6 ms·

Why does Bitcoin have a clear advantage in solving double spend over a centralized solution?

krageon 5y ago
> centralized If you want to trust a conglomerate of folks who have a vested interest in keeping you small and poor to solve your problems, then there is no advantage. If you do not, then the advantage is exactly that it is not centralised.
- acomms 5y ago
  Why are you so convinced that cryptocurrency solves the "outside forces much larger and more powerful than me have influence over the system" problem? It exchanged a solution to some problems for a new set of problems to be solved.
  - krageon 5y ago
    You are questioning what I'm saying by telling me something incredibly vague. I'm afraid I just don't know what to do with your question.
    - secondaryacct 5y ago
      I can rephrase it: why do you think it impossible for vastly resourceful entities to acquire so much power they can control the decentralized system - in a softer way, probably but still. Imagine a world tmr where bitcoin is everywhere. You ll have mining conglomerates in the cheapest electricity providers working as cartels to help each other and protect their interests (so can envision centralizing a blacklist of addresses they dislike, coordination on software version etc), de facto cartels of whales (like todays "billionaires" people describe as a collaborative force), and large lenders who concentrate capital and therefore still can buy out whatever they want (today called banks). How do you think the blockchain solve any of that?
      - megameter 5y ago
        It's easy. Copy-paste the blockchain and start over with a fork. When the system delegitimizes itself, a debt jubilee lies around the corner. This stuff is just glue now - a cheap way of making a financial system.
        DangitBobby 5y ago
        So if you don't like the history of the currency, scrap it entirely and start over. That seems like the opposite of the point of Blockchain.
- imtringued 5y ago
  What keeps people small and poor is the insistence that people should save in monetary terms. It's not rocket science. When you keep your wealth in monetary terms, you don't get to have it in physical terms. Money represents how much real wealth you could have if you spent it. It's deferred consumption. There is no real wealth in something that didn't happen.
  - Cipater 5y ago
    Money is a store of value. Money is a measure of wealth.
mcherm 5y ago
It does not. Bitcoin (and it's successors) are a decentralized solution to the double spend problem. If "decentralized" is a requirement, then a cryptocurrency can be an excellent solution. Other known solutions (like "just trust everyone") don't scale well (an understatement!). If "decentralized" is not a requirement then there are other solutions to the double-spend problem.
- mdoms 5y ago
  So it's your contention that the current traditional financial system "don't scale well (an understatement!)"?
snarf21 5y ago
Because the trust is distributed. One single person can't cause the entire system to break down or steal all them money. With blockchain coins, the incentives are aligned. The weird thing that happened with BTC that I don't think Satoshi could forsee is that the more valuable it got, the less usable it got. This is one of the unsolved issues: how to create decentralized consensus very very quickly that can't also be attacked via a PoW that is too easy.
- ironSkillet 5y ago
  Do you know of any lines of research that are out to prove mathematically that it is impossible to have these desirable characteristics simultaneously? I.e. any improvement in consensus efficiency necessarily gives up some amount of decentralization, appropriately defined.
  - ItsMonkk 5y ago
    This is the sort of thing that really needs to be questioned. 1. How much security do we need for this transaction? 2. For this block of transactions? 3. Can we have varying levels of security? What we are ultimately trying to know is, is it profitable to double spend? If the answer is yes, then no one should be transacting, and anything they do transact is a gamble. If the answer is no, there's much less risk, and the farther the answer is no, the safer the transaction. But we likely don't need as much security as we do now. In fact, it's very easy to handle at a user level. A. Put the transaction on the blockchain. B. Wait for additional blocks. C. If your transaction is huge, wait for more additional blocks. Wait a week, a month. This is an important transaction. When the blockchain has not reverted for such a long time, finally do the transaction in the real world. If you are transacting with yourself, you don't need any security at all. If you are transacting with a bar and the bar knows you, much like a tab, you don't need much security. If you are transacting with an anonymous person, you want high security. So security is currently handled on a blockchain by blockchain basis, where it should be a transaction by transaction basis. What if you can't wait a month? Then you should put heavy fees on that transaction and it should be put in with other higher fee transactions. 4. How does security change with transaction size? Does it make sense to have limits? 5. How does security change with total transaction block size? Does it make sense to have limits? 6. When the coin price goes up, how does that change these factors? 7. When the mining reward in coins drops, how does that affect security? 8. When Bitcoin, in 100 years, moves to 100% transaction fee system, what happens to security? What would the transactions fees look like? 9. In 50 years when the block reward has been halved 5 times, either the price of Bitcoin moves to $1 million, or the security drops. Is that okay?
wyager 5y ago
If you’re fine with all the downsides of trusting you bank, the bank’s central bank and currency issued, the bank’s government, etc then that obviously makes Bitcoin less appealing for you. Remaining upside includes reduced friction for things like international settlement. Don’t tell me that international settlement is easy with traditional banks - I am a financial system power user and it is not.

> centralized If you want to trust a conglomerate of folks who have a vested interest in keeping you small and poor to solve your problems, then there is no advantage. If you do not, then the advantage is exactly that it is not centralised.

acomms 5y ago
Why are you so convinced that cryptocurrency solves the "outside forces much larger and more powerful than me have influence over the system" problem? It exchanged a solution to some problems for a new set of problems to be solved.
- krageon 5y ago
  You are questioning what I'm saying by telling me something incredibly vague. I'm afraid I just don't know what to do with your question.
  - secondaryacct 5y ago
    I can rephrase it: why do you think it impossible for vastly resourceful entities to acquire so much power they can control the decentralized system - in a softer way, probably but still. Imagine a world tmr where bitcoin is everywhere. You ll have mining conglomerates in the cheapest electricity providers working as cartels to help each other and protect their interests (so can envision centralizing a blacklist of addresses they dislike, coordination on software version etc), de facto cartels of whales (like todays "billionaires" people describe as a collaborative force), and large lenders who concentrate capital and therefore still can buy out whatever they want (today called banks). How do you think the blockchain solve any of that?
    - megameter 5y ago
      It's easy. Copy-paste the blockchain and start over with a fork. When the system delegitimizes itself, a debt jubilee lies around the corner. This stuff is just glue now - a cheap way of making a financial system.
      - DangitBobby 5y ago
        So if you don't like the history of the currency, scrap it entirely and start over. That seems like the opposite of the point of Blockchain.
imtringued 5y ago
What keeps people small and poor is the insistence that people should save in monetary terms. It's not rocket science. When you keep your wealth in monetary terms, you don't get to have it in physical terms. Money represents how much real wealth you could have if you spent it. It's deferred consumption. There is no real wealth in something that didn't happen.
- Cipater 5y ago
  Money is a store of value. Money is a measure of wealth.

mcherm 5y ago

It does not. Bitcoin (and it's successors) are a decentralized solution to the double spend problem. If "decentralized" is a requirement, then a cryptocurrency can be an excellent solution. Other known solutions (like "just trust everyone") don't scale well (an understatement!). If "decentralized" is not a requirement then there are other solutions to the double-spend problem.

mdoms 5y ago
So it's your contention that the current traditional financial system "don't scale well (an understatement!)"?

snarf21 5y ago

Because the trust is distributed. One single person can't cause the entire system to break down or steal all them money. With blockchain coins, the incentives are aligned. The weird thing that happened with BTC that I don't think Satoshi could forsee is that the more valuable it got, the less usable it got. This is one of the unsolved issues: how to create decentralized consensus very very quickly that can't also be attacked via a PoW that is too easy.

ironSkillet 5y ago
Do you know of any lines of research that are out to prove mathematically that it is impossible to have these desirable characteristics simultaneously? I.e. any improvement in consensus efficiency necessarily gives up some amount of decentralization, appropriately defined.
- ItsMonkk 5y ago
  This is the sort of thing that really needs to be questioned. 1. How much security do we need for this transaction? 2. For this block of transactions? 3. Can we have varying levels of security? What we are ultimately trying to know is, is it profitable to double spend? If the answer is yes, then no one should be transacting, and anything they do transact is a gamble. If the answer is no, there's much less risk, and the farther the answer is no, the safer the transaction. But we likely don't need as much security as we do now. In fact, it's very easy to handle at a user level. A. Put the transaction on the blockchain. B. Wait for additional blocks. C. If your transaction is huge, wait for more additional blocks. Wait a week, a month. This is an important transaction. When the blockchain has not reverted for such a long time, finally do the transaction in the real world. If you are transacting with yourself, you don't need any security at all. If you are transacting with a bar and the bar knows you, much like a tab, you don't need much security. If you are transacting with an anonymous person, you want high security. So security is currently handled on a blockchain by blockchain basis, where it should be a transaction by transaction basis. What if you can't wait a month? Then you should put heavy fees on that transaction and it should be put in with other higher fee transactions. 4. How does security change with transaction size? Does it make sense to have limits? 5. How does security change with total transaction block size? Does it make sense to have limits? 6. When the coin price goes up, how does that change these factors? 7. When the mining reward in coins drops, how does that affect security? 8. When Bitcoin, in 100 years, moves to 100% transaction fee system, what happens to security? What would the transactions fees look like? 9. In 50 years when the block reward has been halved 5 times, either the price of Bitcoin moves to $1 million, or the security drops. Is that okay?

wyager 5y ago

If you’re fine with all the downsides of trusting you bank, the bank’s central bank and currency issued, the bank’s government, etc then that obviously makes Bitcoin less appealing for you. Remaining upside includes reduced friction for things like international settlement. Don’t tell me that international settlement is easy with traditional banks - I am a financial system power user and it is not.