[Cryptography] Bitcoin is a disaster.

[Phillip Hallam-Baker]

On Tue, Dec 29, 2020 at 7:28 PM John Levine <johnl at iecc.com> wrote:

> 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.
>

Hal shipped the prototype because he had just been told he had a terminal
illness. He couldn't even wait the seven months for the patents to expire.

Ray seems to have managed a fairly complete enumeration of the reasons
BitCoin sucks. But every single one of them has been understood for over a
decade. I would add that it isn't actually government proof either but long
experience (eGold, GoldAge, etc. etc.) tells me that is something that will
only be accepted when the next iteration of the schimera has been launched.

There is a particular syllogism that recurs in this type of reasoning:

A is bad. Therefore anything that is not A must be good. Therefore all and
any defects in the alternatives to A must be temporary and easily solved.
Therefore anyone who argues against the alternative needs to do more
research, or is a tool of the capitalist fractional banking doodahs or both.




> >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.)
>

The refusal to believe that recourse is essential has been a problem since
Chaum's DigiCash. And it is a recurring issue because the only reason the
credit card system hangs together is it provides recourse and the only
reason it can do that is every transaction is covered by insurance.


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

I wouldn't say that. Tim didn't understand network hypertext when he
invented the Web and Marc didn't understand crypto when he invented SSL.

But the BitCoin groupies are not the ones making the proposal. In fact I am
not sure what they are doing other than calling anyone who doesn't agree
with their ideology names and making bets on their tulip craze.
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