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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 a

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?
- fidesomnes 5y ago
  translation "I demand this random HN user show me how it is this is done because I am not going to use a search engine to find it out for myself."
mminer237 5y ago
I don't trust the collective anonymous users of Bitcoin more than I trust my bank and the court system though. If someone hacks into my account, my bank will likely reimburse me for any losses. There are controls in place to stop them from stealing it al. If someone just transferred it to their own account, I could use the courts to get it back. If I use a credit card to pay a scam, I can do a charge-back. With cryptocurrencies, it's just "bye money". They're not going to fork for you. There's no logic to stop people in Russia transferring my entire account. It's too hard to find criminals to get any relief. It's just your fault for using cryptocurrencies and not having 100% perfect security. Not to mention, the chance of my bank stealing all my money is nil. They'd be sued and arrested, and the FDIC would reimburse me anyway.
- rhn_mk1 5y ago
  I don't think this is the kind of "trust" that is relevant in the prevention of double-spending.
- shawnz 5y ago
  > There are controls in place to stop them from stealing it al. If someone just transferred it to their own account, I could use the courts to get it back. What if it's taken thorough wrongful civil forfeiture? Will you be able to afford to navigate the courts to get your assets back after they've been seized?
  - WJW 5y ago
    Not always, but wrongful civil forfeiture is just one of many possible ways to steal. In other cases using the court system will be possible. With bitcoin, it is never possible.
    - shawnz 5y ago
      So if you think the risk of permanently losing your assets via legal channels is, let's say, 99-to-1 compared to the risk of losing your assets to cryptocurrency attacks, then wouldn't it make sense to hold 99% of your assets in the bank and 1% in cryptocurrencies? Cryptocurrencies don't have to replace all existing financial instruments to be a useful hedge. They can just be one tool of many to diversify your risk profile. Especially consider that for people living outside the developed world, the risk of having your assets stolen through legal channels is going to be much higher.
gota 5y ago
> One single person can't cause the entire system to break down or steal all them money. Funny - I have never seen someone in the traditional financing system do that and not get caught. Closest things were ponzi schemes like Madoff (and he did get caught) I have, however, heard of dozens of exactly this incident happening with cryptocoin exchanges (wallets, services, the most general term for all combined slipped my mind)

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?
fidesomnes 5y ago
translation "I demand this random HN user show me how it is this is done because I am not going to use a search engine to find it out for myself."

mminer237 5y ago

I don't trust the collective anonymous users of Bitcoin more than I trust my bank and the court system though. If someone hacks into my account, my bank will likely reimburse me for any losses. There are controls in place to stop them from stealing it al. If someone just transferred it to their own account, I could use the courts to get it back. If I use a credit card to pay a scam, I can do a charge-back. With cryptocurrencies, it's just "bye money". They're not going to fork for you. There's no logic to stop people in Russia transferring my entire account. It's too hard to find criminals to get any relief. It's just your fault for using cryptocurrencies and not having 100% perfect security. Not to mention, the chance of my bank stealing all my money is nil. They'd be sued and arrested, and the FDIC would reimburse me anyway.

rhn_mk1 5y ago
I don't think this is the kind of "trust" that is relevant in the prevention of double-spending.
shawnz 5y ago
> There are controls in place to stop them from stealing it al. If someone just transferred it to their own account, I could use the courts to get it back. What if it's taken thorough wrongful civil forfeiture? Will you be able to afford to navigate the courts to get your assets back after they've been seized?
- WJW 5y ago
  Not always, but wrongful civil forfeiture is just one of many possible ways to steal. In other cases using the court system will be possible. With bitcoin, it is never possible.
  - shawnz 5y ago
    So if you think the risk of permanently losing your assets via legal channels is, let's say, 99-to-1 compared to the risk of losing your assets to cryptocurrency attacks, then wouldn't it make sense to hold 99% of your assets in the bank and 1% in cryptocurrencies? Cryptocurrencies don't have to replace all existing financial instruments to be a useful hedge. They can just be one tool of many to diversify your risk profile. Especially consider that for people living outside the developed world, the risk of having your assets stolen through legal channels is going to be much higher.

gota 5y ago

> One single person can't cause the entire system to break down or steal all them money. Funny - I have never seen someone in the traditional financing system do that and not get caught. Closest things were ponzi schemes like Madoff (and he did get caught) I have, however, heard of dozens of exactly this incident happening with cryptocoin exchanges (wallets, services, the most general term for all combined slipped my mind)