While interesting, it's a pretty myopic take on the issue of trust and blockchain.
Blockchains can only offer their guarantees for concepts entirely encapsulated within the blockchain. As soon as a blockchain touches the real world, trust is required and the guarantees break down.
Concretely: cryptocurrencies encapsulate the quantity of units within the blockchain. 1 BTC will always equal 1 BTC. This is why currencies are so far the only thing you can actually use with a blockchain.
However, that doesn't mean you can trust the exchange rate (obviously, given Tether, but also, exchanges) or that you can trust the person you're transacting with. Or that you can trust the other actors not to scam you, steal from you or otherwise negatively impact your relationship with the blockchain. Or that you can rely on the legal system for remedy. Or that the key holder is the rightful key holder.
Further you can't trust that everyone else will regard the blockchain you're using as the source of truth (See: every fork ever).
Blockchains are an interesting thought exercise but ultimately achieve, literally, nothing. Certainly not in a way that's better, faster, or more efficient than a centralized store.
I personally have not been able to think of a strong blockchain use-case that doesn't rely on spending money in a way the government doesn't want you to or to gamble on something. Even projects like Brave as a counterexample, really make me question how necessary the blockchain part is.
Was it not possible to donate to napsture or any of the share networks? You can donate to TOR by hosting a node.
Blockchain isn't untraceable. The opposite in fact. So are you arguing that "happens to be the only way at the moment" is the same as "the only possible way?"
Chainlink and some Ethereum dapps have proven that you can get decentralized 'real-world' truth into smart contracts, at least from world market data. You can debate at how decentralized Chainlink's architecture might be, but it's certainly a blockchain oracle system that's been proven to work thus far.
Chainlink's model has hardly proven itself, even if the marketcap could lead one to guess otherwise.
Node participation is permissioned and the economical model has not even started to be tested: queries are free and nodes are paid through inflation (i.e. from token holders). The whole model of trust in oracles depends on incentives, so in reality nothing much at all has been proven.
I have pretty much given hope in seeing concrete progress from SmartContract at this point. They're now hyping off-chain computation while the simple decentralized JSON query usecase is still vaporware. If you're interested in this area, you could look towards The Graph, as they attack essentially the same fundamental problem and are launching an incentivized testnet with actual economic incentives[1].
You can get decentralized world opinion from a trusted source of truth. The reality is that blockchain guarantees break down right exactly at the point a single element of trust enters the system. This invalidates the entire guarantee and therefore the costs associated with blockchain are purely superfluous.
> Blockchains are an interesting thought exercise but ultimately achieve, literally, nothing.
You don't need to provide computational garuntees (in the sense of polynomially bound adversaries or whatever) to achieve something. Most things in the offline world don't provide these types of garuntees and still change the world.
> Certainly not in a way that's better, faster, or more efficient than a centralized store.
I personally think the bitcoin craze is silly, but how does one define "better". Certainly there are people who use it and get value from it. Who are we to say its not "better" to them.
Better, faster, and more efficient isn't in the value proposition for decentralized blockchains. It's anti censorship, anti authoritarianism, and open source infrastructure.
[edit] Sorry, to be clear, in the sense that a sufficiently motivated government will simply work around any challenges it offers. For instance, I can count on 0 hands the number of non-Party members in North Korea using blockchain technology.
Sort of. The difficulty comes in the spending. The government can easily ban conversions from crypto to fiat, and immediately all the speculators will sell. The last crash was supposedly caused by someone trying to sell just 9000 BTC. This will drive the value towards zero. You won't be able to spend it at any legitimate merchants. The illegitimate merchants will not take it at anywhere close to today's value. So yes, but also no.
For context, that is nearly half of a billion dollars worth, it is hardly a small amount. Try selling half a billion dollars of anything on short notice and you'll observe similar market reactions. I think that the fact that the market swallowed up that kind of volume is indicative of Bitcoin becoming more mature in a market sense, not less.
The government has banned file sharing, marijuana, prostitution, etc., and all those things still occur at billions of dollars of value scale. They occur because those transactions derive value for participating parties.
Any nation state that bans crypto assets just pushes development and innovation out to the more accepting countries. And so you have game theory against other competing nation states, where if you ban it and they don't, capital flight occurs and you end up losing in the long run.
Blockchains are a way to design applications that cannot be stopped or interrupted unilaterally — to decouple the execution of programs from the ownership and control of the machines on which they run.
This is a deep and fascinating idea that I get the impression you are motivated not to understand.
> If I hold Dai on Ethereum, nobody can take it or my account.
But then you trust other people to even accept your Dai. There are literally thousands of cryptocurrencies. How many of them are at all viable (for any definition of viable)?
> Of course, if I want to cash out to my bank account, I must trust the banks
Yes. Just like you have to trust the gazillion bitcoin exchanges. Or the people who let you convert cryptocurrencies into real money.
> Imagine if you could bring these improved characteristics to any arbitrary computation?
I don't have to imagine. You already said it yourself: "I must trust the banks". Cryptocurrencies are trustless. To bring any of the perceived "improved characteristics" you need to painstakingly recreate all the institutions based on trust that already exist in the real world.
> But then you trust other people to even accept your Dai. There are literally thousands of cryptocurrencies. How many of them are at all viable (for any definition of viable)?
Dai can be exchanged 24/7 without a counter-party, with deep liquidity, on a variety of decentralized exchanges and mechanisms: Uniswap, Curve, Sushiswap, 0x, 1inch, and others. You can see and understand liquidity, volatility, emission schedules, and code transparently on-chain. You can't do this in the traditional system.
> Just like you have to trust the gazillion bitcoin exchanges.
It sounds like you might be impressed by the decentralized exchanges I mentioned earlier.
You can exchange any crypto asset — "viable" or not — for any other, at a market rate, without a counter-party, and then liquidate the "more viable" asset via one of many exchanges or off-ramps. You have a lot of control over the risks you take.
> Blockchains can only offer their guarantees for concepts entirely encapsulated within the blockchain. As soon as a blockchain touches the real world, trust is required and the guarantees break down.
This seems analogous to declaring, "numbers only offer their guarantees for concepts entirely encapsulated within mathematics; therefore, as soon as they interface with the real world, its utility breaks down."
I was agreeing with them until the very last bit where they conclude that this means blockchains achieve nothing. Then I read their nickname and remembered they troll almost every crypto/blockchain-themed thread with vaguely-related shallow quick takes. I hate to go so fast into ad-hominem, but the intention doesn't seem honest.
At least their argumentation is evolving and becoming a bit more convincing, even if today's argument reduces to a false dilemma fallacy (moreover, the guarantees of a nakamoto-consensus blockchain about its internal state are not even absolutely strong).
Well, I do apologize if I've taken it too far towards the tail end.
My argument has evolved to the extent that I've been able to pin down what my gut misgivings have been. I don't know that my position has changed so much as I continue to drive towards clarity.
Thing is, I hate being wrong -- and my goal is to be wrong as little as possible. This means constantly challenging my own positions so that I can discover their limitations ASAP and change them early!
You are right, I'm not a fan of cryptocurrency of course, however, I'm always open to changing my mind.
I see the froth in the market, I see smart folks trying to staple blockchain to anything that moves for thirteen years (!!) and I see no solutions that achieve anything in the real world more efficiently than classical solutions. Folks will say it's fine, that it has other intangible benefits like "censorship resistance" and "decentralization" and "trustlessness" and my explorations have focused on 'given that it's slower, less efficient, etc, do it's intangible benefits make up for that.'
And thus far, my conclusion is no - and I can speak to that. I learned an awful lot about the space, about cryptocurrencies, about blockchain and thus far I've found a pretty naked emperor. And a lot of really fun technical challenges! I can see why tech folks love it.
Thus far what I've seen is a sea of the same old scams that traditional finance law seeks to eliminate given free reign to take advantage of the least well off. And several new kinds of crime invented along the way - like ransomware. I see an entire country of electricity wasted on hashing random numbers while the ice caps melt. I see 100g of e-waste per transaction thrown into a pile, then buried because e-waste isn't actually recyclable. And a pile of cargo-culted trivially disprovable arguments about voodoo economics.
If you're really primarily worried about the sea of scams, I think the focus on crypto is misdirected. My opinion is this tsunami of money flowing into ponzis is way bigger than crypto, and looking at crypto in isolation is missing the forest for the trees.
The astronomical rise in ponzis and scams corresponds with the rise in quantitative easing in the world's central banks. Effectively creating a tax on not owning assets. There's been a large scale, mostly proportional, transfer of wealth from poor to rich going on, and people are now tripping over themselves trying to play catch up.
From reading about the history of periods of hyperinflation/asset bubbles, it's clear to me that people will find any way to get rid of their money when they think it's going to lose buying power, no blockchain is needed for that.
Stopping blockchains themselves would have very little effect on the number of scams. Hell, most of those scams don't even use blockchains and decentralized technology at all. They run on centralized copycats and are centralized themselves. Not much to do with crypto except hijacking the aura of innovation. Nobody can shut down Bitcoin, but they can certainly shut down Binance/BSC.
Now, wonder why aren't governments doing more to stop their people from investing in scams? You had the whole WSB GME saga. You have the Miami governor hyping Bitcoin after his rich neighbors convinced him to buy in. And now you have literal children buying Dogecoin. Whether people lose their savings on GME, million-dollar shacks, NFTs or tulips makes little difference. The alternative to people trying to out-trade their neighors is people blaming the ones responsible for the situation in the first place. So why would they try to stop it?
Thing is though you’re focusing on one aspect rather than the picture. The picture is there are high school students younger than Bitcoin. No killer feature, no killer use case, massive inefficiencies and the intangible benefits really just mean that scammers can enact transactions illegal for a good reason. That’s not progress.
It’s wasteful. It’s slow. And all it really manages to do is hurt people in both old but updated ways; and new and exciting ones!
We ban things which serve only to cause harm like dumping chemicals in the lake. I’d say with that in mind why even allow it in the first place? Regulators were sleep at the wheel because it sounds complex.
[edit] the tangible difference between Gme and crypto is that everyone is trading on the exact same information. True, correct and regularly reported. The last tether transparency report was a damning settlement with the NYAG.
One aspect? This is the full picture. We wouldn't be talking about how polluting Bitcoin is if not for the all-assets bubble, as miners wouldn't be incentivized to spend much energy mining it.
Nobody talks about ransomware or the Silk Road anymore. Crypto is all about central bank policies now.
> Regulators were sleep at the wheel because it sounds complex.
Regulators aren't asleep at the wheel, they are on average in the upper classes in terms of wealth, which means they profit from the situation.
> the tangible difference between Gme and crypto is that everyone is trading on the exact same information. True, correct and regularly reported.
Nice fairy tale. Blockchains are auditable in real time by everyone, the stock market is not, as the Robinhood fallout demonstrated.
> One aspect? This is the full picture. We wouldn't be talking about how polluting Bitcoin is if not for the all-assets bubble, as miners wouldn't be incentivized to spend much energy mining it.
We wouldn't be talking about it nobody was using it, and therefore it wasn't polluting. But it is. What's your point? If wishes were fishes and whatnot.
> Nobody talks about ransomware or the Silk Road anymore.
Ransomware is all people talk about if you listen. [0] It's hitting hospitals, schools, children, the elderly, it's an utter disaster.
> Crypto is all about central bank policies now.
No, lol, it's not.
> Nice fairy tale. Blockchains are auditable in real time by everyone, the stock market is not, as the Robinhood fallout demonstrated.
So if you followed my point above, the issue is the point at which the blockchain interacts with the real world. The value of a bitcoin in the real world isn't wholly encapsulated by the blockchain so is not subject to any of blockchain's gauarantees. No information is available for you to make a fair and accurate investing decision. It's utterly uninvestable.
Consider: 95% of all crypto trading volume is fake. [1] This is the volume that determines the price. That's why there's no ETF.
How much leverage exists in the system? Do you know? Where's the data?
Is Tether, the thing that accounts for 80% or more of trading volume [2] is a massive scam of unprecedented proportions?
Just because you refuse to believe it doesn't mean it's a fairy tale lol. Just ask the NYAG. Our boi Paolo signed off on this list of financial atroicities: [3].
All the blockchain says is 1 BTC = 1 BTC and which keys own which coins. Everything else is trustful, centralized and permissioned -- and this is where it all falls down. This is the point I'm making.
You know what's on the blockchain? Tether. QED, honestly.
> ...the stock market is not...
I'm sorry lol, it's regularly audited and the financials are published for your perusal by regulators. Shit happens sometimes, which is why we have laws and law enforcement.
This is a pretty interesting take on it, I like the idea of trust for the info that the blockchain is encapsulate, but nothing more. I haven’t heard it described from that angle often. It has interesting follow ones for ideas like library-incompleteness of a blockchain network. We sort of take for granted the Internet can log, store and display any type of data under the sun. It’s a library. I wonder if that is a safe assumption for a blockchain’s possible knowledge network.
Fwiw, the topic of discussion on the blockchain network entrance point is “Oracles” I believe.
Another side note is criticism of blockchain concepts seemed to have shift a bit towards “this will never work” to “here are the limitations of the use case.”
At first it was challenging to read ruminations on trust from a more critical perspective, as there is a great deal of prior art on it that I suspect this policy review journal on internet regulation is overlooking, but after realizing what they are about, I'm rather glad to see this where they are at with it.
There is a fairly mature practitioners view of trust, with the benefit of a background in the top level concepts in areas like security protocols, cryptography, information theory, game theory, graph theory, functional languages, state machines, even identity concepts like identity providers and relying parties, and other tools we use in security to talk about trust that didn't seem to be on their radar.
However, I am a bit concerned they could use enough of the magic words to work themselves up into a froth and organize a committee to present grievences that non-specialsts cannot reason about (but still condemn in solidarity with the strongest possible words), and that specialists would reject them so bluntly it could seem like cruelty from the outside.
It's not what they've said, it's who they are and that they've said something. Looks like they're rounding on us.
I'd trust the blockchain enough to use it for voting if implemented in an open-source way. Something like Monero allowing for only the individuals involved in the transaction to know who they voted for.
I would not use a blockchain (nor anything else) for e-voting to be honest. While I could get somewhat confident with some of the e-voting protocols (and that's not a given), it means that citizens should trust a protocol (and an implementation, and a machine) that only people having a doctorate in the field can assess. On the other hand, paper voting is simple, secure enough, and easy to understand by everyone.
In my opinion, e-voting is a solution to a problem that never existed.
Reminder that using paper ballots mean that you never can make sure your vote was counted accurately and you have thousands of people on extreme sides of both political spectrums capable of interfering with your vote in some way.
I think any reasonable system would include both. Paper backups + digital efficiency seems like the way to do it. Maybe paper backups + blockchain digital solutions would be preferable.
I think the point of blockchain is that it's more traceable and secure than other open options. I would think of it less as a crypto-currency and more of a merkle tree like git. Voting blockchain solutions won't be decentralized. It's just a useful protocol with some benefits.
You only need to trust one of them, or trust that they would not all conspire to steal the election the same way. Not too hard, compared to a piece of software that has a much less reliable supply chain.
> citizens should trust a protocol (and an implementation, and a machine) that only people having a doctorate in the field can assess
People commonly do rely upon encryption schemes in precisely this way to protect their finances, healthcare, privacy, and so on (and in spite of constant implementation failures!). I would revise the premise to something like, "it will several decades for users to build trust such a system".
> In my opinion, e-voting is a solution to a problem that never existed.
I believe using it to re-implement existing voting schemes is misguided; it would be like using the internet to replace in-person banking with video calls to a bank teller. New paradigms are more exciting to me than recreations of existing paradigms, even if some features are sacrificed (e.g. cash deposits, in the banking example).
The geographically-hierarchical systems we rely on currently evolved based on their useful properties of being communication- and computation-efficient. That is, holding elections which satisfy the Smith criterion [0] or offer Byzantine tolerance [1] would be difficult to achieve if all you have is paper, pencil, and Pony Express. It also supports why elections are held relatively infrequently -- sending politicians overland to gather together to perform some kind of in-person consensus mechanism (e.g. quorum establishment) isn't something you want to do all the time.
We have back-justified this system with the rationalization that local leaders best reflect the concerns of their community, but this is an enormous simplification -- essentially, it takes the preference space of the electorate (all the issues they care about), embeds it down to one dimension (the list of candidates), and then re-projects it back to the higher space (the candidate's stances). Preserving the feature space by holding more frequent elections [2], or allowing users to choose which features they care about through issue-based vote delegation [3], would be more interesting to me.
To go back to the previous point, as complexity increases, trust becomes more difficult to grow, and existing mechanisms also have thousands of years as a head-start. It will take time, but I hope that people will be open-minded enough to try it at some point in the future. Maybe it will be as low-stakes as how to stock the office fridge, or which equipment to purchase for the local park. But these are the kinds of baby steps that will eventually enable better governance systems.
This still doesn't help, does it? If I can verify that I voted, and my vote counted for something, doesn't mean that the entire vote was counted correctly, or that everyone voted as they are saying they voted, or that a "corrupt government"[1] didn't flood the vote with their own fake votes.
[1] "Corrupt government officials" is the inevitable straw man in any blockchain discussions.
Blockchains can only offer their guarantees for concepts entirely encapsulated within the blockchain. As soon as a blockchain touches the real world, trust is required and the guarantees break down.
Concretely: cryptocurrencies encapsulate the quantity of units within the blockchain. 1 BTC will always equal 1 BTC. This is why currencies are so far the only thing you can actually use with a blockchain.
However, that doesn't mean you can trust the exchange rate (obviously, given Tether, but also, exchanges) or that you can trust the person you're transacting with. Or that you can trust the other actors not to scam you, steal from you or otherwise negatively impact your relationship with the blockchain. Or that you can rely on the legal system for remedy. Or that the key holder is the rightful key holder.
Further you can't trust that everyone else will regard the blockchain you're using as the source of truth (See: every fork ever).
Blockchains are an interesting thought exercise but ultimately achieve, literally, nothing. Certainly not in a way that's better, faster, or more efficient than a centralized store.