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Notice that blockchains have no notion of property rights. As far as the blockchain is concerned whoever controls the asset (i.e. has the password to the walle

• dkshdkjshdk 5y ago
  Have you ever heard that "posession is nine-tenths of the law"? Well... this is a system in which "posession is ten-tenths of the law". This has obvious disadvantages (as you pointed out), but it also has a clear advantage: it becomes trivial to figure out who effectively owns something within the system (whoever controls/posesses the associated key). Just because a system doesn't encode/enforce "property laws", doesn't necessarily mean that it is useless. In fact, few systems (if any) formally encode property laws: that is always something imposed from the outside. If someone steals your crypto keys, you can still use the (normal) court system to get your assets back (assuming you have some way of proving that you own the assets, and you know who stole them from you). Does the Internet encode/enforce property laws? No. If someone (e.g.) copies your stuff, you're still forced to go to the court system (just like when someone "steals" crypto from you). Does that make the Internet "not suitable for almost anything", just because it doesn't automatically enforce property laws?
  • lottin 5y ago
    The internet wasn't invented to keep track of who owns what. It was invented to transmit information and it does an excellent job at that. The blockchain, on the other hand, was invented to keep track of who owns that. That's its only purpose. The fact it doesn't and can't enforce property rights, which, it could be argued, are pretty essential for that purpose, appears to indicate that blockchains do suffer from a fatal design flaw. At least that's the way I see it.
    • dkshdkjshdk 5y ago
      > The blockchain, on the other hand, was invented to keep track of who owns that. That's its only purpose. Well.. its purpose is to enable transactions between people, and not keep track of legal ownership of things. In fact, these networks usually don't make any claim about who legally owns anything: only about who controls something (i.e. who owns it within the system, not who owns it in the legal sense). Does physical cash keep track of who actually owns it (and not just "who posesses it")? No. Does that make it useless or fatally flawed for the purpose of "value exchange"? Not really. If you receive a 10 USD bill from someone as payment, you have to assume that they own that bill (and didn't just steal from anyone else). The bill itself doesn't enforce property law. Furthermore, if you have lax security and a pickpocket takes your wallet (with 500 USD inside), you also have little recourse or method to enforce your ownership of the stolen cash. In fact, you probably even have less recourse than with things on blockchains: there's no way of tracking where cash goes, after someone steals it from you. Is the fact that "cash" doesn't encode/enforce your property rights over it a problem that prevents "cash" from being effectively used a medium of value exchange between people? As far as I can tell, no. Just like with "blockchains", if someone steals your cash, or anything else, you need to go to a court to get things fixed. I understand your argument and accept that such properties of the system could be seen as "design flaws" (though... how could you even fix such design flaws? "law" is not a formal system). On the other hand, if such properties were "fatal design flaws" (for the purpose of a system of value exchange between economical agents), then plain vanilla cash is just as flawed, if not more (since it does not encode or enforce your property rights, and it's even less traceable than blockchain "assets").
      • lottin 5y ago
        Property rights are a social construct. They are recognised in a certain social context and enforced by state institutions by use of force. They are separate from the actual objects of ownership. Cash is like any other physical object. If stolen, the owner can demand that the courts act on their behalf and get the stolen cash back. Sure, it may be difficult, in some situations, to prove ownership of the stolen cash or to recover it, and maybe this explains why many people seem to prefer electronic payments over cash. It might indicate that indeed cash is perceived as being less safe. Now, back to blockchains. Blockchains are very inefficient and expensive to run. This is so, because they have to do a whole lot of extra work in order to avoid relying on a central authority that ultimately has the final say on who owns what. If blockchain users have to go to court to have property rights enforced, that means that the courts do have the final say on who owns what, and so the entire purpose of the blockchain, which was to avoid a central authority, is defeated. Not only that. The other problem is there can be no enforcement without the ability to exert force, and by design a blockchain cannot be changed by use of force, only by "consensus". So the courts would be powerless to enforce anything on a blockchain, even if they wanted. In short, blockchains are designed in a manner that makes them antithetical to property rights. I think most people want property rights and therefore will steer clear of blockchains.