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That's revisionist history, smart contracts did not come until way later. And smart contracts are also not anything remarkable, nor are they trusted or or even

That's revisionist history, smart contracts did not come until way later. And smart contracts are also not anything remarkable, nor are they trusted or or even desirable. They are the equivalent to stored procedures in any other database, except bugs in them allow people to steal money straight out of your bank account with no recourse. This is why these discussions of blockchains are so frustrating to me. Do you think your bank couldn't allow you to upload random code into their internal database? On a purely technical level of course they could, it wouldn't even be that hard. But there are many, many reasons why they shouldn't and they don't.

Daviey 5y ago
Why should your bank get to decide: - Which code you can run on your own funds - Decide which interfaces you can use to manage your funds - Where you are allowed to send it I'm quite ok with extended checks with crypto on/off ramps, but once it is in the network, I want control of my funds. [I say this as someone that has spent the last decade working in finance]
- UncleMeat 5y ago
  A big problem is that if you can run arbitrary code on your transactions, other people can too. This creates the financialization of everything at best. At worst, your access to basic systems is based on your past behavior.
- throwaway82652 5y ago
  Because that is the entire point of keeping your money in a bank. Those things are all there to prevent other people from defrauding you. In a sense that's also why banks allow you to store money there "for free". This is the service you paid for. And even if you disagree with that premise, the solution is still not smart contracts because you also don't control those. This is more of the same frustrating conversation. You've named a problem and the solution is assumed to be blockchains but the dots don't connect at all. Don't think that finance companies can't get caught up in a market mania, because we know by now that they're often the worst victims.
  - Daviey 5y ago
    I do control which smart contracts I interact with, based on my own tolerance to risk. I'm not allowed to do that with traditional traditional banking, but sure - if you want that product (and don't want the control), I can see why DeFi doesn't have a place in your life.
    - throwaway82652 5y ago
      >I do control which smart contracts I interact with No, you don't. This is egregiously wrong and is a blatant misunderstanding of distributed systems. In a typical cryptocurrency blockchain, it's the miners that have control over which smart contracts you interact with. >if you want that product (and don't want the control) This is also a bad assumption. I actually do want this product and the control. However cryptocurrency and defi can never actually provide it because the entire concept and marketing of it is flawed from the beginning. Yes, it's that bad. That's why it's so disappointing to me to see finance people get caught up with it. There is a comment below about "people are trying to figure out what works" when the reality is that it will never work. You fundamentally can't do these things with a distributed system built this way.
      - Daviey 5y ago
        Yes, the more I learn the more I learn I don't know. However, I've worked in infrastructure, security and finance (institutional & retail banking, funds and insurance) for the majority of career. I'm also currently doing a doctoral thesis focussed on smart contract security, so I do know a bit about this. The whole premise of blockchain is execution of intent, in an untrusted environment. The threat you are concerned about is collusion, and the best control against this is further decentralization and scale. Proof-of-Stake (and many DAO's), do provide more assurance against malicious actors by validators risking their own stake if they try malicious activity. Ultimately, I am confident that the "dark forest" will give us much more security and transparency than the current closed/centralised system. You seem quite entrenched in your view, but I'd like to ask. What would it take to change your view? If the answer is nothing, can you really claim to be thinking about this critically?
- jdlshore 5y ago
  That’s easy: safety and regulation. I am happy for the bank to control the code which determines how my money moves, because bugs are a thing, all code has bugs, and if the code that moves my money has bugs, the bank is responsible and I get my money back. I’m happy for my bank to control the interface, because fraud is a thing and the interfaces they offer are sufficient for my needs. Besides, my real money management is in financial planning, and I have spreadsheets under my own control for that. I’m happy for the bank to enact restrictions (imposed by my government) on where I send my money because global politics are a thing and monetary sanctions are a powerful alternative to war. In short, the benefits of centralized control have far outweighed the negatives.
captn3m0 5y ago
Interesting to note that "upload your code to your bank" is exactly how some algorithmic trading firms work already.
- throwaway82652 5y ago
  Yes, but the problem is those are actually well established and useful so none of these VCs caught up in this crypto stuff want to talk about them. It's not even a new idea nor does it require blockchains. It's made strictly worse by blockchains, the only thing that does is add another unnecessary layer of middlemen.
- Daviey 5y ago
  And the inverse, many clients need to install proprietary closed source hardware (within their network) to interact with the institutions.
miracle2k 5y ago
> That's revisionist history, smart contracts did not come until way later. Smart Contracts were mentioned by Nick Szabo in 1997 (https://journals.uic.edu/ojs/index.php/fm/article/view/548 https://journals.uic.edu/ojs/index.php/fm/article/view/548). Satoshi literally added a scripting language to Bitcoin (https://en.bitcoin.it/wiki/Script https://en.bitcoin.it/wiki/Script). > Do you think your bank couldn't allow you to upload random code into their internal database? But there are many, many reasons why they shouldn't and they don't. Yes I would like that ability please. What are the reasons they don't? Also, you are seemingly making the mistake of getting lost in technological minutiae; yes, you can call it a stored procedure. In the end, it is all just zeros and ones being shifted around anyway. The financial network created on Ethereum is in key ways, in its /outcome/, fundamentally different from the existing bank network. It is one where an Iranian teenager can design a financial protocol on equal terms to Goldman Sachs. This is a desirable feature. This design brings with it other consequences. Transfers are hard to reverse; you can consider that a benefit or a flaw, or either at different times. It is simply part of the the nature of the thing.
- throwaway82652 5y ago
  >Smart Contracts were mentioned by Nick Szabo in 1997 And the term and concept were not popularized until Ethereum in 2014. I never heard anyone commonly refer to bitcoin scripting as smart contracts. >Yes I would like that ability please. What are the reasons they don't? There are some already mentioned in other comments here so I won't repeat them. If you want a full response, you should ask them. But if you must know, a lot of existing trading platforms and payment systems do already give you this ability in some form, no blockchains are required at all. >in its /outcome/, fundamentally different from the existing bank network. It is one where an Iranian teenager can design a financial protocol on equal terms to Goldman Sachs. This is a desirable feature. I'm sorry but no, this also doesn't make any sense and there are no desirable features or different outcomes here. From a starting position the main difference between the teenager and Goldman Sachs is the teenager doesn't have billions of dollars in capital. Everything else is technical minutiae. If the suggestion here is that the teenager can somehow take out an unsecured billion dollar loan in ETH, that's not a desirable or even functional financial system at all. I mean seriously here. If you want to make real investments in businesses run by teenagers and other young entrepreneurs I think that's great. You don't need to blockchains to do that. They provide no useful features. I could go into extreme detail here as to why this is the case. >This design brings with it other consequences. It is simply part of the the nature of the thing. No it does not and no it is not, this is more terribly wrong mythical thinking that I hear people repeating. The design is not set in stone and there is no "nature" to it. Like any money system, it is designed by humans to further a certain goal and it absolutely does not have to have any particular consequences. It doesn't have to make fraud as easy as it does, but it was purposely designed to be that way because the goal is explicitly to avoid regulations.

Daviey 5y ago

Why should your bank get to decide: - Which code you can run on your own funds - Decide which interfaces you can use to manage your funds - Where you are allowed to send it I'm quite ok with extended checks with crypto on/off ramps, but once it is in the network, I want control of my funds. [I say this as someone that has spent the last decade working in finance]

UncleMeat 5y ago
A big problem is that if you can run arbitrary code on your transactions, other people can too. This creates the financialization of everything at best. At worst, your access to basic systems is based on your past behavior.
throwaway82652 5y ago
Because that is the entire point of keeping your money in a bank. Those things are all there to prevent other people from defrauding you. In a sense that's also why banks allow you to store money there "for free". This is the service you paid for. And even if you disagree with that premise, the solution is still not smart contracts because you also don't control those. This is more of the same frustrating conversation. You've named a problem and the solution is assumed to be blockchains but the dots don't connect at all. Don't think that finance companies can't get caught up in a market mania, because we know by now that they're often the worst victims.
- Daviey 5y ago
  I do control which smart contracts I interact with, based on my own tolerance to risk. I'm not allowed to do that with traditional traditional banking, but sure - if you want that product (and don't want the control), I can see why DeFi doesn't have a place in your life.
  - throwaway82652 5y ago
    >I do control which smart contracts I interact with No, you don't. This is egregiously wrong and is a blatant misunderstanding of distributed systems. In a typical cryptocurrency blockchain, it's the miners that have control over which smart contracts you interact with. >if you want that product (and don't want the control) This is also a bad assumption. I actually do want this product and the control. However cryptocurrency and defi can never actually provide it because the entire concept and marketing of it is flawed from the beginning. Yes, it's that bad. That's why it's so disappointing to me to see finance people get caught up with it. There is a comment below about "people are trying to figure out what works" when the reality is that it will never work. You fundamentally can't do these things with a distributed system built this way.
    - Daviey 5y ago
      Yes, the more I learn the more I learn I don't know. However, I've worked in infrastructure, security and finance (institutional & retail banking, funds and insurance) for the majority of career. I'm also currently doing a doctoral thesis focussed on smart contract security, so I do know a bit about this. The whole premise of blockchain is execution of intent, in an untrusted environment. The threat you are concerned about is collusion, and the best control against this is further decentralization and scale. Proof-of-Stake (and many DAO's), do provide more assurance against malicious actors by validators risking their own stake if they try malicious activity. Ultimately, I am confident that the "dark forest" will give us much more security and transparency than the current closed/centralised system. You seem quite entrenched in your view, but I'd like to ask. What would it take to change your view? If the answer is nothing, can you really claim to be thinking about this critically?
jdlshore 5y ago
That’s easy: safety and regulation. I am happy for the bank to control the code which determines how my money moves, because bugs are a thing, all code has bugs, and if the code that moves my money has bugs, the bank is responsible and I get my money back. I’m happy for my bank to control the interface, because fraud is a thing and the interfaces they offer are sufficient for my needs. Besides, my real money management is in financial planning, and I have spreadsheets under my own control for that. I’m happy for the bank to enact restrictions (imposed by my government) on where I send my money because global politics are a thing and monetary sanctions are a powerful alternative to war. In short, the benefits of centralized control have far outweighed the negatives.

captn3m0 5y ago

Interesting to note that "upload your code to your bank" is exactly how some algorithmic trading firms work already.

throwaway82652 5y ago
Yes, but the problem is those are actually well established and useful so none of these VCs caught up in this crypto stuff want to talk about them. It's not even a new idea nor does it require blockchains. It's made strictly worse by blockchains, the only thing that does is add another unnecessary layer of middlemen.
Daviey 5y ago
And the inverse, many clients need to install proprietary closed source hardware (within their network) to interact with the institutions.

miracle2k 5y ago

> That's revisionist history, smart contracts did not come until way later. Smart Contracts were mentioned by Nick Szabo in 1997 (https://journals.uic.edu/ojs/index.php/fm/article/view/548 https://journals.uic.edu/ojs/index.php/fm/article/view/548). Satoshi literally added a scripting language to Bitcoin (https://en.bitcoin.it/wiki/Script https://en.bitcoin.it/wiki/Script). > Do you think your bank couldn't allow you to upload random code into their internal database? But there are many, many reasons why they shouldn't and they don't. Yes I would like that ability please. What are the reasons they don't? Also, you are seemingly making the mistake of getting lost in technological minutiae; yes, you can call it a stored procedure. In the end, it is all just zeros and ones being shifted around anyway. The financial network created on Ethereum is in key ways, in its /outcome/, fundamentally different from the existing bank network. It is one where an Iranian teenager can design a financial protocol on equal terms to Goldman Sachs. This is a desirable feature. This design brings with it other consequences. Transfers are hard to reverse; you can consider that a benefit or a flaw, or either at different times. It is simply part of the the nature of the thing.

throwaway82652 5y ago
>Smart Contracts were mentioned by Nick Szabo in 1997 And the term and concept were not popularized until Ethereum in 2014. I never heard anyone commonly refer to bitcoin scripting as smart contracts. >Yes I would like that ability please. What are the reasons they don't? There are some already mentioned in other comments here so I won't repeat them. If you want a full response, you should ask them. But if you must know, a lot of existing trading platforms and payment systems do already give you this ability in some form, no blockchains are required at all. >in its /outcome/, fundamentally different from the existing bank network. It is one where an Iranian teenager can design a financial protocol on equal terms to Goldman Sachs. This is a desirable feature. I'm sorry but no, this also doesn't make any sense and there are no desirable features or different outcomes here. From a starting position the main difference between the teenager and Goldman Sachs is the teenager doesn't have billions of dollars in capital. Everything else is technical minutiae. If the suggestion here is that the teenager can somehow take out an unsecured billion dollar loan in ETH, that's not a desirable or even functional financial system at all. I mean seriously here. If you want to make real investments in businesses run by teenagers and other young entrepreneurs I think that's great. You don't need to blockchains to do that. They provide no useful features. I could go into extreme detail here as to why this is the case. >This design brings with it other consequences. It is simply part of the the nature of the thing. No it does not and no it is not, this is more terribly wrong mythical thinking that I hear people repeating. The design is not set in stone and there is no "nature" to it. Like any money system, it is designed by humans to further a certain goal and it absolutely does not have to have any particular consequences. It doesn't have to make fraud as easy as it does, but it was purposely designed to be that way because the goal is explicitly to avoid regulations.