5 ms·

So it's all trust based? We have to trust that all the governments of the world, who pinky promised to follow the rules, aren't secretly cheating internally an

So it's all trust based? We have to trust that all the governments of the world, who pinky promised to follow the rules, aren't secretly cheating internally and reporting false numbers to everyone else?

worik 5y ago
Yes. Money means nothing without trust. I do not think we can have civilisation without trust
- anonporridge 5y ago
  "The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." -- Satoshi Nakamoto
  - burnte 5y ago
    All currency is fiat. No medium of exchange that isn't strictly bartering is of arbitrary value.
    - deleted 5y ago
      [deleted]
    - anonporridge 5y ago
      Fiat currency here is obviously being used to refer to currencies created by government decree. Plenty of other moneys come into existence emergently, most obviously gold and silver without any authority mandating their use. Money is an emergent property of human society, not a gift handed down by our divinely established kings. The idea that money can only exist by government decree is patently absurd.
      - kasey_junk 5y ago
        Gold and Silver are not “money”. Money is almost by definition based on authority mandated value. It’s true that lots of money exists outside of government decree but equating any commodity to be money redefines the term.
        anonporridge 5y ago
        That's a dumb take. Money is whatever thing human society decides to collectively value in order to more easily trade goods and services across time and space. Money has been and continues to be many things, from government decreed currencies, to gold and silver, to cigarettes in prisons, to sacks of salt paid to Roman soldiers (etymology of 'salary'), to the colloquial "I owe you one". Money is just debt and favors and can take an infinite number of forms depending on the environment and needs of the people using it to more efficiently collaborate.
        joebob42 5y ago
        I think not quite just debt and favors. In my mind at least the key differentiator is that with money, I can take some money from Paul for some good or service, and expect to be able to get a similarly valuable good or service from basically anyone for that same money.
        anonporridge 5y ago
        It's transferable debt. If I give Paul a loaf of bread and in exchange he writes "Paul owes you one" on a piece of paper, that's money. I can trade that with someone else for some good or service and we'll have to haggle over how much "one" favor from Paul is actually worth. The dollar is just "the US government owes you one". How much is "one" worth? That's for the market to decide, and largely depends on how much real world goods and services there actually are along with how many "ones" the US government has issued. Although, before 1971, it was explicitly defined as "for every 35 'ones' you have, the US government owes you 1 oz of gold". Now, the value of "one" floats in the market and is constantly devalued by design. In recent days, the world's markets have decided that "the Russian government owes you one" isn't worth nearly as much as it did last week. Commodity money like gold or bitcoin don't rely on trust in a government's ability to pay it's debt, but rather trust that a sufficient number of people will always desire the commodity for whatever reason. That's still debt, but more a more indirect, coercion free form of debt. For gold, that reason is because it has a long history of established scarcity and has some utility as jewelry to signal wealth to others. For bitcoin, that reason is because it has theoretic perfect scarcity, can be instantly transferred to anyone on the planet with a phone, can be stored in your brain by memorizing the dozen words of your seed phrase, and many other fascinating programmable properties that have yet to be fully explored.
    - Natsu 5y ago
      Coinage evolved from standard weights for bars of useful metals.
      - morelisp 5y ago
        That's what ancient coinage is defined as, so I don't see how this is a useful framing. Shell money predates coinage and works a lot more like fiat money.
  - stjohnswarts 5y ago
    And yet countries have tamed his "anti-fiat" currency and make virtually all of the advantages of bitcoin useless. Bitcoin basically the walking dead right now.
mvkel 5y ago
Yep! This is the fundamental "disruption" blockchain tech introduced. It doesn't require trust.
- MereInterest 5y ago
  Any time a friend or relatives asks me to explain what cryptocurrency is, the trust aspect must be front and center, axiomatic to the entire ecosystem. There is not a single thing in the implementation that makes sense without first assuming a lack of trust amongst every single party. This is also why cryptocurrencies can never be made efficient, and will be a blight for as long as they exist. They are the logical extreme of the inefficiencies imposed by a low-trust society[0]. [0] https://en.wikipedia.org/wiki/High_trust_and_low_trust_societies https://en.wikipedia.org/wiki/High_trust_and_low_trust_socie...
  - anonymoushn 5y ago
    many PoS distributed slowish databases are currently deployed and process comparable transaction volume to credit card networks while emitting less carbon.
    - zrail 5y ago
      > process comparable transaction volume to credit card networks Please cite your sources. edit for people finding this later: Visa and MasterCard do on the order of one billion transactions per day combined. As far as I can tell, Ethereum (proof of work as of today) does about a million per day and Avalance (one of the top 3 proof of stake networks according to Wikipedia) does about a million per day. That's literally one thousand times fewer transactions than the top two card networks. Three orders of magnitude.
      - anonymoushn 5y ago
        Visa's fact sheet[0] says that they processed about 6500 transactions per second on average for a recent 12-month period. A Solana dashboard[1] says that Solana processed about 2700 transactions per second on average for a recent period of a few hours. If we would like to pick nits, we could say that the Visa transactions are not comparable to the Solana transactions because Solana transactions let users run complex programs that Visa does not, or that Solana transactions are not comparable to Visa transactions because nobody accepts SPL USDC and everyone pays out the nose to accept Visa, or that 2700 is a lot less than 6500, or that the 6500 number is misleading because the load should have peaks, and do we really know how much peak load Solana can handle, or that only about 1/3 of the Solana transactions are actual useful stuff for users and the rest are consensus messages. But my point is that these things are only "too slow compared to Visa" by a reasonably small factor now, like 6500 vs 900. Thanks. 0: https://usa.visa.com/dam/VCOM/global/about-visa/documents/aboutvisafactsheet.pdf https://usa.visa.com/dam/VCOM/global/about-visa/documents/ab... 1: https://solanabeach.io/ https://solanabeach.io/
temp12192021 5y ago
Pretty much all human interaction is trust based.
- anonporridge 5y ago
  Except the scientific process, which focuses on working as hard as you can to prove the other guy's work is wrong. Only if you can't do that do you start to trust and build off it. This scientific process of embedded mutual distrust is one of the most successful, generative, and important institutions humanity has ever created.
  - temp12192021 5y ago
    With unlimited resources, sure. But most scientists trust the peer review process and base their work on their own ideas and the ideas/results they read in journals. In short, scientists trust other scientists.
    - anonporridge 5y ago
      Sure, trust is a shortcut we use to not do hard work, and free our time to do more useful things that constantly check on each other. That's fine. But it is critically important that we can periodically check in and verify that our trust is still well placed, and not have systems that can allow someone to massively profit from violating people's trust. The stronger those foundations and verifications of trust are, the better off we all are as a society.
      - temp12192021 5y ago
        No, it's absolutely absurd that you expect every scientist to independently (and recursively) verify every result their work is based on.
        anonporridge 5y ago
        Why are you putting words in my mouth? I never suggested that every scientist independently and recursively verify every piece of previous work. Work and verification of work builds on each other. And every once in a while, we have a major milestone that verifies that much of the work that went into accomplishing the milestone (such as the moon landing) is generally correct. That's how we teach science to people. It's not just "here's the math and the science we know and it's totally right, just trust us bro". We say "here's the math and science we think is right, now let's do experiments along the way to periodically verify that the things we're teaching you actually generate real predictions that match reality". Science is all about being suspicious and verifying. Many (if not all) of the greatest scientific discoveries came from people questioning the established "truth".
pgwhalen 5y ago
Yes, everything meaningful in society is trust based. I really hope crypto maximalists have made it this deep into the thread.
- anonporridge 5y ago
  You're responding to a bitcoin maximalist my friend ;)
- baby 5y ago
  Not sure what you mean, but I think that’s why crypto is so interesting: you have this public ledger that is auditable and where safety is maintained by consensus.
lmohseni 5y ago
Here’s the thing though: any one who works with code knows that you cannot trust code. Code is as tricky and ambiguous as the humans who write it.
sealthedeal 5y ago
Yes, it’s all trust based. I.e. if some random bank in Iowa decides to just create $10,000,000 out of thin air, the Fed will eventually find out and then they would lose banking license, lots of penalties. Same goes for countries. If a countries fed just creates new money out of no where and acts as if it’s always existed they risk everything. I.e. losing access to the global banking network, insane currency fluctuations, use your imagination. The premise is the same though. Our entire financial system as it stands today is based off of trust with auditing oversight and harsh penalties for breaking that trust.

worik 5y ago

Yes. Money means nothing without trust. I do not think we can have civilisation without trust

anonporridge 5y ago
"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." -- Satoshi Nakamoto
- burnte 5y ago
  All currency is fiat. No medium of exchange that isn't strictly bartering is of arbitrary value.
  - deleted 5y ago
    [deleted]
  - anonporridge 5y ago
    Fiat currency here is obviously being used to refer to currencies created by government decree. Plenty of other moneys come into existence emergently, most obviously gold and silver without any authority mandating their use. Money is an emergent property of human society, not a gift handed down by our divinely established kings. The idea that money can only exist by government decree is patently absurd.
    - kasey_junk 5y ago
      Gold and Silver are not “money”. Money is almost by definition based on authority mandated value. It’s true that lots of money exists outside of government decree but equating any commodity to be money redefines the term.
      - anonporridge 5y ago
        That's a dumb take. Money is whatever thing human society decides to collectively value in order to more easily trade goods and services across time and space. Money has been and continues to be many things, from government decreed currencies, to gold and silver, to cigarettes in prisons, to sacks of salt paid to Roman soldiers (etymology of 'salary'), to the colloquial "I owe you one". Money is just debt and favors and can take an infinite number of forms depending on the environment and needs of the people using it to more efficiently collaborate.
        joebob42 5y ago
        I think not quite just debt and favors. In my mind at least the key differentiator is that with money, I can take some money from Paul for some good or service, and expect to be able to get a similarly valuable good or service from basically anyone for that same money.
        anonporridge 5y ago
        It's transferable debt. If I give Paul a loaf of bread and in exchange he writes "Paul owes you one" on a piece of paper, that's money. I can trade that with someone else for some good or service and we'll have to haggle over how much "one" favor from Paul is actually worth. The dollar is just "the US government owes you one". How much is "one" worth? That's for the market to decide, and largely depends on how much real world goods and services there actually are along with how many "ones" the US government has issued. Although, before 1971, it was explicitly defined as "for every 35 'ones' you have, the US government owes you 1 oz of gold". Now, the value of "one" floats in the market and is constantly devalued by design. In recent days, the world's markets have decided that "the Russian government owes you one" isn't worth nearly as much as it did last week. Commodity money like gold or bitcoin don't rely on trust in a government's ability to pay it's debt, but rather trust that a sufficient number of people will always desire the commodity for whatever reason. That's still debt, but more a more indirect, coercion free form of debt. For gold, that reason is because it has a long history of established scarcity and has some utility as jewelry to signal wealth to others. For bitcoin, that reason is because it has theoretic perfect scarcity, can be instantly transferred to anyone on the planet with a phone, can be stored in your brain by memorizing the dozen words of your seed phrase, and many other fascinating programmable properties that have yet to be fully explored.
  - Natsu 5y ago
    Coinage evolved from standard weights for bars of useful metals.
    - morelisp 5y ago
      That's what ancient coinage is defined as, so I don't see how this is a useful framing. Shell money predates coinage and works a lot more like fiat money.
- stjohnswarts 5y ago
  And yet countries have tamed his "anti-fiat" currency and make virtually all of the advantages of bitcoin useless. Bitcoin basically the walking dead right now.

mvkel 5y ago

Yep! This is the fundamental "disruption" blockchain tech introduced. It doesn't require trust.

MereInterest 5y ago
Any time a friend or relatives asks me to explain what cryptocurrency is, the trust aspect must be front and center, axiomatic to the entire ecosystem. There is not a single thing in the implementation that makes sense without first assuming a lack of trust amongst every single party. This is also why cryptocurrencies can never be made efficient, and will be a blight for as long as they exist. They are the logical extreme of the inefficiencies imposed by a low-trust society[0]. [0] https://en.wikipedia.org/wiki/High_trust_and_low_trust_societies https://en.wikipedia.org/wiki/High_trust_and_low_trust_socie...
- anonymoushn 5y ago
  many PoS distributed slowish databases are currently deployed and process comparable transaction volume to credit card networks while emitting less carbon.
  - zrail 5y ago
    > process comparable transaction volume to credit card networks Please cite your sources. edit for people finding this later: Visa and MasterCard do on the order of one billion transactions per day combined. As far as I can tell, Ethereum (proof of work as of today) does about a million per day and Avalance (one of the top 3 proof of stake networks according to Wikipedia) does about a million per day. That's literally one thousand times fewer transactions than the top two card networks. Three orders of magnitude.
    - anonymoushn 5y ago
      Visa's fact sheet[0] says that they processed about 6500 transactions per second on average for a recent 12-month period. A Solana dashboard[1] says that Solana processed about 2700 transactions per second on average for a recent period of a few hours. If we would like to pick nits, we could say that the Visa transactions are not comparable to the Solana transactions because Solana transactions let users run complex programs that Visa does not, or that Solana transactions are not comparable to Visa transactions because nobody accepts SPL USDC and everyone pays out the nose to accept Visa, or that 2700 is a lot less than 6500, or that the 6500 number is misleading because the load should have peaks, and do we really know how much peak load Solana can handle, or that only about 1/3 of the Solana transactions are actual useful stuff for users and the rest are consensus messages. But my point is that these things are only "too slow compared to Visa" by a reasonably small factor now, like 6500 vs 900. Thanks. 0: https://usa.visa.com/dam/VCOM/global/about-visa/documents/aboutvisafactsheet.pdf https://usa.visa.com/dam/VCOM/global/about-visa/documents/ab... 1: https://solanabeach.io/ https://solanabeach.io/

temp12192021 5y ago

Pretty much all human interaction is trust based.

anonporridge 5y ago
Except the scientific process, which focuses on working as hard as you can to prove the other guy's work is wrong. Only if you can't do that do you start to trust and build off it. This scientific process of embedded mutual distrust is one of the most successful, generative, and important institutions humanity has ever created.
- temp12192021 5y ago
  With unlimited resources, sure. But most scientists trust the peer review process and base their work on their own ideas and the ideas/results they read in journals. In short, scientists trust other scientists.
  - anonporridge 5y ago
    Sure, trust is a shortcut we use to not do hard work, and free our time to do more useful things that constantly check on each other. That's fine. But it is critically important that we can periodically check in and verify that our trust is still well placed, and not have systems that can allow someone to massively profit from violating people's trust. The stronger those foundations and verifications of trust are, the better off we all are as a society.
    - temp12192021 5y ago
      No, it's absolutely absurd that you expect every scientist to independently (and recursively) verify every result their work is based on.
      - anonporridge 5y ago
        Why are you putting words in my mouth? I never suggested that every scientist independently and recursively verify every piece of previous work. Work and verification of work builds on each other. And every once in a while, we have a major milestone that verifies that much of the work that went into accomplishing the milestone (such as the moon landing) is generally correct. That's how we teach science to people. It's not just "here's the math and the science we know and it's totally right, just trust us bro". We say "here's the math and science we think is right, now let's do experiments along the way to periodically verify that the things we're teaching you actually generate real predictions that match reality". Science is all about being suspicious and verifying. Many (if not all) of the greatest scientific discoveries came from people questioning the established "truth".

pgwhalen 5y ago

Yes, everything meaningful in society is trust based. I really hope crypto maximalists have made it this deep into the thread.

anonporridge 5y ago
You're responding to a bitcoin maximalist my friend ;)
baby 5y ago
Not sure what you mean, but I think that’s why crypto is so interesting: you have this public ledger that is auditable and where safety is maintained by consensus.

lmohseni 5y ago

Here’s the thing though: any one who works with code knows that you cannot trust code. Code is as tricky and ambiguous as the humans who write it.

sealthedeal 5y ago

Yes, it’s all trust based. I.e. if some random bank in Iowa decides to just create $10,000,000 out of thin air, the Fed will eventually find out and then they would lose banking license, lots of penalties. Same goes for countries. If a countries fed just creates new money out of no where and acts as if it’s always existed they risk everything. I.e. losing access to the global banking network, insane currency fluctuations, use your imagination. The premise is the same though. Our entire financial system as it stands today is based off of trust with auditing oversight and harsh penalties for breaking that trust.