[Cryptography] Bitcoin is a disaster.

John Levine johnl at iecc.com
Tue Dec 29 13:53:55 EST 2020

In article <f8ac9ac83ced0ef207f144289fb50c25b65b6880.camel at sonic.net> you write:
>So, Bitcoin was a good effort, it deployed some new ideas and
>technology, and showed that at some scale the "block chain" idea
>worked, but ultimately, although a successful proof of concept, failed
>to deliver.  It doesn't scale, except by becoming the very thing it was
>supposed to replace. ...

If ever there was an example of shipping the prototype, Bitcoin is it.
The way it fits together is clever, but the ten minute rule means it
never was useful for day to day transactions even before it ran into
scaling problems, and as you note it was about the least anonymous
scheme ever invented.

>The more scalable the network becomes, the more centralized it becomes,
>until ultimately a "scalable" cryptocurrency would be doing things
>exactly the same way as a credit card processor.

It never fails to amuse me how so many cryptocurrency enthusiasts
imagine they have deep new economic insights when they are just
reinventing the past, badly. The reason that banks use book entry
accounting with audits that can reverse bogus transactions is not
because they're stupid. It's because it scales indefinitely without
having to be online all the time, and because normal people don't
want to make large payments without some recourse if the transaction
goes bad.  (A cup of coffee, sure, a house or car, not so much.)

You don't have to like it, but you need to understand it if you're
proposing to replace it.


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