentralised, in all kinds of ways. Look at the ownership of bitcoin, a handful of people have the majority. It's totally an elite phenomenon. But even within the elite it's a tiny amount. IMO we need something far more well distributed.

trident5000 5y ago
So like every asset in existence?

etrabroline 5y ago

>Even if the US government would try to “cancel” some country by severing it from all major exchange infra such as SWIFT, Visa, Mastercard, etc., the central bank of that country can decide to convert all US dollar accounts in the local banks into the local currency. But even 1,000,000 Zimbabwe dollars is not the same as 1 US dollar. International trade requires USD. The US can basically wipe out an entire country's saved wealth by flipping a switch in a computer. That can't happen with the decentralized nature of Bitcoin. This entire article is undefendable sophistry. >However, from the global system perspective, creating such unstoppable systems is dangerous because at the root of the complex system evolution and stability is that the agents (subsystems) in the environment can die and give way for newer, better things. Bitcoin was intended as an alternative to USD. USD has proven to be a tool of wall street to impose US imperialism on the third world, and on its own citizens. Obviously cryptocurrencies have proven way more opportunities for "giving way for newer better things" than the US banking system has. EDIT: Here is the US using the dollar to mess with countries it had a beef with. https://www.rferl.org/a/explainer_how_does_swift_ban_hurt_iran/24518153.html https://www.rferl.org/a/explainer_how_does_swift_ban_hurt_ir... https://www.theguardian.com/us-news/2019/aug/06/trump-freezes-all-venezuelan-government-assets-in-us https://www.theguardian.com/us-news/2019/aug/06/trump-freeze...

lottin 5y ago
The US doesn't have a switch to "turn off" a country's reserves of US dollars, I don't know where you get this notion from.
- merth 5y ago
  correct me if I am wrong but, they don't have actually currency. they have an IOU, which is a promise that I will pay you back X amount of service/products. the moment US says I changed my mind, is "turning off" a switch.
  - lottin 5y ago
    No, this is a misconception. Fiat currency is not a IOU. An IOU is redeemable, fiat currency is not—you can't take one USD to the Federal Reserve and have it redeemed for some amount of something. (This was true in the past, when, at least theoretically, USD was redeemable for gold, but not any more).
    - zhdc1 5y ago
      I don't understand this argument. US dollars are legal currency, so all you have to do to redeem the underlying value is purchase something with it (or, if you want to be pedantic, use them to cover a public or private debt). Of course, the underlying value of what you can get in exchange for them can change, but that's true for every medium of exchange in the first place. There's nothing magical about gold, silver, or any other commodity, nor is there anything special about tying a piece of paper to a commodity. If the government doesn't want you to use it or any derivative products as a currency, like what happened in the US with the 1933 Coinage Act, you're pretty much out of luck.
      - lottin 5y ago
        Legal currency simply means that a payment in that currency is considered, by courts of law, to extinguish a debt. (So a creditor can't demand to be paid in diamonds, for example. As long as the debtor pays in legal currency, the debt is considered extinguished.) On the other hand, a redeemable currency is a currency which the issuer promises to redeem for a certain amount of some commodity. This is independent from the fact that such a currency might (or might not) be accepted as payment in private transactions. The US dollar is legal currency, but is not redeemable.

vmception 5y ago

there are degrees of decentralization, but mostly people are just allergic to the word trust minimized is valid as well doesn't really matter. in less theoretically secure networks, validators don't reverse transactions because doing so deters commerce to their network. it works well enough, the market can bear it. a state that disagrees with it would still have trouble coercing all of the validators, and the state can buy up all the tokens with public money to try to become the majority of the validators... be my guest, I would call that success because its a moon cannon. All the holders get rich because a silly government agency pumped the coin to try and take over a network.

politician 5y ago
When 65% of the currency is mined in China, that's not exactly decentralized. Folks long BTC are exposed to the risk that the CCP will weaponize their mining share into a 51% attack. [1] https://cbeci.org/mining_map https://cbeci.org/mining_map
- etrabroline 5y ago
  Why not the US? Or Russia? It would be easy for a large state to dwarf the hash rate of the network if they wanted to sabotage it.
- vmception 5y ago
  theoretically less secure networks and the nomenclature around "validators" refers to Proof of Stake networks and Delegated Proof of Stake networks, of which bitcoin is neither. so this discussion isn't about Bitcoin but I can understand how that might not have been clear. I'm not saying these points don't also apply to bitcoin in some degree, this thread just wasn't about it.
  - politician 5y ago
    Fair point.
- zhdc1 5y ago
  I doubt this would happen, but I could very well see the CCP cracking down on coin mining for host of different reasons.

kybernetikos 5y ago

> I’d say that the blockchain developers are at least as likely to become corrupt, coerced, or influenced Some think that has already happened in the case of at least one major cryptocurrency, but what happens if a system is changed to depart from the core values that the users care about? Those users create and adopt new systems. Many of the other criticisms are sort-of true, but not in a way that I think is particularly concerning. It is true that currently people lose money when they lose their keys, and that most implementations of blockchain systems don't have the ability to recover mistaken or fraudulent transactions. However, these are true because of the interests of the people using and leading development on blockchains at the moment. If we start to prioritise UX, or decide to create systems with some sort of authority to determine fraudulence (maybe government?), fixing these problems is not outside the realms of a smart contract system or a new blockchain system. The broad technology is very flexible, and could even be adapted to incorporate government actions etc if that's what the developers and users want (so far it seems not to be). For me, the aspect that I'm interested in is that with blockchain there are no gatekeepers that stop you creating software that does interesting things with value. This is still not true with the fiat ecosystem - even the OpenBanking API, forced on the banks by governments is not a great system for democratising algorithmic access to money, and for me that's the most exciting thing about decentralised money.

adenverd 5y ago

> developers control the cryptocurrency issuance because despite the issuance is (usually) determined algorithmically, developers have the power to change these algorithms...If we compare this system with the US dollar system governed by the Federal Reserve, the Supreme Court of the US, the Congress, and the US government (in different ways), I’d say that the blockchain developers are at least as likely to become corrupt, coerced, or influenced by the system beneficiaries than the Fed and the Government officers and judges because the latter are 1) older on average, and more senior people tend to act more independently; 2) much better protected, physically and financially. Don't miners and nodes then have to adopt those algorithmic changes though? It's essentially voting by adoption - if a majority of miners/nodes don't adopt a set of changes (e.g. increasing the supply cap or rate), then they aren't propagated to the blockchain. This seems a lot more decentralized than the US/Fed monetary system that the article compares it to, where citizens have effectively zero influence on policy.

jayd16 5y ago
>It's essentially voting by adoption Unlike democratic policy, the votes for bitcoin policy are not 1 citizens 1 vote. You can claim that citizens have effectively no control (although they clearly do have some control). If you're not a miner you have absolutely no control. Even if you are a miner, your control is some function of your hash power.
- flotzam 5y ago
  > If you're not a miner you have absolutely no control. The economic majority of Bitcoin users ultimately decides what "Bitcoin" even means and can enforce that against miners with e.g. a User Activated Soft Fork: https://uasf.co https://uasf.co
  - georgyo 5y ago
    I disagree. As a user, I have no real say. What ever the miners and exchanges decide if what I must use. And for the vast majority of users just don't care about which fork should be considered the true path. As a user, I have about as much control over US currency. I can be very vocal, protest, and raise awareness for what I think is correct, but ultimately almost all decisions happen with governing bodies. And in the case of Bitcoin, the governing bodies are the miners and exchanges, which have very different incentives than the users.

yourabstraction 5y ago

I don't think this author really understands how Bitcoin development and upgrades work. There's Bitcoin the software, of which there can be any number of implementations, and then there's Bitcoin the network, of which there is only one. Miners and full nodes on the network have full control over which implementation/version of the Bitcoin software they choose to run. So sure, in theory people could be corrupted into for example changing the code that controls the monetary policy in the reference client, but you still need to get miners and full nodes to run your new version of the software. This is what makes it so hard to make any changes to Bitcoin, and forms the stability that many feel is one of its key strengths.

ptudan 5y ago
Even if miners and devs do try to screw people over, it's always possible to fork from a certain blockheight.
- hellajeff 5y ago
  Yep. This is why you don't keep your coins on an exchange. If there's another fork like BCH or ETC you might be screwed.
  - viraptor 5y ago
    What do you mean? On every exchange I'm aware of, you ended up with both BTC and BCH accounts. Did some of them completely ignore the fork?
    - hellajeff 5y ago
      BCH and ETC aren't the only forks. Take a look at cheapETH. I bet the exchange you're on didn't give you any of those!
- logifail 5y ago
  > it's always possible to fork from a certain blockheight So looking back at the 2016 hard fork of Ethereum after the DAO thing[0], is it a feature that "the community"[1] can choose to hard fork to revert transactions that are "bad"[2], or is it a bug? [0] https://blog.ethereum.org/2016/07/20/hard-fork-completed/ https://blog.ethereum.org/2016/07/20/hard-fork-completed/ [1] I'm not sure who defines this [2] I'm also not sure who defines this

mdoms 5y ago

> A second component is decentralized cryptographic truth. With cryptocurrency, it is now possible for an Israeli and a Palestinian, a Chinese person, a Japanese person, a Democrat and a Republican to all agree on the state of the Bitcoin blockchain. Does this guy know that there are already multiple forks with competing communities in Bitcoin?

micropresident 5y ago

I can attest to the headline of this article. I am one of the developers who helped launch Bitcoin Cash, and worked on the Bitcoin ABC client. I was in charge of building, signing, and releasing the software for a little over a year. And, I can attest to the fact that someone needs to build the code and release it. The developers can change that code at will. However, there are a number of things right, and a number of things wrong in this article. I will use my experience as an example. But note, while I use Bitcoin Cash as an example for my response, I do not ideologically support it for a number of reasons outlined in this article. Although, I do still hold Bitcoin Cash for the time being. > Who governs the blockchain system and issuance? > Usually this is an open-source community of developers. Note that I say that developers control the cryptocurrency issuance because despite the issuance is (usually) determined algorithmically, developers have the power to change these algorithms. This is completely true. However, they still only release code/binaries. The users must run these binaries, and there is no "Nakamoto consensus" for doing so. This results in huge internet political battles where people launch propaganda campaigns to vying over whose code is ran. Take Bitcoin Cash as a primary example: The people who moved to Bitcoin Cash from Bitcoin Core are ideologically opposed to the Bitcoin Core Team's roadmap for Bitcoin. There was a huge online propaganda war between r/Bitcoin and r/BTC with large amounts of disinformation being produced on both sides, as well as banning and censorship on these forums. Ultimately the "big blockers" lost and moved over to creating their own blockchain in 2017. This kind of political warfare happened again when Bitcoin SV and nChain's development team was ousted off onto their own blockchain. And then in 2019, when Bitcoin ABC -- the development team who launched Bitcoin Cash in the first place -- decided to change the issuance rules to send themself some funds out of the block reward, they lost the political battle and were kicked off the network generating another fork called Bitcoin ABC. Ultimately the users and exchange determine what code represents the ticker and naming of the coin they trade. This is the stalwart to developer control. > Also, I suspect that most cryptocurrency developers have big portions of their net worth stored in the very currency that they develop. The developers are biased when they make decisions regarding the project because the relative value of the cryptocurrency can change a lot as the result. This is a good thing. It means the developers must be very careful with the thing they work on, and it aligns their incentives. You can see other Bitcoin Cash development groups (such as Bitcoin Unlimited) who do not hold their treasury in Bitcoin Cash constantly propose questionable ideas and attempt to push for them to be included in Bitcoin Cash. > How the agents verify that the their counteragents transferred them some money? This is a valid concern. In fact, Bitcoin Core is largely run by engineers who work for Blockstream. They took VC investment from PayPal and other companies who demand a return-on-investment. The product they pitched is called Liquid. Liquid itself depends on Bitcoin not processing very many transactions on-chain. Common wisdom is that it simply doesn't work to do so. However, A quick look at the contingent of Bitcoiners who launched Bitcoin Cash, and their reasons for doing so will tell you this is false. Bitcoin Cash can easily process hundreds of transactions per second -- and can be scaled up to do quite a bit more -- using almost identical code to Bitcoin Core. We fixed a number of quadratic scalability problems with how BTC operates at the protocol level that enabled this. Why do people still pretend that on-chain scaling doesn't work? > When people say that blockchains are “decentralised”, they often conflate the computing operations structure and the logical structure of the system. Blockchains rely on distributed computation, but they also represent a singular logical stream of transaction history. This is 100% correct, and I have written on it multiple times. There is no such thing as decentralized development. Decentralization is a network topology. > In effect, blockchains are totalitarian algorithmic systems. They anticipate the rule of soulless machines over people described in many dystopias and that can very realistically come true if we as a society keep being as excited and mesmerised by the developments such as cryptocurrencies. 100%. The monetary policies of most cryptocurrencies are antithetical to functioning societies. The wild volatility in cryptocurrencies, in large part, is due to the issuance. Most cryptocurrency enthusiasts are ignorant of how money operates, or are attached to a particular ideology -- completely ignoring modern observations about how money (when functional) as always operated. The volatility makes them useless for denominating business contracts. Ultimately, cryptocurrency is in its infancy. I think that eventually it will "work." But right now, it does not work for what people ultimately need it to be doing. As far as I am concerned, people are currently trading pogs or magic cards.

cejast 5y ago

> One feature that cryptocurrencies gain from their decentralised computing design is that they become very robust to potential attacks from national governments. I was always under the impression that they would be more susceptible to attacks from national governments, since they'll have greater access to the resources needed for a 51% attack.

gopalv 5y ago
> more susceptible to attacks from national governments The attacks don't need to be on the currency, it can be on the privacy. The ledger is like a giant warrantless paper-trail of who paid whom. As a side-note, how would I reject a payment that came through bitcoin? If I were an unscrupulous government who wanted to target an individual, I'd just send them some money from a suspicious account and then bring them in for questioning over that payment.
- TchoBeer 5y ago
  I think both parties have to sign a transaction.
  - sauwan 5y ago
    Maybe my wallet does that automatically, but that has not been my experience.
  - jacoblambda 5y ago
    This is not the case at least on most major networks. On UTxO (Unspent Transaction Output) based networks the transaction is signed by the sender and generates new UTxO for each recipient. The UTxO aren't signed by the recipient but they can be redeemed by the recipient using their private keys (as the UTxO is either signed by or derived from the recipient's public key/address). If you wanted to "return" the funds you'd just create a transaction containing the received UTxO as an input and deduct whatever fees that are used in the Tx from said UTxO. This "returns" the Tx without you spending any funds or having "kept" any amount of their funds. On the Account/Balance model I believe the way it works is similar. The sender signs the Tx with their private key and the receiver signs the Tx with their public key. In this case the "return" Tx is just going to involve sending the fund amount back to the sender since there isn't any separation of Tx outputs in the account balance.

klodolph 5y ago

I see the same issue pop up when people ask about applications for NFTs in video games or similar ideas. The idea is that you use NFTs to represent some kind of in-game capability--whether it's ownership of the game license, ownership of game content, or ownership of an in-game item. The main benefit I can think of that this gets you is the ability to trade the NFT itself on the blockchain, but most the other supposed advantages fall apart under any kind of scrutiny, at least from what I can tell. The key problem here is that the experience or capability that the NFT provides is likely going to be entirely mediated by the game software itself, not by any smart contracts on the blockchain or anything like that. The NFT would most likely be validated by connecting to a server and making an API call... because validating the NFT locally would require downloading the relevant blocks in the blockchain. Since any "promises" about what the NFT are ultimately mediated by the game software, which is entirely controlled by the game developers, there is no real "ownership" in any sense beyond what you could achieve without blockchain... except for the fact that you can trade the NFTs in blockchain transactions.

cwkoss 5y ago
If I could buy an NFT that gave the bearer a license to stream a particular movie from any host, and had the ability to resell or transfer it, I would find that significantly more valuable than the license Amazon offers with their "Buy" button. Could be fun to trade. Lots of interesting economic effects would come out of the ability to resell IP at the same market as the author: - if a movie came out, and nobody likes it, they may instantly resell it at a market price after viewing. If it's unpopular enough, perhaps the original creator would only be able to get hundreds of licenses on the market before price to consumer is forcibly reduced against the will of the creator. Bad creators have to compete in price against dissatisfied fans. - Great IP owners will want to carefully manage number of circulating licenses to maximize their overall earnings. A great film will not be resold after viewing, so owner may choose to gradually increase price until sales volume falls off. This invites speculators and enables IP owners to capture the lifetime value of their property more rapidly via effectively selling off future profits. Perhaps let IP owners could 'lock' or declare a frequency limit on license issuance to guarantee a level of scarcity to encourage investment. - Scalpers can try to corner properties, but the IP owner can always issue more licenses to break the corner. It'd be a risky bet. - If all of this lives on a blockchain, it'd make a bunch of cool publicly available metrics to economically quantify the value of IP over time.

mahadeep 5y ago

How about hard fork?

rektide 5y ago

One thing I'd like to see more stress on is that these systems, whatever degree of decentraliation they have, they are highly highly coupled systems, requiring nearly absolute cohesion. These protocols are built to establish consensus, and that almost always requires change to be accepted by a sizable majority. Touched upon in the article: > But in blockchains, we have something almost opposite to that. Since blockchain systems are logically indivisible, and also in many ways more formal and algorithmic than traditional financial systems, blockchains practically defy any authority, even the authority of people over their own accounts. My bias is more towards how adaptable & flexible systems are. There's little loose coupling, little flexibility, it feels like. Sometimes flexibility is engineered in, with smart contracts, but those virtual machines are enormously unadaptable, unflexible systems, by design, and trying to extend or grow or adapt them feels highly unlikely. Governance models for these systems seem rare, and- speaking as an outsider, a not regular user- I rarely if ever come across descriptions of how these blockchains are changing or adapting. It takes many years it feels like to get basic life-preserving measures happen such as the bitcoin block size limits. Decentralized somewhat, but extremely high authority, extremely unadaptable, unchanging. They possess few of what we think of as the general resilliency, adaptability measures that decentralization & distributiziation beget.

aazaa 5y ago

> ... There exists, therefore, an obvious discrepancy between the libertarian vision of Bitcoin as a decentralised infrastructure that cannot be regulated by any third party institution, and the actual governance structure that dictates the technological development of Bitcoin — which, in spite of its open-source nature, is highly centralised and undemocratic. ... I'm a little surprised about the lack of discussion around code forks and hard forks. Thousands upon thousands of networks based on either the actual Satoshi code or the ideas it embodies have been launched over the last ten years. Bitcoin itself sustained one major hard fork that persists to this day (Bitcoin Cash). Each one of those projects represents someone making a choice that the status quo wasn't good enough. Most will die sooner than Bitcoin, but some won't. The result is a kind of decentralization that's very hard to control: hundreds of competing projects, each one trying to be the next X.

plater 5y ago
That might be true to some extent, but each of those new projects consist of one or more people at the top controlling the functionality for the rest of the users.

kaliali 5y ago

BLOCKCHAIN IS NOT BITCOIN. Cardano is decentralized. https://pooltool.io/ https://pooltool.io/ With 2,459 active stake pools operating all around the world to process Cardano transactions. You can see the distribution of Cardano in Biggest Groups (Stake) on top left in the link below. https://adapools.org/groups https://adapools.org/groups It would take many many groups getting together to take over 50% of staked Ada in Cardano. Bitcoin on the other hand is not that decentralized Bitcoin Mining Pools 2020 https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fwww.buybitcoinworldwide.com%2Fwp-content%2Fuploads%2F2017%2F02%2Fpools1.png&f=1&nofb=1 https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2F... You can see that if three major mining pools joined together, they could take control of the entire Bitcoin network. Decentralized? - Charles Hoskinson https://youtu.be/0QtQGzqAIiU https://youtu.be/0QtQGzqAIiU China Could Hold 60% of the Residual Bitcoin- Tough Competition for Digital Yuan https://coinpedia.org/news/china-could-hold-60-of-the-residual-bitcoin/ https://coinpedia.org/news/china-could-hold-60-of-the-residu... (March 6, 2021) China Declares War on Bitcoin - China Uncensored (April 19, 2021) After a bitcoin crackdown, China now calls it an ‘investment alternative’ in a significant shift in tone - CNBC https://www.cnbc.com/2021/04/19/china-calls-bitcoin-an-investment-alternative-marking-shift-in-tone.html https://www.cnbc.com/2021/04/19/china-calls-bitcoin-an-inves... I know this is a site where everyone likes to think they are way more informed than the world population but in terms of cryptocurrency, I find the posts here woefully poor in quality and information. ------ And I haven't even started on Cardano's Project Catalyst - their democratic method of funding new cryptocurrency projects/developers and adding projects on the Cardano Network. All decided and controlled by ADA holders and not necessarily IOHK/Cardano Foundation/Emurgo, the organizations who made Cardano. ------ If you have a problem with my statement, then actually challenge what I have to say instead of hiding behind a downvote. Cut the bullshit propaganda and have an actual conversation about it.