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Comment by lallysingh | Hacker News Reader

Why can't you require that each wallet be signed by a party that identifies the person behind it? Then you find where the money went and you force them to give it back.

But I think really the statement of interest is here: > ... at which point there is no point having a blockchain.

Lots of people have different reasons for liking block chains. Their reasons may disagree with yours.

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> Why can't you require that each wallet be signed by a party that identifies the person behind it? Then you find where the money went and you force them to give it back.

And what if they refuse [despite consequences]?

> Lots of people have different reasons for liking block chains. Their reasons may disagree with yours.

I'd say the common/paramount feature is "decentralized, trustless ledger w/distributed consensus." Dillinger talks at length here about how "...the Trustless nature of Bitcoin was the main thing that convinced me Satoshi wasn't scamming." Yes, lots of private things calling themselves a "blockchain" exist. But those all submit themselves to some sort of authority/trust system. And it's likely the case that they do that in order to avoid the problem described.

IMO it's anarchy [good connotation] vs rule-of-law. Crypto-coin/asset systems can be ruled by distributed consensus but this feature is mutually exclusive with state-managed systems. When they intersect or when they're forced to intersect, we end up with an imbalance/mismatch.

> And what if they refuse [despite consequences]?

I feel like this is a problem that is pretty commonly exercised in our legal system and incarceration is usually a strong last resort motivator.

That's why I added "despite consequences". Ok, now they're in jail and they still refuse. Now what? Ugh, lets go convince the peers contributing to consensus that we need to fork the chain and delete this transaction (like Ethereal).

This is just the tip of the iceberg BTW. What if they die or have a brain injury? Their password securing the wallet is now lost to the world. Now there's no way to reverse this transaction. We accept this risk with the trustless system of currency. But real estate, equities, this kinda stuff -- it just doesn't map well at all.

Forking the chain or otherwise building consensus may be necessary to recover the coins from those particular transactions, but it's not clear that we would need to do that. As an analogy from traditional currency, consider what happens if somebody dies while in debt. Their estate can be used to settle the debt, but if the money isn't there, creditors will go unpaid. There's no guarantee that all of the transactions that occurred with that money can be reversed.

One other potential problem is that if an owner of some Bitcoin dies, there may not be access to their wallet at all. However, if there is considerable wealth in that wallet, they should have incentive to pass that on to their heirs, in which case they may have set up a will or otherwise passed on instructions for how to recover the money. Whoever that money is recovered to can then be approached for settling the estate or what-have-you.

In the end, though, laws and the consequences for breaking them are (in principle) set up to incentivize behavior that is good for society. If you break laws, you face consequences. If you avoid those (e.g. court orders you to pay and you refuse), you face other/worse consequences (e.g. garnished wages, contempt of court). If the consequences still aren't strong enough or enforceable enough to maintain the peace, then society has a problem and new laws can be passed.

I agree with blockchains that represent something equivalent to money, which would include bitcoins.

The problem is using blockchains to represent shares in a company (for example). Ownership of a company can't be "lost", or "unpaid". Legally, someone owns each share of a company, and a court can declare ownership is moved. At that point, your blockchain doesn't represent reality any more (as declared by a court) and then, what value does it have?

That's definitely an interesting distinction. In that case, I would expect there to be consensus among shareholders to follow the court's order. That could be enough to force the transaction if the chain is unique to the company in question. However, it would pose issues if the shares are riding on a broader chain outside of their control, like Ethereum. Even if the chain was unique to the company, you could still have issues if you are using proof of work instead of proof of stake. Interesting problem.

Can a court actually declare that ownership is moved, or can they only declare that one is to transfer ownership, implicitly under penalty of something else if you don't? If you have a car and the court declares that it is my car now, that doesn't physically transport it to my driveway and you could steps to prevent that from happening (eg, driving it into a lake).

You can drive it into a lake, but that counts as theft, the same as if you stole someone else's car.

When it comes to things like houses, a court certainly can declare ownership is changed, there is no option for you to refuse, or have to do anything.

The receiver of ill-gotten gains refusing/being unable to pay them back is not a new legal problem and certainly not unique to blockchain.

But when it comes to (I don't have a good term..) unique objects, like houses, or shares in a company, they exist and have an owner. A court can simply declare "you don't own that house any more, this person does". A business doesn't become ownerless forevermore because someone lost a private key.

With houses it's not always that simple. Often in real estate fraud cases an 'agent' will sell one person's house to another and skip town with the money. If the courts revert the deed to the original owner then the innocent buyers are still out all that money.

If the money is in a bank account in a foreign country, a court may have no jurisdiction to recover the money.

>That's why I added "despite consequences". Ok, now they're in jail and they still refuse. Now what?

This already happens without block chains.

Financial transactions between real legal entities probably have no expectation that the transaction should be completely anonymous or trustless. Instead, they probably have expectations that the transaction mechanism can be trusted, and that they have legal recourse to make up the difference. Blockchains probably have very relevant uses, but using them to approximate our existing financial system doesn't seem to be that useful. All of our laws and the current system exist for a reason. I'd bet on supply chain as the corporate/real world workload that makes the most sense. the distribution of the chain actually provides a relevant service in those cases.

I think the point is if you have to trust someone then using a blockchain is no better than using centralized ledgers.

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