> People seem to conflate decentralization with anarchy.
Heh, I’m sorry I guess I phrased that badly. I’m saying there is an authority in all anarcho-x-isms, one which proponents ignore.
My intention was to suggest an analogy of that hidden authority in blockchains, in that everything blockchain can do, can also be done cheaper by having a trusted party do the conventional stuff, and in some cases — such as legal disputes, where you have to bring in a trusted mediator — you end up with all the weaknesses of both the conventional approach and blockchain.
We all would, but blockchains don’t prevent that. If anything it makes the problem more likely, because the current status quo is reversible in a court when sufficient evidence is supplied, but in the blockchain, possession of the private key is ownership.
Private keys get lost and stolen all the time even for relatively trivial things; in the case of property ownership, even if the private key is permanently offline — e.g. existing only in the form of a QR code on a sheet of paper in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying “Beware of the Leopard” — for something as valuable as property, you can bet it would be stolen.
> I'd like to know that when I receive $50 on Venmo/Paypal out of the blue:
To which the direct counterpart is: what happens on a blockchain if you get scammed and want your money back? Do you really want the authorities to do what the blockchain says, or do you want your money back?
>To which the direct counterpart is: what happens on a blockchain if you get scammed and want your money back? Do you really want the authorities to do what the blockchain says, or do you want your money back?
I think you're misunderstanding this particular example. If someone sends me ~$50 BTC out of the blue and then somehow contacts me to say "oops can I have that back?". There are only two options with a block chain: (1) I send it back or (2) I'm up $50. With Venmo, and this has happened to people, there's (3) I send the $50 back, but the original $50 was from a pending deposit that was fraudulent, so Venmo decides I owe Venmo $50, and now I'm down $50, the thief is up $50, and Venmo is square.
This will probably come as a tremendous shock to a lot of people in this forum but Venmo is going to look out for itself before it looks out for you. There are many cooperative scams (of multiple people vs Venmo) and it is not always easy for Venmo to determine exactly what is going on or who is scamming who.
Replace "Venmo" with "Coinbase" and you could have the exact same scenario in the future. "Oops, sorry we messed up, the fraudster's transaction got rejected and he didn't actually send you $50 in BTC like we said he did. What, you already initiated a payment of $50? Tough luck".
This is a Venmo problem, not a "fiat currency" problem.
I agree that it is a "Venmo problem", but more broadly it is a "human controlled/authority financial system problem". I do think something analogous could happen with Coinbase, particularly because your interactions with Coinbase require the use of centralized financial systems (bank account info or credit card info). I also think Coinbase holds and can access your private key. Correct me if that's wrong.
What's more important is that you aren't required to use Coinbase, or even anything like it, to use cryptocurrency. In fact sites like Coinbase defeat at least some of the point.
> you aren't required to use Coinbase or even anything like it, to use cryptocurrency
That's a purely academic argument; It's like saying that "you aren't required to have a Visa or Mastercard card in order to make purchases online". Technically speaking that statement may be true, and you may even find hermits that don't have a card... but, in any practical sense, everybody does, and that's how they do their online purchases.
> you may even find hermits that don't have a card... but, in any practical sense, everybody does, and that's how they do their online purchases.
It never stops. :( A person's tiny subset of experience is rarely indicative of anything but that, a subset. I conduct every transaction I can via credit card for two reasons: cash back and protection via the ability to revert fraudulent transactions. But I also have known rational, "techy" (SWE) people who refuse to use them. And I know way better than to attempt to project my experience on "everybody".
I mentioned "in every practical sense" - I'd bet that those that don't have credit cards don't do online purchases either, in the vast majority of cases (>95%). But indeed, that's true in the western world - I might be worng for Africa and Asia/China where mobile-only payments are more prevalent.
France is an example of a western country with < 50% prevalence according to that site. I think you might still be biasing your estimates (the 95%) due to your own experience.
Amazon.com, for example, accepts checking accounts and retail purchased gift cards for US residents.
That just credit cards ([edit] From your own source, roughly 85% French had debit cards[3]). According to statista[1], France has ~50% credit card penetration, but roughly ~100% have debit cards.
Also, digital buyer penetration was <63% in 2017 and is 78% now[2].
It’s not a misunderstanding per se, rather I’m saying there are other scams besides the one you’ve listed, specifically ones which have basically the same effect, but if you follow the blockchain as word-of-God you they’re not fixable, and if they’re fixable you’re not following the blockchain.
The reason I started listing problems that I think crypto solves is because it seemed like many people were either not aware of or not acknowledging the existence of them. This was leading to lots of misinformed discussion. I'll summarize what I think are my least controversial conclusions, primarily for my own sanity.
Cryptocurrencies have the following benefits:
- No one (authority or otherwise) can seize assets that exist and belong to you on the blockchain, from the blockchain, without knowing your private key. People can seize your assets only outside the blockchain. People can lay claim to your assets inside the block chain, and attempt to coerce or induce you to transfer them, but they can't do it themselves. How useful can that be in practice? I don't know and am not discussing it. It's a discussion worth having, but only if people truly understand and acknowledge the prior statements.
- Some subset of all scams, namely those involving reverted and repeated transactions, become impossible. Because by definition blockchain transactions are "non-reversible" and prevent "double-spending". (control F either quoted term: https://bitcoin.org/bitcoin.pdf)
- Counterfeit is impossible (ex: you cannot fabricate a bitcoin out of nothing).
Cryptocurrencies have the following drawbacks:
- Immense energy consumption.
- Increased complexity over almost every existing financial system.
- A propensity to attract scammers that build scams on top of or around blockchain technology (but with a few notable exceptions, not IN it).
- Mistakes can't be fixed by an authority. They have to be fixed through the cooperation of all those involved.
Heh, I’m sorry I guess I phrased that badly. I’m saying there is an authority in all anarcho-x-isms, one which proponents ignore.
My intention was to suggest an analogy of that hidden authority in blockchains, in that everything blockchain can do, can also be done cheaper by having a trusted party do the conventional stuff, and in some cases — such as legal disputes, where you have to bring in a trusted mediator — you end up with all the weaknesses of both the conventional approach and blockchain.
> I'd like to be able to not even have to think about this happening: https://www.reddit.com/r/personalfinance/comments/pywwnp/how...
We all would, but blockchains don’t prevent that. If anything it makes the problem more likely, because the current status quo is reversible in a court when sufficient evidence is supplied, but in the blockchain, possession of the private key is ownership.
Private keys get lost and stolen all the time even for relatively trivial things; in the case of property ownership, even if the private key is permanently offline — e.g. existing only in the form of a QR code on a sheet of paper in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying “Beware of the Leopard” — for something as valuable as property, you can bet it would be stolen.
> I'd like to know that when I receive $50 on Venmo/Paypal out of the blue:
To which the direct counterpart is: what happens on a blockchain if you get scammed and want your money back? Do you really want the authorities to do what the blockchain says, or do you want your money back?