And many crypto-anarchists discovered that day that most people did not care about decentralization.
It's meaningless as a store of value, it's too volatile because there's no government backing it or mature monetary policy, and pretty much everyone will take a lawyer and the legal office over a 'smart contract'.
If you want to force a transaction to be reverted you need to either create a cataclysmic event prior to the event you want changed, or you need to own billions of dollars in hardware and spend tens if not hundreds of millions on electricity currently to overpower the network via 51% attack.
HODL. Lambo. Moon!
That's about it.
I don't think "decentralization" is a good term to define cryptocurrencies like bitcoin or ethereum. There are lot of properties in these systems. For example limited supply, untamperability of history, irreversable transactions, permissionless use etc. You can compare to older systems offering similar features and how well these systems work compared to them.
Transaction capacity & speed is most often not the primary point of blockchain systems, somehow many seem to assume that. For example it is no possible to create truly irreversible transactions in centralized system, since centralized system is always prone to forceful intervention.
Reversible transactions are a huge positive.
I think that's a little simplistic.
Without reversibility you're not going to receive as much. People are far less likely to trust smaller or newer merchants without these sorts of features.
You probably also want your customers to be able to rectify mistakes, such as sending money to the wrong place.
I guess we could say when you are receiving you want irreversibility if you're planning to rip off your customers or otherwise not fulfil your contract with them
If you hand a bearer instrument like a bank note to someone, that transaction is technically irreversible. They put it in their pocket, and you can't recover it without a physical assault. You have to trust them to provide the goods or services that you just paid for. Or you have to trust the justice system that it will allow you to (eventually) recover your payment if the other party reneged. These remedies are often not available with cryptocurrency. You may be unaware of the counterparty's physical location or true identity, and even if you did, they may be in a different legal jurisdiction altogether. You can't round up a posse to go get the money back.
If you pay with a finance system account, you can dispute the charge with the payments processor, and your payment may be reversed by them, even after the cash balances have already been altered, by withholding payment from a future transaction through that processor. Criteria for reversal may vary between processors. If consumers trust the reversal policy of the processor, the merchants get more money, because consumers don't have to trust them or the formal justice system. They can get refunded now, and let the processor and the merchant argue over the details. This remedy is available to cryptocurrencies. While individual transactions are irreversible, it is possible to redirect future transactions through a trusted intermediary or a smart contract.
Basically, everyone wants an escrow mechanism of some sort built in to the system, so that if a customer doesn't get the goods or services, the merchant doesn't get their money; and if a merchant doesn't get paid, the customer doesn't get goods or services. As long as the transactions are irreversible, someone can get ripped off, and they have to go out-of-band for a remedy. As long as transactions are trivially reversible, someone can get ripped off, and they have to go out-of-band for a remedy.
Conveyance of money and delivery of goods or services are each half-trades. We don't like those half-trades. They're too much like gifts, in that there is too little ability to enforce reciprocity without a preexisting social link. If you conduct business in half-trades, you still have to trust, and people can still get ripped off. So far, cryptocurrencies only technologically validate the money-conveyance half-trade. What it needs is a way to validate the other half-trade, for goods or services, and bundle them both into an atomic whole-trade that either reverses or becomes permanent as a single unit.
Trade chains would be nice, too, but atomic transactions are what people need to trust the system instead of trusting each other.
If I pay someone for a laptop and instead of a laptop I receive a box of rocks, I can claim they didn't send the laptop and they can claim they did. There is no way for a third party to know who is lying.
The recipient could be lying to get a refund when they received the laptop, the sender could be lying to get paid when they sent a box of rocks. Maybe neither of us is lying and the delivery driver swapped the package contents.
This is not a problem alternative payment methods solve, nor one they created. See Amazon. The solution is some kind of insurance, which can be layered on top of any payment method -- you buy through Amazon using whatever payment method you like, they take a cut in exchange for eating the returns when sellers send the wrong stuff. Then crappy traders are the intermediary's problem and whether they kick them out or eat the losses themselves is their own choice.
But you don't want that kind of system built into the payment method itself, because it has overhead, and not all transactions require it. Sometimes the thing you're paying for has already happened and you're just settling your account, in which case a proof of payment is all you need out of the transaction. Sometimes you are buying something in person or can otherwise verify the goods yourself before making payment. Sometimes the seller is known and trustworthy enough that you're willing to buy without insurance. In all of these cases mandatory insurance is costly dead weight overhead, and they represent a significant proportion of transactions.
Meanwhile if you're buying from someone you don't trust and can't verify, you have the option of using an intermediary or escrow service or buying insurance. But that doesn't mean it needs to be mandatory in all cases.
You either need to replicate the trust system that greases cash transactions, or make the "get stuff" half of the trade as easily verified as the "move money" half. The latter is the easier part of the problem, because part of the reason that money is money is the fungibility factor.
Solving the former would eliminate counterfeiting, provide record of provenance, track supply chain, simplify customs clearance, and trivialize recalls in one stroke. But it is a truly massive undertaking. Solutions like insurance and charge-backs are several orders of magnitude cheaper to implement, and don't require an unbroken chain of cooperation from everyone in a supply chain from manufacturer to consumer.
It doesn't exist. It won't exist without a lot of work. But that's what everyone wants. Right now, protecting yourself from scams in a caveat emptor marketplace is an externality that can be diffused away, such that it can be paid a little bit at a time, by everyone. If you eliminate the possibility of scamming, that's removing a cost, such that no one has to pay it any more. A payments system that cannot be scammed by anyone but a giant conspiracy of renegades, or a state-level actor, would likely be preferred by everyone.
But a weak link like Amazon prevents this. They do not themselves know whether the goods in their warehouse are counterfeit, so if you buy something, receive genuine goods, and return a counterfeit to them for a refund, they don't even know that you were the one that scammed them instead of one of their "fulfilled by Amazon" sellers. If they eliminated the common binning, and were able to show that the goods shipped to you were verified as genuine, with a record of provenance going straight back to the factory, you wouldn't be able to do that. But Amazon would rather pay the scammers than pay someone to build a scam-resistant system. That's a reasonable business decision for one company to make. Society as a whole might prefer that the scammers get a smackdown instead of a payoff.
The point is that it is useful to both have reversible, and irreversible currencies existing in the world at the same time.
That way people who want to use reversible currencies can use that, and people who instead prefer irreversible ones can use those.
We want it at the systemic level, too. I used to work for financial traders. One day one of our traders made a quick profit by buying something at an absurdly low price. It turned out that a major market participant had fat-fingered a trade offer; they lost enough that the company could well go out of business.
Eventually the exchange stepped in, reversed all the transactions, and put things back the way they were. I thought our trader would be mad, but he just shrugged. And why not? The rules protected them all.
Well, yes, that's the question, isn't it?
The other thing to note is that decentralisation isn't just about ideology. If we forget finance and focus on data, a blockchain solution may in the future provide the ability for open federated data that is provably correct and can operated on transactionally.
Think flight availability: right now the majority of flight ticketing is controlled by Amadeus. A highly centralised, controlled and opaque service. Assuming _many_ technical problems were solved, a blockchain flight ticketing service could allow anyone to run a local node with real time availability that was guaranteed to be correct.
Even if this was run be a federation of providers, it would be a better solution than the current one.
Or do you believe that users would have followed the developers even if they forked the chain to pocket all the money themselves?
The majority of the ETH world doesn't believe that, which is why people like Charles Hoskinson left it.
That belief is contra to the concept of an immutable decentralized ledger, which means ETH isn't canonically a cryptocurrency, an immutable ledger, or a decentralized ledger anymore. The upcoming (well, it's never going to happen) POS fork is going to centralize it further among the very small number of massive whales who control the ecosystem.
In PoW only a few people have the resources to build and run mining farms. Certainly not me. In PoS anyone can stake on a desktop or laptop. This greatly increases the amount of people who can participate in the network.
Just to clarify a bit in an edit here -- As a general comment about POS vx POW, you have to purchase a huge amount of the cryptocurrency to participate in POS in a meaningful way -- so there is a cost to that just as there is in mining. The recurring costs of electricity are not there in POS of course.
I'm relatively confident the network will never go POS, but not confident enough to put money on it anyway -- you never know what these kids will pull.
The largest predecessor to bitcoin was e-gold
>The e-gold system was launched online in 1996 and had grown to five million accounts by 2009, when transfers were suspended due to legal issues.
The founder, Dr. Jackson, in July 08 - "pleaded guilty to "operation of an unlicensed money transmitting business" and "conspiracy to engage in money laundering"
Bitcoin founded in Aug 08 was decentralised so the authorities couldn't easily shut it and the founder went anonymous to avoid the problems of Dr. Jackson.
That's what the decentralisation is all about. It doesn't really matter that Bitcoin is effectively controlled by some Chinese miners or that Ethereum forks. It's about governments not being able to control them.
Your argument is like how left-liberals claim that poor Americans vote against their own self-interest by voting for Republican. No, they aren't voting against their own interest, they are voting for it, you just don't get what that is and in your mental model that's the case.
Specifically to your argument, can you pass an ideological Turing test of representing the opinion of people who supported the hard fork? In other words, sitting behind a computer, someone has to judge whether you are a true DAO hard fork supporter or not, and will they be able to correctly identify you.
The fact is, all software is mutable. All software (including Bitcoin) can go for changes (irrespective of the nature of those changes, which could even be, "hand over the write access of bitcoin network to federal govt").
So what is decentralization then if literally any piece of software can be changed if enough number of people go for it?