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Comment by echelon | Hacker News Reader

> Saying that blockchains are less secure than a relational database storage points towards not understanding immutable ledgers with shared state at all.

If I crack your Bitcoin keys, your money is mine. Nobody is going to restore your property.

If I hack into a bank or rob you at an ATM, police will come and get me, and the judicial system will put me in jail.

Crypto is stateless. Lawless. You can't own math. You just have a solution to a problem that you haven't shared with anyone.

And if someone with compute resources cared, they'd take it away from you.

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Being lawless is a feature, not a bug. This is why, despite the many apparent flaws, bitcoin usage just keeps on growing with people living under authoritarian regimes, for instance. The money is yours and no government can confiscate it.

> Being lawless is a feature, not a bug

Depends on who you ask. Being lawless is not a feature to me, for example. Some of what I think you mean by that I will probably want, but not lawlessness itself.

The money is yours and no government can confiscate it.

Anyone can confiscate it.

Let's say the Government wants your cryptocurrency. You rub your hands together with an evil laugh and say it's protected by a private key that you've memorized!

They put you in jail and say you can come out when you hand over the keys to your cryptocurrency.

Or it could just be a random person with a plumbing wrench that will happily stop hitting you in the head with it if you give up your private key. Or it could be someone that breaks into your house and steals your wallet's recovery phrase. Or it could be you accidentally sending ETH to a BTC wallet.

The original argument was that with traditional finance, banks could edit your balance when needed. That can't be done with bitcoin: the protocol won't accept transactions that aren't signed with the owner's private key.

The best metaphor is perhaps digital cash. No government can edit the cash in your wallet out of there, but as the owner, you can definitely lose it by force or stupidity.

> The money is yours and no government can confiscate it.

Well the FBI owns the largest Bitcoin wallet. And I am pretty sure it's not from mining.

Ref: https://steemit.com/bitcoin/@loryon/fbi-is-global-stakeholde...

That is money taken from custodials (i.e. the bitcoin wasn't actually yours) or through force from captured individuals. No part of that was taken by calling the bitcoin CEO to require editing the balances on the blockchain.

But if an employee at the bank removes a zero from a field in the database and lowers your balance there’s nothing in the protocol to prevent that, external controls have to be added to keep that from happening, like checksums, auditing, and monitoring. Blockchains provide that security in the protocol but of course have other problems. It’s all trade offs and different use cases.

That bank employee is going to find themselves on a trip to federal prison.

If they get caught. The point is that blockchains can have value, I don’t know anyone reasonable who doesn’t believe this. Git is technically a blockchain.

> If they get caught.

Federal and international regulations require sophisticated bookkeeping and auditing. Banks and fintechs spend billions of dollars on fraud detection and security. Not only is it a matter of protecting their own self interests, but laws and reputation demand it.

> The point is that blockchains can have value, I don’t know anyone reasonable who doesn’t believe this. Git is technically a blockchain.

Git history doesn't have monetary value. It has practical, functional value.

The processes you mentioned are external controls, I’m talking about the protocol.

For Git, I don’t see how that’s relevant. If things that don’t have monetary value can be secure at the protocol level why shouldn’t money be just as secure.

If an employee at the bank removes a zero, you can sue them and your bank and get your money back. More likely, it wouldn't come to that, you can contact your bank and get that 0 corrected without legal interference (because they don't WANT to be sued).

If someone steals your coin... That's it. Game over. There's no way to force them to give it back. Assuming they are in the same country as you and you can identify them, then you might be able to start legal proceeding to get your money back, but even then, nothing you can do will force them to return whatever coin they have. If they die, game over, the coin is lost forever and the best you can hope for is their estate has enough value in it to recover the loss.

An error on the side of the bank gives you a clear target for legal action to recover funds, and barring you having more wealth stolen than the bank has value (unlikely), you'll get your money back.

The security of the block chain is both a boon and a curse. It allows the blockchain to operate without a central controller, but it also, by design, makes transactions irreversible.

The justice system is an external control, I’m saying that blockchain protocols can have value because they provide this security without an external control. That permanence could be a feature or a downside depending on how the protocol is used.

And I'm pointing out the downside. External control does not work on the blockchain, which means that when mistakes or theft happen, there's no mechanism to undo.

It's a pretty large downside. The only upside I've heard is that you could avoid oppression or government theft. However, I'd contend that a government that would directly rob your bank account isn't exactly going to stop at just that.

We agree there. The crypto ecosystem seems to be in a massive bubble, and Tether is a blatant fraud that’s contributing to wash trading on the unregulated exchanges, and NFTs are just a scam. But it bothers me when people use those facts to try to say that blockchain technology therefore doesn’t have a valid use case. It does, and proof of work was a monumental invention, but how blockchain ultimately will be used is unclear right now because the industry is so broken.

I think we should continue to research blockchain and crypto, it is an interesting topic. But when the crypto scam industry is worth many billions then basically every online discussion will be full of people who try to manipulate others to buy into crypto so that their crypto assets would increase in value. So until the scam part dies down it will be impossible to have a fruitful online discussion about it, it will just be a lot of scammers and a lot of defensive people who try to avoid getting scammed.

> If an employee at the bank removes a zero, you can sue them

Only if you live in a democratic country with fair courts.

Fine, if you live in a non-democratic country with no or an unreliable banking system, go nuts with the blockchain.

I get the feeling that 99% of blockchain users/proponents aren't in that circumstance.

You are probably right. But they help the other 1% by using crypto.

Not sure why downvotes. If only 1% of people who need it use Bitcoin, it becomes unreliable for them.

But it still doesn't protect the other 1%. An oppresive regime that can steal their money or other physical assets, can also beat, pressure them until they hand over access to their crypto wallet.

There are always edge cases, where nothing helps. Fortunately, most countries are not like North Korea and you have some freedom, often enough to use crypto.

… and if you live an abusive or failed state, the blockchain encryption just means that the kidnappers will start running XKCD 538 on you or your family until you give them your password. This is not a problem with a technical solution.

Consider also the scale: what percentage of cryptocurrency users live in regimes like that versus the percentage who have functioning courts but are one exploit/phish away from irrecoverably losing all of their cryptocurrency?

> … and if you live an abusive or failed state, the blockchain encryption just means that the kidnappers will start running XKCD 538 on you or your family

You assume that from the blockchain kidnappers can find out who I am. I don't think they can, unless I exchange crypto with them.

>Consider also the scale: what percentage of cryptocurrency users live in regimes like that versus the percentage who have functioning courts but are one exploit/phish away from irrecoverably losing all of their cryptocurrency?

People always make mistakes. Do you suggest to prohibit every possible action which might lead to bad consequences? Do you suggest to damage people in need in order to save those living with good conditions?

They can tell you have money by your activity. If they grab your devices, they know you have the apps. If you do anything on a public blockchain like win a bid for an NFT, that’s also a clue.

Sure, if you live like a monk and never talk about it, you can probably avoid attention but there are plenty of people who thought they could do that successfully up until they didn’t. Again, it’s not a problem with a technical fix.

Not kidnappers. Officers from the oppressive regime. Unfortunately we have examples of regimes demanding access to personal devices - including forced installation of applications, rooting phones and installing backdoors.

Basically the question is: who do you want to rely on/trust more, encryption or the justice system?

That's a false equivalence.

I have more trust in the correctness of encryption than the reliability of the justice system.

HOWEVER, that's not what's at issue with crypto. The issue of crypto is that it's irreversible. It absolutely does exactly what you tell it to do, and no more. But, at the same time, that means that when non-algorithm mistakes or exploits (ransom, cons, etc) happen you have 0 recourse to fix it.

There's a reason crypto is the preferred method of wealth transmission for scam artists, hackers, and ransomware.

I love how the only "use case" for this tech has been speculative trading (paid for by that stodgy fiat money everyone hates so much) but the innovation fantasy sell is still in every thread related to crypto.

Speaking for myself here, but I much prefer to have USDC in defi than US dollars in my traditional bank. Far from a fantasy IMO

You can also buy and own a lightsaber. It makes the sound effects and you can pretend it's real, but it doesn't actually do the things you imagine it to.

It's really strange to me how you don't wonder why or dig deeper as to why I have my opinion. I'm automatically just a dumbass who is living in your bias, nothing to see here

We all have access to the articles that made your opinion--we don't need to wonder.

> If I hack into a bank or rob you at an ATM, police will come and get me, and the judicial system will put me in jail.

What if the state decides the money in the bank isn't really yours (e.g. civil forfeiture, political dissident, capital controls, etc)

The same thing as if they decide that you are using your cryptocurrency to evade taxes, child support, launder money, etc.?

That doesn't make them "less secure," and there are many ways to improve blockchain wallet security (which is independent of blockchain security) beyond a single point of failure.

The question is, will the cryptoheads accept living by their 'freedom' rules or will they recreate coercitive means of securing assets (with their own memetic flave of course).

Crypto simply does not rely on a third party, which is both its advantage and disadvantage.

This is such a libertarian hyper dream.

In this world, unless you live in the wilderness without tools and supplies, everyone depends on others to some degree.

Crypto is an attempt to greedily cut others out and play god. The more plebs you convince of your world view, the more powerful you become.

Meanwhile you do nothing of value for society. Just waste brilliant minds and power.

The point isn't to not depend on anyone else for anything, instead it's to unwind some of the dependency assumptions we've built up over time.

Many in the world don't have access to a financial system. If they have internet, now they do (assuming they can find some way to onboard). Beyond that, plenty of financial tools only were accessible to the ultra-rich/institutions. Many of those are now accessible to everyone.

May be worth taking a step back to see why brilliant minds are intrigued.

> Many in the world don't have access to a financial system. If they have internet, now they do (assuming they can find some way to onboard).

If anyone has access to the internet, they have access to banking services. I mean, there are internet banking services being offered in Burundi and Mozambique, two of the poorest countries in the world.

A relational database can also be stateless and lawless if you try hard enough. But I think that the point that a lack of recourse is inherent to the technologies ideology does ring somewhat true.

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