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You are having a banker’s response, i.e. someone who is used to have a currency guaranteed by a sovereign government and enforced by the rule of law. > The Bit
by bertil 13y ago
You are having a banker’s response, i.e. someone who is used to have a currency guaranteed by a sovereign government and enforced by the rule of law.
> The Bitcoin economy is rife with theft and fraud. This is a risk to be managed.
Nope, it is a PR nightmare that no technicality will get you out of. ‘Malleability bug’, combined with an obnoxious foreigner in an exotic country was James-Bondian enough to get over people’s head. Most people still don’t understand what a browser does; they best understanding of cryptography is that they shouldn’t use their pet’s name for they password because it doesn’t include a number; their current level of confusion is such that even the BBC (the smartest media there is) still illustrate its papers with golden doublons engraved with a sticked B — and you can tell it’s digital because those are iridescent. BitCoin was beyond a tough sell to begin with; now you have three unresolved, unexplainable if they were resolved, impossible to repair if they were explained hacks, each involving more money than anyone can ever expect to have. It doesn’t matter that ‘hot wallet’ is marginal, transactional or what you want to call it: even the simplest explanation that is was “‘orders of magnitude’ less than MtGox” is still is a cop out. The current perception is that whomever will end up keeping your BitCoin is anyone technically savvier than you.
You might like that idea because you trust your own skill-set (risk-assessment and mitigation, I’d say from your comment, not crypto); that’s not the case of hardly anyone, certainly not the people whom you are trying to convince to adopt. Even if you pushed them to consider it, I can’t imagine any actuary seriously pricing the risk of getting it all gone, and only making sense of it far too late, not with the systemic odds on computer security that we had recently: a year of unweaving a industrial-spying complex gone loose, major to the point of being obviously intention SSL breaches at every level of every OS, even things as inspiring as brick-and-mortar Targets get now attacked digitally.
Underestimating economic risk because you exclude financial systemic crisis was one huge mistake; I can’t imagine anyone would jump to the occasion of doing that at an even more obvious level now.
Your explanations have as much chance saving BitCoin as I had stoping the War on Terror by pointing out on September 20, 2001 that lives were actually saved because the reduced traffic and activity after 9/11 meant less road and work accidents, and that all these people falling in smocking rumbles, that was demographics as usual. What is needed now is a compelling case of justice and the rule of law.
- ryanjshaw 13y agoI'm having a hard time following your argument. PR: With no evidence to support your claim that this is a nightmare, I believe you're overstating the situation. The current BPI/Winkdex/etc. values show there are plenty of people still quite confident in the Bitcoin system. Risk management: Consider parent's option (a) again: there is no intrinsic reason Bitcoin-based services can't reduce their hot wallet size down to zero and send all settlement through a human review process. The "hot/cold wallet" design is a choice that many naive but greedy people are choosing in building their Bitcoin-based systems but it is not the only choice. In banks you usually only STP low-value, low-risk transactions; in the current breed of Bitcoin-based systems, it would appear that system designers are naivly STPing everything. There is no evidence I have seen to suggest that Bitcoin-based systems intrinsically cannot manage risk properly (this is obvious when you simply consider that the majority of coins have not been stolen). Regulation: There is some kind of strange unstated assumption on HN that regulation magically makes banking safe all by itself, and until that regulation is in place Bitcoin-based systems cannot be safe or effectively risk managed. With the exception of insured deposits, which is a question of policy and time rather than strictly a matter of regulation, there is no reason that Bitcoin-based services can't proactively implement policies that the banking world is required to implement by law (AML/KYC rules, auditing, active risk monitoring, human review in settlement, etc.) Using a service that doesn't implement these policies is a risky choice (and yes, I believe many Bitcoin supporters will probably have to change their opinions about e.g. identity verification if they want to see Bitcoin survive and succeed). Before anybody makes assumptions: I do not have an opinion about whether Bitcoin will succeed or not. I do think the underlying technology and possibilities are being unfairly stigmatised by critics' generalizations of the inadequacies in implementations of current Bitcoin-based systems.
- mcv 13y ago> There is some kind of strange unstated assumption on HN that regulation magically makes banking safe all by itself, and until that regulation is in place Bitcoin-based systems cannot be safe or effectively risk managed. Magically? No, that's not how regulation works. It takes a lot of work and diligence. But if done right, it will make it safer. If a regulator with sufficient authority had audited MtGox, it would have been closed down a long time ago, and people wouldn't have lost remotely as much money. Without it, bitcoin users are at the mercy of a bunch of utter amateurs.