[Cryptography] What has Bitcoin achieved?

[John Levine]

>> 1. Bitcoin payments are irreversible.
>> 2. Bitcoin's value is unmanaged.
>> 3. Bitcoin payments are somewhat more anonymous.
>> 4. Bitcoin payments are, for now at least, very cheap.
>> 
>> Everyone agrees that #4 is an improvement, but for most people, #3 is
>> indifferent and #1 and #2 are actively worse. It is not a bug that my
>> credit card transactions can under some circumstances be reversed, and
>> it is not a bug that central banks manage currency values to avoid
>> large fluctuations. 
>> 
>
>Numbers 1 and 4 are tightly coupled, it is cheap exactly because it is irreversible. If you
>don't have the cost of executing reversions, neither the infrastructure to do it, that makes
>Bitcoin-like systems as a whole cheaper.

Executing reversions is easy -- you have some entity (the "bank") that
can publish undo entries into the block chain when it has reason to do
so.  The hard part is the non-crypto part of running the bank in a way
that is sufficiently trustworthy that people are willing to accept its
decisions.

>I dare say we would be better off without transaction reversions, because in the end
>reversions give people a false sense of security that makes them irresponsible and demands a
>huge infrastructure to deal with it. The only ones gaining from it are those charging to
>execute the service itself.

I believe that you feel that way, but it's quite clear that most
people don't, since approximately nobody pays for stuff from a wallet
full of cash.  (Do you?  If not, why not?)

Crypto nerds often have a tendency to conclude that the reason the
latest wonderful crypto-based scheme isn't successful is that people
are too stupid to appreciate it.  This is rarely a productive line of
argument.

R's,
John