Interview with Nicholas Weaver, a researcher at the International Computer Science Institute at UC Berkeley. Weaver teaches a course on blockchains: Why blockchains and cryptocurrencies like Bitcoin are bullshit - Vox
Fascinating. Thoughts?
I’m not sure that I buy his argument that the block chain isn’t decentralized. His argument is that “the miners” have centralized control of the block chain. That’s like saying “the people” are in charge of anything (or everything). Anyone can be a miner and take some control of the block chain. To have real control over the block chain, people working together need to have control of more than 50% of the computing power dedicated to mining the cryptocurrencies. This problem has been known many people with even a passing interest in bitcoin forever.
Some people are saying that Chinese miners are approaching 50% market share in mining power but no one really has evidence that they are colluding to take effective control of the block chain. Of course, we wouldn’t necessarily know that this had happened until it was too late to do anything about it.
He is correct that cryptocurrencies are vastly less efficient. I think I read that cryptocurrencies use either a thousand or ten thousand times as much energy to confirm a transaction than the credit card payment system.
Add to that that at least with bitcoin it takes more energy to produce less coin as time goes on.
I know less about Bitcoin than I do about women.
I think the first thing that must be said is: just because someone fully understands the programming involved with blockchains doesn’t mean he understands the nuances of it’s social, political and economic effects. What his expertise might be trustworthy on is that it’s ineffecient and not as trustworthy as assumed. I mean, I basically agree it’s bullshit but I certainly don’t need a computer scientist to point out the obvious real world problems with how it’s being used atm.
What’s wrong with cash?
Same here.
because “fiat currencies” are evil or something. Same argument the goldbugs make. as if gold is inherently valuable itself.
it’s something cooked up by geeks who are enamored with all of the neat technical details of their shiny new toy, but completely unwilling to consider the question of “what problem is this supposed to solve?” invariably, the first response is always “decentralization” as though we’re just supposed to accept that as a nakedly obvious advantage. I think some of them have fantasies that when the “Fed fails” we’ll all move over to whatever their favorite cryptocurrency is and then we’ll all be throwing parades to honor the geeks as our saviors.
Nothing, if you’re buying drugs, hit jobs or hand jobs on the street corner. Harder to make a payment to someone 5,000 miles away unless you want to mail them an envelope full of twenties.
Of course, unless you’re ordering a service, someone still has to mail your brick of cocaine, panda cub or rocket launcher back to you.
I’m sure I’ve mentioned before my pet hypothesis that Bitcoin was actually invented by the NSA, FBI, or some other government agency, for the purpose of making it easier to track criminals. Yes, bitcoin is untraceable… if everyone involved uses it perfectly. But almost nobody does that, and it only takes a tiny bit of imperfection to give you a huge amount of information about the users, for almost no effort.
From looking at bitcoin and its limitations, I think it’s obvious that the original design of the blockchain, mining, and clients was intended to be a proof of concept that a few people could run to mess around with, not a serious worldwide currency. The fact that the number of transactions allowed are so starkly limited by design, for example, is a major problem for the real currency, but would be irrelevant if all of the mining and trading was in the background of a handful of computer labs for fun.
Nothing, so long as you are using small amounts, infrequently and locally. Once you start using larger amounts more frequently, the Feds get interested. Unless, of course, you want to forego using financial institutions as well since they are required by lawto report any “suspicious” cash transactions and all cash transactions exceeding, individually or in aggregate, $10,000. That regulation is specifically designed to catch criminals who deal in large/frequent amounts of cash.
Well, the the cryptocurrency creators and minors didn’t/don’t have tremendous amounts of it. That’s whats wrong with it!
If you don’t like where the money is presently sitting, and who controls it:
- Make your own money
- Convince everyone else that it has worth
- Profit!
Steps 1 and 2 can be tricky. Step 2 is less tricky if there is a cryptocurrency mania going on.
My understanding is that no miner can override what anyone else has done due to the crypotgraphy. Everyone can get read access, and they can add to the chain, but they can’t delete or alter anything. And if anyone tries to alter their own stuff, they become the one that is presumed to be faulty and get “fixed.” The block chain is saved on multiple computers, so any one person changing it doesn’t work, any more than one person deleting a video off YouTube removes that video from the Internet.
Because the guv’ment can devalue currency or declare it worthless unlike bitcoin because … wait, I have an argument here somewhere.
I dunno if you’re right. But, it’s a fascinating idea.
Gatopescado
The more I learn about BitCoin, the more I’m convinced it’s a bubble. Remember the dot com bubble? Remember Beanie Babies? Same prinicple.
It’s easier to get fucked investing in Bitcoin.
The “problem” it “solves” is that fiat currency is supported by whatever government issues it. Fiat currency is therefore vulnerable to bad monetary policies or economic fluctuations. The banks that issue currency, as well as credit card companies, lenders and other institutions that deal with fiat currency are restricted by regulatory guidelines and laws issued by governments.
So if you fundamentally believe that government of any kind is intrusive, corrupt and inept, crypto currency is very appealing as a mechanism of conducting financial transactions decoupled from the influence of government.
If you believe that government has a role creating and enforcing laws and running the infrastructure of civilization, cybercurrencies look like a toy for techies or a way for terrorists, organized crime and cyber criminals to conduct business without being detected.
That’s a good point. How did the Feds make online poker illegal? It wasn’t by criminalizing online poker but rather criminalizing banks making transactions related to online poker. If online poker used bitcoin it would still be around as legal as could be.
No, it’s illegal to set up any gambling without explicit government permission. What you’re talking about is how the Feds attacked the problem of online gambling that has no physical presence with even the servers out of country. It wouldn’t be “as legal as could be” to set up a bitcoin based online gambling company in Texas.