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Sure, but if you want to qualify the "trust" to such minute detail, you can also do the same with traditional banking. I don't have to "trust" the banks, I have

• PretzelPirate 5y ago
  > Why should I believe that the quasi-experimental procedure you describe operates smoothly You don’t have to trust that the process works when you can see that it works by looking at the code and even become a validator/data provider yourself to ensure there’s always at least one honest participant (from your perspective). There was even uncertainty around the US forming a central bank with some worrying about the power it would have. Unless it would have been your approach already, not having confidence in L2s because they’re new technology isn’t a reason to dismiss them and decide to let the government manage all of your financial guarantees. > I don't have to "trust" the banks, I have legal guarantees and transparency mandates enforced by governments In this scenario, banks = L2 and government = L1. Are there scenarios where a bank (or other financial institution) can steal/withhold funds from you, or where they can censor your ability to transact with your own money? What is the recourse you have in those situations. What if the L1 itself uses its “right” to take your money through civil forfeiture or eminent domain? Are there cases where you may not trust the government (or where someone may not trust their government) because it is controlled by a small number of appointed or elected individuals? In that case, you can compare it to an L1/L2 blockchain setup where the L1 is controlled by a small number of validators (say 1000). That system would be easily corruptible (I can bribe 1k people) and I’d never treat it as a safe settlement system. Blockchain is all about your choice of who and what to trust. In the traditional financial system, some people will be fine with fully trusting their government and large financial institutions, whiles others will bury precious metals in the backyard and surround them with land mines. There’s all sorts of middle ground and blockchains let you choose where you want to sit on that spectrum.
  • spupe 5y ago
    > Are there scenarios where a bank (or other financial institution) can steal/withhold funds from you, or where they can censor your ability to transact with your own money? What is the recourse you have in those situations. What if the L1 itself uses its “right” to take your money through civil forfeiture or eminent domain? Eminent domain is about land use. Civil forfeiture and eminent domain are well described in the laws of all developed countries. And they exist for very good reasons, we don't want to get rid of this at all. The aim of the article is a critique of the potential for cryptocurrencies to be a true exchange medium equivalent to currencies as we have today. That is the illusion that feeds speculation and big dreams. If you are proposing that the use case for cryptos is individuals that have a reason to fear their own government, that leaves us criminals, political dissidents and wealthy oligarchs in third world countries. And it's still unclear whether they would be better served by storing their wealth in such a volatile and fraud-prone medium, versus actually digging a hole in the backyard as you describe. Or, you know, trusting another government/banking system like Switzerland like they all do.