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Because the creator of crypto concept never understood why there are centralized institutions in the first place. It was so naive to think the problem was the c

by mrjin 5y ago

Because the creator of crypto concept never understood why there are centralized institutions in the first place. It was so naive to think the problem was the correctness of the records and thus everyone should keep a copy of the global ledger!! I hardly if not never heard of any fraud that actually altered records held by the authority institutions and in fact, in all the fraud cases I know the records held by the authority institutions indeed correctly reflects what happened. So the problem was never about records but rather how to ensure the transaction happen as expected without having to know or trust the counter party. Of course in most of the cases the parties in a transaction don't know or trust each other and neither should they. So here come the neutral authority institutions which provides the instruments to allow the transactions to complete. So you can see that cryto is actually barking at the wrong tree and thus we again see authority institutions, exchanges or in this Ronin, emerged. Traditional institutions are heavily regulated and there is almost nothing for those so called exchanges.

bhewes 5y ago
People have been cooking the books forever. WorldCom or Tyco being examples.
- bena 5y ago
  But that isn't solved by the blockchain. These scandals were found out by using the very books they had. There's no such thing as an uncookable book. As long as I can lie about information going in, I can manipulate it. Even in the crypto space, you have wash trading and the like.
  - bhewes 5y ago
    Makes it easier to track with more then one copy of the ledger and immutability of entries (lies or not). Probably would not take three years to find the fraud as in the case of WorldCom. Though this is all spec as not been tested in real life.
    - dmitriid 5y ago
      > Makes it easier to track with more then one copy of the ledger and immutability of entries Yup. As all the scams have proven, it's easy to track and get the money back. And that's before we get into nuggets like this [1]: --- start quote --- A clever operator found a vault containing five Bored Ape NFTs, which had unclaimed $APE associated with them since they were locked up in the vault. They used a flash loan to purchase a large amount of the vault's token, redeem the five BAYC NFTs, claim the airdropped tokens, return the BAYC NFTs, sell back the tokens, and repay the loan, all in one transaction that cost them nothing but netted them 60,564 $APE, which they then swapped for 399 ETH ($1.1 million). People were somewhat split on whether this could be classed as a vulnerability in the $APE airdrop, since (as with many crypto hacks and scams) the person was operating completely within the rules set out in code. --- end quote --- [1] https://web3isgoinggreat.com/?id=2022-03-18-1 https://web3isgoinggreat.com/?id=2022-03-18-1
      - woojoo666 5y ago
        Reminds me of the guy who bought a pass for unlimited flights for $250,000 and cost the airline millions in losses[1]. This is not a vulnerability, and not a crypto problem either, just a poorly designed giveaway [1]: https://en.wikipedia.org/wiki/AAirpass#Profitability_investigations https://en.wikipedia.org/wiki/AAirpass#Profitability_investi...
cik2e 5y ago
>> Because the creator of crypto concept never understood why there are centralized institutions in the first place. You are totally missing the point. Having to rely upon central banks was the fundamental problem being solved. > 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. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. -Satoshi Nakamoto [0] Getting central banks out of the picture is original philosophical motivation for developing a digital currency. All of the "cashless society" convenience aspects are secondary features. Everything that follows, regarding ledgers/records/blockchain/double-spending/trust-less is what's needed to make a digital currency work without a centralized authorities that mint money and validate transactions. > A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990's. I hope it's obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we're trying a decentralized, non-trust-based system. -Satoshi Nakamoto [1] Next up, the irreversibility of transactions is a feature, not a bug. > For many purposes, reversal and arbitration is highly desirable, but there is no way anyone can compete with the arbitration provided by Visa and Mastercard, for they have network effects on their side, and they do a really good job of arbitration, at which they have vast experience, accumulated skills, wisdom, and good repute. So any new networked transaction system has to target the demand for final and irreversible transactions. [2] [0] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour... [1] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour... [2] https://satoshi.nakamotoinstitute.org/emails/cryptography/threads/1/#014865 https://satoshi.nakamotoinstitute.org/emails/cryptography/th...
- hypertele-Xii 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. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Replace "bank" with "cryptocurrency exchange" and the quote still applies verbatim.

by mrjin 5y ago

bhewes 5y ago

People have been cooking the books forever. WorldCom or Tyco being examples.

bena 5y ago
But that isn't solved by the blockchain. These scandals were found out by using the very books they had. There's no such thing as an uncookable book. As long as I can lie about information going in, I can manipulate it. Even in the crypto space, you have wash trading and the like.
- bhewes 5y ago
  Makes it easier to track with more then one copy of the ledger and immutability of entries (lies or not). Probably would not take three years to find the fraud as in the case of WorldCom. Though this is all spec as not been tested in real life.
  - dmitriid 5y ago
    > Makes it easier to track with more then one copy of the ledger and immutability of entries Yup. As all the scams have proven, it's easy to track and get the money back. And that's before we get into nuggets like this [1]: --- start quote --- A clever operator found a vault containing five Bored Ape NFTs, which had unclaimed $APE associated with them since they were locked up in the vault. They used a flash loan to purchase a large amount of the vault's token, redeem the five BAYC NFTs, claim the airdropped tokens, return the BAYC NFTs, sell back the tokens, and repay the loan, all in one transaction that cost them nothing but netted them 60,564 $APE, which they then swapped for 399 ETH ($1.1 million). People were somewhat split on whether this could be classed as a vulnerability in the $APE airdrop, since (as with many crypto hacks and scams) the person was operating completely within the rules set out in code. --- end quote --- [1] https://web3isgoinggreat.com/?id=2022-03-18-1 https://web3isgoinggreat.com/?id=2022-03-18-1
    - woojoo666 5y ago
      Reminds me of the guy who bought a pass for unlimited flights for $250,000 and cost the airline millions in losses[1]. This is not a vulnerability, and not a crypto problem either, just a poorly designed giveaway [1]: https://en.wikipedia.org/wiki/AAirpass#Profitability_investigations https://en.wikipedia.org/wiki/AAirpass#Profitability_investi...

cik2e 5y ago

>> Because the creator of crypto concept never understood why there are centralized institutions in the first place. You are totally missing the point. Having to rely upon central banks was the fundamental problem being solved. > 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. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. -Satoshi Nakamoto [0] Getting central banks out of the picture is original philosophical motivation for developing a digital currency. All of the "cashless society" convenience aspects are secondary features. Everything that follows, regarding ledgers/records/blockchain/double-spending/trust-less is what's needed to make a digital currency work without a centralized authorities that mint money and validate transactions. > A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990's. I hope it's obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we're trying a decentralized, non-trust-based system. -Satoshi Nakamoto [1] Next up, the irreversibility of transactions is a feature, not a bug. > For many purposes, reversal and arbitration is highly desirable, but there is no way anyone can compete with the arbitration provided by Visa and Mastercard, for they have network effects on their side, and they do a really good job of arbitration, at which they have vast experience, accumulated skills, wisdom, and good repute. So any new networked transaction system has to target the demand for final and irreversible transactions. [2] [0] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour... [1] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour... [2] https://satoshi.nakamotoinstitute.org/emails/cryptography/threads/1/#014865 https://satoshi.nakamotoinstitute.org/emails/cryptography/th...

hypertele-Xii 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. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Replace "bank" with "cryptocurrency exchange" and the quote still applies verbatim.