Comment by astoor | Hacker News Reader

Comment by astoor | Hacker News Reader

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I'd also add that one of the big fallacies/deceits of blockchain is that it does not allow trustless transactions as the article author suggests, it simply shifts the trust. In the author's example of gathering funds to renovate a neighbourhood park, you'd still need to trust that the contract developers hadn't made a unfixable bug or deliberate backdoor, you'd still have to trust your neighbours to not screw up when interacting with the smart contract, you'd still need to trust the blockchain platform because if your funds are lost or stolen transactions are by design irreversable and you have no recourse to the law, etc. In pretty much every case, you would be better off without the additional complexity, risks and points of failure of a blockchain solution.

What this is really about is that the cryptocurrency enthusiasts distrust authority. They would rather put their trust in anonymous developers, shady mining cartels, exchanges which clearly engage in front running and wash trading, cryptocurrency scheme leaders who are convicted fraudsters, etc. If people genuinely want to put their trust in the less trustworthy, even if for no other reason than trying to get rich quickly, then we have a fundamental problem with our society.

Great example. I would add here a problem that blockchain solution does not solve and I might say it even makes it hard to fix (but I might be wrong as I don't work with blockchain so maybe I am missing something):

This Smart contract about fixing the park is a virtual thing. But if someones does this kind of job then in real life there is usually someone else who will accept and sign that the work was done accordingly with the requirements.

First, I don't understand how this works.

If everybody in the neighborhood needs to accept the work and sign it then I think it will be very difficult to be a contractor. Because you are suddently at the mercy of all residents to accept the work which is a nightmare as everybody could have a small things to change.

Let's say the residents there will delegate the acceptance to one single person. This case gets more interesting. What if the persone they delegate this acceptance is corrupted and will sign and accept the work but after 2 months the work will break. How do the residents recovery the loss? Will they go to the _centralised_ court? Will they go to the _centralised_ state to help them? And here goes the problem: what if the crypto dream gets implemented globally so no central authority. What then?

This is another intractable problem with blockchain and cryptocurrencies, known as "the oracle problem" - in order to do something useful in the real world, it has to interact with the real world in some way. There are various schemes to try to offer solutions for automatable processes, but when human decision-making is involved data still has to come from humans who are "off-chain", i.e. have no direct link with the blockchain or cryptocurrency platform.

> What this is really about is that the cryptocurrency enthusiasts distrust authority.

I really think you hit the nail on the head with this statement. There are often so many hidden assumptions in anything that authorities by definition are bad. I believe the whole blockchain/crypto/web3 movement is more an idealogy than a solution to a problem.

But wouldn't you first look up that developers prior work history on the blockchain? I'd just ask what they've deployed in the past and could then easily verify if they are skilled or a bad actor. As for the funds being stolen I think we're just at the beginning of crypto custody services. It's like in the eighteen hundreds saying banks are a bad idea because they get robbed all the time.

“Just ask” and “easily verify” are carrying a lot of water in your comment. Ask who? Verify how? How would someone with no programming experience do it, how long would it take them, and would it be a good use of their time vs. the old-fashioned way?

There are countless cases of anonymous developers spending several years building positive reputations on Hacker News, Reddit, GitHub etc. before disappearing with >$10M USD of other people's cryptocurrency. Whether they set out to perform a long con, or whether the opportunity makes them thieves, is irrelevant - you simply can't trust anonymous people to look after your money.

True, but there's value in reducing the number of parties you must trust to get something done. It's easy to imagine that, at the margin, there are a subset of collective action problems that will get solved if you can reduce the number of parties that must be trusted. Worrying about the need to sue 3 people has to be better than worrying about the need to sue 6.

If that were the case, then decentralization would be the explicit opposite: instead of trusting a central party you've got N machines owned by M parties involved, most of whom you couldn't take to court if you wanted if a "smart contract" was misinvoked or a blockchain transaction was screwed up. Sure, most chains require attacks to be 51% or more collusion, but if a 51% attack happened, how many third parties did you trust that you probably can't sue? Millions of machines with thousands of owners? That is by far the opposite of "trust as few parties as possible".

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