
Why “blockchain” is BS in 4 slides - thijser
https://twitter.com/ncweaver/status/980485587827224577
======
cornholio
There is some truth in the slides but it's well mixed with falsehoods and
misunderstandings.

* Distributed consensus schemes are not useful only for monetary applications. When they are used as such, there exist mechanisms to commit to a certain fiat price and minimize market exposure to the point where transactions are almost free, in fiat terms.

* The disbursement of tokens and the distributed consensus rewards do not need to be tied together like in Bitcoin. A premined token like Stellar can offer very strong security guarantees without needing mining pools (but of course, any kind of imaginable database is vulnerable to majority attacks, so that means nothing by itself)

* The limited block capacity is a Bitcoin-specific problem that incidentally motivated interesting results in off-chain transactions (Lightning).

* The sorry state of the distributed financial markets says nothing about the technology and more about human greed and the slow capacity of regulators to adapt; critically, smart contracts and distributed algorithms enable control mechanism and hard guarantees that have no old world equivalent, they can eliminate counterparty risks, guarantee solvency and fair arbitration etc.

That being said, 95% of the times the word "blockcahin" is uttered these days,
what follows is most likely bullshit.

~~~
JumpCrisscross
> _smart contracts and distributed algorithms enable control mechanism and
> hard guarantees that have no old world equivalent, they can eliminate
> counterparty risks, guarantee solvency and fair arbitration etc._

The required nexus between the blockchain and the tangible and legal worlds
means every limitation that exists today will exist for a "smart contract".
It's the same plumbing with a paint job.

~~~
as300
I'm sort of thinking out loud here, but the nexus will have to consist of
third-party auditors who operate based on reputation.

Right now, we have the government operating as both the "miners" and the
auditors.

A middle-ground, then, might be one in which there is a general-purpose public
blockchain where the government takes the role of the trusted third-party _on-
chain_ , thereby lowering the overall societal costs of things like
unfulfilled contracts while still ensuring that my oil-reserves are what I say
they are.

From the government's perspective I see this as desirable but falling prey to
the principal-agent problem. We'd need virtually no civil-court judges or
attorneys to prosecute white-collar crime anymore. It'd lower costs, but in
doing so unemploy many of the people in the system.

~~~
jayd16
This is called the Federal Reserve Bank and it is indeed separate from the tax
and fraud portions of the federal government in the US.

But the rest of your post is pretty silly. How does a secure digital exchange
protect against fraud? It doesn't.

~~~
as300
Fraud can occur when a party lies about assets it owns when entering into an
agreement, which would be prevented if you had to present proof of ownership
for any asset you claim to own? Most ponzi schemes would never happen.

~~~
jayd16
You can own something, accept payment for it, and never actually relinquish
ownership. Besides, the blockchain is only proof of ownership of things on the
chain. Real world things are not covered at all.

~~~
hndamien
Digital rights are real words things though. Other forms of rights that are
not currently digital could be made digital too.

------
kbenson
Ethereum smart contracts are million dollar bug bounties? That sounds about
right to me, and seems historically accurate.

~~~
TTPrograms
By this logic so is every financial software system, though.

~~~
jacques_chester
Bugs in financial software can typically be unwound by the parties involved,
or by courts, or both. This is less true for a scheme designed to be
irreversible in itself.

~~~
mikekchar
Traditional finance isn't any easier to unwind than bitcoin. If I give you $5
I can't magically "erase" that transaction. The $5 bill doesn't materialise
back in my pocket. Instead, I get the police to force you to give the money
back. As an accountant, if you erase a transaction (even if it was a mistake),
you can go to jail. What you do it make a balancing transaction to correct the
mistake. Nothing is stopping you from doing the same thing with bitcoin.
Making it so you can't erase or hide the previous transaction just enforces
rules that already exist -- and it a great feature.

The main difference is that it is infeasible to hold large amounts of cash,
and so we usually allow a third party to hold on to our money. That third
party will usually hand over your money if requested by the government (some
overseas banks are notable exceptions!!). With bitcoin I can hold on to it
myself and not have to worry about the actions of a third party. Secondly,
even if you horde cash, it's hard to secure it. It's basically impossible to
make it so that only you can access it. With Bitcoin, it is easy to secure a
large amount of value and ensure that only you can access it. Bizarrely, a
large number of people totally ignore this advantage...

This is the entire point of bitcoin. With the hype, fraud and what not, people
often assume that bitcoin must have been developed as a scam. But I really do
believe that the purpose was to allow people to have access to money and _not_
have to rely on a third party who probably doesn't have your best interests at
heart. It's not really surprising that criminals will be interested in this
kind of system. They are the ones with the highest need. The government can't
freeze your account.

The interesting question is: do we need that kind of security? Do we trust the
banks and government to act appropriately with our money?

~~~
jacques_chester
The difference is that if there is an _error_ , I can unwind the error with
the counterparty's cooperation _or without it_.

A bit harder to do that when someone deprives me of bitcoin by theft or fraud.

I am familiar with compensating transactions. Ledgers are a necessary
mechanism, but they are not a _sufficient_ mechanism to safeguard against
theft, fraud and error. These systems work because of multiple overlapping
defences and they still fail.

I find that I tense up at the strong strain of technoutopianism that runs
through bitcoin and cryptocurrency circles.

You're asking the rest of us to bet everything on block. I don't trust anyone
to not make a mistake and I don't believe in single lines of defence, no
matter how computationally intractable they are on paper.

------
booomagnolia
The slides make a number of decent points, but the general tone ends up being
self-defeating, which is a shame because many of these points are actually
worth debating in depth.

Specifically, on governance of blockchains (as in: trustless distributed
consensus systems, and not as in: merkle chains), I do tend to agree with the
tweets that devs have a huge amount of pull, and that this is both grossly
under-estimated and under-discussed.

------
mjamesaustin
Isn't he discussing cryptocurrencies in particular rather than blockchain in
general? There are many uses for blockchain other than as a cryptocurrency.

Correct me if I'm wrong - I'm not an expert in blockchain by any means.

~~~
asfgjadfgionoin
>There are many uses for blockchain other than as a cryptocurrency.

Name one.

~~~
legionof7
Governance (DAO's, Ardent United, Aragon, etc.)

~~~
davidgerard
That's "interesting" as opposed to "useful", because The DAO is most famous
for being hacked.

------
jayd16
Brutally concise. This thread is going to get rough.

------
darawk
> Cryptocurrencies are provably inferior when you don't require censorship
> resistance

A) This isn't true. They also have predictable monetary policy and anonymity
(or pseudonymity, in the case of Bitcoin). These can be _useful_ properties,
whether or not you agree with their uses.

B) Even if it were true, so what? Censorship-resistant money seems like a
pretty cool technology to me.

> Any volatile cryptocurrency transaction requires two currency conversion
> steps.

Sure, in the absence of merchants accepting the currency that is true. But
that's sort of like decrying the internet as useless when it came out because
nothing was on it. And listen, if you want to go ahead and make a case that
cryptocurrencies are structurally incapable of becoming commonly accepted - by
all means, go for it. _That_ is how you attack the concept. You don't attack a
new technology by saying it isn't adopted yet:

"Cars can never work because there are no paved roads"

"Credit cards are stupid because nobody accepts them"

If you want to try to make some intrinsic, fundamental case that there is some
structural barrier preventing the adoption of cryptocurrencies, that's a
perfectly reasonable line of argument to make. Simply stating the obvious,
that they are not yet widely accepted, is not.

> Any lottery-based reward creates mining pools, which means a few entities
> can and do control things.

While true in a certain sense, an analogy here might be useful: Capitalism is
centralized, because people organize into corporations, which end up
aggregating capital. This is an accurate description of capitalism. However,
capitalism is still distinct from what's commonly known as 'top-down economic
planning', e.g. communism. The fundamental difference is that the process is
organic, and for the most part, empirically, the organic version of this
process leads to better outcomes.

Again, perfectly fine to argue that _this particular one_ doesn't lead to good
outcomes for such and such reasons. However, to argue that it is centralized,
is kind of missing the point. Yes, powerful entities do form, but their power
is not guaranteed. Their power is highly contingent upon their continued
performance of their duties, and the collective desire to let them keep their
place. This powerfully aligns their incentives with the well-being of the
ecosystem.

Now, does this mean that that alignment is perfect? Definitely not. Just like
in a capitalist economy, those incentives can and do deviate from each other.
_However_ , these things do not exist in a vacuum. All tradeoffs must be
considered as alternatives to competing mechanisms. And I think the tradeoff
made here by crypto-currencies is a good one, relative to alternative options.

> Limit capacity fee death spirals

This whole slide just ignores the existence of payment channels. The author is
sufficiently educated to know he's being disingenuous here, so there's no need
to respond to it beyond that.

In summary, and I want to be totally clear on this: There are great reasons to
be skeptical of crypto-currencies. There are lots of things they don't do
well, and there are lots of very serious tradeoffs that they make that are
different than the ones we make with government-backed fiat currencies. They
pose real risks to certain pillars of civilization and it's not clear that
they are on balance good things. But our criticisms of them should be couched
in an understanding of those risks and tradeoffs. They offer real benefits in
some dimensions, and they have real costs in others.

If someone is telling you that a politically neutral, censorship-resistant
world currency is, a priori, useless, you may want to re-evaluate the source.
We may or may not _like_ what something like Bitcoin will do to the world -
but the idea that it doesn't have the potential to do _anything_ is really
quite silly.

~~~
JumpCrisscross
> _This powerfully aligns their incentives with the well-being of the
> ecosystem_

Like ensuring Bitcoin can't scale beyond the Great Firewall's limits?

~~~
darawk
What do you mean by that? By 'scale' are you referring to transaction scaling?
If not I don't understand your point.

~~~
JumpCrisscross
Bitcoin miners' interests don't always align with the Bitcoin community's.
Miners want to keep control. If growing the system means they lose control, it
can be in their interest to limit growth (which benefits everyone but hurts
them). This appears to have happened with mainland Chinese miners resisting
transaction scaling on the Bitcoin blockchain due to their Internet
constraints (being behind China's firewall).

~~~
darawk
Ah, yes, that is an excellent example of that sort of misalignment. However, I
think its also an excellent example of what's great about cryptocurrencies.
Because in that situation, Bitcoin as an ecosystem has an out: A hardfork. If
the miners and the users disagree, a new group of miners can form around a
separate code-base that addresses this problem in a different way. Everyone in
the ecosystem is incentivized for this not to happen, because it dilutes
value. However, if the issue becomes salient enough to overcome that dilution,
a fork will occur, and that has happened a few times now.

To me, this is a pretty awesome way of discovering the best way to do things.
If two parties can't come to agreement, they simply go their separate ways,
and organically the system comes to decide which chain is more valuable. I
find this to be one of the most beautiful, elegant parts of the crypto
ecosystem.

Consider the contrast to a government currency. If you disagree with how the
Chinese Communist Party manages the Renminbi, or how the Federal Reserve
manages the US dollar, you don't meaningfully have the option to create your
own alternative, and let it be judged by the world. This is the truest sense
in which crypto is decentralized.

Now, this model is not without its flaws. National currencies have done very
well for a long time being managed in this way. The ability to homogenize
everyone on a single national currency has real benefits. It's easy to build
up lots of infrastructure around it because it's dependable, for instance.
Thinking through issues like this are really what's at the root of a well
thought out criticism of crypto-currencies, though, IMO.

------
Steeeve
The whole cryptocurrency market is surreal to me for these reasons and many
more.

But I did think the same thing about Twitter, especially early on when it was
constantly broken. And yet, while it was broken people were still talking
about it and it was gaining mommentum.

That's the parallel I see here. Enough of the right people are talking about
it that it's going to be a thing for at least the near-term future. The whole
eco-system can be flawed, but it has momentum.

And even among those that have been scammed, it's in their best interest to
keep pushing the virtues of cryptocurrency as long as they have any left to
sell.

~~~
ebbv
Except the thing that kept twitter around through the problems was
celebrities. People following celebrities like Ashton Kutcher and Kim
Kardashian and comedians kept it relevant until it became used in the Arab
Spring and then it became “legitimate.”

I don’t see a parallel there for cryotocurencies. It’s just a bubble and I
don’t see any Arab Spring type of event to legitimize it.

------
EthanHeilman
Disagree with slide three on "private blockchains". Weaver underestimates the
difficulty of reaching consensus among a fixed set of participants by assuming
there is just one party that signs blocks. If there is more than one party you
end up in the land of BFT. Distributed systems are hard to build. Additionally
a solution which is trivial to implement makes that solution good. I wish we
had more trivial solutions to these problems.

------
OrganicMSG
Seems fair.

Would be nice to have a fifth slide explaining friction cost and why it might
be a very bad idea to embed ever increasing friction as your formal
verification method.

------
augbog
Totally off topic but for his bio says for secure messages use
Signal/iMessage.

Signal is great but iMessage?

~~~
Fnoord
iMessage is more popular. You want people to use Signal, but if they don't
want or cannot use that, iMessage is his preferred alternative. For a similar
reason, I use Signal and WhatsApp. (All 3 are E2EE.)

Nicholas Weaver covered iMessage's strengths and weaknesses before:

(20150804) iPhones, the FBI, and Going Dark [1]

(20150806) Nicholas Weaver on iPhone Security [2]

(20150908) Apple's iMessage defense against spying has one flaw [3]

(20171211) Is Apple Fully Complying With iMessage and FaceTime-Related Court
Orders? [4]

I also remember a technical analysis on iMessage by either Matthew Green or
Nicholas Weaver.

[1] [https://www.lawfareblog.com/iphones-fbi-and-going-
dark](https://www.lawfareblog.com/iphones-fbi-and-going-dark)

[2]
[https://www.schneier.com/blog/archives/2015/08/nicholas_weav...](https://www.schneier.com/blog/archives/2015/08/nicholas_weaver_1.html)

[3] [https://www.wired.com/2015/09/apple-fighting-privacy-
imessag...](https://www.wired.com/2015/09/apple-fighting-privacy-imessage-
still-problems/)

[4] [https://www.lawfareblog.com/apple-fully-complying-
imessage-a...](https://www.lawfareblog.com/apple-fully-complying-imessage-and-
facetime-related-court-orders)

------
dimgl
I'm not a fan of cryptocurrency and even these slides were horrendous.
Seriously, way to make your point so poorly that not even people who agree
with you want to read it.

Also, this guy didn't even discuss blockchain tech. Just cryptocurrency.

~~~
KirinDave
Because without cryptocurrency, as he says, it's a merkle tree and THAT IS NOT
NEW. Github already did it. It works. Revolutionary? No.

~~~
cozicoolmail
*Git already did it. GitHub is just a site running a Git server for people to use.

~~~
KirinDave
I choose Github just because of its indisputable scale and financial success.
Github pushed git to where it is now. Not linux (we don't even use git
remotely like the kernel devs do), not Linus, or any previous system. Github
did it.

Say what you will about their ethics, their structure, their politics, that
company did this thing and they're now more important to the world of software
products than any prior company in that role ever has been.

------
trisimix
A lot of what you said was crap and it devalues ther correct things you said.
That said I assume you used these as a visual aid and maybe delved more than
what you posted here, a lot is very extreme.

------
kerng
I read some of the slides, but they are authored from an emotional standpoint,
which makes it difficult to follow ideas and conclusions. Statements like
"public blockchain security is a lie", are just not useful. If this content is
used at Berkley I'm worried for peoples tuition. I'd expect more depth and
logical statements for a presentation at a university.

~~~
Fnoord
> Statements like "public blockchain security is a lie", are just not useful.

The good news is the statement you quoted was _not_ made.

> I'd expect more depth and logical statements for a presentation at a
> university.

The slides _contain_ logic statements, depth, and e.g. historical comparisons.

Since there's some character assassination in this thread (how sad): Nicholas
Weaver's credentials can be found here [1].

[1]
[http://www1.icsi.berkeley.edu/~nweaver/](http://www1.icsi.berkeley.edu/~nweaver/)

~~~
kerng
Sorry, I don't know the author and it shouldn't matter. Still think the slides
are made up of emotional trigger words rather then arguments and content, you
can grab content like this from random reddit threads. How sad indeed.

~~~
Fnoord
They're a summary (powerpoint presentation); not the actual argument(s).
Emotional trigger words stick; empty abstract words don't.

------
AndrewKemendo
What am I missing about Cryptokitties? It was on the last side. A16Z/USV
invested $16M [1].

They claim digital collectibles is a viable business.

[1][http://fortune.com/2018/03/20/cryptokitties-andreessen-
horow...](http://fortune.com/2018/03/20/cryptokitties-andreessen-horowitz-
cryptocurrency-ethereum/)

~~~
leroy_masochist
According to USV, the reason is that the underlying technology is really
exciting and has lots of potential:

> The (original) internet brought us a world where any site could link to any
> other site, and they could all be accessed from anywhere in the world. This
> was the first interoperability revolution. The next one will be with data
> and digital assets. For a long time, data has been the property of platforms
> — with cryptonetworks and cryptoassets, data can live outside of anyone
> platform, under the control of users. This has the potential to open up a
> lot of innovation. [0]

Matt Levine as usual had a bit of fun with this:

> Look: They are right, and I was wrong, and I am sorry. I thought that
> CryptoKitties was just a game that allows you to buy cartoon cats on the
> blockchain, and I thought it was silly. But I completely missed the point.
> CryptoKitties is actually a game that allows you to buy cartoon cats on the
> blockchain, _and put little hats on them_. [1]

[0] [https://www.nickgrossman.is/2018/zombies-eating-
kitties/](https://www.nickgrossman.is/2018/zombies-eating-kitties/)

[1] [https://www.bloomberg.com/view/articles/2018-03-22/when-
marg...](https://www.bloomberg.com/view/articles/2018-03-22/when-margin-loans-
go-wrong)

------
logicallee
That's not why blockchain is bs.

Let me tell you a little story you might want to remember, so you can tell
your grandchildren. This is how you might tell them:

"You think algorithms are hard, little children? You don't want to stay up to
date? Well gather round, gather round, let gramps give you a sense of human
folly and just how far we have come. Maybe that will let you appreciate how
lucky you have it.

"Way back before all these modern doodads, gizmos, and doohickeys, back in
aught 9, or "two thousand and nine" as we called it, mathematicians were so
clueless about algorithms that they made distributed databases resistant to
sybil attacks through proof of work doing random-ass hashes. What that meant
is instead of figuring out how to prove nodes weren't colluding, we made them
prove they were burning oil - or gas - or coal - or sunlight, or whatever they
wanted. But they had to throw their hands up and come up with a random hash,
to prove that they were really all working on the problem.

"By 2018, the resulting worldwide bitcoin database used 30.1 terrawatt-hours
of power per year to perform the work that a $20 dedicated chip could do in
the size of a container of tic-tacs. And that $20 includes 100 gb, a dedicated
microcontroller, and 5 years worth of alkeline batteries. The database size
borders on nil.

"All because we didn't know any better. That is something like $3,848,100,000
in 2018 money - three _billion dollars_ spent on doing $20 worth of work.

"To put this into perspective, imagine that in 1802, Merriam Webster had
purchased fifty thousand tumblers, into which it put printed plates, and then
hired fifty thousand workers to open each one every few minutes, and count to
see if it had managed to assemble the plates into alphabetical order. (This is
called bogosort.)

"Well, if you don't know that there is such a thing as a sorting algorithm, if
it's unknown to science, then perhaps bogosort is the best you can do. Such
was the state of distributed blockchains in 2018.

"So you need to be thankful for what you have. Oh but it's tough! You have to
think it through! Well in my day nobody thought it through. We just shoveled
thirty terawatts of coal into furnaces and made little kids cry when they
couldn't afford gaming equipment anymore, since all of it was being used to
get around the fact that nobody sat down and did the math for a $20
distributed database.

"you kids have it printed in black and white. sit down and learn. we had to
take electricity from schools and hospitals, to raise the sealevel to where
parts of Hawaii had to be evacuated. This stuff has consequences. Learn your
algorithms. Trillions of watts died for them."

~~~
wellboy
Blockchains are moving away from PoW to PoS, which requires a millionth of the
energy use, so that's not really an argument.

~~~
logicallee
Kindly elaborate. Which ones? To what extent? What is the state of the art
here?

This was my only issue with bitcoin when I evaluated it several years ago.

~~~
wellboy
Pretty much all the newer ones, Nano, Iota and Eth probably soon to.

There is also a debate to use delegated PoS or a hybrid of PoS and PoW to get
both of their upsides with none of tbeir downsides.

~~~
yc-kraln
Iota is not a blockchain. It's also not a cryptocurrency. It's about 98% scam
and 1% insane. and 1% Bosch.

~~~
wellboy
Yes, 3rd gen blockchains aren't blockchains anymore. :)

------
JumpCrisscross
In my travels across the country, one angle of cryptocurrencies I take solace
in is its relative confinement to younger urban coastals (note: I'm one of
these). Its proponents can, for the most part, afford to lose their
investment. In a decade's time we'll have a generation of investors with a
healthy sense of wariness.

~~~
InclinedPlane
That is not true in either case. Cryptocurrencies have gone mainstream
recently, receiving a lot of attention by the mainstream press. Additionally,
there's no proof that being burned by cryptocurrency shenanigans leads to
greater wariness in the group as a whole.

~~~
JumpCrisscross
> _Cryptocurrencies have gone mainstream recently, receiving a lot of
> attention by the mainstream press_

They receive a lot of press attention because people like me, who don't own
any cryptocurrencies and never plan to, find them fascinating. When I'm in San
Francisco or certain bars in my Manhattan neighborhood, people talk about
owning them. When I'm at a restaurant in Phoenix or Salt Lake City or Raleigh,
it's people observing the phenomenon just like I am.

> _there 's no proof that being burned by cryptocurrency shenanigans leads to
> greater wariness_

Fair enough. My basis is the general wariness that followed the Great
Depression. (Counterfactual: no such enduring effect followed the dot-com bust
nor the financial crisis.)

------
a-dub
The financial side is weird, but there are some clever implementations of
cryptographic protocols in the crypto currency space that could be used for
the design of semi-decentralized services that could make the internet better.

This stuff could be the makings of /etc/passwd for the internet.

------
DennisP
> protection is limited to the amount of money wasted

Somebody hasn't been keeping up with proof-of-stake research.

> spammers who want to occupy space _forever!!!_

Or Ethereum's storage rent proposals.

------
jayavanth
April fools?

------
known
Blockchain =
[https://en.wikipedia.org/wiki/Audit_trail](https://en.wikipedia.org/wiki/Audit_trail)
\+
[https://en.wikipedia.org/wiki/Public_key_infrastructure](https://en.wikipedia.org/wiki/Public_key_infrastructure)

------
gweinberg
Has anyone not heard all of this before? And the counterarguments also?

~~~
KirinDave
There aren't many compelling counterarguments. That's why people haven't heard
them.

~~~
kikimora
There is one such argument and I don't think you would need another one. If
you trust your government to control your money good for you. But most of
worldwide population does not trust their governments and for a good reason.
If you live in Iraqi or Syria or Somalia would you prefer your central bank to
control your money or do it yourself? Blockchain gives you that option.

Wealthy people in these countries use offshore locations to secure their money
from their own corrupt governments. With blockchain everybody can have such
option and thus motivate governments to create better environments for
ordinary people. And it is not surprising to see that democratic countries
embrace cryptocurrencies and try to regulate them but more authoritarian
regimes just ban cryptos.

------
EGreg
Since we started intercoin.org I thought I would go through point by point and
see how it applies to our project. It’s true that his points apply to many
projects.

1) Two conversion steps - since Intercoin is designed to be used as actual
currency and not just a store of value, people can pay each other anytime with
zero fees. Given enough adoption, people stop cashing out (think PayPal, Venmo
etc.) and just pay each other in that economy. They do this to save fees and
time.

2) Entity to convert currency: Actually this entity can be a simple market
maker on an exchange. Within its economy, Intercoin has sidechains for each
community and deterministic pricing, with no market makers. And you don’t have
to worry about eg PayPal or Cyprus banks freezing your money.

3) A “private blockchain” requires far more than that if it is to be used for
crypto-currency. The main guarantee is that there are no forks of the log, aka
double-spends. Intercoin lets every community run their own distributed
ledger, so you don’t need to search the whole world for double-spends. That
makes it so efficient you can even do micropayments (Netflix, Basic Attention
Token etc.)

4) Proof of Work/Stake/blah. Intercoin letting communities run their own
ledger the way Wordpress lets them run a blog, it comes with its own set of
challenges as small communities can have very few computers. It has to be
secure like your end-to-end encrypted email when you get on someone’s wifi. So
we can’t use the traditional stuff.
[https://intercoin.org/technology.pdf](https://intercoin.org/technology.pdf)

5) Lottery-based systems create mining pools: yep and in fact any kind of
proof of stake creates centralization, while any kind of proof of work creates
an arms race that leads to centalization. Intercoin takes inspiration more
from XRP consensus protocol and SAFE network design.

6) “Code developers can and do act like central authorities.” If this refers
to issuing the Unique Node List like Ripple, or reverting transactions like
ETH etc. then that’s not good. If this means putting out a new client of
server software and having decentralized adoption then that’s inevitable.
Otherwise you get fragmentation like Linux. And even then, there are only a
few major Linux distributions. I happen to prefer _collaboration_ on a
centralized codebase in this case, but decentralization in everything else.
(eg I would be totally OK with WebKit being overseen by the W3C consortium and
have new ideas begin as extensions that are finally adopted into the main
codebase - think of all the wasted web developer man hours since multiple
browsers launched).

7) Protection limited to money wasted - not sure what that means. A person
knows their money can’t be stolen. In Intercoin our priorities are A) the
overall network must never be corrupted, B) no one can steal your money C) no
one can freeze your money permanently, in that order.

8) Transactions vs Capacity. VERY good points here, and all global networks
are susceptible to this, as are public facing websites (DDOS etc.) This is why
Intercoin is designed to be like the original Internet, with each community
able to run its own network and set its own policies. That allows a
theoretically UNLIMITED number of transactions per second, not 7 or 1000.
Usually each validator includes a free tier for the first X transactions per
day, to known members of the network. Networks run their own computers and the
consensus algorithm is much cheaper and doesn’t waste half the world’s
electricity to work. The validators - being off the shelf computers run by
random people — fund themselves through the currency. But they earn money for
actually processing transactions, not a lottery.

9) Bad economics - yes this is rampant in cryptocurrency circles (eg people
including Satoshi thought Bitcoin being deflationary “sound money” will make
people want to spend it, when the opposite is true). Intercoin has among its
advisors world-famous economists from diff schools like MMT (Walter Mosler)
and Austrian School, Chicago school, precisely for this reason. We want to let
communities issue their own currencies and implement UBI on a community level
through entirely voluntary means. It brings together people on the left and
right.

10) “All ICOs are securities being sold fraudulently” - Intercoin Inc. has
raised money through exemptions with the SEC (Regulations D and S) and is now
working on registering Intercoin tokens _with_ the SEC as securities ahead of
a public offering. Not everyone shirks the law. In fact, we consider tech to
be only one of the services we provide for communities. The others are turnkey
solutions for regulations (securities, money transmission) and taxes (501c3
for UBI donations, capital losses etc.) so communities can install their
currencies as easily as Stripe Atlas lets you open a company.

I hope this addresses it point by point.

------
arisAlexis
just name another technology that can offer immutability and transparency

~~~
majewsky
Git.

~~~
arisAlexis
I will pay you 10K in USD if you make a smart contract on Git. Publicly
committed

------
arisAlexis
amazing how much hate. this is a tech social phenomena. given that only select
people can downvote imagine the censorship.

------
thriftwy
So, what is that you propose instead?

If nothing then disregard you.

~~~
HappyKasper
That’s a bit of a fallacy - you can legitimately point out the shortcomings of
something without needing to name an alternative (e.g. criticizing Ponzi
schemes). In this case, though, you could actually have an alternative of
simply not using blockchain. The world was just fine for a long time without
it.

~~~
thriftwy
For Ponzi scheme, alternative is banks and stock exchanges, _not_ "nothing".

~~~
TheCoelacanth
For cryptocurrencies, the alternatives are the dozens of alternate ways of
transferring funds.

------
charlesdm
I stopped reading when I saw the first slide. Seriously, who puts so much text
on a slide?

~~~
Finnucane
“PowerPoint is also bullshit” is a separate thread.

------
angel_j
Still preferable to governments printing fiat to finance war and capital
crimes, while devaluing you and your generation's labor with institutionalized
pro-inflation economics

------
Donzo
"Every tradeable ICO is really an unregulated security."

I disagree with this claim. It depends on whether the token constitutes an
investment contract. If the token has utility, was sold as a utility bearing
token (rather than an investment opportunity), and if the project possesses an
open codebase which token holders can theoretically modify, then I don't
believe said token is an unregulated security.

Yet, the vast majority of tokens do in fact function as unregulated
securities, which is why these waters are muddled.

~~~
KirinDave
If it's a utility then why ICO? Strictly as a fundraising method? To enable
resale? None of that requires a centralized consensus chain even in a
trustless world.

No, you ICO a utility token because you hope it'll go superluminal by
interacting with an ecosystem full of unregulated securities.

~~~
Donzo
That may be why you would do it, but many motivations exist in this world. To
reduce all these projects to greed-tunnels is to reduce these many motivations
and over-simplify the world.

You are approaching the ICO as though there were some Boolean value as to
whether they are "good" or "bad," and have returned "bad" for you. In reality,
to throw them all in the "bad" bin is lazy and the opposite of due diligence.

Let me give you some examples of other motivations beyond fast cash that might
power an ICO:

1\. Ideology

2\. Community spirit

I will not attempt to encapsulate what these motivations mean to various
actors, but I can tell you that it's not "just about money" for everyone.

However, I will fully concede that most ICOs are scams. Advertising networks
are not being overly cautious by restricting adbuys on ICOs. And most people
are not equipped to tell the difference between a scam project and a real one.

~~~
Donzo
Did down-voters take issue with my position? Please explain.

I'd love to learn more about your position. I seek the truth.

------
wellboy
Slide 1: Obviously you need to convert from and to Fiat since crypto isn't
used by the majority of people duh.

Slide 2 & 3: Yes, 1st generation blockchains are slow and have high fees.
That's why Bitcoin has just implemented the Lightning Network and there are
3rd generation blockchains like Nano and IOTA that have zero fees and instant
transactions. Duh.

Slide 4: False dichotomy. Yes, there are a couple of scams in the crypto
sphere, even 5% of the top 100 are scams, e.g. Eos, Verge, Veritaseum. Is 5%
100%? No. Duh + Facepalm.

------
CyberDildonics
This is an exceptionally terrible 'presentation'.

He says something about distributed trust and then puts 'THIS IS A LIE'.
That's not evidence and it isn't an argument.

He states that developers act as a central authority, which as it relates to
the rules of creating new units and where they go to, is not true, since those
rules are already established for the given chain.

He says there is a fee auction death spiral, which also is demonstrably false.
Even bitcoin, with it's ludicrous restriction of throughput by political
means, hasn't actually gone through a death spiral from fees which rationally
should have made anyone think very hard about its future.

He says almost every exchange is full of fraud. This is debatable, but does
not actually have anything to do with crypto-currencies (which is what he is
actually talking about instead of "blockchain").

The last slide is basically just venting about stupid things people have done
and bought in to, but also has nothing to do with crypto-currencies not
working.

It's amazing to me that people seem so certain of themselves while having such
hollow arguments.

~~~
jayd16
>He says there is a fee auction death spiral, which also is demonstrably
false.

Pretty sure its demonstrably true seeing as BT has gotten so bad the marketing
changed from currency to store of value.

~~~
CyberDildonics
I'm not sure how bitcoin's artificial restriction of throughput (which still
didn't kill it in any sense) means that all cryptocurrencies either suffer
from a fee death spiral or spam. Neither has seemed to happen even in extreme
circumstances.

Bitcoin's nonsense propaganda has nothing to do these assertions of inherent
flaws with crypto-currencies.

