3 ms·

In the "not your keys, not your coins" setup, that trusted third party is the government, which gives you security against theft, kidnapping, burglary, etc, so

In the "not your keys, not your coins" setup, that trusted third party is the government, which gives you security against theft, kidnapping, burglary, etc, so you can keep your keys safe. Adding another trusted third party, like a gaming company, to the mix, to act as the custodian of who owns what, creates a much less-reliable / more-fragile private property system, as that custodian, at their own behest or that of a political faction who holds the reigns to the govenment, can deprive you of your control over the virtual asset. So to put it another way, trusted third parties can also be a threat to private property. The right balance between being protected by a trusted third party from theft and robbery, and being protected against a trusted third party stealing and robbing you, is the "not your keys, not your coins" setup, where the trusted third party only enforces rules against others trespassing your person or home, without having custody of your property on your behalf, so as to not have intimate knowledge of and control over everything you own.

lottin 4y ago
> So to put it another way, trusted third parties can also be a threat to private property. Of course, a corrupt government is a threat to private property, but it's also true that a non-corrupt government (or some other form of authority) is necessary to enforce property rights. Crypto-currency enthusiasts mistakenly believe that by preventing any authority from interfering with the blockchain they eliminate the threat to private property. Instead, by doing that, they make property rights impossible.
- CryptoPunk 4y ago
  I just explained how the blockchain far from "preventing any authority from interfering", relies on authorities to protect individuals from theft, kidnapping, burglary, etc, for people to be secure in their control of their keys. It strikes the right balance between being protected against the state stealing and robbing people, and people being protected by a state from theft and robbery. Unfortunately, anti-libertarian ideology, which is the dominant ideology in society now, cannot conceive of a need to maintain non-political checks on the power of the state, so the adoption of cryptocurrency, which imposes such checks, is very unsettling to its adherents.
  - lottin 4y ago
    You have not explained how the state enforces property rights on a blockchain. Consider this scenario: you forget your keys at a restaurant, where a stranger finds them and uses them to transfer your funds to their address. Since the transaction was not authorised by the rightful owner of the funds (you), the transaction isn't lawful. It violates your property rights as the owner of the funds. However there's nothing the state can do to reverse the transaction. Explain how the government enforces your property rights in these circumstances.
    - CryptoPunk 4y ago
      In the example you provided, the state can compel the thief to forfeit his private key, under pain of imprisonment. But there are other cases where the state is not able to intervene, because of the immutability of the blockchain protocol. The limits placed on the state's power is a beneficial trade-off, where the state loses some power to protect people's private property, while losing even more power to rob people's private property.
      - lottin 4y ago
        If the state can seize the thief's assets, it can also seize anybody else's assets. There's no way around it. And there's no trade-off. What are you talking about? Either the government can seize the assets or it cannot. The power that is needed to enforce property rights can also be used to violate these same rights.
        CryptoPunk 4y ago
        The state first needs to be informed of the theft, by the victim, to be able to seize the thief's assets. Moreover, there is a significant possibility that the state will fail in its attempt to seize the thief's assets. Both of these qualities of these respective situations are significantly different than a case of a virtual good held by a large trusted third party custodian. The latter means the state by default can easily discover who owns what, and is guaranteed to be able seize whatever it sets out to seize, at minimal enforcement and political cost. In other words, it's not a simple binary proposition, between the state being able to seize assets and not being able to. The power of the state to seize assets exists on a spectrum, with less power in the context of blockchains. I contend that this spot on the spectrum, that the blockchain places the state's power to confiscate and surveil on, is better for society at large.

lottin 4y ago

> So to put it another way, trusted third parties can also be a threat to private property. Of course, a corrupt government is a threat to private property, but it's also true that a non-corrupt government (or some other form of authority) is necessary to enforce property rights. Crypto-currency enthusiasts mistakenly believe that by preventing any authority from interfering with the blockchain they eliminate the threat to private property. Instead, by doing that, they make property rights impossible.

CryptoPunk 4y ago
I just explained how the blockchain far from "preventing any authority from interfering", relies on authorities to protect individuals from theft, kidnapping, burglary, etc, for people to be secure in their control of their keys. It strikes the right balance between being protected against the state stealing and robbing people, and people being protected by a state from theft and robbery. Unfortunately, anti-libertarian ideology, which is the dominant ideology in society now, cannot conceive of a need to maintain non-political checks on the power of the state, so the adoption of cryptocurrency, which imposes such checks, is very unsettling to its adherents.
- lottin 4y ago
  You have not explained how the state enforces property rights on a blockchain. Consider this scenario: you forget your keys at a restaurant, where a stranger finds them and uses them to transfer your funds to their address. Since the transaction was not authorised by the rightful owner of the funds (you), the transaction isn't lawful. It violates your property rights as the owner of the funds. However there's nothing the state can do to reverse the transaction. Explain how the government enforces your property rights in these circumstances.
  - CryptoPunk 4y ago
    In the example you provided, the state can compel the thief to forfeit his private key, under pain of imprisonment. But there are other cases where the state is not able to intervene, because of the immutability of the blockchain protocol. The limits placed on the state's power is a beneficial trade-off, where the state loses some power to protect people's private property, while losing even more power to rob people's private property.
    - lottin 4y ago
      If the state can seize the thief's assets, it can also seize anybody else's assets. There's no way around it. And there's no trade-off. What are you talking about? Either the government can seize the assets or it cannot. The power that is needed to enforce property rights can also be used to violate these same rights.
      - CryptoPunk 4y ago
        The state first needs to be informed of the theft, by the victim, to be able to seize the thief's assets. Moreover, there is a significant possibility that the state will fail in its attempt to seize the thief's assets. Both of these qualities of these respective situations are significantly different than a case of a virtual good held by a large trusted third party custodian. The latter means the state by default can easily discover who owns what, and is guaranteed to be able seize whatever it sets out to seize, at minimal enforcement and political cost. In other words, it's not a simple binary proposition, between the state being able to seize assets and not being able to. The power of the state to seize assets exists on a spectrum, with less power in the context of blockchains. I contend that this spot on the spectrum, that the blockchain places the state's power to confiscate and surveil on, is better for society at large.