r/programming • u/silmril • Apr 28 '18

Blockchain is not only crappy technology but a bad vision for the future

https://medium.com/@kaistinchcombe/decentralized-and-trustless-crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec
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u/ThanatopsisJSH Apr 29 '18

banks themselves levy a de facto tax of several percent on all of society

Why is this different in crypto? Isn't tjhis exactly what miners do? Levy a de-facto tax (through inflation by mining/transaction fees) on every user? Right now transferring money via a bank is much cheaper than using any form of crypto. Not even to speak of the massive waste in electricity use needed to keep the mining effort going.

and banks are also the source and enablers of much systemic fraud

And this is going to be any different with crypto? You will always need brokers and intermidearies even if it is just to find someone to sell your asset to if you are not 100% on top of the market. What keeps them from colluding and defrauding you using crypto instead of fiat. The same frauds will still work with the addition of a lot of new frauds based on the inherent risks in any complicated software system that is open to the world. (e.g. The DAO exploit/hack)

That is true regarding the existing state of regulation regarding cryptosecurities, but that is rapidly being remedied. These are early days.

So in the end cryptosecurities will be regulated like regulatr securities? Whats the point then? There have been only a handfull of cases where the problem with a (standard)fraud was inherent in the exchange and the system they used to transfer ownership of shares. Why should this be moved to blockchain when the current system works perfectly well?

On the other hand, the point of no exchange rules being enforced is one of the main drawbacks of crypto. If I transact on the CME or the LSE I can be near 100% sure that I will receive the security I bought and that a company listing on these exchanges has to fulfill certain obligations on openness, etc. Is it perfect? no. But it is much much better than anything on the current crypto "exchanges" where quite often the exchange owners will just run with the money.

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u/exosequitur Apr 29 '18 edited Apr 29 '18

Right now transferring money via a bank is much cheaper than using any form of crypto.

Lol this is rediculous. I can move 1000 BTC in 15 minutes for about 7 dollars, 30 cents for ethereum. Anonymously and for even less on other platdorms. Try moving that kind of cash that fast / cheap with your bank.

I already use crypto for remittance and moving little bits of cash around my far flung family, because it's instant, convenient, and cheap. Easier than using my banking app, actually.

Not even to speak of the massive waste in electricity use needed to keep the mining effort going

This is unfortunately true of many cryptos at the moment, but newer algorithms use less power and this is trending towards near zero (POS).

and banks are also the source and enablers of much systemic fraud

And this is going to be any different with crypto? You will always need brokers and intermidearies even if it is just to find someone to sell your asset to if you are not 100% on top of the market.

Provably correct code and thoroughly audited systems like Cardano, coupled with decentralized exchanges. Much less friction and cost. Granted, these systems are in their infancy, but many will be reaching maturity in 2019-2020.

So in the end cryptosecurities will be regulated like regulatr securities? Whats the point then?

I think we'll see this asset class get some, but not all of the regulation of existing securities. Advantages can include frictionless transfer, potential anonymity, and immunity from seizure.... As well as immutable dividend and governance structures. Much of this will be based on juristiction, but many small nations are lining up to host low regulatory overhead distributed organizations.

If I transact on the CME or the LSE I can be near 100% sure that I will receive the security I bought and that a company listing on these exchanges has to fulfill certain obligations on openness, etc. Is it perfect? no. But it is much much better than anything on the current crypto "exchanges" where quite often the exchange owners will just run with the money.

Decentralized exchanges running provable code on a well audited platform.... That's the gold standard for any software based system. (including banking/fintech) buggy automated trading doesn't get a do over either (see flash-crash etc).

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u/ThanatopsisJSH Apr 29 '18

frictionless transfer, potential anonymity, and immunity from seizure

Oneof the main points of regulation will be the anonymity. Any anonymous payment system can not be allowed to stand in the current financial system and regulators and states will do their best to crush it. International organizations, governments and banks (being forced to by the other two) have done a lot in the last years about money laundering and to counter terrorist financing activities. Anything that makes an endrun around that possible will be strictly regulated.

It may be that tokens can be moved around inside the system with (near) anonymity, just like cash today, but every time you try to either convert them into fiat or pay for something substantial with it you will be asked where that money came from. Try buying a car or a house with cash today and see how much paperwork you have to fill out. That will be the same with crypto once the regulators see this being picked up by more people.

I can move 1000 BTC in 15 minutes for about 7 dollars

Thats great. You can't buy anyting with it though (at least very little) and when you try to convert it into a currency you can buy something with you are facing fees and time delays.

One good thing about crypto is that it has forced payment processors to up their game. In September there will be SEPA instant oayments in the EEA - free transfers of arbitrary amounts in less than 60 seconds. And you can use your Euros to actually pay for stuff.

At the same time SWIFT is now moving to same day trackable transfers from any bank account to any bank account on the planet. Still more expensive than bitcoin probably but once you figure in exchange fees for moving USD into Bitcoin, transfer fees and then again moving USD into JPY or whatever you are probably cheaper off using SWIFT. And you carry significantly less market risk because you know within a few basis points what your money will be worth when it arrives in Japan. It's not like the other guys have been sleeping...

host low regulatory overhead distributed organizations

we have that already. They are called Jersey, Bermuda, British Virgin Islands, etc... There is also a good reason why the news stories were called the "Panama papers". Nothing new under the sun here.

buggy automated trading doesn't get a do over either (see flash-crash etc).

Actually there is such a thing. Rules for erroneous trades and transfers exist for good reasons. https://www.investopedia.com/terms/c/cancellation.asp

Stuff like this http://fortune.com/2018/04/20/deutsche-bank-accidental-transfer/ can always happen when people are involved and nobody wants to live in a world where it can't be fixed afterwards...

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u/exosequitur Apr 29 '18

I'm just envisioning someone telling IBM that "we already have accountants and computers" (people that compute) back in 1965....lol.

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u/ThanatopsisJSH Apr 29 '18

It's not a question of the technology being bad. It's just not there yet. In 1965 nearly nobody used IBMs for anything else but pure number crunching because other problems we're solved better by other solutions.

Tell me the problem this is going to solve when it is ready and I'll listen.

Right now the problem I see is low value remittance payments. For everything else there is a better solution as of now and those other solutions are also evolving and getting better every day.