Hacker News Reader

Comment by UkrainianJew | Hacker News Reader

>For example, who wouldn't want a system that forces banks to track customer balances in a secure, private, and auditable data structure?

Crypto doesn't force banks to do that.

Also, if it was a real problem, there would be legislation for it since RSA became a thing.

And if it was, having a 3rd-party timestamping server and regular cryptographic signatures would be enough to solve it. No bank in their right mind would burn terawatts of power to prevent an error that has a 0.00001% chance of happening and costs virtually nothing to fix.

View on HN

Technology from the cryptocurrency world can be used to force banks to do that.

RSA alone isn't enough. How do you use RSA to build this? You can do auditable sums (prove that private balances sum to a public total), but I can't think of a way to do things like proving that a particular debit happened.

> costs virtually nothing to fix.

There is very high system-wide cost to the status quo. Part of the reason that bank errors are so inexpensive to fix is because transfers take 2-5 days.

>I can't think of a way to do things like proving that a particular debit happened.

Prove to whom? Banks have multiple layers of redundancy (including internal logs, paper/PDF statements, etc). So in case of any software error or a single-employee malice, it will be just fine.

>Part of the reason that bank errors are so inexpensive to fix is because transfers take 2-5 days.

That's a feature, not a bug. It gives you time to stop a transaction initiated by someone who stole your identity. With blockchain, you lose keys - you lose coins.

It doesn't have to be that way though. There's nothing inherent about the timescale of 2-5 days that prevents the same level of security and reversibility with shorter transactions. The problem is the lack of coherence, lack of information, and lack of fast technology. It's easy to build a reversible version of BTC with programmable timeouts for reversal, and the timeouts can then be tuned based on transaction size, risk tolerance of the sender, and willingness of a third party to underwrite the transaction risk.

Credit cards basically do this. Part of the reason they are able to is because they gather more data and rely on more sophisticated technology than the banking system. With blockchains, you have another small tool to improve the situation.

Reply on news.ycombinator.com