> This is an argument against electronic records, not blockchain specifically. They are side channel attacks.
What makes it a blockchain problem is removing the safeguards. If you are saying the blockchain is an immutable record controlled by individual private keys, you are saying that any mistake is permanent. If you allow corrections, you don’t need the expense of a blockchain.
> > and you also have new problems like the possibility of someone claiming a malicious transaction years ago.
> What do you mean by this? Maybe an example would help.
I go to buy your house. You show me the chain saying you own it. A month later, someone says you phished their grandfather who was in hospice (or that the transaction was made by a spouse without approval, etc.) and now there’s a dispute about whether the transaction was authorized. Traditionally this is handled with third parties who can confirm that, say, they had everyone in the same room and checked ID. Moving to a model where access to a private key is all that matters requires similar solutions before you can say it removes the need for title insurance.
> What makes it a blockchain problem is removing the safeguards. If you are saying the blockchain is an immutable record controlled by individual private keys, you are saying that any mistake is permanent. If you allow corrections, you don’t need the expense of a blockchain.
That makes sense. I think the need to correct mistakes, and mistakes I concede will definitely happen, is debatable. There are benefits to some for correcting mistakes and costs to some for it as well. Figuring out whether the benefit exceeds the cost is way out of my scope.
> Moving to a model where access to a private key is all that matters requires similar solutions before you can say it removes the need for title insurance.
You're right, and I was careful not to say "all" of the needs for title insurance.
I think its worth considering the possibility that not being able to correct even that emotionally charged dying grandfather case, and instead seeking recompense between the two parties most directly involved in the crime (the grandfather and me in your example) is OK. For example, I'm now required to purchase a newly minted and desirably worthless "restitution" NFT from the grandfather for the price I sold the house (or the market value, or w/e is fair), or I go to jail. If we try to backtrack the whole transaction, you are now probably being harmed as well. Is that really better? What if we figure this out 10 years after the initial sale, and the property has changed hands 5 times already. Good luck rolling that back.
Edit: I have just started reading the bitcoin whitepaper and at least half of the introduction is about the possible benefits of the irreversibility of transactions. https://bitcoin.org/bitcoin.pdf
Looking at this thread it's not clear if any one of the 3 examples you provided (civil forfeiture, title fraud, need for title insurance) would benefit from crypto technology today, and it's not clear if they would ever benefit from it (3 thousand years from now is not a good argument).
I hope you realize how unconvincing all this sounds to a non-enthusiast. Without a killer application (like email for the internet) I'm afraid crypto isn't very useful, and it's been 13 years without a killer application.
What exactly isn't clear? How cryptography works / benefits people? How applying cryptography to ledgers and ownership databases works? Or how it's all going to be enforced?
By the way I'm not pro crypto in that I'm not trying to convince people to put money into it. I think the energy costs of all crypto token systems are prohibitively high right now. That, and the deflation problem I personally think are the biggest unsolved problems in Bitcoin right now.. But somehow I can't even get past what a cryptographic ledger is and how it's beneficial on this forum, of all forums. Yikes.
I've been patiently explaining my understanding of the ideas behind crypto. 3Blue1Brown seems to be favorably received on this forum, so maybe this will help educate you: https://www.youtube.com/watch?v=bBC-nXj3Ng4 NFTs are a natural extension of a cryptographic ledger as it's explained in that video. It's just adding non fungible tokens to the otherwise fungible bitcoin tokens being exchanged on the blockchain, and we'd like those non fungible tokens to represent real world objects, rather than just USD.
Aside: I feel like we're in the dark age of cryptocurrencies right now. People are just incredibly unimaginable. I imagine 7,000 years ago there was a guy named Bob who wanted to trade his apples for some oranges. A girl named Alice wanted some apples but didn't have any oranges so instead she offers a piece of gold jewelry. Most of the Bob's on this forum would tell her to ** off. But there was some Bob who accepted the gold jewelry realizing he could then exchange that jewelry for Tom's oranges. Suddenly we went from a barter society to one that uses a currency.
Eventually we stopped using gold as a currency and started using slips of paper with lots of fancy counterfeit protection mechanisms like blue and red threads and fancy inks. Along comes cryptocurrency with mathematically provable counterfeit protection mechanisms, and no one sees the benefit. I just don't get it.
It's very clear how cryptography benefits people. We are not discussing that, we are discussing cryptocurrencies and blockchains and cryptographic ledgers. And we are not looking to explain how all that works, because first we need to identify real world problems which would be solved by those technologies, and yes, somehow you can't get past how they are beneficial. You have provided three examples, but others have questioned whether crypto would solve them, and I don't believe you have provided adequate arguments to defend your position. It was fairly easy for me to understand the motivation behind cloud computing, or stock market, or credit cards. Blockchains originally sounded like it might be something as significant. Yet many years later nothing particular useful has materialized. And it's not even clear if it ever will.
> and I don't believe you have provided adequate arguments to defend your position.
We'll have to agree to disagree then. Maybe a more relatable and simpler problem would help, this one exclusively with cryptocurrency (no NFTs):
I can print a piece of cotton/paper that looks like a US dollar bill, manipulate it and with enough effort make it look convincing enough to fool someone in to thinking its a real dollar, then go to the store and exchange it for some good. I simply cannot do that with a Bitcoin.
If you want to debate whether or not fabricating a dollar bill out of something significantly less valuable than a dollar bill is a problem that needs solving, find someone else.
If you want to debate whether or not you can fabricate a Bitcoin out of nothing, you're now entering the realm of theoretical mathematics. I am not an expert in that, but the crypotgraphy and cryptology classes I took as an undergrad ~15 years ago were good enough for me to trust it.
If you want to debate whether that singular problem is worth a system like Bitcoin, you're probably on to something but it seems like we haven't gotten to that point yet.
> I can print a piece of cotton/paper that looks like a US dollar bill, manipulate it and with enough effort make it look convincing enough to fool someone in to thinking its a real dollar, then go to the store and exchange it for some good. I simply cannot do that with a Bitcoin.
This is true but rare because it’s harder to do than it might seem and the U.S. Secret Service is quite good at shutting down counterfeiters. This costs less as a fraction of the economy than operating the Bitcoin network does, and it still provides true anonymity.
Thank you. All I was looking to do was convince someone that crypto does indeed provide a theoretical benefit, so that the conversation could evolve from "crypto SUCKS, and it doesn't do ANYTHING GOOD, and its a SCAM (read: I lost money speculating), and I DON'T LIKE IT", to: are the problems that crypto solves worth the costs.
Other problems/solutions aside, there is probably some gas fee that would make crypto worth it just for anti-counterfeiting. Do you have any sources for a numeric estimate on what counterfeiting costs the US economy?
Yes, counterfeiting is a problem. But just to clarify, to solve it - are you proposing we replace US dollar with bitcoin? If you are, have you thought this through? Has anyone? Do you think this will happen in the foreseeable future?
Thinking this through is exactly what I want the conversation to be about. I'll help you out:
[2006] "Counterfeiting of the currency of the United States is widely attempted. According to the United States Department of Treasury, an estimated $70 million in counterfeit bills are in circulation, or approximately 1 note in counterfeits for every 10,000 in genuine currency, with an upper bound of $200 million counterfeit, or 1 counterfeit per 4,000 genuine notes.[1][2] However, these numbers are based on annual seizure rates on counterfeiting, and the actual stock of counterfeit money is uncertain because some counterfeit notes successfully circulate for a few transactions."
(source: https://www.treasury.gov/about/organizational-structure/offi...)
I think Bitcoin representing the totality of USD is infeasible, but there may be some adjustments or optimizations to the transaction costs associated with it that make a new currency seem more reasonable (no less scary, certainly, but fright is an emotion and economics is mathematical).
(edited quote to be more relevant to cryptocurrency specifically)
Fixed my quote. At this point I'm having a conversation with myself, so mistakes are bound to become more likely. I'll probably revisit this in a few days (or just take my thoughts elsewhere) but for now I'm out!
Awesome! I find it really pleasantly surprising when people take time to sit and think about things rather than reacting quickly, so regardless of whether or not I find myself agreeing with whatever conclusions you reach, I appreciate you doing this :)
> That makes sense. I think the need to correct mistakes, and mistakes I concede will definitely happen, is debatable. There are benefits to some for correcting mistakes and costs to some for it as well. Figuring out whether the benefit exceeds the cost is way out of my scope.
> This reminds me of another problem that I've I haven't seen mentioned yet. https://www.newyorker.com/magazine/2021/12/13/half-a-billion... In a fixed supply cryptocurrency like bitcoin these kind of losses will inevitably lead to deflation.
This to me is the big question: you could solve a lot of these by introducing trusted third parties but once you've done that it really raises the question of whether you need the full blockchain level of processing overhead or some kind of distributed ledger. Lots of people have been in situations where they were mugged, an elderly and/or impaired family member made a mistake or was taken advantage of, etc. and they were able to recover by proving this to a bank or similar institution. It can be painful but it's an important option to have for most people and I think that's going to be a key impediment to people trusting a system. I do this professionally and I'm not sure I'd want to commit to something where someone who gets my private key with a zero-day can do whatever they want.
What makes it a blockchain problem is removing the safeguards. If you are saying the blockchain is an immutable record controlled by individual private keys, you are saying that any mistake is permanent. If you allow corrections, you don’t need the expense of a blockchain.
> > and you also have new problems like the possibility of someone claiming a malicious transaction years ago. > What do you mean by this? Maybe an example would help.
I go to buy your house. You show me the chain saying you own it. A month later, someone says you phished their grandfather who was in hospice (or that the transaction was made by a spouse without approval, etc.) and now there’s a dispute about whether the transaction was authorized. Traditionally this is handled with third parties who can confirm that, say, they had everyone in the same room and checked ID. Moving to a model where access to a private key is all that matters requires similar solutions before you can say it removes the need for title insurance.