Bear Market? Grayscale Bitcoin Trust Averaged $2 Million Invested Per Week in Q4 2018
Found this article via twitter: https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/
tldr: Do you need a public blockchain? Most certainly no. Cryptocurrencies are useless.
Quotes from the article with my thoughts:
>Most blockchain enthusiasts have a unnaturally narrow definition of trust. They’re fond of catchphrases like “in code we trust,” “in math we trust,” and “in crypto we trust.” This is trust as verification. But verification isn’t the same as trust.
Agreed. It is better than trust.
>What blockchain does is shift some of the trust in people and institutions to trust in technology. You need to trust the cryptography, the protocols, the software, the computers and the network. And you need to trust them absolutely, because they’re often single points of failure.
Agreed, tho the distinction of elimination of trust and shifting of trust appears to be a problem of semantics. Nobody in his right mind claims that blockchain _eliminates all trust_ … instead it shifts the trust from (arguably) corruptible systems of human beings in power and institutions to the verifiable trust in code. Tho:
>When that trust turns out to be misplaced, there is no recourse. If your bitcoin exchange gets hacked, you lose all of your money. If your bitcoin wallet gets hacked, you lose all of your money. If you forget your login credentials, you lose all of your money. If there’s a bug in the code of your smart contract, you lose all of your money. If someone successfully hacks the blockchain security, you lose all of your money.
>Would you rather trust a human legal system or the details of some computer code you don’t have the expertise to audit?
Whatcha think? How about your expertise to audit the human legal system? How about getting the expertise to audit the “some computer code”, at least the basics? The ressources are out there, if you want to.
>Blockchain enthusiasts point to more traditional forms of trust—bank processing fees, for example—as expensive. But blockchain trust is also costly; the cost is just hidden. For bitcoin, that’s the cost of the additional bitcoin mined, the transaction fees, and the enormous environmental waste.
Transaction fees fluctuate yet appear to be very low atm (https://bitcoinfees.info/). Enviromental waste is a factor yet definite numbers and impact are highly debated.
>Bitcoin might theoretically be based on distributed trust, but in practice, that’s just not true. Just about everyone using bitcoin has to trust one of the few available wallets and use one of the few available exchanges.
Sounds more like 2013 than 2019 and – as with every emerging technology – this will get better and more diversified all the time as long as the technology keeps developing.
>And we’ve seen attacks against wallets and exchanges. We’ve seen Trojans and phishing and password guessing. Criminals have even used flaws in the system that people use to repair their cell phones to steal bitcoin.
We’ve seen this with conventional banking too.
>Honestly, cryptocurrencies are useless. They’re only used by speculators looking for quick riches, people who don’t like government-backed currencies, and criminals who want a black-market way to exchange money.
>To answer the question of whether the blockchain is needed, ask yourself: Does the blockchain change the system of trust in any meaningful way, or just shift it around?
It changes the system of trust to a distributed system of verification which is very meaningful.
>Does it just try to replace trust with verification?
It shifts from trust in (financial) institutions to trust in verifiable code.
>Does it strengthen existing trust relationships, or try to go against them?
It eliminates and/or upgrades existing trust relationships which is a good thing.
>How can trust be abused in the new system, and is this better or worse than the potential abuses in the old system?
Actually a valid question. Whatcha think?
>And lastly: What would your system look like if you didn’t use blockchain at all?
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
Bexam is a blockchain-based trading platform.