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Yeah, this is what I don't understand from the naysayers. Anyone who says blockchain-driven assets don't have intrinsic value seems to ignore the value of trust

Yeah, this is what I don't understand from the naysayers. Anyone who says blockchain-driven assets don't have intrinsic value seems to ignore the value of trust - the ability to trust that the ledger is accurate seems extremely valuable. The author of the article skips over the question entirely, maybe he's addressed it elsewhere, but if the crypto skeptics continue to ignore one of its primary value propositions, I have to assume either ignorance or bad faith.

swenger 5y ago
A blockchain doesn’t provide trust, though. A person who doesn’t understand technology doesn’t trust a distributed ledger, but they do trust their centralised bank because it’s regulated.
- core-utility 5y ago
  There are plenty of non-tech people with investments in crypto that would disagree with you. Also, some exchanges are FDIC insured.
- eof 5y ago
  They do though. A very small percentage of current holders of crypto have an understanding of the technology. Trust will (continue to) come with time.
- hackinthebochs 5y ago
  It provides "distributed trust", in the sense that you know no single person or group is in control and you trust the distributed consensus, in terms of ledger state and algorithm accuracy.
  - lbotos 5y ago
    I'm not fully up to speed but are modern blockchains still susceptible to a 51% attack?
    - betwixthewires 5y ago
      Current PoW chains, yes. Some other consensus schemes have higher threshold requirements to pull off a similar sort of attack, in particular you can look at Casper FFG and other byzantine fault tolerant PoS schemes. There are some with lower threshold tolerance of these attacks based on the idea that they're unlikely and the added threshold doesn't actually add security. I don't know about that but some people seem to think so.
  - floatboth 5y ago
    Maybe no single entity is literally in full control but large mining pools and the developers of the software both have extreme influence over the chain.
- throwaway6977 5y ago
  You sound privileged enough to have access to a reliable and trustworthy bank. Many, many people aren't as lucky.
  - rzanella 5y ago
    So this person lives in a place they can't trust banks... But they have access to computers, internet, enough money to pay the tx fees of cryptocurrencies... amazing
    - throwaway6977 5y ago
      Less snark would be preferred to elicit a response, but yes- there are more cheap computers than people in the world, and smart phones are near ubiquitous even in very poor places. You simply don't have the life experiences to make this criticism. i.e. PRIVILEGE
    - floatboth 5y ago
      Don't forget enough tech expertise to be able to use any of this crap in any "decentralized" way (if they all just use coinbase, where is that decentralization?)
- joshmarlow 5y ago
  I would question how much of the layperson's trust is due to bank regulation and how much is due to familiarity.
  - brandonmenc 5y ago
    Probably nearly 100% due to regulation.
the_gastropod 5y ago
Is trust in bank records generally low? Especially in moderately modernized countries?
horsawlarway 5y ago
But that ledger isn't accurate. It's just distributed and difficult to change. I technically am the owner of (quite a few) bitcoin that were being processed by MtGox when they imploded. The wallet they were in at the time was emptied and no longer exists. I still receive the relevant court documents as the case continues still. As far as the ledger is concerned - they are no longer mine. --- So question to you: How do you reconcile the theft of my property with the ledger at this point? It turns out I have no ability to do so at all. The ledger is distributed and impossible to meaningfully change. So while I trust that the ledger can't be changed easily - I don't trust the ledger to accurately reflect ownership (it can only represent possession, not true ownership). So now what? Now it turns out I have to turn around and trust a central authority anyways! That authority being the government that is handling the prosecution of MtGox for fraud and theft.
- voldacar 5y ago
  >Now it turns out I have to turn around and trust a central authority anyways! That authority being the government that is handling the prosecution of MtGox for fraud and theft. In theory, DeFi can solve this. In practice it is hampered by poor UX and high transaction/gas fees. I think in the far future, the idea of ever having "your" assets in a wallet whose key you don't control will be seen as a ludicrous archaism. Sorry for your loss btw, that really sucks
  - horsawlarway 5y ago
    > Sorry for your loss btw, that really sucks You and me both - 41 bitcoin at $4.17 a piece. Admittedly, if they hadn't been stolen I was planning on buying a 1/4 of weed with them, so I probably wouldn't be rich either way... shrug Fun story though - I can honestly say I spent more than USD 10 million in bitcoin on weed in college. Only about $500 at the time.
    - CTDOCodebases 5y ago
      You know they recovered 150000 Bitcoin from a cold wallet and are going to repay holders?
keyanp 5y ago
> the ability to trust that the ledger is accurate seems extremely valuable Maybe it "seems" valuable, but why exactly is it valuable? For what use case and which situation (besides crime)? I think the issue is that many don't see value in its "primary value proposition" because the features they want from banks are already there (stability, FDIC insurance). The only thing I personally see missing is no/low-fee instant transfers, but crypto hasn't solved that either (too slow and/or high fees).
- bobmichael 5y ago
  One IMO realistic use-case is providing a wealth preservation mechanism for people living in a country with a corrupt government that's experiencing hyperinflation, for example Lebanon.
  - webmaven 5y ago
    > One IMO realistic use-case is providing a wealth preservation mechanism for people living in a country with a corrupt government that's experiencing hyperinflation, for example Lebanon. Sure, but (like it or not) that's covered under the umbrella of "crime".
    - munchler 5y ago
      In that case, I think the point is that some "crime" is ethically justified and worth supporting technologically. The OP's statement implies that all crime is bad.
      - webmaven 5y ago
        Sure. But it is worth asking if this particular channel of support is worth enabling all the other forms of criminality that use cryptocurrencies.
    - betwixthewires 5y ago
      Yep, but all that means is that "crime" is a meaningless distinction itself.
HelloNurse 5y ago
The article discusses pseudo-money, not generic decentralized databases. The main point is that even if a blockchain distributed database technically "works" it is highly inadequate for many practical money-like applications, particularly because trust has to include the real world.
AnIdiotOnTheNet 5y ago
In some context I would agree, there is theoretical value to a decentralized trustless ledger[0]. What I can't agree with, however, is that entries in a decentralized trustless ledger are inherently valuable as cryptocurrency proponents would like us to believe. The entries in the ledger have no inherent meaning, they're just a number associated with another number and the only reason anyone equates that with a monetary value is that, for the moment, they can find someone else[1] to give them money to shuffle those numbers around. I think that, at best, one could say that BTC is backed by hype and speculation. I am not convinced that is a useful basis for a currency[2]. This is in contrast to fiat currencies which their various governments offer guarantees that they will honor. NFTs, on the other hand, make even less sense to me. They seem like they are just cryptocurrency in disguise trying to fool people who otherwise question the concept of inherent value by claiming (falsely) that they are equivalent to ownership of digital goods[3]. [0] I have yet to hear a use case for which they are actually better than traditional alternatives, but I can imagine that one might exists. [1] read: greater fool. [2] Leaving aside all the energy wasted on PoW. [3] And that's before we get into my conviction that attempts to force artificial scarcity into a post-scarcity space are backward and perverted.
- mitchdoogle 5y ago
  Money in your bank account is just a number in a database somewhere.
  - AnIdiotOnTheNet 5y ago
    You must have missed a significant portion of my post if you do not see why I do not believe those are equivalent. I'll reiterate: the number in the database represents an amount of tokens guaranteed to be accepted by the government of the country I live in. Cryptocurrency 'coins' carry no such guarantee, only the possibility of greater fools.
gfodor 5y ago
It turns out in history lots of people committed crimes where the evil party was not the criminal, but the state deeming their actions criminal.

swenger 5y ago

A blockchain doesn’t provide trust, though. A person who doesn’t understand technology doesn’t trust a distributed ledger, but they do trust their centralised bank because it’s regulated.

core-utility 5y ago
There are plenty of non-tech people with investments in crypto that would disagree with you. Also, some exchanges are FDIC insured.
eof 5y ago
They do though. A very small percentage of current holders of crypto have an understanding of the technology. Trust will (continue to) come with time.
hackinthebochs 5y ago
It provides "distributed trust", in the sense that you know no single person or group is in control and you trust the distributed consensus, in terms of ledger state and algorithm accuracy.
- lbotos 5y ago
  I'm not fully up to speed but are modern blockchains still susceptible to a 51% attack?
  - betwixthewires 5y ago
    Current PoW chains, yes. Some other consensus schemes have higher threshold requirements to pull off a similar sort of attack, in particular you can look at Casper FFG and other byzantine fault tolerant PoS schemes. There are some with lower threshold tolerance of these attacks based on the idea that they're unlikely and the added threshold doesn't actually add security. I don't know about that but some people seem to think so.
- floatboth 5y ago
  Maybe no single entity is literally in full control but large mining pools and the developers of the software both have extreme influence over the chain.
throwaway6977 5y ago
You sound privileged enough to have access to a reliable and trustworthy bank. Many, many people aren't as lucky.
- rzanella 5y ago
  So this person lives in a place they can't trust banks... But they have access to computers, internet, enough money to pay the tx fees of cryptocurrencies... amazing
  - throwaway6977 5y ago
    Less snark would be preferred to elicit a response, but yes- there are more cheap computers than people in the world, and smart phones are near ubiquitous even in very poor places. You simply don't have the life experiences to make this criticism. i.e. PRIVILEGE
  - floatboth 5y ago
    Don't forget enough tech expertise to be able to use any of this crap in any "decentralized" way (if they all just use coinbase, where is that decentralization?)
joshmarlow 5y ago
I would question how much of the layperson's trust is due to bank regulation and how much is due to familiarity.
- brandonmenc 5y ago
  Probably nearly 100% due to regulation.

the_gastropod 5y ago

Is trust in bank records generally low? Especially in moderately modernized countries?

horsawlarway 5y ago

But that ledger isn't accurate. It's just distributed and difficult to change. I technically am the owner of (quite a few) bitcoin that were being processed by MtGox when they imploded. The wallet they were in at the time was emptied and no longer exists. I still receive the relevant court documents as the case continues still. As far as the ledger is concerned - they are no longer mine. --- So question to you: How do you reconcile the theft of my property with the ledger at this point? It turns out I have no ability to do so at all. The ledger is distributed and impossible to meaningfully change. So while I trust that the ledger can't be changed easily - I don't trust the ledger to accurately reflect ownership (it can only represent possession, not true ownership). So now what? Now it turns out I have to turn around and trust a central authority anyways! That authority being the government that is handling the prosecution of MtGox for fraud and theft.

voldacar 5y ago
>Now it turns out I have to turn around and trust a central authority anyways! That authority being the government that is handling the prosecution of MtGox for fraud and theft. In theory, DeFi can solve this. In practice it is hampered by poor UX and high transaction/gas fees. I think in the far future, the idea of ever having "your" assets in a wallet whose key you don't control will be seen as a ludicrous archaism. Sorry for your loss btw, that really sucks
- horsawlarway 5y ago
  > Sorry for your loss btw, that really sucks You and me both - 41 bitcoin at $4.17 a piece. Admittedly, if they hadn't been stolen I was planning on buying a 1/4 of weed with them, so I probably wouldn't be rich either way... shrug Fun story though - I can honestly say I spent more than USD 10 million in bitcoin on weed in college. Only about $500 at the time.
  - CTDOCodebases 5y ago
    You know they recovered 150000 Bitcoin from a cold wallet and are going to repay holders?

keyanp 5y ago

> the ability to trust that the ledger is accurate seems extremely valuable Maybe it "seems" valuable, but why exactly is it valuable? For what use case and which situation (besides crime)? I think the issue is that many don't see value in its "primary value proposition" because the features they want from banks are already there (stability, FDIC insurance). The only thing I personally see missing is no/low-fee instant transfers, but crypto hasn't solved that either (too slow and/or high fees).

bobmichael 5y ago
One IMO realistic use-case is providing a wealth preservation mechanism for people living in a country with a corrupt government that's experiencing hyperinflation, for example Lebanon.
- webmaven 5y ago
  > One IMO realistic use-case is providing a wealth preservation mechanism for people living in a country with a corrupt government that's experiencing hyperinflation, for example Lebanon. Sure, but (like it or not) that's covered under the umbrella of "crime".
  - munchler 5y ago
    In that case, I think the point is that some "crime" is ethically justified and worth supporting technologically. The OP's statement implies that all crime is bad.
    - webmaven 5y ago
      Sure. But it is worth asking if this particular channel of support is worth enabling all the other forms of criminality that use cryptocurrencies.
  - betwixthewires 5y ago
    Yep, but all that means is that "crime" is a meaningless distinction itself.

HelloNurse 5y ago

The article discusses pseudo-money, not generic decentralized databases. The main point is that even if a blockchain distributed database technically "works" it is highly inadequate for many practical money-like applications, particularly because trust has to include the real world.

AnIdiotOnTheNet 5y ago

In some context I would agree, there is theoretical value to a decentralized trustless ledger[0]. What I can't agree with, however, is that entries in a decentralized trustless ledger are inherently valuable as cryptocurrency proponents would like us to believe. The entries in the ledger have no inherent meaning, they're just a number associated with another number and the only reason anyone equates that with a monetary value is that, for the moment, they can find someone else[1] to give them money to shuffle those numbers around. I think that, at best, one could say that BTC is backed by hype and speculation. I am not convinced that is a useful basis for a currency[2]. This is in contrast to fiat currencies which their various governments offer guarantees that they will honor. NFTs, on the other hand, make even less sense to me. They seem like they are just cryptocurrency in disguise trying to fool people who otherwise question the concept of inherent value by claiming (falsely) that they are equivalent to ownership of digital goods[3]. [0] I have yet to hear a use case for which they are actually better than traditional alternatives, but I can imagine that one might exists. [1] read: greater fool. [2] Leaving aside all the energy wasted on PoW. [3] And that's before we get into my conviction that attempts to force artificial scarcity into a post-scarcity space are backward and perverted.

mitchdoogle 5y ago
Money in your bank account is just a number in a database somewhere.
- AnIdiotOnTheNet 5y ago
  You must have missed a significant portion of my post if you do not see why I do not believe those are equivalent. I'll reiterate: the number in the database represents an amount of tokens guaranteed to be accepted by the government of the country I live in. Cryptocurrency 'coins' carry no such guarantee, only the possibility of greater fools.

gfodor 5y ago

It turns out in history lots of people committed crimes where the evil party was not the criminal, but the state deeming their actions criminal.