5 ms·

Once you have a central authority that everyone trusts, what does the blockchain add?

wmf 12y ago
The author attempted to explain this in a previous post: http://jpkoning.blogspot.com/2013/04/why-fed-is-more-likely-to-adopt-bitcoin.html http://jpkoning.blogspot.com/2013/04/why-fed-is-more-likely-... Summary: A blockchain is cheaper than maintaining three redundant data centers. As long as mining is involved, I don't agree with that argument.
- Rhapso 12y ago
  Rather than mining, you could just let a trusted authority issue blocks which would be validated by peers, it still prevents double spend, but would allow the authority to prevent transactions.
  - wmf 12y ago
    That raises the question of whether a central audit log counts as a blockchain.
Hermel 12y ago
Plausibly inaliable property rights. With central servers (and today's banking system), the government can freeze bank account. Even if today's laws would prohibit that, there is no guarantee that this will also be the case in the future. Thus, the only way to plausibly guarantee that the government won't freeze your digital assets, is by issuing them on a decentralized infrastructure under the control of the public (e.g. as colored coins on the Bitcoin blockchain).
- fiatmoney 12y ago
  You still can freeze accounts. You merely maintain a list of "frozen" addresses, and anyone who accepts payment from them is guilty of a crime. It's actually much easier in this scenario.
  - Karunamon 12y ago
    Consider that wallets can be created on the fly and coins tumbled, finding the owner of a newly-created wallet is impossible until they do something else with those coins.
    - msandford 12y ago
      Make it illegal to create a new wallet without central authority approval and illegal to tumble coins. Closed those "loopholes" that "only criminals use" and the majority of people who know nothing about how bitcoin works would agree that it's not bad to do that. Once nobody can tumble legitimately then quite literally only the criminals will tumble and there you go.
      - Karunamon 12y ago
        Now, as this central authority, invent a way to distinguish between "tumbling" and normal transactional flow. Really, you can dictate whatever you want as this central authority, but enforcing it is a whole different matter.
        quanticle 12y ago
        Central authorities already distinguish cash transactions with illegitimate intent (e.g. for smuggling or money laundering) and legitimate cash transactions. It's not a big stretch to think of tumbling being treated as a form of money laundering, where the nature of the transaction may be wholly legitimate, but the criminality is based on the intent of the transaction.
        dllthomas 12y ago
        "If it's going to a registered account, it's normal transaction flow. If it's going to an unregistered account, it's illegal. If any funds are received from an unregistered account, they must be sent to an address provided by the central authority, or it's illegal. Registered accounts are signed periodically by the central authority and certificates can be verified automatically at transaction time."
philrapo 12y ago
A free, real-time settlement system to send payments frictionlessly.
- trothamel 12y ago
  If it's free, how do the miners get compensated.
  - f3llowtraveler 12y ago
    Bitcoin is not free, it's just cheaper than legacy banking alternatives.
f3llowtraveler 12y ago
> Once you have a central authority that everyone trusts ...Which we most definitely do not have.

wmf 12y ago

The author attempted to explain this in a previous post: http://jpkoning.blogspot.com/2013/04/why-fed-is-more-likely-to-adopt-bitcoin.html http://jpkoning.blogspot.com/2013/04/why-fed-is-more-likely-... Summary: A blockchain is cheaper than maintaining three redundant data centers. As long as mining is involved, I don't agree with that argument.

Rhapso 12y ago
Rather than mining, you could just let a trusted authority issue blocks which would be validated by peers, it still prevents double spend, but would allow the authority to prevent transactions.
- wmf 12y ago
  That raises the question of whether a central audit log counts as a blockchain.

Hermel 12y ago

Plausibly inaliable property rights. With central servers (and today's banking system), the government can freeze bank account. Even if today's laws would prohibit that, there is no guarantee that this will also be the case in the future. Thus, the only way to plausibly guarantee that the government won't freeze your digital assets, is by issuing them on a decentralized infrastructure under the control of the public (e.g. as colored coins on the Bitcoin blockchain).

fiatmoney 12y ago
You still can freeze accounts. You merely maintain a list of "frozen" addresses, and anyone who accepts payment from them is guilty of a crime. It's actually much easier in this scenario.
- Karunamon 12y ago
  Consider that wallets can be created on the fly and coins tumbled, finding the owner of a newly-created wallet is impossible until they do something else with those coins.
  - msandford 12y ago
    Make it illegal to create a new wallet without central authority approval and illegal to tumble coins. Closed those "loopholes" that "only criminals use" and the majority of people who know nothing about how bitcoin works would agree that it's not bad to do that. Once nobody can tumble legitimately then quite literally only the criminals will tumble and there you go.
    - Karunamon 12y ago
      Now, as this central authority, invent a way to distinguish between "tumbling" and normal transactional flow. Really, you can dictate whatever you want as this central authority, but enforcing it is a whole different matter.
      - quanticle 12y ago
        Central authorities already distinguish cash transactions with illegitimate intent (e.g. for smuggling or money laundering) and legitimate cash transactions. It's not a big stretch to think of tumbling being treated as a form of money laundering, where the nature of the transaction may be wholly legitimate, but the criminality is based on the intent of the transaction.
      - dllthomas 12y ago
        "If it's going to a registered account, it's normal transaction flow. If it's going to an unregistered account, it's illegal. If any funds are received from an unregistered account, they must be sent to an address provided by the central authority, or it's illegal. Registered accounts are signed periodically by the central authority and certificates can be verified automatically at transaction time."

philrapo 12y ago

A free, real-time settlement system to send payments frictionlessly.

trothamel 12y ago
If it's free, how do the miners get compensated.
- f3llowtraveler 12y ago
  Bitcoin is not free, it's just cheaper than legacy banking alternatives.

f3llowtraveler 12y ago

> Once you have a central authority that everyone trusts ...Which we most definitely do not have.