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> A critical weakness of crypto is that the actors involved are less trustworthy than government. If anything, "crypto" is based on the idea that people can't

by imdsm 4y ago

> A critical weakness of crypto is that the actors involved are less trustworthy than government. If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls. It isn't meant as an improvement to an existing system, but as an alternative system, and while we often hear of people who say it is a scam, that it won't work, that it can't work, the unbiased reality is that it is being used for value transactions and has been non-stop for over a decade now. The phrase "a general consensus on the value of crypto" is equal to "a general consensus on the value of money". Crypto (as in cryptocurrencies, cryptoassets, and, in general, blockchain based digital ledgers) is a vast subject. Nothing stops someone from creating their own paper currency or non-blockchain digital currency (Nectar points, air miles). There are for sure questions to be asked here about how unregulated, crowd managed currencies can be integrated into existing societies were money is heavily regulated, but that is another subject.

AlexandrB 4y ago
> If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls. Those controls only address problems created by the distributed nature of crypto (double spend), but don't touch the most common types of financial fraud which is why wash trading and rug pulls are so common. Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly.
- imdsm 4y ago
  They address more than just double spend attacks, but also ownership and control. Without a private key, in a protocol where every transaction must be signed, no changes can be made to a ledger where balances are associated with corresponding public keys. The human issues that we have from use of the system, fraud, P&D schemes, non-custodial wallets (exchanges) etc, aren't fundamental issues with the technology itself, but with the periphery. Cash can be used to buy drugs, bank accounts can be used for money laundering, financial markets can be manipulated. We must be cognisant of the fact that where there are people, there will be misuse. Crypto is no different. > Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly. Must we assume that pricing is to be trusted? What pricing is this, exchange pricing? If you're using centralised exchanges then the issue is whether you trust the centralised exchange to keep an honest order book, and whether you're able to determine whether the exchange rate reflects the value of the token/asset. Many people have recently begun trading on financial markets, see Gamestop, wallstreetbets etc, without the proper knowledge required to ensure they're making the right decisions. This is no different from buying BTC because your neighbour told you it'll hit $100k by Christmas. These are societal problems from people who want to get rich quick and almost always get hurt trying.
jqpabc123 4y ago
If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system LOL! When you buy crypto, how do you determine what price is fair? Most people turn to an unregulated "exchange" that can easily manipulate prices in a multitude of different ways. This is called "trust" --- blind, misplaced trust --- without any oversight or transparency. You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth.
- imdsm 4y ago
  I'm not sure this is the forum for capital lols, but to answer your question: > how do you determine what price is fair? Well that comes down to you, doesn't it? Would you buy a litre of milk for $10? $5? $3? $2? $1? What about if you were buying some sterling to come and visit us here in the sunny UK, what exchange rate would you say is fair? £0.50? £0.75? £0.80? £0.85? What about if I was selling you a kg of Palladium, would you pay $100,000? $90,000? $70,000? [Assumed dollar currency but arbitrary to the point.] That last question may be harder to answer without a google, as you might find it hard to determine what price is fair. If you can't determine the fair price for something you're buying, the question should be whether you should be buying it at all. > You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth. It seems to me that you're having an adverse reaction to my comment, so I won't address the final two lines.
  - jqpabc123 4y ago
    im not sure this is the forum for capital lols, Sorry. At this point, hearing people still try to defend crypto as being "trustless" is kinda comical --- sorta like people who trusted and defended Bernie Madoff because he was once chairman of NASDAQ. How many crypto rug pulls would be enough to convince you otherwise?

by imdsm 4y ago

AlexandrB 4y ago

> If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls. Those controls only address problems created by the distributed nature of crypto (double spend), but don't touch the most common types of financial fraud which is why wash trading and rug pulls are so common. Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly.

imdsm 4y ago
They address more than just double spend attacks, but also ownership and control. Without a private key, in a protocol where every transaction must be signed, no changes can be made to a ledger where balances are associated with corresponding public keys. The human issues that we have from use of the system, fraud, P&D schemes, non-custodial wallets (exchanges) etc, aren't fundamental issues with the technology itself, but with the periphery. Cash can be used to buy drugs, bank accounts can be used for money laundering, financial markets can be manipulated. We must be cognisant of the fact that where there are people, there will be misuse. Crypto is no different. > Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly. Must we assume that pricing is to be trusted? What pricing is this, exchange pricing? If you're using centralised exchanges then the issue is whether you trust the centralised exchange to keep an honest order book, and whether you're able to determine whether the exchange rate reflects the value of the token/asset. Many people have recently begun trading on financial markets, see Gamestop, wallstreetbets etc, without the proper knowledge required to ensure they're making the right decisions. This is no different from buying BTC because your neighbour told you it'll hit $100k by Christmas. These are societal problems from people who want to get rich quick and almost always get hurt trying.

jqpabc123 4y ago

If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system LOL! When you buy crypto, how do you determine what price is fair? Most people turn to an unregulated "exchange" that can easily manipulate prices in a multitude of different ways. This is called "trust" --- blind, misplaced trust --- without any oversight or transparency. You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth.

imdsm 4y ago
I'm not sure this is the forum for capital lols, but to answer your question: > how do you determine what price is fair? Well that comes down to you, doesn't it? Would you buy a litre of milk for $10? $5? $3? $2? $1? What about if you were buying some sterling to come and visit us here in the sunny UK, what exchange rate would you say is fair? £0.50? £0.75? £0.80? £0.85? What about if I was selling you a kg of Palladium, would you pay $100,000? $90,000? $70,000? [Assumed dollar currency but arbitrary to the point.] That last question may be harder to answer without a google, as you might find it hard to determine what price is fair. If you can't determine the fair price for something you're buying, the question should be whether you should be buying it at all. > You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth. It seems to me that you're having an adverse reaction to my comment, so I won't address the final two lines.
- jqpabc123 4y ago
  im not sure this is the forum for capital lols, Sorry. At this point, hearing people still try to defend crypto as being "trustless" is kinda comical --- sorta like people who trusted and defended Bernie Madoff because he was once chairman of NASDAQ. How many crypto rug pulls would be enough to convince you otherwise?