[nickpsecurity]

"VISA does 56,000 tps."

That's what I keep telling them. The whole of credit processing and banking... even the Fed... runs on centralized, transactional architectures with redundant datacenters and optionally redundant checks from mutually-distrusting parties. What people want to do can be built on a highly-efficient, log-based system with distributed checking run by a foundation (or international collaboration) in a neutral country. It would be simpler, more secure, use less energy, faster, and so on. Additionally, we can choose what level of detail we want in reporting or auditing to reduce data overload.

These blockchain models want everything to go on a blockchain whose operational hurdles even they can't agree on. It's like this subfield of IT is ignoring simple solutions to simple problems while pushing complex solutions with complex problems.

So, I add to your own question: what is it about a smart contract on Bitcoin or Ethereum that couldn't be done with a signed email or website document optionally run through a few cryptographic notaries? The latter is not only simpler and more efficient: it's in use commercially with many courts already approving of concepts and some implementations.

[Anonobread]

Ironically, the only people who have made money on smart contracts - cough Ethereum - did it by convincing other investors to part with their money subsequent to selling those investors on the idea of smart contracts. That whole sub-niche industry is just a big cess pool of people chasing investment gains that we're told can be had by pointlessly tilting at windmills.

Conversely, Bitcoin never promised smart contracts. To the extent Bitcoiners take part in Ethereum debates, we're only doing it because we know the real game Ethereum is playing is diverting investment capital away from Bitcoin.

[jgalt212]

> diverting investment capital away from Bitcoin

Even if that were true, that would necessarily be a bad thing in the interests of not putting all your eggs in one basket.

[nickpsecurity]

I take it you meant to word that as "wouldn't necessarily be a bad thing." As in, diversion would be good to avoid monoculture risks.

[brighton36]

Very good answer.

[brighton36]

The reason to use a blockchain is because you're locked out of service in the incumbent models. That means : gambling, drugs, sometimes porn, and capital flight. That's why you use a blockchain. (And IMO, that's what makes them so cool)

Otherwise - Blockchains totally suck at everything, and these private-blockchains/blockchains without energy are completely inane and stupid

[nickpsecurity]

I haven't seen anyone say that. Why can you do those things with a blockchain but not non-blockchain, settled ledgers? Seems like it boils down to rules and who is enforcing them rather than the tech.

[brighton36]

Correct. Blockchains are for regulatory arbitrage. The entirety of the efficiency of any blockchain depends on the regulatory environment. If drugs and gambling were legalized tommorrow, across the Internet connected world, no one would mine, and blockchain would die.

[nickpsecurity]

I'm focusing on the other end of this. Couldn't those blockchains or at least those related to criminal activity be made illegal, controlled via regulation, or seized? I don't see how a blockchain is immune to this if people ever try to convert it to cash.

[contingencies]

The answer, I suspect, is that it potentially wholly and fundamentally disempowers existing centralized authorities - as asset issuers, regulators, reputation police, debt collectors, and border-guards - and promises to outlive them, with relative guarantees of high availability and no SPOFs.

[nickpsecurity]

You mean it claims to. In reality, these will be centralized things under management or control of companies with an ecosystem interacting with them. Regulators and lawyers will step in to do their thing. The result is... another set of authorities giving us problems. That's what future it's looking like will happen.

Of course, the problems on authorities' side might be better or worse with the new models. Nonetheless, my argument is that these blockchains are essentially a combination of specific tech, ledgers, distributed verification, cooperation, and incentives on infrastructure side. You can do all that without blockchains using simple, dumb tech with different organizational structure & participation rules.

[contingencies]

Decentralized systems are demonstrably less centralized than conventional capitalistic private sector/bank/gov/licensing hierarchies and the monopolies they foster. As you point out, it's the human factor that's generally the problem. I doubt we'll ever see a better illustration there than the current situation with Bitcoin. Historically, we've seen the well chronicled growth of government and commercial interests on the internet. Both are good examples of decentralized systems that fail or are weakened through human causes. I suppose these are the same areas in which offensive security research is focused.

We should be smart enough now not to put all of our trust in to one system, and instead to foster a biological-style heterogeneity of systems, all of which we can opt in/out of on a dynamic basis based upon their various objective properties and our risk model versus requirements (==motives).

[nickpsecurity]

"As you point out, it's the human factor that's generally the problem. I doubt we'll ever see a better illustration there than the current situation with Bitcoin. "

BOOM! Now you're seeing what I'm talking about. Regardless of the tech, it ends up coming down to the people controlling key companies, organizations, or code. Plus the legal system. So, I prefer just fixing that angle on a centralized system run by mutually-suspicious parties with open verification and incentives aligned right way.

"instead to foster a biological-style heterogeneity of systems, all of which we can opt in/out of on a dynamic basis based upon their various objective properties and our risk model versus requirements (==motives)."

That's a good idea. I'd push several good ones if they were available. Preferably they'd be really different from one another to maximize the diversity benefit. Another angle on that is to derive the currency value from a set of high-value or stable commodities. That was what high-assurance engineer Clive Robinson pushed for as an alternative to either gold or our currency. Turns out, there's an altcoin company doing exactly that. Can't recall the name.

[contingencies]

When we founded Kraken, I did a lot of research and reach-out in the alternate financial systems space. The 'basket of commodities' suggestion is very well promoted by theorists in that area, though of course it doesn't remove the problem of manipulation: whether static or dynamic in composition, it has the same problem as setting central bank interest rates today - prior knowledge of manual change to the system becomes profitable, and corruption ensues. Some also suggest emphasizing particular qualities in the selected commodities.