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Why “blockchain” is BS in 4 slides (twitter.com)
373 points by thijser 10 months ago | hide | past | web | favorite | 213 comments

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.

> 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.

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.

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.

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.

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.

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

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.

It's that plus a whole new crop of perverse incentives which arise with any "smart contract". Especially, no smart control can reach out to the "real world" and get data, more less facts. A smart control would essentially be limited to some data-stream in on Internet. And anything like that can be subverted seven ways from Sunday. Do you really want billions riding on THAT?

(and, yes, give us some Rube Goldberg scheme of averaging six different weather stations for your result. I'm sure nothing can go wrong with any of those ideas. Yeah, World finance then gets to be hoisted on the lpad petard).

Something equivalent to LIBOR rates could in principle be made to run on distributed markets with a great deal of transparency and little possibility for manipulation. They are a standard feature of many contracts. Whole central banks could be automated. Something like "next year's tomato quality" will obviously need a physical world mediator, but that's hardly surprising.

When the great recession started, it was not caused by an external shock, rather by the viral mistrust that the underwriters of the bad loans were solvent. A financial fragility problem that the blockchain can work to address.

This risk can be mitigated by bridging the real world and the blockchain using oracles. This risk mitigation can be somewhat decentralized using a voting or reputation mechanism. This is by no means perfect, and I'm not aware of any trustless mechanisms for this, but its a problem people are currently working on, and I think there will eventually be a good solution.

I also don't think this is a false dichotomy. Most likely we'll end up at a place with some improvement over what we have today (I'd actually argue we're currently at this point now) but not without all of the limitations.

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

This is true -- it's also true the 5% is pretty damn interesting.

There are plenty of interesting tokens out there. Some of them are tackling real problems. That's pretty exciting. I don't begrudge someone who's trying to solve something.

The historical analogs are lazy in my view. The financial and political system we operate in today has done plenty of damage. Indeed, some of the key examples listed on the slide.

The last global financial crisis wasn't that long ago (and wasn't that "reversible", certain people may recall). You could spin every one of those dot-points as commentary on our existing financial systems.

Doesn't mean blockchain is going to fix it. In fact, I have many doubts and concerns. There is so much to do. However, I really like that people are trying.

The 5% are interesting in the same way that Communism and hardcore Libertarianism are interesting. "Would be very cool if it could work (there's no way in hell it would work)"

The political overlay is valid - I do see that blockchain can get pretty political. That said, I can't think of any modern political system that couldn't do with improvement.

Even with that remark -- I wasn't thinking particularly politically. There are plenty of markets I think blockchain has a decent swing at.

One of the coolest things about cryptocurrency right now is the insane amount of money being invested in decentralization. With all of the Facebook privacy issues in the news right now, decentralization offers an interesting alternative where users control their data.

Recording something permanently into a blockchain is the opposite of users having control over their data.

Blockchain does not appear to be the best way to build a decentralized system for user controlled data (such as a decentralized social network).

We already figured that system out: local software, local storage, open source, local permissions & controls. Billions of people have personal computing devices now. No blockchain is needed at all, that just adds entirely unnecessary bloat.

You shift the point of control back to the local device and away from the network. It is that simple, and it's how we largely used to control user data.

I didn't necessarily say blockchain. Cryptocurrency and the blockchain is the incentivization structure, not necessarily the end product.

I agree. Blockchain only makes sense for things that require immutability which many applications do not. OpenBazaar is a good example of one of the applications I was thinking of.

Except you wouldn't use the blockchain to have control over their data", you'd use it for identity and verification. Facebook' #1 issue is fake news and Bot's. You can eliminate those problems entirely with a blockchain and smart contract that requires identity and proof of such.

How would you prove identity on a blockchain? You'd be worse equipped than Facebook. Are you suggesting some entity verify folks who sign up for this distributed social network? Make an Ehtereum contract to do it? Either way, this sounds dubious at best.

I think the idea is:

* Website gives person a unique code to broadcast on the blockchain to prove they have control over that identity

* 'Approved' services claim things publically about identities (eg age, allowed to drive) which others can use to verify claims

What I don't get is:

* how you know which 'approved' services to trust in the first place

* why you'd want all of that information public

* how it'd fix the original issue

You can treat the 'approved' services list using a whitelist, like a CA.

The other issue is that none of this is necessary. If I want to prove to Person X that Gov Y says that I have property Z, why can't I just present a cryptographically signed certificate saying I have property X. You could even have a similar revocation list as CA.

revocation seems easier with the blockchain. it just comes with too much other baggage to feel worth it.

> You can eliminate those problems entirely with a blockchain and smart contract that requires identity and proof of such.

You don't think if the problem were that easy to solve, it would be solved already? Throwing blockchain in the mix gets Facebook nothing that it couldn't get today by just partnering with organizations can verify identities.

Not to mention, the "fake news" issue isn't largely an identity issue — there are plenty of people and organizations willing to lie on their real accounts to further their sociopolitical agenda, and plenty more people who don't care if something's true so long as it confirms their existing viewpoints.

It's as easy as requiring identity, just like you have to for your bank account or credit card information. They'd have to treat your FB account like your checking account.

It's as easy as requiring identity, just like you have to for your bank account or credit card information.

In other news, smart contracts eliminated cancer.

>One of the coolest things about cryptocurrency right now is the insane amount of money being invested in decentralization.

All this money is invested in "get-rich-quick" hopes. Few would care, or invest anything, if it was just for the decentralization aspect (case in point, all the failed aspects of decentralized social networks and other such efforts).

>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;

I agree that human greed and corruption is a big problem. It is a problem for any system out there.

But, blockchain was supposed to solve this by introducing trustless and decentralized applications. If there is now a need for regulators, how is blockchain supposed to solve other problems? The world is already complex, we don't need another layer.

So far I've found that if anyone is making claims about "blockchain" which don't just boil down to "basically git", then what follows is entirely bullshit.

People that use the word "fiat" are also entirely ignorable.

If something is 95% of the times X, can't we just label the whole thing as X? Just making life simpler. (Actually, my threshold goes even as low as 50% for the case of BS.)

> * Distributed consensus schemes are not useful only for monetary applications.

OK, but blockchain is not a distributed consensus protocol. It's a document timestamping protocol.

Yes, a document timestamping protocol that we reach a consensus on in a distributed fashion. I'm not sure why a document timestamping protocol can't also be a distributed consensus protocol?

I do kind of find it annoying that we use the word distributed when its a clustered/consensus system. In my mind distributed should mean actors can work independently of each other but that's not really the case here. But this ship has sailed.

I'm not sure why a clustered system can't be distributed? One can always argue over taxonomy, but clustered systems are typically considered to be a type of a distributed system.

I'm also super curious why you think blockchain systems don't have actors that work independently of each other? I was always under the impression that was the entire point.

>clustered systems are typically considered to be a type of a distributed system.

Sort of. However, a Perforce server with local replicas is not the same thing as a fully offline git transaction, for example.

>I'm also super curious why you think blockchain systems don't have actors that work independently of each other?

They work as part of the network but two users can't make a transaction without having to involve the network.

True, but in practice "blockchain" implies some sort of distributed consensus.

Except for private blockchains, which are totally brain-dead.

Github does pretty damn well selling private blockchains and whitelabel private blockchain services.

Clever. I like it.

Can you explain? My understanding is we're all working on the same hard math problem, once a certain number of us have verified the answer (ie distributed consensus) one of us is given a reward to encourage further problem solving.

Nope, any bitcoin client can verify any transaction very easily. (Bootstrapping by verifying every transaction in the blockchain does take a while though.) Proof of work is only to prevent a 51% attack where someone spins up enough bots to hijack "consensus" and rewrite transaction history. That's why the difficulty can be dialed up or down - most of the work in mining is not related to verifying the transactions.

Yes. People often misunderstand that verifying transactions with blockchain is intrinsically difficult which is not the case. The hard part is making a ledger that can't be rewritten.

And mining is actually less akin to solving math problems and more akin to, well, actually mining. That is, digging around enough until you find some gold.

This is very much not what distributed consensus is. You don't "work on the same hard math problem" and you don't get "a reward to encourage further problem solving". Consensus is agreeing on a value among (almost) all protocol participants, and "distributed consensus" is proper technical term, not a vague definition by hand waving like "object oriented programming". Read about Byzantine Generals problem first.

Could one look at it more like viewstamped replication rather than traditional consensus?

Thanks for everything except the condescension!

dozzie 10 months ago [flagged]

Dude, you come to a discussion without knowing the basic concepts. What exactly did you expect?

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

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

But that's almost definitely true, and every bank in the world loses millions of whatever currency they hold every year to fraud.

The primary difference is that banks are encouraged to cooperate to recover these. In the blockchain world, it's incredibly difficult to recover losses and people suggest "no-takesies-backsies" is an ethical method of doing business while wracked by fraud.

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.

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?

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.

> Traditional finance isn't any easier to unwind than bitcoin.

This is one of those cases where the theory and practice don't match. The are two cases: the destination account exists or doesn't. If it doesn't, your bank returns your money minus some handling fees. Your Bitcoin in the same situation is gone to an unused wallet which nobody can access.

If the account is valid: With Bitcoin it's on you to track down who owns your funds now and figure out how to recover it. In case of a bank though you raise an issue with them and start the process - either internal or across banks. It allows the person receiving the money to approve a quick reveal, or allows you to start legal action to recover your funds.

At some high, abstract level, these are similar. But in practice, banks make it pretty easy to recover your funds in case of simple mistakes.

> 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...

We had examples of a number of entities, which tried to apply the best practices and were aware of the risks, completely failing at the task. Multiple exchanges, smart contract operators, and other companies failed to protect their coins. The real world shows us that this is not that easy given clever adversaries.

How do you secure large amounts of Bitcoin? Keeping it all in a hardware wallet is a lot like keeping all your money in a safe in your closet, and keeping it on your computer or in an exchange is even worse.

The big difference is that you'll probably lose everything you stole and also go to prison if you exploit a bug in a regular financial service. You probably won't be able to make legitimate users of that service lose all their money.

Most are built on reversible foundations.

Mind you, Ethereum apparently was too. :P

The important question is if you think it's possible to create impervious functions of ~100 lines of code. I tend to think that with modern formal verification systems this is a feasible goal. Otherwise you have to stick with closed-source security-through-obscurity and rely on legal reversal. This seems pretty weak to me, though - ex, if a stock exchange was hacked, sure you could reverse it legally, but the market disruption would take years to recover. Regardless of the specific nature of crypto, I think formally verifiable open systems are both achievable and a worthwhile goal.

I am not sure what your position here is: that you can do whatever you want, or at least a lot of useful things, in ~100 lines of code? That if your software is broken down into functions no bigger that ~100 lines of code, and they have each been individually verified, then their composition has also been verified? Or something else?

There is also the matter of verifying the platform itself.

> There is also the matter of verifying the platform itself

The Ethereum virtual machine has been formally verified.


Thank you for bringing this to my attention. If I am following along correctly, it does not so much verify the deployed EVM as it provides a formal and executable semantics for an EVM that satisfies the test suite, and the authors demonstrate its use in finding some real-world problems, which is exactly the sort of thing that we want:

"These properties make KEVM an ideal formal reference implementation against which other implementations can be evaluated. We proceed to argue for a semantics-first formal verification approach for EVM contracts, and demonstrate its practicality by using KEVM to verify practically important properties over the arithmetic operation of an example smart contract and the correct operation of a token transfer function in a second contract."

From the paper, it seems that the latter example could have found a bug that caused problems in a deployed Ethereum contract.

Regarding your last point, the platform itself can be fixed if it has any malfunctions. The issue is only with an application built on top of the platform malfunctioning while the platform operates exactly as it's supposed to.

In that case there is no redress as the platform is for all intents and purposes immutable when it's working correctly.

You are seriously underestimating what it would take to verify the platform. We are not talking about just a few hundreds of lines of code here.

What I meant is that an error in the platform is not catastrophic, because in those cases, the blockchain can be paused, fixed, and if need be, rolled back.

In other words, errors that occur due to malfunctions in the platform are reversible. Errors in applications built on top of it are not.

They aren't immutable. They can be fixed.

Doesn't that require the active cooperation of all parties involved?

Or the implicit third party of the state, more specifically the legislative and judicial branches.

I think the bottom line is that contract law is an AI-hard problem-- meaning it takes a "real intelligence" to negotiate and enforce contracts. Simple logical rule sets implemented in code are too dumb.

Agreed — I find it really odd how many people are willing to assume that another complex field must be easy just because they've never thought about it in depth.

What does that actually mean in practice? Any successful piece of code is a million dollar bug bounty. A Windows remote execution can sell for millions and do damage in the billions.

Is it easy to exploit smart contracts? Is it fundamentally impossible to make them secure? Maybe we lack the proper tools, maybe current architectures need to be improved.

It's different from Windows bug because Windows bugs can be easily patched.

When we come to blockchain world, we run into a dilemma:

1. Hard-forking means it's no longer truly "immutable"

2. Not Hard-forking means we're fucked.

The first point is important even if you're not an immutability nerd, and most people don't realize the significance of a truly ownerless ledger because most people haven't thought really deep into how the society and economy works.

In my opinion the difference between a truly ownerless ledger and another one that has made 0.1% tradeoff is as different as the difference between selling something for 1 cent and giving it away for free.

I think blockchains like Ethereum that want to become general purpose will have tendency to move towards being more centralized. Not saying that's bad, it's a tradeoff, but nobody knows what the end result would be. It could end up becoming like the Web, where the protocol itself is supposed to be decentralized but every user facing stuff is completely centralized.

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.

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.

That's what people keep saying, but I'm yet to see one that is actually a blockchain (specifically, "private blockchains" are a nonsense concept, they're just merkel trees, like git uses), or isn't better solved by some other mechanism.

For those who are unaware, it is April first today.

If you call it a block chain, you're almost certainly referring to cryptocurrency or some kind of monetary policy.

If you want to talk about something useful you were probably calling it something like a signed/verifiable log.

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

Name one.

The modelling of value is a prerequisite to the most interesting use cases.

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

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

Logistics and proving provenance. Proof of location.

Prediction Markets

Global computer and storage system


I didn’t realize git was Turing complete

"Turing complete" wasn't part of GP's suggestion; my reply therefore still applies. On top of that, Ethereum's "turing complete" relies on an unsafe, unproven and likely broken programming language.

And I didn't realise the secrets I gave to my notary were out in the open. Hint: they're not, and that's legally enforceable. The blockchain is nothing because data is [legally] [1] nothing. You might as well just use public key cryptography and release your data over BitTorrent, like Wikileaks did. It'll get distributed based on supply & demand, and using BitTorrent is still cheaper & efficient than blockchain.

[1] At least, in the EU.

With the wonders of cryptography, you don't necessarily need to put secrets out in the open to notarize something on the blockchain. You can quite easily use a one way hash on the secret document, allowing you to verify the authenticity and the timestamp, but preventing someone from reversing the operation and seeing your secret information.

Turing completeness was sort of assumed with "Global computer". Neither myself nor the poster mentioned Ethereum at all. He just mentioned "global computer" as one application of blockchain that isn't a cryptocurrency. I could have just as easily been talking about NEO, which uses a number of languages, including C# and Java. Further, while Ethereum does frequently use a new language (Solidity), it doesn't rely on it. Ethereum is a virtual machine, and the first implementation of the virtual machine was Solidity. Others have been made as well, its turing complete after all.

A notary


Supply chain provenance

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

Well, yes, but most of them (my pet peeve being voting) are as bullshit as cryptocurrency. Do you have an example that is not a bullshit?

online poker will probably move towards blockchain and you can do things to prevent spam when people pay fees, theres virtually no adoption of blockhain tech, things move slower in an open source project so its understandable

I don't know a thing about poker, so I'll take it at a face value, but the spam prevention idea is bullshit. It's not new, it wasn't new even twenty years ago, from what I remember. It wouldn't fly back then, and nothing substantial changed since then.

Can you point me to some papers, books, etc to support this claim? Trying to understand the "block chain is BS" side of the argument, I'm fairly neutral but I rarely see any technical arguments against the concept.

See Hashcash, which long predates the blockchain.


This specific presentation seems to work perfectly even if you replace all occurrences of "cryptocurrency" with "blockchain" and vice versa.

is there a spec for block chain? i'm confused by what people mean by block chain and the only thing i can find is this loosely written white paper

There is no consensus definition of what a blockchain is. In fact the Satoshi whitepaper that introduced Bitcoin does not even use the word blockchain it talks about a hash chain of blocks a concept which predates Bitcoin by ~30 years. The real innovation of Bitcoin was to use PoW to both limit Sybil attacks and to make additions to the hash chain computationally expensive to revert. Often however when people talk about blockchains they are talking about systems which don't use PoW at all. Like end-to-end encryption or peer-to-peer networks blockchain describes a cloud of concepts and technologies. A better terminology would be DLT (Distributed Ledger Technology).

If so many companies are doing things for the blockchain, are they storing in the same blockchain as bitcoin or are companies creating more blockchains and needing miners to help mine, etc,

We are still very much in the experimental phase of the technology and companies are taking many different approaches. Some companies are using Ethereum as their blockchain so they don't have to build and operate one. Other companies are launching blockchains by which they mean a ledger created by a set of trusted validators running a BFT algorithm (see Distributed Systems). Systems built on a trusted set of validators don't need miners as they don't use PoW.

That makes sense. Thanks for explaining. They really just mean a ledger. Doesn't one lose the trust if the ledger is not distributed and verified by outsiders? Using a trusted set of validators, I assume is an internal operation. They aren't asking "Joe Nobody" off the street to become a trusted validator...

The hope is that the validator set would include many different trustworthy organizations in different parts of the world.

could all these validators agree at their own whims to roll back their ledger to undo a change?

Here's a decent writeup on the blockchain: https://infogalactic.com/info/Blockchain

The original Bitcoin paper is essentially a description of the blockchain.

> There are many uses for blockchain outside of cryptocurrency

> What is a good spec for blockchain?

> Bitcoin

A blockchain is just 1 of the innovations that went into the bitcoin protocol.

Finally people are seeing that a blockchain without POW or censorship resistance is bullshit.

This is why bitcoin (cash) is more important than ever.

Is bitcoin really important? I think most people have no practical use for it.

2B+ people do not have access to banking or trade. They are poor because we do not trade with them.

I couldn't pay someone in South Africa rural area for something worth $2 without bitcoin.

Many other people are censored.

Billions more have their wealth devalued via inflation.

Bitcoin is a way for people to be free without any state taking their money (see Greece)

So these people are essentially poor and don't have access to trade and Banking, but they are going to have access to the blockchain, hardware wallets, and the various other technologies they need, and this will all happen before banks or mobile app payment systems are able to capture the market?

Call me a skeptic.

It's staggering to think that these bitcoin enthusiasts have never heard of M-Pesa or other similar systems. Note that these systems work with dumbphones, which is useful because (I believe) almost all of the mobile phone penetration in places like Africa are dumbphones, not smartphones.

You've never visited Africa, have you?

Yes. The implication is that the 2B unbanked will get access to a cheap Android, and therefore ability to trade instantly with anyone anywhere with no fees, before the banana state fixes their massively corrupt government.

> ability to trade instantly with anyone anywhere with no fees

Neither of those statements has ever been true and in recent years they've been ludicrously untrue — affluent people in developed countries were complaining about the transaction costs and they're supposed to be transformative for people in a developing country?

Ethereum and Litecoin among others offer fast and cheap transactions today, and efforts are underway to solve this problem for Bitcoin (e.g. Lightning Network).

There will likely be a trade-off or balance of trust against transaction speed and cost. We're still working out how to build it and so we're not there yet, but my belief holds; the banana governments are not going to disappear anytime soon.

Fast and cheap are still not synonyms for instant and free but that’s at least possibly closer to one day being competitive with the existing mobile systems.

Those existing systems are also useful for evaluating the claims that this avoids bad governments, which is to say that it’s limited to bypassing antiquated banks. A networked system can’t avoid a sovereign state unless that state is completely inept, at which point everyone will be using a neighboring currency or USD anyway.

A lot of the world lives on less than $2 a day.

You can buy a cheap refurbished Android phone for $5.

And you have SMS cointext.io to transact for instance.

You do not need a hardware wallet, only to memorize the 12 word seed phrase.

Just look at the set of users who have phones without adequate banking. You will see this is measured in the billions of people.

The best hope to lift people out of poverty is for us to transact and deal with these people.

The amount of your transactions doesn't matter. If chains can't give people individual transactions in a trustless environment WITHOUT just recreating a new set of banking networks to bridge you onto the lightning network, all we've done is rotate the moneyhandlers.

Maybe that's great for your pocketbook. To me it seems pointless and worthy of scorn.

Bitcoin is sooooo important that everyone has devised an alternative off-chain protocol that actually does peer-to-peer scaling and in no way actually needs bitcoin except as a reconciliation strategy.

Yeah wow, we're all impressed.

What's wrong with off-chain scaling?

Nothing, unless you have an agenda to make the blockchain relevant. I don't, so I do all my scaling off-chain.

I'm confused by this, as well as by your parent comment. Could you make your claims more directly so I can understand them?

What's the point of having a chain at all? It's not a unqiue or prigiledged BFT solution. It has some nice but not essential properties.

If you end up scaling off-chain, then one asks why you have the PoW chain and it's phenomenal cost at all.

> What's the point of having a chain at all?

Different people answer differently, but many would give censorship-resistant currency as a use case. My personal answer is more complicated.

> If you end up scaling off-chain, then one asks why you have the PoW chain

Let me generalise slightly to include PoS, which I greatly prefer but which is also pretty expensive, and suffers from the same fundamental inefficiency problems. Obviously, you need on chain consensus and guarantees so that the payoff matrix for the offchain game is setup correctly so that honest behaviour in the offchain game is a Nash equilibrium. So that when I "pay" you some money in a payment channel you really have received it in a certain sense, and offchain payments are basically as secure as on chain ones.

> Different people answer differently, but many would give censorship-resistant currency as a use case. My personal answer is more complicated.

Nothing about blockchains prevents censorship.

> Let me generalise slightly to include PoS, which I greatly prefer but which is also pretty expensive, and suffers from the same fundamental inefficiency problems.

Most literature I've read suggests potentially a hundredfold increase in throughput with Proof of Stake when executed correctly.

The only fundamental inefficiency problem PoS shares, by my reading, is the broadcast mode limitation where every node needs the full chain to be broadcast before it can move forward. However, PoW systems are nowhere near that rate limit.

I'm certainly happy to be shown this is wrong. Got resources?

> Obviously, you need on chain consensus and guarantees so that the payoff matrix for the offchain game is setup correctly so that honest behaviour in the offchain game is a Nash equilibrium.

You're right, the offchain game needs to be set up so that honest behavior is the optimal behavior. But this is where the cart is firmly planted in front of the horse. What you need is not a blockchain, what you need is trust that controls are in place to resolve a dispute equitably. The blockchain is a methodology not for eschewing trust, but contracting it out in a novel way. A blockchain, folks with guns, an escrow service with a good API, international banking: they all serve the same purpose here.

We should use these tools when they serve us. But what I've seen is that for an actual daily-use currency all that's going to happen is a million little token vendors which can negotiate lightning channels to one another will show up and we'll just have new banks that are like the old banks, but with the threat of a chain resolution which may or may not occur. The practical outcome will be indistinguishable from a healthy banking system, won't actually stop fraud, will be subject to the exact same controls that other physically rooted banks are subject to, and also be a lot more confusing.

I think lightning is solid; in that it will work. I also think it reduces a play at fundamentally restructuring commerce into a flashy buzzword pitch to reshuffle the existing players on the board somewhat.

Having been deeply in the (somewhat broken) American banking system, I can tell you that the system desperately needs to be reworked from the ground up and that can only happen with a truly distributed, truly transparent (an often undersold or ignored aspect of Bitcoin but a truly phenomenal property), truly and fundamentally new way of performing commerce.

We don't have that.

> Nothing about blockchains prevents censorship.

The decentralization of block producers helps. For instance we saw a few years ago that a few payment processors could decide to not support wikileaks donations, meaning that the only non-cryptocurrency way to donate to them was to mail them cash in an envelope. A government seeking to do the analogous thing would need to effectively make the network soft-fork a rule in disallowing payments to wikileaks addresses, something much harder to do.

> I'm certainly happy to be shown this is wrong. Got resources?

I have never seen any legitimate public blockchain claim 100x improvement from PoS over PoW. I'd be surprised if it were more than 3x for ethereum.

One very powerful upper bound in any non-sharded blockchain without validator delegation is that every full validator must process all transactions, and we want validators to be able to do so with relatively weak hardware (e.g. a Macbook Pro). Certainly, a 100x increase in ethereum TPS would violate this upper bound; for instance, the current state size (2GB) is not designed to fit into RAM, and hence every transaction must do a random disk read and write onto a hard disk. The actual computation can be pretty expensive too, e.g. I've seen a benchmark that ECDSA verification takes 500ms on an i5 processor.

The "broadcast mode limitation" you mention imposes another upper bound, but I do not think it is sharper than then validation upper bound.

> The practical outcome will be indistinguishable from a healthy banking system, won't actually stop fraud, will be subject to the exact same controls that other physically rooted banks are subject to

So this is more subjective but I have to disagree here, depending on what you mean by "healthy banking system". We've learned from history that to have banks run on fractional reserve yet not be subject to frequent bank runs, we have to make them hold reserves in some central bank. And even if you just set up an "anti-escrow service" you have anti-fraud and AML laws to comply with. The end result is that there are huge capital requirements to create new banks most places in the world and fraud still occurs; the capital requirements lead to an oligopolistic industry that doesn't actually provide the consumer services it exists to provide very well. This seems pretty backwards to me. I think in the near-term, payment channel hubs will be much cheaper to stand up than banks and the trust model will be the same as on-chain payments: if you accidentally pay someone off-chain you have no recourse. It seems that building fraud protections on top of this base is more sensible.

Right, people buying something for $2 in rural Africa can afford to pay a $30 fee to make that transaction happen. They definitely don't use something like M-Pesa instead.

What are you buying from rural South Africa that's worth $2?

It's none of your business.

But there was some music I paid for online because I liked the sound.

It's awesome that I'm able to support artists and creators across the globe and make a difference in someone's life (as they made a difference in mine).

Transaction cost? 1 cent with Bitcoin Cash. They kept $1.99

All public blockchains require a cryptocurrency. The open nature of the protocols is only possible because of the built in system of financial incentives.

yes ofc. don't read much onto biased hate posts

In the strict sense? Git histories are blockchains, so there’s definitely a use. In the loose sense? People seem to conflate “blockchain” with “decentralised concensus”. At least nakamoto consensus doesn’t work outside of currency-like applications. PoS-based systems are probably bound by the same limitations there, too.

I have never seen someone use “blockchain” to describe a structure which can be rewritten or tampered with. Git commit dags aren’t a blockchain by anyone’s definition, as far as I’m aware.

Again — people tend to talk about Blockchain as a combination of the data structure and some sort of consensus algorithm but the term only properly refers to the data structure.

The only difference between it and a git history is that git histories are dags instead of trees — The hash-of-parent-node structure is the exact same, except commits can have multiple parents. The tamper resistance of the data structure itself comes from the hashes: it serves as both a pointer and a checksum for the previous nodes.

Brutally concise. This thread is going to get rough.

> 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.

> This powerfully aligns their incentives with the well-being of the ecosystem

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

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

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).

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.

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.

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.

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.

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.

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

Signal is great but iMessage?

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

[2] https://www.schneier.com/blog/archives/2015/08/nicholas_weav...

[3] https://www.wired.com/2015/09/apple-fighting-privacy-imessag...

[4] https://www.lawfareblog.com/apple-fully-complying-imessage-a...

iMessage is end-to-end encrypted, and a good bet that the app publisher is safe. Apple has a strong record of strict security and anti-government-snooping policy.

iMessage is end-to-end encrypted as well.

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.

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

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

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.

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.

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.

> 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/

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.

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

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.


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/

[1] https://www.bloomberg.com/view/articles/2018-03-22/when-marg...

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."

Go on, how do you "prove node's aren't colluding"?

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

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.

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.

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

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

> 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.

Read: PoS has downsides.

Yes that's why they hybrid.

So does cash

The casper-ffg paper is a pretty good spec for a hybrid PoW-PoS system, and is IMO a good place to start before looking into full PoS systems

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.

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.

> 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.)

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.

> 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.

April fools?

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

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

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.

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

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.

just name another technology that can offer immutability and transparency


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

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

So, what is that you propose instead?

If nothing then disregard you.

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.

For Ponzi scheme, alternative is banks and stock exchanges, not "nothing".

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

Also, I wouldn't need 4 slides to show why Microsoft or Facebook are bad for you.

Doesn't prevent them from their multi-billion worth.

Markets can stay irrational indefinitely.

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

“PowerPoint is also bullshit” is a separate thread.

I had the same feeling. It would be better to be 8 slides or more.

> Seriously, who puts so much text on a slide?

People creating a deck intended to be READ, not SPOKEN.

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


I upvoted for "your generation's labor." Like what?

"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.

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.

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.

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

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

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.

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.

>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.

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.

It's a presentation deck not a paper.

I'm not sure how that changes the fact that everything he says is either completely untrue or irrelevant. If you want to point out an inaccuracy in what I've said, feel free.

> I'm not sure how that changes the fact that everything he says is either completely untrue or irrelevant.

I don't see how you have enough information to make that determination. It's a presentation deck. Those are just bullet points, not the arguments you would (presumably) hear in the full presentation.

Did you read through it? I don't think any amount of explanation is going to take arguments that have been thoroughly debunked for year and suddenly make them a reality. If you want to be specific about anything he or I said, feel free.

> arguments that have been thoroughly debunked

Could you give one example of an argument made in the deck which has been "thoroughly debunked"?

The fee death spiral is a wild prediction seeing that throughput can easily be expanded when not blocked politically since there aren't any technical limitations (bitcoin cash) AND that even when throughput is constrained to a suffocating degree (btc), the chain still worked and never broke down or went through a 'death spiral' it just had outrageous fees.

Most of the things he says are actually false arguments that no one is trying to make or just completely irrelevant.

High fees are only a problem of PoW blockchains, not of PoS blockchains which are becoming the majority right now.

PoS has other disadvantages which PoW doesn't have.

Such as?

Excuse me, this is just an assertion. By your own standards you should really back up all of these claims with extensive evidence.

What do you want explained more thoroughly than I did in my parent comment?

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