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by Aurelius3 1582 days ago
>This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull?

Isn't the entire banking infrastructure based upon social trust? I'm confused at how you can say crypto requires alot of trust yet traditional banking does not... One is based upon mathematical principles, the other on social ones. Of course traditional banking is large and well supported, but it is still inherently a social system which requires trust.
1 comments
cyber_kinetist 1582 days ago
Even cryptocurrencies (Bitcoin, Ethereum, etc.) uses social trust when crises happen. You occasionally see forks being made when a major scam or attack has happened and most people agree that rewriting (or maybe recreating might be a better term) the history of the blockchain is acceptable.

The mathematical principles that crypto uses is ultimately just a tool to mediate human interactions. There is nothing that is set in stone; if enough people developing the block chain agrees there can always be a change of the rules and protocols of the system. You see it less with Bitcoin (which is very conservative about changing things) and more with Ethereum (which is more prone to do experiments and changes). But the potential for change is always there.

So one of the major problems I with most cryptocurrencies is about off-chain governance: that how decisions are made related to the rules of the system is incredibly opaque. How does consensus get reached among cryptocurrency developers? Is there enough communication between developers and the people using the currency, so the users can understand what are the effects of changes that are made in the system? Can users voice about concerns about the system and have the ability to change what developers do? At least Ethereum does have some formal processes on how people can submit proposals to changing the VM, but there is still a significant gap between technical contributions and the more pragmatic concerns ordinary users might have (e.x. about deflation or the POW/POS debate).

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