[Cryptography] Proof of Work is the worst way to do a BlockChain

[Ersin Taskin]

>
> "Proven to be fraudulent"
>
> "in jail"
>
> You are quite sure that Turkish banks have not done the same thing in your
> entire mortgage history?
>

:) Clever! You may be surprised to hear that we did not have the mortgage
system until 2002. Funnily we call the house purchase with bank loans
"mortgage" today to differentiate it from the way you could get loans to
buy a house before the mortgage system. So the name made it to Turkish.
Before 2002 if you wanted to buy a loan to buy a house you had to provide
personal guarantee with stocks or other physical collatoral or a personal
guarantor that the bank guarantees collection from and the mortgage was not
insured. There were no intermediaries, no third parties, no credit
assessment companies, nothing. You and the bank. The house was put under
collatoral gets registered in the deed register immediately. There was no
room for fraud. Therefore the collapse was not due to the mortgage thing.
The basic reason the banks collapsed was banks having to little reserve
fraction and giving loans to their fraudelent sister companies with the
hope to grow these companies and pay back. When the golbal crisis hit
Turkey in 2001 they entered into the vicious cycle hitting the "too little
reserve fraction" wall. Some even took the money to off-shore and tried to
escape when they realised they are going bankrupt. They sort of sucked the
deposits of innocent people to off-shore. It is what we called "hortumlama"
in Turkish. It was a phrase created then meaning something like "sucking
through a hose". They ended up in jail of course. The strong and honest
banks survived the crisis and grew much faster. The parties who made laws
and regulations allowing this never won an election since then. And the
party who sticks to tight regulations have won each and every election
since then. Turkey has a lot to criticise, trust me. But the banking system
is not in the list.
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