A good way of putting it that I saw recently: cryptocurrency erases the distinction between possession and ownership, and therefore eliminates the concept of theft.
It might sound inviting to some, up until they encounter a bigger criminal.
Yes. I also watched that episode of Nova, and I thought it did a good job of explaining how cryptocurrency works, so at first I was a little surprised that the OP said he was still confused. But I was mostly interesting in learning how the technology works, which is what Nova explained. The OP seems to be asking “Why is it valuable?” which is a completely different question.
No disrespect, since the words aren’t yours, but I’ll be damned if I can make any meaning out of that word salad.
If, like a physical coin, the thing is utterly fungible and possession is ownership that doesn’t eliminate the concept of “theft”. It eliminates the concept of “prosecution for theft.” Theft just got a LOT easier.
Or perhaps I utterly misunderstand whatever point they were trying to make. Unless, like a bad koan, it’s meant to be a head-spinner that sounds profound while mostly being misleading.
Like when Seth Green had his ape stolen, all he could do was buy it back. (That’s going to set some people googling.)
Perhaps I should say that the intent of cyptocurrencies is to erase the distinction. The whole point is that they operate without any need for recourse to the legal system. There is no need for contract law or anything else; the cryptography behind the blockchain ensures that only when both parties agree to an exchange does it happen.
In real life, possession is not ownership, for a coin or anything else. Something of mine gets stolen and I have legal resource to get it back. This can be true even if I willingly gave up the property, if it was under false pretenses or the like. With cryptocurrencies, though, what I have is a perfect record that the coin was legitimately transferred to someone else.
The difference becomes even clearer in the case of “smart contracts”–essentially, transactions that only take place under certain conditions. There have been a number of “hacks” where money was transferred unintentionally. But these aren’t truly hacks at all, since the code is the contract, and the hacks simply made use of improperly handled edge cases in the code. It is no different than finding a loophole in a traditional contract, except that in that case I can bring the case to court and perhaps make an argument about the intent of the language or that the entire contract must be void if it contains illegitimate terms like this. There is no such recourse for smart contracts, unless you can convince everyone to fork the blockchain (which has happened).
Money quote:
Of course. Within the 4 walls of the blockchain itself it’s impregnable. But there’s vast room for criminality in the space just outside that wall. e.g.
Plus the traditional methods that took down FTX.
Seems to me to be a distinction without a practical difference. But I’m not a cyrpto-bro. (Neither am I suggesting you are; thanks for the explanations.)
I think there’s a bit of a distinction: from the crypto-bro’s perspective, one could see the goal as “How do we steal people’s money without getting into the messy and obviously illegal business of beating people with a wrench? I know! Build an anonymous system where all you need to transfer someone’s funds to your account is a password, and where it’s impossible to prove that the password was even stolen, and where it’s so difficult to use that everyone will use some online exchange to kick off transactions and acts as convenient point of entry for gathering passwords?”
Of course, this does eventually intersect the legal system in the case of exchange hacks and the like. But it’s proven rather beneficial to parties like North Korea, who can steal money without even leaving their borders.
Exactly. The stuff in your wallet isn’t there anymore? That means it’s not yours. So sad, too bad.
Yeah. But not greatly different than when some jerk bonks the old lady over her head, grabs her purse, rifles it for $30 in cash, drops the purse, and runs. Three minutes later there’s no proving the $30 in his pocket came from her purse. Traditional greenbacks are at least as anonymous as any crypto ever could be.
OTOH, everything is vastly easier to scale up using the power tools of the computer and the internet. Instead of bonking one old lady per hour, you can bonk 1,000 old ladies’ computers per minute, if not per second.
It takes a certain willful naivete to join a game where computer-powered transnational criminality is inherently built into the system and granted scale and scope advantages like that.
Not quite as anonymous. If you mug an old lady, there’s a chance somebody saw it happen. Or it was caught on camera. Or she just came out of a bank (which is why she got targeted) and there’s a record of a withdrawal. The lady herself can give details of the thief.
And most of those can exist for the crypto case, too.
In the early books of Glen Cook’s Black Company series, they frequently say “Money has no provenance.”
Hence why I said it might sound inviting to some until they encounter a bigger criminal.
A bit like a pyramid scheme, except that no one really knows where they are on the pyramid. Though it’s always a good bet that there’s a bigger fish out there, somewhere.
I agree that it’s very much like a game. There’s no such thing as stealing within the bounds of an MMO like EVE Online. If you can acquire something by whatever means, then by definition it is now yours. In a game with no real consequences, it might seem refreshing to have an environment with no authority that can step in and reverse things. And I suppose applying the same mechanic to real life might also sound inviting.
Unless she wrote down the serial numbers and series dates.
Well, yes, but realistically, she didn’t, and even if she did, that would only matter if anyone else ever checked the serial numbers against some police database. And it would be trivial to create hard currency that didn’t have serial numbers at all.
Well, there definitely is stealing. It’s just that no one is able to prosecute the offense. You can still be ostracized from the group that you were in before, and that might be a bigger blow to people, as they no longer have access to the network of players they did before. Unless they did it at behest of another in-game group, they probably will have trouble making new friends if the heist is large enough to be discussed on forums or the like.
The interesting thing is that this can blur the line between reality and the game world, and the developers have to make it clear that you do not actually own anything in the game, or else the same laws that might prosecute someone from stealing money in a Nigerian prince scam might be used on someone conned in the EVE world, but the general attitude of the developers has always been that if the game itself wasn’t being exploited in some way, that is, it was perfectly within the bounds of how one would expect the game to function if one knew perfectly well how it was designed, then it’s just part of game play and not real-life theft. However, to the developers of World of Warcraft and probably most other MMOs, they will generally (so I’m told) take action to take back items that were obtained under false pretenses, because that’s not what their game are about, even if they likewise say that you don’t actually own the items.
I’d say that’s a distinction without a difference, but we’re just getting into semantics here. People can call it theft all they want, but if the ground rules are that anything that takes place within the bounds of the system is legit, then in effect that means there is no such thing as theft. Possession = ownership.
And I agree that this is not the case for most other MMOs, like WoW, where you can appeal to an authority to reverse fraudulent transactions. In that case, there is a notion of a thing belonging to you even if it was somehow taken.
I wonder if anyone has tried to press this case in (real-life) court. Say, something of value in WoW was taken fraudulently, and for whatever reason the WoW mods refused to reverse the transaction. The person then sues, claiming that the previous cases where the mods did reverse the transaction demonstrate that they view in-game theft as a real thing.
Hoping that Gatoscapado has fine tooth-combed and retained every aspect about all the posts in this thread so far, so that at a moment’s notice can delineate - as consicely and coherently as possible - a cogent, succinct summary on basically everything discussed here.
“Um…Can you?” unanswerable response in 3…2…1…
Let’s try an analogy. A bunch of pirates get stranded on an island. One of them finds a load of seashells, and trades them with other pirates for coconuts and stuff.
Eventually the seashells become a form of money. Even the pirates that don’t care about them are willing to take them in trade, because they know they can trade them for other things.
At some point, two pirates are trading, and one realizes that he left his seashells at his hut. The other pirate doesn’t like this, but wants to close the deal, and so they scratch “Pete owes Bill 20 seashells” into some tree bark, agreeing to resolve the difference later.
The other pirates get to like the idea and add more transactions to the list–a ledger. The seashells are getting moldy and gross, and everyone hates carrying them around. At some point, they just throw them all away, since the ledger gives all the information on who owns what.
But the pirates don’t trust each other. They each start carrying around a duplicate of the public ledger to make sure there are no differences. They check against the other ledgers, too. They figure that a new transaction is legit if at least 50% of the other ledgers agree. A pirate could choose to cheat by altering a transaction, but they’d have to get half the other pirates on that side, and since none of them trust each other, it’s pretty infeasible to cheat.
That’s pretty much Bitcoin and the others. A ledger that keeps track of all transactions, with many different copies that are only updated when they can get 50% of them to agree.
If we are going to talk about distributed ledgers, surely we must mention Leslie Lamport’s award-winning paper from 1998 (and subsequent work by Castro and Liskov) long before Bitcoin:
https://www.microsoft.com/en-us/research/uploads/prod/2016/12/The-Part-Time-Parliament.pdf
I’m sooo close! Start the countdown…
Oh. A ‘Shell Game’. I get it now. 