<!DOCTYPE html>
<html>
<head>
<meta http-equiv="Content-Type" content="text/html; charset=UTF-8">
</head>
<body>
<p><br>
</p>
<div class="moz-cite-prefix">On 10/2/23 13:46, Phillip Hallam-Baker
wrote:<br>
</div>
<blockquote type="cite"
cite="mid:CAMm+LwiJ+jmX28Vz_2BNJXu72bFreYkWtbHAzWP+kcdXo-CLGA@mail.gmail.com">
<meta http-equiv="content-type" content="text/html; charset=UTF-8">
<div dir="ltr">
<div dir="ltr">
<div class="gmail_default" style="font-size:small"><br>
</div>
</div>
<div class="gmail_quote">
<div><br>
<div class="gmail_default" style="font-size:small">What we
were promised was decentralized finance. What was
delivered instead was a classic Ponzi fraud wrapped up in
psychobabble. Pseudo-currencies are to the world of
cryptography what astrology is to astronomy and esoteric
alchemy to chemistry.</div>
<div class="gmail_default" style="font-size:small"><br>
</div>
<div class="gmail_default" style="font-size:small"><br>
</div>
<div class="gmail_default" style="font-size:small">There is
a rule in physics that if you claim to have invented a
perpetual motion machine, you are mistaken, something,
somewhere is adding energy into your system. The same
holds for proposals for better assassination markets: if a
system allows such, the system is going to be regulated
out of existence.</div>
<br>
</div>
</div>
</div>
</blockquote>
<p>I'm going to agree, but it's more nuanced than just being a Ponzi
scam. It was a mistake. We made buggy software, and Ponzi scams
are a symptom of the software bug.<br>
</p>
<p>What we learned was that finance cannot be deregulated, because
it is finance. Money is power. Power is regulation. Nobody who
has money, wants to risk money or spend money if they do not have
regulation to ensure that their risks are honestly represented or
in case they do not get what they spent their money for.
Therefore, people who have money, or anything that can effectively
be used as money, demand regulation. Having money means that they
also have power, so they actually get regulation.</p>
<p>Cryptocurrency in its current "block chain" formulation aimed to
replace this regulation with simply making sure that the
transactions are a consistent record complying with impartial
computer code. It was a worthwhile experiment; regulation that is
more impartial is after all a resolution devoutly to be wished.
The problem is that real transactions require both the movement of
money, which the computer code is aware of, and the production of
value, which is not part of the universe that code can respond
to. And because a block chain can track only one side of the
transaction, the stage was set for big systematic failures on the
other side. <br>
</p>
<p>The world - the world of genuine goods delivered and services
performed for money spent, risks taken on money invested, and,
yes, regulations enacted and court cases settled by human beings
to redress scams run by other human beings who in one way or
another pretended that they would do those things but did not - is
not represented in the inputs to that computer code. And
therefore the code, interpreted as regulation, fails to do the job
required of any system that can support genuine wealth.<br>
</p>
<p>Those who require regulation of both sides of the transaction -
who need to keep track of more than just whether or not an amount
was paid - are more or less exactly EVERYBODY IN THE WORLD who is
talking about genuine wealth - about production, investment, jobs,
and real-world resources. The only kind of "money" amenable to
the world-blind accounting-consistency regulation of
cryptocurrency is "money" that doesn't represent genuine value or
production in the world. It for doesn't represent production of
value - it only represents trade. For every winner who realizes a
profit, there's an equal and opposite loser who believed that they
would. <br>
</p>
<p>It was a worthwhile experiment. It was something of a success
because we did successfully fix the trusted-role bug that had been
the downfall of previous cryptocurrency protocols. So the state
of the art was advanced, and we discovered a new bug whose
existence we hadn't run into before. But it's still a serious
bug, and systems that still have this bug, ultimately won't work.
Solving both bugs simultaneously - how to have trust in a
world-aware regulatory system that somehow doesn't require a
central trusted role - will be, at best, tricky.<br>
</p>
<p>We failed to recognize what the requirements for supporting
genuine wealth actually were, and made a mistake. The ponzi scams
are the user-facing problem that manifested, ultimately, as a
critical bug report. Thing is I don't think the CVE system
acknowledges bugs that are this subtle. <br>
</p>
<p>If you want real cryptocurrency that tracks real wealth, we've
got to fix that bug. Money cannot exist independent of the
regulation of the society whose wealth it represents. People who
don't want regulation don't want to see it fixed. But script
kiddies don't want to see a patch on a bug that allows them to get
root on other people's servers, either. <br>
</p>
<p>Bear</p>
<p><br>
</p>
</body>
</html>