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The utility of decentralized blockchains is that they facilitate permissionless financial innovation. Yes, that means "regulatory arbitrage". But not just circu

by darawk 4y ago

The utility of decentralized blockchains is that they facilitate permissionless financial innovation. Yes, that means "regulatory arbitrage". But not just circumventing the law, more importantly, circumventing the de facto law of corporate gatekeepers. A substantial amount of de facto financial regulation comes not from democratically elected governments, but from companies that gate-keep access to the databases where financial truth resides. A great example of this is Visa and Mastercard dropping PornHub as a client. But there are many others. Building software that interfaces with money is extremely difficult, what you can and cannot do is extremely limited, and you may only do so at the pleasure of the major financial institutions that sit between your code and the traditional financial system. Right now, if you want to write code that manipulate's someone's money, you have to ask the permission of both the owner of the funds, and several intermediaries along the way. What those intermediaries choose to allow you to do can be arbitrary, capricious, and certainly is not democratic. It is true that decentralized blockchains also facilitate the flouting of the law, and that can be good or bad, depending on your point of view. But fundamentally, having an open fabric for finance, in which anyone can build any kind of application they wish, seems like a pretty cool thing to me.

tootie 4y ago
Pornhub was cut off for failing to police child pornography. Why would you want to participate in a financial system that was incapable of excluding evildoers?
- vlovich123 4y ago
  Look, I dislike crypto as much as the next guy, but I must have missed the memo. Are evildoers not perfectly capable of participating in the current financial system? https://www.thelocal.ch/20150208/hsbc-swiss-bank-helped-terrorists-and-criminals/ https://www.thelocal.ch/20150208/hsbc-swiss-bank-helped-terr... https://www.swissinfo.ch/eng/business/how-the--war-on-terror--exposed-compliance-gaps-in-swiss-companies/46915746 https://www.swissinfo.ch/eng/business/how-the--war-on-terror... https://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs https://www.theguardian.com/world/2011/apr/03/us-bank-mexico... Let’s also ignore all the shadiness that the Russian Oligarchs, oil shieks, Bibi, Berlosconi all seem to engage in and yet seemingly have no limit to the financial systems. The belief that our financial system excludes evildoers is a nice fantasy that I haven’t seen be rooted in reality.
- cypress66 4y ago
  That should be dealt with by the justice system, not some corporations.
  - throwaway290 4y ago
    Payment processors saw the writing on the wall. The reason they did what they did and PH made a 180 and disposed of incriminating content all in one month is because justice system has teeth and they did not want to find themselves liable. And justice system has teeth because PH is a proper company participating in a financial system. Good luck stopping a criminal in another country profiting from crime by accepting bitcoin
    - miracle2k 4y ago
      There is no reason for payment processors to be liable. If you have a problem with Bitcoin, you need to support a general, unrestricted right be all persons and orgs to be served by the financial system, except maybe for a narrow and limited set of injunctions through the courts. No other position is cohesive.
      - throwaway290 4y ago
        Sorry, I do not support your right to be serviced by financial system if it supports your wrongdoing. Your freedom stops where mine begins. My position seems pretty cohesive to me. If you do not do evil, then you have nothing to fear. If you have something to fear despite doing no evil, let's fix the government. This is a human problem and won't be solved with tech. (And again, it was pretty clear to anyone that there was wrongdoing in this case and PH was going to get sued. I do think it should have been sued anyway, that it was not may have to do with victims not willing to come forward given sensitive nature of the crime, general disinclination of people to deal with dirt, or a good content cleanup job.)
        miracle2k 4y ago
        > If you do not do evil, then you have nothing to fear. If you have something to fear despite doing no evil, let's fix the government. So - if I have to fear being being shutoff from the financial system by private actors who dislike me, despite not having been convicted of a crime, a law to ensure my right to be served.
- dangero 4y ago
  why would you want to participate in an internet that is incapable of excluding evildoers?
  - throwaway290 4y ago
    because internet is not the mechanism that allows distributors and producers of CSAM to get paid? But good point, with cryptocurrency the internet would obviously have to become capable of excluding evildoers.
  - tootie 4y ago
    The pipes of the internet are essentially a public utility. Anyone operating above the level of an ISP should be able to police their usage.
- Dylan16807 4y ago
  My understanding is they policed it a lot better than facebook does. And the solution they were pushed into was extreme overkill. Either way, I don't want a financial system to punish a Canadian company for breaking the law, I want the government to do it.
  - throwaway290 4y ago
    Your understanding is wrong. In fact, Facebook has been consistently reporting millions of videos even before PH got heat. Any platform that hosts images or videos has this problem, but with all its shenanigans FB has been among the best at identifying and removing the content. It is ridiculous to blame them for actually doing the right thing, which includes reporting found CSAM. Microsoft with Bing done markedly worse. PH pre-2021, obviously, too (and the bar is higher since it distributed this content for actual profit). This is all public information.
    - Dylan16807 4y ago
      Reporting millions of videos is a good thing, but having millions is pretty crazy too. And Bing doesn't host things.
      - throwaway290 4y ago
        Anywhere you can upload images they have this. No one is on the radar because no one cares except few companies. For a porn-oriented platform however, having this and not reporting this and selling this, that's egregious. > host If it's findable on Bing with previews and all, Bing has ingested the content at some point. In some cases it's justified to get all technicalities fully clarified before taking an action, otherwise we'd be wondering and litigating whether PH did something wrong.
remram 4y ago
But that's not even true. You can always get people's money and turn them into some tokens. You can run whatever code you want to manipulate those tokens, then at the end of each day you tell them their new balance of tokens. The whole proof-of-work, decentralization, ledger, ... are in no way necessary steps in this. As long as you go through creepy, deregulated, fallible exchanges to obtain/trade/redeem those tokens, you are not permissionless or cryptographically secure or free from gate-keepers or anything of the sort.
- siftrics 4y ago
  > The whole proof-of-work, decentralization, ledger, ... are in no way necessary steps in this. If you know of a ledger that's (1) permissionless and (2) avoids the double-spending problem and (3) _does not_ involve those things you mentioned ...then please, do tell me about it. I'd love to know your breakthrough solution.
  - DaiPlusPlus 4y ago
    Ethereum's Proof of Stake?
    - chemmail 4y ago
      They are not talking about the consensus mechanism but the overall raison d'etre of blockchain.
    - trifurcate 4y ago
      Which involves decentralization and a ledger.
  - remram 4y ago
    What I'm saying is that you don't need a decentralized ledger to enable the "financial innovation" we've been seeing, and that it's not permissionless if every meaningful action (buy/sell/trade) happens on good ol' central exchanges.
    - 4y ago
Nursie 4y ago
> fundamentally, having an open fabric for finance, in which anyone can build any kind of application they wish, seems like a pretty cool thing to me. Where money is concerned, no. Having gatekeepers, boundaries, approvals, registers, participants and authorities is onerous, but it keeps things more honest and it makes them much more traceable in cases of negligence or fraud. We have ... well pretty much all of recorded history to show us how very many people will use any and every means available to remove money from others and disappear. So no, this idea of an open fabric, in which anyone can build anything is a recipe for disaster by its very nature.
- jiggawatts 4y ago
  I was going to simply paste a list of notable crypto scams, but... heh... other people have already put together annual "top-10" lists of scams: https://mashable.com/article/biggest-crypto-scams-2022 https://mashable.com/article/biggest-crypto-scams-2022 https://mashable.com/article/biggest-cryptocurrency-scams-2021 https://mashable.com/article/biggest-cryptocurrency-scams-20... https://www.zdnet.com/article/2020s-worst-cryptocurrency-breaches-thefts-and-exit-scams/ https://www.zdnet.com/article/2020s-worst-cryptocurrency-bre... https://www.zdnet.com/article/bitcoin-battered-the-worst-crypto-catastrophes-of-2019/ https://www.zdnet.com/article/bitcoin-battered-the-worst-cry...
- darawk 4y ago
  That's certainly a valid point on the trade-off curve to choose. But you could make a similarly reductionist argument about free speech, guns, home chemistry sets, etc. I think the position that "money is too important to be open" is a potentially reasonable one! But what I don't think is particularly defensible is the position that the gatekeepers of our monetary system should be the corporations who happen to occupy the current choke points. And I think if you wanted to build a democratically controlled financial system that doesn't have corporate gatekeepers, you'd actually want to start with something very much like a decentralized open blockchain. That is, if you want to build a democratically controlled permissioned system, you need to start with an open fabric, and place the gatekeepers and choke points with intention. Personally I prefer an open fabric, but I do understand the appeal of walled gardens.
jasonhansel 4y ago
> What those intermediaries choose to allow you to do can be arbitrary, capricious, and certainly is not democratic. In practice, to adopt crypto you usually also need to rely on intermediaries to handle parts of the process for you. Fortunately, in the crypto space, you can use trusted, non-capricious, democratic intermediaries like FTX.

by darawk 4y ago

tootie 4y ago

Pornhub was cut off for failing to police child pornography. Why would you want to participate in a financial system that was incapable of excluding evildoers?

vlovich123 4y ago
Look, I dislike crypto as much as the next guy, but I must have missed the memo. Are evildoers not perfectly capable of participating in the current financial system? https://www.thelocal.ch/20150208/hsbc-swiss-bank-helped-terrorists-and-criminals/ https://www.thelocal.ch/20150208/hsbc-swiss-bank-helped-terr... https://www.swissinfo.ch/eng/business/how-the--war-on-terror--exposed-compliance-gaps-in-swiss-companies/46915746 https://www.swissinfo.ch/eng/business/how-the--war-on-terror... https://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs https://www.theguardian.com/world/2011/apr/03/us-bank-mexico... Let’s also ignore all the shadiness that the Russian Oligarchs, oil shieks, Bibi, Berlosconi all seem to engage in and yet seemingly have no limit to the financial systems. The belief that our financial system excludes evildoers is a nice fantasy that I haven’t seen be rooted in reality.
cypress66 4y ago
That should be dealt with by the justice system, not some corporations.
- throwaway290 4y ago
  Payment processors saw the writing on the wall. The reason they did what they did and PH made a 180 and disposed of incriminating content all in one month is because justice system has teeth and they did not want to find themselves liable. And justice system has teeth because PH is a proper company participating in a financial system. Good luck stopping a criminal in another country profiting from crime by accepting bitcoin
  - miracle2k 4y ago
    There is no reason for payment processors to be liable. If you have a problem with Bitcoin, you need to support a general, unrestricted right be all persons and orgs to be served by the financial system, except maybe for a narrow and limited set of injunctions through the courts. No other position is cohesive.
    - throwaway290 4y ago
      Sorry, I do not support your right to be serviced by financial system if it supports your wrongdoing. Your freedom stops where mine begins. My position seems pretty cohesive to me. If you do not do evil, then you have nothing to fear. If you have something to fear despite doing no evil, let's fix the government. This is a human problem and won't be solved with tech. (And again, it was pretty clear to anyone that there was wrongdoing in this case and PH was going to get sued. I do think it should have been sued anyway, that it was not may have to do with victims not willing to come forward given sensitive nature of the crime, general disinclination of people to deal with dirt, or a good content cleanup job.)
      - miracle2k 4y ago
        > If you do not do evil, then you have nothing to fear. If you have something to fear despite doing no evil, let's fix the government. So - if I have to fear being being shutoff from the financial system by private actors who dislike me, despite not having been convicted of a crime, a law to ensure my right to be served.
dangero 4y ago
why would you want to participate in an internet that is incapable of excluding evildoers?
- throwaway290 4y ago
  because internet is not the mechanism that allows distributors and producers of CSAM to get paid? But good point, with cryptocurrency the internet would obviously have to become capable of excluding evildoers.
- tootie 4y ago
  The pipes of the internet are essentially a public utility. Anyone operating above the level of an ISP should be able to police their usage.
Dylan16807 4y ago
My understanding is they policed it a lot better than facebook does. And the solution they were pushed into was extreme overkill. Either way, I don't want a financial system to punish a Canadian company for breaking the law, I want the government to do it.
- throwaway290 4y ago
  Your understanding is wrong. In fact, Facebook has been consistently reporting millions of videos even before PH got heat. Any platform that hosts images or videos has this problem, but with all its shenanigans FB has been among the best at identifying and removing the content. It is ridiculous to blame them for actually doing the right thing, which includes reporting found CSAM. Microsoft with Bing done markedly worse. PH pre-2021, obviously, too (and the bar is higher since it distributed this content for actual profit). This is all public information.
  - Dylan16807 4y ago
    Reporting millions of videos is a good thing, but having millions is pretty crazy too. And Bing doesn't host things.
    - throwaway290 4y ago
      Anywhere you can upload images they have this. No one is on the radar because no one cares except few companies. For a porn-oriented platform however, having this and not reporting this and selling this, that's egregious. > host If it's findable on Bing with previews and all, Bing has ingested the content at some point. In some cases it's justified to get all technicalities fully clarified before taking an action, otherwise we'd be wondering and litigating whether PH did something wrong.

remram 4y ago

But that's not even true. You can always get people's money and turn them into some tokens. You can run whatever code you want to manipulate those tokens, then at the end of each day you tell them their new balance of tokens. The whole proof-of-work, decentralization, ledger, ... are in no way necessary steps in this. As long as you go through creepy, deregulated, fallible exchanges to obtain/trade/redeem those tokens, you are not permissionless or cryptographically secure or free from gate-keepers or anything of the sort.

siftrics 4y ago
> The whole proof-of-work, decentralization, ledger, ... are in no way necessary steps in this. If you know of a ledger that's (1) permissionless and (2) avoids the double-spending problem and (3) _does not_ involve those things you mentioned ...then please, do tell me about it. I'd love to know your breakthrough solution.
- DaiPlusPlus 4y ago
  Ethereum's Proof of Stake?
  - chemmail 4y ago
    They are not talking about the consensus mechanism but the overall raison d'etre of blockchain.
  - trifurcate 4y ago
    Which involves decentralization and a ledger.
- remram 4y ago
  What I'm saying is that you don't need a decentralized ledger to enable the "financial innovation" we've been seeing, and that it's not permissionless if every meaningful action (buy/sell/trade) happens on good ol' central exchanges.
  - 4y ago

Nursie 4y ago

> fundamentally, having an open fabric for finance, in which anyone can build any kind of application they wish, seems like a pretty cool thing to me. Where money is concerned, no. Having gatekeepers, boundaries, approvals, registers, participants and authorities is onerous, but it keeps things more honest and it makes them much more traceable in cases of negligence or fraud. We have ... well pretty much all of recorded history to show us how very many people will use any and every means available to remove money from others and disappear. So no, this idea of an open fabric, in which anyone can build anything is a recipe for disaster by its very nature.

jiggawatts 4y ago
I was going to simply paste a list of notable crypto scams, but... heh... other people have already put together annual "top-10" lists of scams: https://mashable.com/article/biggest-crypto-scams-2022 https://mashable.com/article/biggest-crypto-scams-2022 https://mashable.com/article/biggest-cryptocurrency-scams-2021 https://mashable.com/article/biggest-cryptocurrency-scams-20... https://www.zdnet.com/article/2020s-worst-cryptocurrency-breaches-thefts-and-exit-scams/ https://www.zdnet.com/article/2020s-worst-cryptocurrency-bre... https://www.zdnet.com/article/bitcoin-battered-the-worst-crypto-catastrophes-of-2019/ https://www.zdnet.com/article/bitcoin-battered-the-worst-cry...
darawk 4y ago
That's certainly a valid point on the trade-off curve to choose. But you could make a similarly reductionist argument about free speech, guns, home chemistry sets, etc. I think the position that "money is too important to be open" is a potentially reasonable one! But what I don't think is particularly defensible is the position that the gatekeepers of our monetary system should be the corporations who happen to occupy the current choke points. And I think if you wanted to build a democratically controlled financial system that doesn't have corporate gatekeepers, you'd actually want to start with something very much like a decentralized open blockchain. That is, if you want to build a democratically controlled permissioned system, you need to start with an open fabric, and place the gatekeepers and choke points with intention. Personally I prefer an open fabric, but I do understand the appeal of walled gardens.

jasonhansel 4y ago

> What those intermediaries choose to allow you to do can be arbitrary, capricious, and certainly is not democratic. In practice, to adopt crypto you usually also need to rely on intermediaries to handle parts of the process for you. Fortunately, in the crypto space, you can use trusted, non-capricious, democratic intermediaries like FTX.