Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud
wsj.com
wsj.com
- Wallets have bugs that lose hundreds of millions of dollars
- Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018
- Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized
- No legal use case found to date
Blockchain is a parasite on society.
On the bright side, there will be a lot of social capital to acquire by "fixing blockchain" with revolutionary "centralised databases" afterwards :)
Blockchain or Distributed Ledger Technology or whatever the name is of late has shown the possibility of standardizing identity, time-stamping and other forms of data with almost no trust involved. These systems are herding cats successfully, the only question is which will be settled upon as global infrastructure, much like IPX/SPX vs TCP/IP.
The greater danger than fraud is when governments and other institutions get involved to use these systems as control and tracking tools. Snowden's revelations showed laughable secrets compared to what will be done with blockchain as infrastructure.
People looking to blockchain as salvation are simply misguided. The reality is much more complex than such hopes, and sadly more destructive as well.
This makes no sense. Why would a surveillance state possibly need or want a blockchain?
The paper currency you may have in your pocket has serial numbers on it but it is impractical to associate those numbers with an individual, much less the sequence of travel it takes among varied transactions. Blockchain-style crypto systems make it exceedingly simple for a government to track every transaction anyone engages in, from paying for gas to buying stock to selling a house.
We are certainly not there yet for most of the currently-imagined purposes. However, there are services like Chainalsys[1] that are already being used to track users. It is not a stretch to imagine the impact of full government monitoring.
Take that a few steps further with regulatory control of development, mining operations, validating nodes, etc; then the control aspect kicks in and makes asset freezes of today seem quaint.
Combined with international information-sharing efforts, you will either have to agree with the ruling elite or be excluded from the broader economy. Dissidents will be tracked far more easily as well, leaving nowhere to run but increasingly remote locations.
This is why I say that blockchain/crypto will become far worse than the hope for what they could do for people around the world. At the same time, numerous advances in many sectors will make things seem magical - from construction and manufacturing and medicine and robotics. With jobs shifting away from labor-intensive toward creative endeavors in all fields, control will no longer be over people directly but the systems that support us - and who will have control of those systems?
Not agreeing, just trying to explain that point. IMHO, this is sort of whataboutism.
But I don't agree with the criticism either, for blockchains/Bitcoin so far does not deal measurable damage. Energy consumption is not a danger on it's own.
The energy wastefulness is proportional to the block rewards and fees, the rewards will be exponentially declining to zero and fees should be proportional to the usefulness of the system. Also most probably some other more efficient cryptocurrency - possiblly PoS or DPoS based (https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-p...) - will replace bitcoin.
Having said that - yeah - there is just too much scam in all of this crypto-world, this will end up badly.
Even if this were true, and it's obviously not, what about the illegal use cases? Aren't they important?
Bitcoin has helped people gain access to a wide variety of medicines that the state has improperly and violently prohibited.
That's not nothing.
And if it can do that - if, in the face of such overwhelming opposition, this technology has aided people in need, then doesn't it stand to reason that it can help other groups of people also?
They might be, but does enabling you to buy LSD over the internet really justify a $300 billion market cap?
LSD is one of the most important inventions in the history of humanity. The state has chosen to ban it, which to me seems a little childish. But I mean, I get it. Sure, go ahead, ban it for now.
In the face of such a small-minded prohibition, I might look around for tooling which seems imbued by its nature with a desire to circumvent such a ban. And even if it is scaffolded on hundreds of billions of dollars, it has the hallmark of a sacred origin if it's successful at doing that.
Or maybe not. I don't really know.
But I do feel confident that, in light of such circumvention, it's not quite correct to write it off as "nothing at all," which blockchain skeptics seem wont to do.
How do you expect anyone to take you seriously?
Anything using the currencies as stores of wealth or mediums of exchange seem to be better suited by traditional finance which are less volatile and capable of higher volume. Anything using the ledger as a distributed datastore seems like it would be better suited by a datastore that wasn't wrapped up in a currency ledger and uses a consensus algorithm less costly than proof-of-work.
* Donations to wikileaks. Paypal froze their account and there are tons of examples where they have done this without good cause.
* Legal businesses like marijuana sellers, porn, escort services and gambling platforms have had trouble using and keeping payment services. Some have been forced to only accept cash payments as they couldn't accept credit cards.
* A way to accept irreversible payments digitally. Credit card charge back fraud is a big problem.
* Credit card companies and other payment processors take an often expensive fee. Cryptocurrencies are much cheaper (see Bitcoin Cash as Bitcoin is not a good example).
* Easier to move money. For example sending money to or taking money with you when you cross borders. Western Union is slow, expensive and cannot be used to send everywhere. The same can be said about banks in isolated countries or countries in disarray. With cryptocurrencies all you need is internet (sometimes a VPN as well).
Edit: As usual when I try to point this out I'm down voted. I encourage you to counter my examples.
It's not a matter of what they've been better than status-quo broken finance systems. The question is "if we replace these broken systems with something, why does it have to be a blockchain using PoW for consensus?"
In many of the cases people use crypto because otherwise they'd have had to been a bank or a money transmitter or file with SEC and uphold their legal obligations as such, and in those cases using blockchain didn't make those obligations disappear.
In other cases, the hype around "blockchain" created solutions that could have been served by any form of digital currency or any form of distributed database -- not just this specific form.
Preventing double spends in a decentralized manner without a trusted third party. No other form of digital currency can do that.
There is a possibility that PoW can be replaced with some form of PoS (proof of stake) but it's not certain if it works well enough. Note that I consider both PoW and PoS backed ledgers cryptocurrencies.
> It's not a matter of what they've been better than status-quo broken finance systems.
They're better than everything at the examples I listed.
Security is a huge deal. Want to get hacked? Tell people you accept bitcoin payments. Put an interface on your website. Remember to bolt your server down to the floor with big long bolts. And the backup server. And the other backup. And all the little thumbdrives. Cash is far easier to secure.
Think credit cards are difficult, try negotiating with a customer wanting a refund in bitcoins. Exactly how much bitcoin do they get today in exchange for a purchase made last week?
Nobody outside onionland handles commercially-significant crypto transactions. There are reasons.
> Nobody outside onionland handles commercially-significant crypto transactions.
I've bought computers, books, clothes, games, online services and made significant donations using cryptocurrencies. I have also received several refunds (they were priced in euros and so I received a matching amount in cryptocurrencies).
That's just an ignorant and wrong statement.
Ya. BOUGHT. I guarantee the people selling them to you have different stories. The retailers that do take bitcoins knowingly do so for other reasons. The are trying to be cool and, perhaps, have a jump on the competition if things change. I'd bet they operate the bitcoin division at a loss.
If that’s not a “legal use case”, I don’t know what is.
Are we going to argue next that credit cards have no use case because other forms of payment exist?
Another example: I just bought a watch off of a guy on a forum using bitcoin, bank transfers or WU would have been a far bigger pain in the ass.
Calling this complicated, risky and expensive process a "use case" is like calling a Rube Goldberg machine that opens a door "useful for opening doors". It's like no, not really. It can do it, sure, but there are significantly better ways of achieving the same thing.
[0] When there are no more greater fools entering the market, the price will tank and you will not be able use it to transfer value.
[1] It's possible that right after your purchase, the price of the token shoots up or down 50%, making rational purchasing decisions difficult.
[2] transactions on Visa, Apple Pay, or PayPal all get complete within seconds.
The only complaint valid in that case is the changing price, but it has been stable for months, and it has grown a lot more during the last year than the same investment in a savings account.
So what you say is essentially correct about Bitcoin, but if you add cost of opportunity to the equation, you have lost a lot more than people using criptocurrencies.
And the criptocurrency of the future can be different to Bitcoin. All bets are off.
> but there are significantly better ways of achieving the same thing.
There are no ways of accepting payments digitally without a third party. There is no "better way".
> transactions on Visa, Apple Pay, or PayPal all get complete within seconds.
0-conf can be accepted within seconds. Also credit card transactions are reversible after many weeks. Credit card chargeback fraud is a big problem for businesses.
1- I agree. Bitcoin is no exception here: I must buy Bitcoin through GDAX. Then my transaction must be confirmed by Bitmain. And they're all running software by Blockstream. That's 3 third parties that were trusted for my purchase.
2- 0-conf transactions are very risky for recipients, hence why exchanges require confirmations.
3- Credit card chargebacks is how the real world solved the fraud problem in the featured article. Can you please provide an equivalent article showing how businesses are suffering due to chargebacks?
Or many other outlets including decentralized exchanges or localbitcoins.
> Then my transaction must be confirmed by Bitmain.
Or by the other miners.
> And they're all running software by Blockstream.
Or you could use Bitcoin Cash which have several development teams or use another cryptocurrency if Blockstream is your worry.
Also Bitcoin Core was mostly written before Blockstream came to be. It's also open source and you can bet that faults will be abused if they exist.
> That's 3 third parties that were trusted for my purchase.
No 3rd party is trusted when you send coins to someone else. That's the point.
> 0-conf transactions are very risky for recipients, hence why exchanges require confirmations.
They are actually quite safe if done on sane networks like Bitcoin Cash, not Bitcoin.
That's why several merchants accept 0-conf for small to medium purchases. See xmr.to as an example.
> Can you please provide an equivalent article showing how businesses are suffering due to chargebacks?
Just google "credit card chargeback fraud" or "friendly fraud" for tons of examples.
I’ll always choose the latter.
What is the point you are trying to make? That you’re too dumb to not buy from “random sellers”?
Can you read? Good! Then you can read reviews.
We do accept other payment methods from established clients.
Shopping on the web with credit cards is a solved problem. There is some hidden subtext at play with bitcoin that I'm missing. Is it that you don't trust your customers?
Before, people were using stolen cards to buy accounts on our service and then selling those on hacking forums.
After forcing new users to pay in cryptocurrency (or have a call with us), there’s been essentially no fraud.
For our niche this seems to work well.
Cryptocurrencies need to solve several issues such as energy consumption, price stability, and scaling before we see anything useful.
- As for wallet bugs: if you're talking about Ethereum or low-quality software projects yes, but for Bitcoin it's been a long time since that was an issue
- Regarding power: setting aside all those sensationalistic headlines. Crypto-miners are a way that enable renewables to be optimized when there are imbalances on the demand/supply on the powergrid. Contracts with renewables enable further development of that infrastructure. Of the top of my head BitFury, one of the big crypto-mining firms are in majority if not completely powered by renewables.
- Also compare that to the multiples of power used today by gold mining, or infrastructure that Bitcoin aims to replace.
- In the end, it's like any other power usage, the market will decide if it's viable, govs could probably tax power usage on cryptocurrencies, but it won't matter since the market will adapt.
- There are decentralized exchanges trying to break through along with various different type of projects, albeit the space is crowded by scammers/ICOs like any new space it's the unfortunate nature of the people.
- Although it's illegal in Venezuela, Venezuelans protecting their wealth from the dictatorship is quite a use case. Also, what's the legal use case for owning gold? I do commerce legally just fine with Bitcoin although the tech is still evolving on that front.
Judging on a tech based on its current state is being blinded to the evolution of tech and I'm surprised to see it from an HN user.
I personally don't care about Blockchain or the ICOs, scams etc. unfortunately pop everyone, but I see value on Bitcoin, using your money completely permissionlessly with other people is a great feeling in our days.
I also see great applications in the future where we can have more native money on games/apps.
Like internet, people will abuse, scam and it can be dangerous but thing how it would have been if there was no free internet to browser any website you want, but only a regional app store.
Based on DoE estimates of energy cost per ton of gold mined [1] and the current annual production of roughly 3000 tons/year, it looks like gold mining consumes an average of roughly 7 GW (assuming there have been no efficiency improvements since 1975).
That's roughly equal to the power consumption of all Bitcoin mining. But of course Bitcoin can't replace gold, because the majority of gold mined is used for non-monetary applications.
[1]: https://www.energy.gov/sites/prod/files/2013/11/f4/gold-silv...
Bitcoin needs the mining network to keep consuming energy to show it is special, otherwise it is basically just a number. Eventually bitcoin creation ceases and the energy burned will be paid in the transaction costs.
Building Bitcoin mining ASICs, for example...
Thanks to regulatory capture and governmental privacy erosion that eschews anonymous transfers such as cash.
https://medium.com/@jimmysong/why-blockchain-is-hard-60416ea...
In a sense, current conceptions of blockchain are trying to do the impossible. They want the security of a decentralized system with the control of a centralized one. The desire is the best of both worlds, but what they end up getting is the worst of both worlds. You get the costs and difficulty of a decentralized system with the failure modes of a centralized one.
99.5% of the other stuff is a scam.
Relevant.
Second, your post is incredibly one-sided and misleading.
>>The space is littered with fraud.
And also unprecedented accessibility. In no previous era in history were so many teams of capable developers living outside of wealthy countries able to raise enough capital to pursue ambitious technology projects.
Also unprecendented innovation and market evolution: we're seeing:
* rapid emergence and growing popularity of websites for vetting and rating token sales, and identifying scams
* an investor class that is becoming wiser to scams, and more discerning in general, every day. No longer can a whitepaper alone raise tens of millions of dollars worth of ETH. In just the space of 18 months, we've seen investor behaviour undergo a massive transformation towards sophistication.
>>Wallets have bugs that lose hundreds of millions of dollars
Wallet bugs and scams are largely a thing of the past in Bitcoin. Ethereum's ecosystem is much younger, and so we see it going through the same trials.
Once the industry matures, these kinds of problems will be much less common.
>>Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018
That's because energy is one of the largest, if not the largest input to the production of cryptocurrencies and maintenance of blockchains.
Blockchains require very little resources other than integrated circuits and energy, which makes them very different from other product categories, where labour costs are much higher relative to direct energy costs.
So the flip side here is much lower costs in other types of resources relative to the cost of the good/service being generated.
Also, proof of stake is coming.
>>Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized
Development is highly decentralized, with people defecting through hard forks when they disagree with some coalition of developers (see Bitcoin Cash versus Bitcoin Core).
In Ethereum at least there are also multiple independent implementations of a full node.
All changes to development occur through consensus, with a straightforward exit path, via hard forks, for those who do not agree with that consensus.
As for exchanges: several decentralized exchanges have been released over the last year.
Once blockchain scalability gets better, and peer-to-peer usage increases, exchanges will also be much less necessary.
>>No legal use case found to date
Absolutely ridiculous claim. How about avoiding rent-seeking by monopolistic platform providers, by encoding the rules of use and fee levels in an immutable smart contract?
Anyway, providing people with the ability to circumvent regulated industries that impose financial censorship can have social value. Unless you think Wikileaks bypassing the financial blockade was not a net benefit to the world, or that repressive governments never impose tyrannical laws.
OmiseGo: a Thai-based project that received $25 million worth of cryptocurrency in their token sale to develop a decentralized exchange and payment network.
They've led development on multiple scaling initiatives, including vanilla Plasma and Plasma Cash, as demonstrated by their GitHub:
Golem: a Poland-based project that received $8.6 million of cryptocurrency in their token sale to develop a decentralized market that enables people to sell their unused computing resources.
They launched on the Ethereum mainnet last month, and all of their code is released open source:
https://github.com/golemfactory
Request Network: a France-based project that received $33.6 million in cryptocurrency to develop an open payment request network and protocol. They launched their DApp on the mainnet in March, and like the others, everything is open source:
https://github.com/RequestNetwork/
I could easily list off a dozen more, but I don't have the time to do the write up for that many. My point is, the market for raising funds through token sales has become extremely competitive. There are now over 84,000 ERC20 token contracts, and 749 tokens with enough trading volume to be listed on coinmarketcap.com.
The projects raising the most funds are all more than just a whitepaper nowadays. They all have significant substance backing them. And unlike traditional venture capital, they are globally distributed, unlocking the potential of people who as a consequence of geography, would historically have had a lot of difficulty raising the necessary capital to pursue these projects.
There's still a lot more room for improvement in terms of quality, but the trend is clearly in the direction of improving quality, if you compare the top token sales today to those that were raising millions a year or two ago.
As ex-Coinbase engineer could still lack imagination and foresight, being hired at Coinbase says nothing about possessing these. (not saying OP does lack these, but original post is pretty poor for an "authority" on the subject).
But agreed on lazy dismissal and I'll throw in assumption.
I got a degree in finance in college (in addition to MIS/Economics) because of all the scandals of my youth. I wanted to see if I could avoid those issues.
Being a software engineer it's actually pretty easy, being a business owner you're certainly riding the tides that are our joke of a financial regulatory system (up to the highest bidder to make the laws/regulations).
It seems obvious that dapps can decentralize supplier/consumer relationships, removing the 30% that perhaps ops job relies on.
TL;DR – We all need to stop ignoring Bitcoin's rapidly-growing electricity consumption and making flawed "What about _____?"† arguments. The Bitcoin community (myself included) needs to start facing reality and be able to demonstrate four things:
1) Bitcoin’s energy usage is actually reasonable, when viewed in proper context
2) All that electricity is actually serving a useful purpose
3) Bitcoin’s growing energy needs can be brought under control
4) Over time, the electricity for Bitcoin will increasingly come from renewable sources
I personally believe that #1 and #4 are already true and will continue to trend in the right direction over time. As for #2 and #3, those can become true in the near future, but right now it's all hypothetical and Bitcoin needs to start delivering on its (unfulfilled) potential soon.
* https://medium.com/@petershin45/bitcoin-is-killing-the-plane...
- Wallets have bugs that lose hundreds of millions of dollars >> Software has bugs that cost lives. Losses in the millions are terrible events but they raise awareness to information security and that's priceless.
- Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 >> PoW uses electric power to secure billions of euros in assets. Bitcoin miners were paid ~3.5B USD last year and paid an estimated 1.5B in utilities not to mention the thousands of jobs it creates. In any case right now Bitcoin's PoW spends as much as 3k US households so I don't think it's quite 0.5% of the world's total consumption...
- Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized >> It's quite evident that realistically it's near impossible to start decentralised, but many teams and projects are adopting loose structures and contemplating moving their governance to a DAO.
- No legal use case found to date >> Among those who disagree with you are all the G-7 governments, almost all major exchanges, many of the major banks, law firms, etc. I'm not saying you're wrong, but you are not even wrong.
Blockchain is a parasite on society. >> FU. This is my job you are talking about.
- Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 1998
- Promoters yelling “digitalize everything” while services, development teams and internet companies are all highly centralized
- No legal use case found to date
Internet is a parasite on society.
(Clearly satire....)
I would argue that the negativity toward such things as the wildcat banking era is a result of cognitive biases like this that manifest when dealing with complex social systems.
More on the wildcat banking era:
https://www.alt-m.org/2015/07/23/real-pseudo-free-banking/
>>Indeed, the all-around record of U.S.-style free banking improved significantly as the Civil War approached. Even banknote discounts — another consequence of unit banking that has been wrongly treated as a necessary consequence of having multiple banks of issue — had become almost trivial by the early 1860s. According to my own research, someone who, in October 1863, was foolish enough to purchase every non-Confederate banknote in the country for its full face value, in order to sell the notes to a broker in either Chicago or New York, would have suffered a loss on that transaction of less than one percent of his or her investment.[9] That's less than the cost merchants incur today when they accept credit cards, or what people typically pay to withdraw cash from an ATM that doesn't belong to their own bank.
One can make the same argument about anything. "Look at all the fabric wasted on beanie babies that could be used for clothes" one could have argued in 1998. if Bitcoin is just a fad ,energy use will plunge due to difficulty decreasing. The energy consumed on mining represents a an input cost based on an expected return on investment, like energy spent on car manufacturing, for example. if the return falls, so will input costs because no one operates at a loss for long.
A significant number of operators in places like China are stealing electricity, either by tapping into wires or by making deals with corrupt local officials for reduced/free electricity. Articles such as these occur quite regularly.
http://www.scmp.com/news/china/society/article/2143758/chine...
https://www.ccn.com/chinese-police-seize-600-bitcoin-mining-...
http://www.scmp.com/news/china/society/article/2108486/four-...
https://kyc360.com/article/bitcoin-causes-electricity-crisis...
As such, there really isn't a "price floor" to crypto mining. Stolen electricity is free, they will keep mining no matter what.
Blockchain is a brilliant and revolutionary technology. Is cryptocurrency the killer app? Maybe, but in any case it's financing the development of decentralized projects which may solve difficult problems in the realm of self organizing machines, artificial intelligence, mesh networks, trustless systems, transparency, etc.
It gets old seeing educated people on HN trying to frame anything-cryptocurrency in the most negative light possible without productive discussion, most often out of jealousy and bitterness about not partaking in the profits enjoyed by those who saw potential earlier and bought some.
Ugh, that is so presumptuous. I've been in Bitcoin since the "Bitcoin 0.3" announcement on Slashdot. I was an engineer at Coinbase. I'm on 2 Bitcoin-related patents. I was reading about Ethereum when people were still learning about Bitcoin. I've tried really hard to see what can be done with cryptocurrencies and I've arrived at different conclusions than you have. I think you may need to ask yourself harder questions.
As someone who researches self organizing systems, especially in the network space, I have seen numerous applications of mesh network organization based on a blockchain-like decentralized ledger that adds a new dimension after well over a decade long plateau in development. Semi-centralized blockchains utilizing proof-of-stake and other methods seem to be valuable ways to add transparency to certain government functions (such as voting), publishing trade records, and clearing transactions over an ACH-like network (which is currently monitored manually by the Fed and is a growing vulnerability in the global financial network). To dismiss the whole space is to lack vision, or perhaps to be dejected about not being in the financial position you could have been in given the early opportunity.
- As for voting and trade records, how do you deal with the fact that developers can fork the chain and invalidate past transactions like they did with Bitcoin in 2010 and 2013, or like they did with Ethereum in 2016? Why do you trust the developers more than your own government? And if you live in an oppressive regime, what makes you think your government will allow your blockchain to be used for voting?
- If your government wants transparency, why don't they simply expose a read-only API to their database?
What blockchain gives us is a very low overhead payment system (payment channels), along with decentralized management of IP addresses and networks.
This could all in principle be managed by a centralized server but blockchain gives our systems a more-or-less neutral venue in which people can interact with predetermined rules, whereas a centralized server would put us in the position of arbiter of all interactions on the system.
On your blockchain, if a new consensus rule is being disputed or if a bug in the consensus rules causes a fork, who has the final say, the developers or the miners?
We will likely use Cosmos which uses proof of stake validators instead of miners although we are prototyping on Ethereum. In any case, the miners/validators would decide, as they always have and always will. If there was a big divide between users and validators, the users could choose to leave and use a different fork (although they would have to modify their router firmware). The only power that the developers have is thought leadership, and the ability to claim that something is an "official" binary. This is also how the Ethereum DAO hardfork went down.
Why does it need to be in production? The technology is 10 years old, and it has been widely known by researchers for less than half that time. Just trying to find any hole you can pick? This is by a respected researcher who has recently shifted his focus to blockchain with the potential it has for IoT and mesh networks: https://www.researchgate.net/publication/324005919_SENATE_A_...
> As for voting and trade records, how do you deal with the fact that developers can fork the chain and invalidate past transactions like they did with Bitcoin in 2010 and 2013, or like they did with Ethereum in 2016? Why do you trust the developers more than your own government? And if you live in an oppressive regime, what makes you think your government will allow your blockchain to be used for voting?
The credentials you tried showing off made it sound like you would have a good understanding of the various blockchain technologies in play... You should know that proof-of-stake and master nodes allow a semi-centralized network to be created where the transactions are still public and verifiable, but important parties (i.e. the government, in the case of some of the examples I provided) have a significantly stronger influence on the outcomes of the network. Sure, any developers can fork the blockchain or create invalid blocks, but why would you switch your software to use that chain?
> If your government wants transparency, why don't they simply expose a read-only API to their database?
They probably don't want transparency but that's a separate issue. Let's use the example of voting -- an election running on a public blockchain protocol with all of the votes can be verified and summed, and by knowing your private key you can see how your vote was counted without decrypting that vote to anyone else (even the government). With an API and a database, you could authenticate and get the value they stored for how you voted, but obviously it's a violation of privacy to see how everyone else voted so you can't verify the system as a whole. Most prominent example in this space: https://followmyvote.com/online-voting-technology/blockchain...
These are pretty basic examples to be honest and you are allegedly quite involved in the space, so I assume you just don't want it to be true.
Blockchain based voting systems might help prevent the rare case of multiple voting, but AFACT, do nothing to protect an unscrupulous government from stuffing the ballot box with fabricated votes. Ultimately, like the other issues GP raised, the technology seems to do little to solve the underlying social problems.
It seems ironic that such trust/reputation has become a central point, in light of blockchain's nature as a decentralized trust-less system.
Not a convincing rebuttal.
I did not..
But I did inform her that when it crashed I just stuck her money in my savings account. And nothing was lost. I was willing to eat the loss if it had gone up when she wanted to cash out.
And I did buy her a new radiator. I don't have to give a shit about mothers day for the next decade.
The bitcoin-cash fork is a perfect example of how blockchain tokens can be trivially summoned out of the void with identical properties to the parent token which spontaneously "creates value" when the sum total value of the fork and the parent exceeds the value of the parent pre-fork. What this tells us is that blockchain markets are very inefficient and the vast majority of money in the system has near zero understanding of the intrinsic properties that underpin the token's ability to even exist as a thing that can be traded on an exchange. Once the market is saturated with an understanding of how these tokens are actually infinitely abundant and not at all scarce as we know it, we are going to see a catastrophic correction.
I'd like to find alternatives to Bitcoin and Ethereum that are actually innovating. For most coins, forking is the extent of their technology.
Exhaustive analysis of ICO white papers shows about 1/4 contain major red flags. The bar the WSJ set is pretty low (as in easy to pass without raising flags). Any white paper that didn't plagiarize long passages, re-use others' headshots or fail to name principals, or fail mention risk basically passes.
It's also worth noting that the multi-billion dollar figure cited for total funds raised through ICOs is about as reliable as the ICOs themselves, since it's based on self-reported figures from ICOs that frequently appear out of thin air with multi-million claims of funds raised so far.
Want to see something truly scary? Pick a coin, any coin, that has had a major vulnerability discovered by researchers in a peer-reviewed publication. Then go onto that coin’s subreddit and watch in amazement as a bunch of security illiterate redditors bend over backwards to invalidate the paper’s claims with conspiratorial nonsense and cries of spreading FUD.
Blind loyalty is bad enough in meatspace. In the cryptocurrency realm, it’s simply dangerous.
The crazy thing is that any one of these coins could have a double-spending vulnerability, which by its very nature would likely be undiscoverable. There could very well be some clever hacker somewhere exploiting double spends and slowly bleeding money out of exchanges.
Because every node has the same database. All and every one of the miners maintain a copy of what's essentially the same DB, the same distributed ledger.
But there are plenty of stolen keys and seeds for wallets and if someone gets your wallet, all your money will be moved to someone else's. This, sadly, happens frequently.
[1]: https://bitsblocks.github.io/bitcoin-maximalist [2]: https://bitsblocks.github.io/crypto-facts [3]: https://bitsblocks.github.io/get-rich-quick-bible
https://multicoin.capital/2018/02/23/models-scaling-trustles...
No, not just illegal stuff like intershipsp for no pay but more major stuff like outright fabrication of founder bios, etc.
What matters more, it seems to me, is that both the cryptocurrency and tech startup world are filled with bad investments which are going to make the next economic bust exponentially worse.
how is that not "legitimate fraud?"
I predict it will shake out about the same way also.
Blockchain and bitcoin aren't going anywhere in the near future. Some people have, and will continue to have, a use (for whatever reason). The "I hates it precious!" screeds won't change this. In the end it will turn out it's not the savior the proponents claimed it would be nor the demon incarnate the detractors claimed either but just another instrument of the powers that be.
Why folks can't take less emotional views on these two phenomenon is beyond me. It really is. You don't like Bitcoin? Fine, ignore it. I simply don't get the mouth frothing hatred.
A good more concrete example of this is the DAO from Ethereum. A lot of verbage was wasted beforehand saying how it was going change everything about corporations and investment but as far as I can tell little has changed.