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I'm very sceptical of blockchain (though I've been in crypto off and on since 2013) but most of the arguments in this article are non-sensical. For example: >

I'm very sceptical of blockchain (though I've been in crypto off and on since 2013) but most of the arguments in this article are non-sensical. For example: > But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer. I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. > Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans. However, in the world of blockchain there is no human supervisory authority. This is a well-known, probably inevitable effect of what is probably the main point of using blockchains. Clearly people feel it is a price worth paying. I do agree that 99% of blockchain usage is pointless at best, but that is really a different question. It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea.

chemmail 4y ago
Yeah, sounds like this guy needs to just not use the internet or computers at all. That is where almost all scams originate. Don't bother even talking to people. When the internet was created, no one knew the power. Maybe some day soon we will be able to employ this tech to further humanity.
isodev 4y ago
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. These features and capabilities are usually implied for financial systems. It's really just common sense.
- Cthulhu_ 4y ago
  I mean when you put it that way, blockchains aren't really financial systems in the first place.
- Grustaf 4y ago
  Yes, it is, in the traditional financial system. Crypto is an attempt at building an alternative, with different trade-offs. You might not agree with the trade-offs, most people don't - I mostly don't, but it's definitely a choice, it's not inevitable.
- ohthehugemanate 4y ago
  to be clear about the semantics here: cash doesn't count as a "financial system", right? Blockchain currencies are basically counterfeit-proof, digital cash with an audit trail. comparing them to credit cards is an apples:oranges comparison.
  - alpaca128 4y ago
    With cash that limitation exists because there isn't really an alternative. That doesn't mean we should use it as example, being able to undo mistakes is a valuable feature. That's also one of the reasons most online accounts aren't E2E-encrypted, most people prefer having a way to reset their password/key over losing all access to data.
  - isodev 4y ago
    Sorry if my comment wasn't clear - I wasn't trying to compare cash to credit cards, of course. Regulation around "cash" transactions are quite strict here (including the definition of a verbal contract etc.), so unless one is engaged in "under the counter" activities, you can benefit from similar protections. Of course, in contrast to credit cards and online transactions, recovery from cash fraud/mistakes is more complicated since you'd need to contact the authorities/the other party yourself and deal with the whole process "manually" (instead of just clicking a button in your bank's web portal and letting them take care of it)
- deleted 4y ago
  [deleted]
themacguffinman 4y ago
If blockchain proponents want to replace the existing system that does protect against human-factor scams and frauds (ie. the current financial system that lets governments and institutions control it to enforce the law) then it's going to be part of the discussion whether they like it or not.
- Grustaf 4y ago
  Of course it should be part of the discussion, but the article seems to think that crypto people are unaware of it. They're not, they just think it's worth it.
  - themacguffinman 4y ago
    It doesn't matter if crypto advocates are aware of it, these arguments are for other people to understand. The argument is well-known because it's incredibly valid and common for people to want protection against those problems of fraud. When people point out that you're not wearing any pants, "uh I know I'm not wearing any pants" doesn't really address the relevant concern.
    - Grustaf 4y ago
      Of course it does. It's like saying "but Uber doesn't own any cars, they can't run a taxi service". There are pros and cons with their approach, and you might prefer the traditional way, but they purposely chose another way.
      - themacguffinman 4y ago
        Clever reframing, but when you choose such a different way with clear downsides, it's on you to justify it. It would have been the responsibility of the founders of Uber to explain to stakeholders why they were justified in running a taxi service without owning cars. Just like if I point out that you're not wearing pants, I'm generally expecting the response to explain why that's justified for me to continue standing next to an apparently pantless lunatic instead of telling me that you already have. There's no part of the article that ever said crypto people aren't aware of this problem, it pointed out the problem. It's a problem. "I have intentionally chosen a path that runs into this glaring problem" is not helpful or interesting at all. If you have nothing more to say beyond "they know", then I guess I don't have anything more to say either.
JohnGB 4y ago
> Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans. This "could" happen, but in practice it rarely happens because the money has moved on as soon as it hits the account. Additionally, for many types of fraud, there has to be an actual court order to get a bank to take action. So the argument is predicated on a false assumption.
- jiveturkey 4y ago
  Actually reversals frequently happen. For example, a multi day delay is built into ACH, partly for this exact reason. Also, with credit cards and some flavors of bank transactions you as the end user are protected against fraud, even if (yes)the money has already moved on, you are made whole. The loss is absorbed by the bank. By absorbed, of course I mean you've paid for that service with various fees which amount to a kind of insurance. (Nothing really comes "for free".) But yes, there are plenty of other types of transactions, like gift card scams, that you would not be made whole for.
- the_mitsuhiko 4y ago
  I cannot judge the American banking situation but I can attest to the fact that transactions are reverted constantly in Europe. The reason for this is the SEPA direct debit system where debitors can directly charge an account via SEPA direct debit and fraud does happen. For that reason banks are very happy to reverse the transaction and it's not at all a unique situation.
- Grustaf 4y ago
  I guess it differs by geography, but here in Sweden, when I accidentally transferred €10k to an old account that didn't exist anymore I wasn't the least bit concerned that the money would get lost. I would have been extremely surprised if they hadn't given me the money back. That's the advantage of a high trust society. Heck, once an ATM retracted my cash because I wasn't quick enough, I called the bank and they just credited my account with the €300 or whatever it was. No questions asked.
- knorker 4y ago
  Do you have a source for that? In my experience transfers are pretty much always successfully reversed. Hell, when one of the PirateBay founders hacked a bank and tried to rob it they actually reversed/prevented most of that, even though he had full access to the bank mainframe. He only managed to extract a couple of thousand that his accomplices took out of an ATM, IIRC.
okintheory 4y ago
It seems a bit off to assert that "people feel it is a price worth paying" when almost all purchases online are made with credit cards which have some protections against fraud, and almost none are made with blockchains in comparison. It seems like so far, most people don't think it's a price worth paying?
- y4mi 4y ago
  I'd go one step further: the few legal purchases done with crypto currencies are mostly done by people unaware they're paying that price
  - jychang 4y ago
    Purchases, perhaps. Money transfer, definitely not. Bitcoin is a pretty cheap way to transfer money across international borders. A person probably wouldn't use bitcoin at the grocery store to buy milk, but it works better for sending grandma (located in a third world country) a bunch of money.
    - HWR_14 4y ago
      Bitcoin is still more expensive than the banking system among first-world countries. How much can it be worth to send money to third-world countries of no banks are willing to set up there?
      - Grustaf 4y ago
        You could always use the crypto currency as the store of value there, just as people did with MPesa. You don't necessarily ever have to convert it to a local currency.
        dmurray 4y ago
        MPesa doesn't store your money in some kind of private currency with a fluctuating value. If you're thinking of it as storing "minutes" as some American cellphone providers would, that's not right. You deposit and withdraw Kenyan Shillings, or your local equivalent, just as if it were a shilling-denominated bank account.
Cthulhu_ 4y ago
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. In a sense, it admits that traditional banking has the advantage in that regard because it has things like traceability, reversibility, insurance, accountability, and legal guarantees. These have been put aside on purpose in the crypto market, and while I think I understand the whys and wherefores, I don't see giving up these consumer protections is worth it. Well, not to me anyway, but I'm not getting rich off of crypto.
- Grustaf 4y ago
  For most people it isn't. Maybe at some point it will, if governments let the money printer brr even more, or if we see more of what Canada did. If that is amplified by say 10x, I think a lot of people would start to reconsider.
  - pm90 4y ago
    At no point will people deliberately give up consumer protections they have today. If an economy is undergoing extreme hyperinflation, the consumer protections would have likely already been gone at that point.
    - cmoscoso 4y ago
    - Grustaf 4y ago
      What does it matter if people "give up the protections" or if they disappear? The result could still be that they flock to crypto, which is what we're discussing. But it's not a binary question. Some people are already "giving up consumer protections" in some cases. And not just by buying crypto. Ordering stuff from Wish is also a gamble.
  - nicbou 4y ago
    If the money printer runs for long enough, we might get to see the sort of volatility that's a daily occurence with crypto. ...so therefore crypto is better? And if you're afraid of cancel culture coming to a financial instrument near you, why would you want to put all your financial transactions on a permanent record? Sure, it's pseudonymous, but your entire purchase history is one hell of a fingerprint. Traditional currency has a perfectly anonymous payment method: send cash.
nottorp 4y ago
> > But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer. > I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. The problem is any payment system DOES need that. And the competition has it. Abstract goals without connection to real life needs are nice. Not useful.
- Grustaf 4y ago
  I don't agree at all. It is definitely a nice feature, but as with everything else, it's a trade-off. Most people, today, want these features, but it's definitely not true that a payment system "has to" have them. Cash largely doesn't. It's like saying that any messaging system needs to be traceable, so you can see who sent you something. That is convenient and useful, but we survived until email without it.
  - nottorp 4y ago
    > Cash largely doesn't. If you get a contract/receipts you can use the legal system to attempt to recover your cash. With blockchain that's technically impossible? There recently was a piece of news about some blockchain believers who locked themselves out of 20 million in <random crypto coin> because they used a "smart contract" and their code was buggy. Both the payer and the payee would like the transaction to go through but neither can do anything about it. Edit: random link https://vnexplorer.net/aku-ethereum-nft-launch-ends-with-34m-locked-in-flawed-smart-contract-s1071559.html https://vnexplorer.net/aku-ethereum-nft-launch-ends-with-34m...
    - tiluha 4y ago
      How would a cryptocurrency be different here? If the counterparty is known you can still go after them via the legal system. If they are unknown, there would be no way of recovering the cash either.
knorker 4y ago
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. I don't think this argument is nonsensical. It's true that these things were not goals. The author's point, I think, is that obviously they should have been. Because this is how people lose money. You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers. > Clearly people feel [the loss of reversal] is a price worth paying. I don't think so. I think the vast majority of even pro-bitcoin people are actually either in the camp of not realizing the full meaning of this, or they don't truly understand that there's no recourse, until it actually happens to them. Certainly people in general expect "the bank" or "the police" or "courts" to "just fix it". If cryptocurrency people were honest about this in their MLM pitches then people would tell them to piss off. > It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea. Well, "store of value" is the idea now, now that the initial plan proved a massive failure.
- Grustaf 4y ago
  > You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers. Different people have different perspectives. Clearly a lot of coiners think it's totally fine to put the burden on the user. Of course the author is free to disagree, but it's silly to pretend there is only one possible set of priorities.
hestefisk 4y ago
The problem with the article is that there are no real arguments besides citing other articles. At best, it’s a summary of Bruce Schneier’s works with a catchy headline. I’m not a blockchain die-hard, but there are some solid practical uses. For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help. Have a look at Corda/R3 as an example; there’s a reason why big financial institutions are investing a lot in this space because it can really drive efficiencies. As with most things in life, the answer is seldom black or white. The same rule applies to blockchain as well.
- hiq 4y ago
  > For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help. When does that happen?
  - hestefisk 4y ago
    Documentary trade finance - e.g cross-border trade where importers and exporters transact physical goods using letters of credit issued and endorsed by banks on both sides of the transaction. A good example is a container load of crude oil shipped from an upstream exporter in India to a refinery (importer) in the States. Banks act as facilitators of such as transaction on import / export side, often have to interact with shipping / logistics and insurance providers to ascertain that goods have been sent in order to clear and settle payment from buyer to seller. It’s an entirely event-driven and very paper-based business with lots of complex processing logic which can very well be replaced by a smart contract, especially because each party may not trust each other a lot (eg exporter wishing to audit transactions of the importer’s bank). A blockchain works quite well for this type of problem. Disclaimer: I do not work for Corda.
    - hiq 4y ago
      How come the trust regarding the physical goods themselves does not expand to the financial aspects of the transaction?
Aunche 4y ago
>This is a well-known, probably inevitable effect of what is probably the main point of using blockchains. Clearly people feel it is a price worth paying. If people really thought it were a price worth paying, everyone would be using Ethereum Classic instead of Ethereum.
- cmoscoso 4y ago
hudon 4y ago
> It can be used for storing value It can only do this for as long as ownership of a certain private key is valuable. Some keys have shown to hold value for ~10 years (those tied to the BTC ticker symbol), but some keys have gone from valuable to worthless pretty quick. The fact that you have to bet on holding the right kind of private key I think makes it pretty clear that blockchains do not, in fact, reliably store value. > transferring value in a decentralised way There are no longer any decentralized blockchains that also have significant value (ie. worth transferring). For instance, the figurehead known as Bitcoin has been centralized for a while [0]. [0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-bitcoin-fork-centralized-decision-making-saved-the-day/ https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...
- tromp 4y ago
  Coordination in rollling out a bugfix is not a strong indication of bitcoin being centralized. There are certainly aspects where bitcoin is not as decentralized as one would hope, but overall and when compared against alternatives, it's pretty decentralized.
  - hudon 4y ago
    > Coordination in rollling out a bugfix is not a strong indication of bitcoin being centralized. It depends on how many parties, relative to the whole, are coordinating. It is a very strong indication when 2 devs are coordinating a fundamental decision for thousands of people. You have to realize also that "bugfix" is subjective to human judgement. It's often unclear whether a given behavior is truly contrary to intent or not, and it takes humans in authority to judge this for the rest to avoid perpetual conflict.
roenxi 4y ago
Also it is difficult to bring up the real reason without looking a bit crazy. The governments of the world - pretty much all the major ones - are behaving in a completely irresponsible way. "Trustless" isn't something to be applied to a neighbour. It is a polite way of saying that people are really sick of the lies emanating from the halls of power about what good economic management looks like. It still baffles me that the official policy is that prices should rise exponentially. I haven't seen evidence it is a good policy and it is weird that there are no serious political challenges to it. Easy to explain, but still weird.
coldtea 4y ago
>I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. Doesn't matter if "it was a goal". It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation. >Clearly people feel it is a price worth paying. People felt that for smoking too. Then they didn't. And tons of people are just misinformed with Amway-style proselitization, and when they lose money without recourse they are surprised...
- Grustaf 4y ago
  > It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation. Why are you the one to decide what should have been a goal? And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries. Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
  - coldtea 4y ago
    >Why are you the one to decide what should have been a goal? Notice how this is an absurd strawman. Also how this is not an argument. I'm not claiming "I am the one to decide", if it wasn't obvious. I'm stating my opinion on what should have been decided, followed by some arguments/qualifiers on where/why it should be applicable. Generally, when people say something, it's their opinion. No clarification is required on that, it's a convention of human discussion. Even though people state things should be X or Y, they don't necessarily make the claim that they are the sole arbitrers of the ultimate authority on a subject: they convey their take on what should be/have been done. >And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries We've had inflation and catastrophes and we managed to move value without the blockchain. >Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like. You can trust the blockchain even less then.
Gertio 4y ago
Just because it's getting ignored, doesn't mean it doesn't matter. I bring that up on all Blockchain discussions.
captainbland 4y ago
This is true. I suppose what is important to me is that cryptocurrencies solve the problem that they set out to solve, but the problem they have defined seems to be based on a lot of shaky premises (e.g. a volatile, deflationary currency is useful) and set in a world that doesn't exist (one with limitless green energy and no fraud).
fho 4y ago
One thing people forget, or just plain do not know, is that Bitcoin has "smart contracts" (at least it had them when one BTC was around 0.2€ ... haven't checked in much after that). One example of those smart contracts was involving a trusted third party into a payment. The smart contract in that payment would only clear if two parties signed off on the payment. That's definitely a way to avoid fraud.
- JohnFen 4y ago
  Assuming that you can trust the "smart contracts". And I think there's a lot of reasons why such trust is not warranted.
JeremyNT 4y ago
> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. And there's a reason you never hear it as an argument - the lack of such fundamental protection is a massive weakness of these blockchain currencies. The extremely technical savvy early adopters do not care, because evading authorities is actually an objective and they profit regardless as long as the value of their holdings goes up, but protecting normies from scams is actually kind of important if you want to be used as a "normal" currency rather than a speculative asset. A central authority with the ability to deal with bad actors is a fundamental aspect of making fiat currency actually work in the real world.
jpambrun 4y ago
> Clearly people feel it is a price worth paying. I was never asked and I really don't think phone scams and ransomware, which are both enabled by cryto currency, is a price worth paying. In fact, I think it's a major disservice to humanity really.

chemmail 4y ago

Yeah, sounds like this guy needs to just not use the internet or computers at all. That is where almost all scams originate. Don't bother even talking to people. When the internet was created, no one knew the power. Maybe some day soon we will be able to employ this tech to further humanity.

isodev 4y ago

> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. These features and capabilities are usually implied for financial systems. It's really just common sense.

Cthulhu_ 4y ago
I mean when you put it that way, blockchains aren't really financial systems in the first place.
Grustaf 4y ago
Yes, it is, in the traditional financial system. Crypto is an attempt at building an alternative, with different trade-offs. You might not agree with the trade-offs, most people don't - I mostly don't, but it's definitely a choice, it's not inevitable.
ohthehugemanate 4y ago
to be clear about the semantics here: cash doesn't count as a "financial system", right? Blockchain currencies are basically counterfeit-proof, digital cash with an audit trail. comparing them to credit cards is an apples:oranges comparison.
- alpaca128 4y ago
  With cash that limitation exists because there isn't really an alternative. That doesn't mean we should use it as example, being able to undo mistakes is a valuable feature. That's also one of the reasons most online accounts aren't E2E-encrypted, most people prefer having a way to reset their password/key over losing all access to data.
- isodev 4y ago
  Sorry if my comment wasn't clear - I wasn't trying to compare cash to credit cards, of course. Regulation around "cash" transactions are quite strict here (including the definition of a verbal contract etc.), so unless one is engaged in "under the counter" activities, you can benefit from similar protections. Of course, in contrast to credit cards and online transactions, recovery from cash fraud/mistakes is more complicated since you'd need to contact the authorities/the other party yourself and deal with the whole process "manually" (instead of just clicking a button in your bank's web portal and letting them take care of it)
deleted 4y ago
[deleted]

themacguffinman 4y ago

If blockchain proponents want to replace the existing system that does protect against human-factor scams and frauds (ie. the current financial system that lets governments and institutions control it to enforce the law) then it's going to be part of the discussion whether they like it or not.

Grustaf 4y ago
Of course it should be part of the discussion, but the article seems to think that crypto people are unaware of it. They're not, they just think it's worth it.
- themacguffinman 4y ago
  It doesn't matter if crypto advocates are aware of it, these arguments are for other people to understand. The argument is well-known because it's incredibly valid and common for people to want protection against those problems of fraud. When people point out that you're not wearing any pants, "uh I know I'm not wearing any pants" doesn't really address the relevant concern.
  - Grustaf 4y ago
    Of course it does. It's like saying "but Uber doesn't own any cars, they can't run a taxi service". There are pros and cons with their approach, and you might prefer the traditional way, but they purposely chose another way.
    - themacguffinman 4y ago
      Clever reframing, but when you choose such a different way with clear downsides, it's on you to justify it. It would have been the responsibility of the founders of Uber to explain to stakeholders why they were justified in running a taxi service without owning cars. Just like if I point out that you're not wearing pants, I'm generally expecting the response to explain why that's justified for me to continue standing next to an apparently pantless lunatic instead of telling me that you already have. There's no part of the article that ever said crypto people aren't aware of this problem, it pointed out the problem. It's a problem. "I have intentionally chosen a path that runs into this glaring problem" is not helpful or interesting at all. If you have nothing more to say beyond "they know", then I guess I don't have anything more to say either.

JohnGB 4y ago

> Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans. This "could" happen, but in practice it rarely happens because the money has moved on as soon as it hits the account. Additionally, for many types of fraud, there has to be an actual court order to get a bank to take action. So the argument is predicated on a false assumption.

jiveturkey 4y ago
Actually reversals frequently happen. For example, a multi day delay is built into ACH, partly for this exact reason. Also, with credit cards and some flavors of bank transactions you as the end user are protected against fraud, even if (yes)the money has already moved on, you are made whole. The loss is absorbed by the bank. By absorbed, of course I mean you've paid for that service with various fees which amount to a kind of insurance. (Nothing really comes "for free".) But yes, there are plenty of other types of transactions, like gift card scams, that you would not be made whole for.
the_mitsuhiko 4y ago
I cannot judge the American banking situation but I can attest to the fact that transactions are reverted constantly in Europe. The reason for this is the SEPA direct debit system where debitors can directly charge an account via SEPA direct debit and fraud does happen. For that reason banks are very happy to reverse the transaction and it's not at all a unique situation.
Grustaf 4y ago
I guess it differs by geography, but here in Sweden, when I accidentally transferred €10k to an old account that didn't exist anymore I wasn't the least bit concerned that the money would get lost. I would have been extremely surprised if they hadn't given me the money back. That's the advantage of a high trust society. Heck, once an ATM retracted my cash because I wasn't quick enough, I called the bank and they just credited my account with the €300 or whatever it was. No questions asked.
knorker 4y ago
Do you have a source for that? In my experience transfers are pretty much always successfully reversed. Hell, when one of the PirateBay founders hacked a bank and tried to rob it they actually reversed/prevented most of that, even though he had full access to the bank mainframe. He only managed to extract a couple of thousand that his accomplices took out of an ATM, IIRC.

okintheory 4y ago

It seems a bit off to assert that "people feel it is a price worth paying" when almost all purchases online are made with credit cards which have some protections against fraud, and almost none are made with blockchains in comparison. It seems like so far, most people don't think it's a price worth paying?

y4mi 4y ago
I'd go one step further: the few legal purchases done with crypto currencies are mostly done by people unaware they're paying that price
- jychang 4y ago
  Purchases, perhaps. Money transfer, definitely not. Bitcoin is a pretty cheap way to transfer money across international borders. A person probably wouldn't use bitcoin at the grocery store to buy milk, but it works better for sending grandma (located in a third world country) a bunch of money.
  - HWR_14 4y ago
    Bitcoin is still more expensive than the banking system among first-world countries. How much can it be worth to send money to third-world countries of no banks are willing to set up there?
    - Grustaf 4y ago
      You could always use the crypto currency as the store of value there, just as people did with MPesa. You don't necessarily ever have to convert it to a local currency.
      - dmurray 4y ago
        MPesa doesn't store your money in some kind of private currency with a fluctuating value. If you're thinking of it as storing "minutes" as some American cellphone providers would, that's not right. You deposit and withdraw Kenyan Shillings, or your local equivalent, just as if it were a shilling-denominated bank account.

Cthulhu_ 4y ago

> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. In a sense, it admits that traditional banking has the advantage in that regard because it has things like traceability, reversibility, insurance, accountability, and legal guarantees. These have been put aside on purpose in the crypto market, and while I think I understand the whys and wherefores, I don't see giving up these consumer protections is worth it. Well, not to me anyway, but I'm not getting rich off of crypto.

Grustaf 4y ago
For most people it isn't. Maybe at some point it will, if governments let the money printer brr even more, or if we see more of what Canada did. If that is amplified by say 10x, I think a lot of people would start to reconsider.
- pm90 4y ago
  At no point will people deliberately give up consumer protections they have today. If an economy is undergoing extreme hyperinflation, the consumer protections would have likely already been gone at that point.
  - cmoscoso 4y ago
  - Grustaf 4y ago
    What does it matter if people "give up the protections" or if they disappear? The result could still be that they flock to crypto, which is what we're discussing. But it's not a binary question. Some people are already "giving up consumer protections" in some cases. And not just by buying crypto. Ordering stuff from Wish is also a gamble.
- nicbou 4y ago
  If the money printer runs for long enough, we might get to see the sort of volatility that's a daily occurence with crypto. ...so therefore crypto is better? And if you're afraid of cancel culture coming to a financial instrument near you, why would you want to put all your financial transactions on a permanent record? Sure, it's pseudonymous, but your entire purchase history is one hell of a fingerprint. Traditional currency has a perfectly anonymous payment method: send cash.

nottorp 4y ago

> > But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer. > I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. The problem is any payment system DOES need that. And the competition has it. Abstract goals without connection to real life needs are nice. Not useful.

Grustaf 4y ago
I don't agree at all. It is definitely a nice feature, but as with everything else, it's a trade-off. Most people, today, want these features, but it's definitely not true that a payment system "has to" have them. Cash largely doesn't. It's like saying that any messaging system needs to be traceable, so you can see who sent you something. That is convenient and useful, but we survived until email without it.
- nottorp 4y ago
  > Cash largely doesn't. If you get a contract/receipts you can use the legal system to attempt to recover your cash. With blockchain that's technically impossible? There recently was a piece of news about some blockchain believers who locked themselves out of 20 million in <random crypto coin> because they used a "smart contract" and their code was buggy. Both the payer and the payee would like the transaction to go through but neither can do anything about it. Edit: random link https://vnexplorer.net/aku-ethereum-nft-launch-ends-with-34m-locked-in-flawed-smart-contract-s1071559.html https://vnexplorer.net/aku-ethereum-nft-launch-ends-with-34m...
  - tiluha 4y ago
    How would a cryptocurrency be different here? If the counterparty is known you can still go after them via the legal system. If they are unknown, there would be no way of recovering the cash either.

knorker 4y ago

> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. I don't think this argument is nonsensical. It's true that these things were not goals. The author's point, I think, is that obviously they should have been. Because this is how people lose money. You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers. > Clearly people feel [the loss of reversal] is a price worth paying. I don't think so. I think the vast majority of even pro-bitcoin people are actually either in the camp of not realizing the full meaning of this, or they don't truly understand that there's no recourse, until it actually happens to them. Certainly people in general expect "the bank" or "the police" or "courts" to "just fix it". If cryptocurrency people were honest about this in their MLM pitches then people would tell them to piss off. > It can be used for storing and (slowly) transferring value in a decentralised way, and that is really the main idea. Well, "store of value" is the idea now, now that the initial plan proved a massive failure.

Grustaf 4y ago
> You can't just call all the most important aspects of monetary transfers "out of scope" if you're trying to create a system for monetary transfers. Different people have different perspectives. Clearly a lot of coiners think it's totally fine to put the burden on the user. Of course the author is free to disagree, but it's silly to pretend there is only one possible set of priorities.

hestefisk 4y ago

The problem with the article is that there are no real arguments besides citing other articles. At best, it’s a summary of Bruce Schneier’s works with a catchy headline. I’m not a blockchain die-hard, but there are some solid practical uses. For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help. Have a look at Corda/R3 as an example; there’s a reason why big financial institutions are investing a lot in this space because it can really drive efficiencies. As with most things in life, the answer is seldom black or white. The same rule applies to blockchain as well.

hiq 4y ago
> For instance, in trade finance where multiple parties in an environment with limited trust have to settle a complex transaction asynchronously, blockchain / DLT can really help. When does that happen?
- hestefisk 4y ago
  Documentary trade finance - e.g cross-border trade where importers and exporters transact physical goods using letters of credit issued and endorsed by banks on both sides of the transaction. A good example is a container load of crude oil shipped from an upstream exporter in India to a refinery (importer) in the States. Banks act as facilitators of such as transaction on import / export side, often have to interact with shipping / logistics and insurance providers to ascertain that goods have been sent in order to clear and settle payment from buyer to seller. It’s an entirely event-driven and very paper-based business with lots of complex processing logic which can very well be replaced by a smart contract, especially because each party may not trust each other a lot (eg exporter wishing to audit transactions of the importer’s bank). A blockchain works quite well for this type of problem. Disclaimer: I do not work for Corda.
  - hiq 4y ago
    How come the trust regarding the physical goods themselves does not expand to the financial aspects of the transaction?

Aunche 4y ago

>This is a well-known, probably inevitable effect of what is probably the main point of using blockchains. Clearly people feel it is a price worth paying. If people really thought it were a price worth paying, everyone would be using Ethereum Classic instead of Ethereum.

cmoscoso 4y ago

hudon 4y ago

> It can be used for storing value It can only do this for as long as ownership of a certain private key is valuable. Some keys have shown to hold value for ~10 years (those tied to the BTC ticker symbol), but some keys have gone from valuable to worthless pretty quick. The fact that you have to bet on holding the right kind of private key I think makes it pretty clear that blockchains do not, in fact, reliably store value. > transferring value in a decentralised way There are no longer any decentralized blockchains that also have significant value (ie. worth transferring). For instance, the figurehead known as Bitcoin has been centralized for a while [0]. [0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-bitcoin-fork-centralized-decision-making-saved-the-day/ https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...

tromp 4y ago
Coordination in rollling out a bugfix is not a strong indication of bitcoin being centralized. There are certainly aspects where bitcoin is not as decentralized as one would hope, but overall and when compared against alternatives, it's pretty decentralized.
- hudon 4y ago
  > Coordination in rollling out a bugfix is not a strong indication of bitcoin being centralized. It depends on how many parties, relative to the whole, are coordinating. It is a very strong indication when 2 devs are coordinating a fundamental decision for thousands of people. You have to realize also that "bugfix" is subjective to human judgement. It's often unclear whether a given behavior is truly contrary to intent or not, and it takes humans in authority to judge this for the rest to avoid perpetual conflict.

roenxi 4y ago

Also it is difficult to bring up the real reason without looking a bit crazy. The governments of the world - pretty much all the major ones - are behaving in a completely irresponsible way. "Trustless" isn't something to be applied to a neighbour. It is a polite way of saying that people are really sick of the lies emanating from the halls of power about what good economic management looks like. It still baffles me that the official policy is that prices should rise exponentially. I haven't seen evidence it is a good policy and it is weird that there are no serious political challenges to it. Easy to explain, but still weird.

coldtea 4y ago

>I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. Doesn't matter if "it was a goal". It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation. >Clearly people feel it is a price worth paying. People felt that for smoking too. Then they didn't. And tons of people are just misinformed with Amway-style proselitization, and when they lose money without recourse they are surprised...

Grustaf 4y ago
> It should have been a goal, and it's necessary (doesn't have to be perfect, but absolutely has to exist) for anything wanting to be used as a means of exchange in a modern economy, outside of Mad Max situations and speculation. Why are you the one to decide what should have been a goal? And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries. Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like.
- coldtea 4y ago
  >Why are you the one to decide what should have been a goal? Notice how this is an absurd strawman. Also how this is not an argument. I'm not claiming "I am the one to decide", if it wasn't obvious. I'm stating my opinion on what should have been decided, followed by some arguments/qualifiers on where/why it should be applicable. Generally, when people say something, it's their opinion. No clarification is required on that, it's a convention of human discussion. Even though people state things should be X or Y, they don't necessarily make the claim that they are the sole arbitrers of the ultimate authority on a subject: they convey their take on what should be/have been done. >And aren't you aware that a lot of people do live in Mad Max like scenarios? Even in a modern country like Argentina the currency is in free fall, not to mention many unstable African countries We've had inflation and catastrophes and we managed to move value without the blockchain. >Not to mention that Trudeau let the cat out of the bag, you can't even trust that teddybear of a country with your money if you say something the government doesn't like. You can trust the blockchain even less then.

Gertio 4y ago

Just because it's getting ignored, doesn't mean it doesn't matter. I bring that up on all Blockchain discussions.

captainbland 4y ago

This is true. I suppose what is important to me is that cryptocurrencies solve the problem that they set out to solve, but the problem they have defined seems to be based on a lot of shaky premises (e.g. a volatile, deflationary currency is useful) and set in a world that doesn't exist (one with limitless green energy and no fraud).

fho 4y ago

One thing people forget, or just plain do not know, is that Bitcoin has "smart contracts" (at least it had them when one BTC was around 0.2€ ... haven't checked in much after that). One example of those smart contracts was involving a trusted third party into a payment. The smart contract in that payment would only clear if two parties signed off on the payment. That's definitely a way to avoid fraud.

JohnFen 4y ago
Assuming that you can trust the "smart contracts". And I think there's a lot of reasons why such trust is not warranted.

JeremyNT 4y ago

> I don't think protection against human-factor scams and frauds was ever a goal, you certainly never hear it as an argument. And there's a reason you never hear it as an argument - the lack of such fundamental protection is a massive weakness of these blockchain currencies. The extremely technical savvy early adopters do not care, because evading authorities is actually an objective and they profit regardless as long as the value of their holdings goes up, but protecting normies from scams is actually kind of important if you want to be used as a "normal" currency rather than a speculative asset. A central authority with the ability to deal with bad actors is a fundamental aspect of making fiat currency actually work in the real world.

jpambrun 4y ago

> Clearly people feel it is a price worth paying. I was never asked and I really don't think phone scams and ransomware, which are both enabled by cryto currency, is a price worth paying. In fact, I think it's a major disservice to humanity really.