In simple terms. The currencies, and related technologies al deal with the problem of transferring of money/services between parties where no centralized trust/power exists.
This is, in the words of their proponents to prevent abuse by the trusted party:
Credit card companies blocking transfers to legitimate companies on the basis of pressure from the US gov.
Banks printing money and devaluing currency of currency holders, etc.
Bailouts/handouts to undeserving private companies with public money.
Often mentioned that this freedom comes at the price of making it easier for bad guys to receive payments for various bad things, increasing their income, increasing the scope of the damage they do.
If you write a program on the eth blockchain, no party can one change the way the contract was written or execute. What is written is what it does. You can't change the TOS later or something similar. They are called contracts for this reason.
They prevent screw-overs in TOS that you have to "accept" or similar shenanigans that big corps use to screw you over, over time.
> In simple terms. The currencies, and related technologies al deal with the problem of transferring of money/services between parties where no centralized trust/power exists.
When does that really occur in every day life?
I understand that a seller can scam me (send a brick) or I could revoke my payment and scam the seller.
But that problem is never solved?
> Credit card companies blocking transfers to legitimate companies on the basis of pressure from the US gov.
Technology is never going to fix societial problems. Paying with dollars or crypto -> if the USA says no, and you still pay you can get fined or worse.
> Banks printing money and devaluing currency of currency holders, etc.
To keep currencies afloat and thus society operational / functioning, you mean?
> Bailouts/handouts to undeserving private companies with public money.
Technology is never going to solve human problems like that. This is not a technology problem.
It seems like the benefit of not having to trust world governments or their currencies isn't that compelling for most people, who I presume almost universally already participate in said social contracts.
I certainly trust world governments more than some random Internet community. Who's to say the whole thing isn't a scam? Has this tech been independently audited?
If you can break this scheme you can steal billions of dollars worth of currencies right now. If that is not independently audited by all evil hackers out there I don't know what is :)
It's possible to create a secure scheme that is still a scam.
What guarantees do we have that the developers/maintainers won't push changes to their own benefit? Presumably they already have given themselves a bunch of starting capital that everyone else's buy-in props up, like bitcoin.
> If you write a program on the eth blockchain, no party can one change the way the contract was written or execute. What is written is what it does. You can't change the TOS later or something similar. They are called contracts for this reason.
Generally it's about eliminating counterparty risk. Compare Coinbase (centralized) with Uniswap (decentralized).
Coinbase users put their trust in a custodian. That custodian has the ability to steal from them or be stolen from. That's how MtGox went down in flames.
Uniswap users don't have to custody their funds with anyone to trade. They can use whichever they want.
Coinbase's platform can change on the whims of the company. Users have to accept this if they want to continue using the platform.
Uniswap is nothing more than a handful of small contracts which are unalterable and public. If you don't like, fork it. Don't like the official frontend? You can fork that too. Some wallets just build uniswap directly into the app. And since you don't have to sign up to use uniswap, the experience is completely seamless.
Now there's a lot more you can do with decentralized applications, but this should help get the point across.
I'm afraid it doesn't. From my understanding, bitcoin and other currencies are just numbers or strings, correct? There are ways to check them on your computer/device to make sure that they are valid, but that is running code locally. With a distributed app, is the code passed around, or is it executed in a distributed way as well? The "forking the official frontend", is that something you just run on your machines or is it run in a distributed manner somehow?
Actually eliminating this problem by using a cryptocurrency requires 2 crucial aspects:
1. The transaction being performed would have to be stateable and checkable 100% as an eth contract. Thus, if the deal is: I mail you my old iphone, and once I receive it, you shall gain a bunch of digital value, then.. how? How do you put in an eth contract that the iphone is real, not stolen, not broken? How do you protect against someone mailing you a brick? If the entire transaction cannot be _completely_ described in the contract, there are still third parties and plenty of room for scams. As far as I can tell (and I'm no expert, so I'm writing this mostly to check if my assumptions are wrong - plenty of knowledgable folks in the thread), bitcoin, ethereum et al make this _worse_: Normally if you send me a literal brick in a box, I don't have to file in court, I can just make some pictures and make a claim with the payment processor. Yes, this can be abused, but right now, today, this is more of a help than a hinder: They _DO_ prevent the 'mail a brick in a box' scams relatively well. With ethereum and such, if we code in the contract that the money will be transferred once DHL or UPS or whatnot signs off that the package was signed for, then what the heck do I do if you mail me a brick in a box? The kinds of middlemen (courts, governments, payment processors, transaction broker, etc) that can help me out are precisely the middle men that systems like ethereum are trying to eliminate!
2. That Joe Random knows how to program eth contracts and inherently knows how to ensure that the contract code seems like it has no leaks. Given that teaching someone to program is difficult, that there are many folks who don't seem to have a knack for it, and that there are lots of stories about faulty contracts that resulted in massive financial loss, I don't see how Joe Random gets to do this. Thus, Joe Random will need to rely on trusted parties: A programmer for the contract, or a website that shows standard contracts, or a security consultant that will review the contract code Joe Random wrote to ensure it is sound. If that consultant wants to scam Joe, how does Joe stop this? One could make overtures that eth itself will solve this (by using it to convey that a whole boatload of parties all sign off on 'You can trust Jane Consultant, she knows her stuff', but now you're just encoding a web of trust, which you can do just as well for current systems ('You can trust paypal, they know their stuff and will fairly treat chargebacks and complaints' [1]).
Combine the two and I'm left with the idea that the problem eth tries to solve is real, but that it is just the technical part of a more complicated solution - a solution whose human parts are not obviously solved.
In other words, yeah, eth as a concept seems misguided and mostly useless to me. But I'm sure I'm missing something.
[1] PayPal isn't particularly trusted. But that's just proof of the current system working: It's not hard to figure that out, and to get an in-depth analysis of what paypal will and won't do for you if you get scammed.
Cryptocurrencies will only make sense in cataclysmic scenarios or for very niche use cases. Trust systems (of which money is one) work well (some times very well) 99.99% of the time.
It’s certainly been useful to some people for gambling - but that use case could’ve been satisfied with a video game, or a physical casino.
Only in cataclysmic scenarios? I'm sorry to inform you, but in such scenarios most probably cryptos won't work either, as they all depend on proper working of the internet.
It doesn't even need to be a Madmax situation: just imagine a war between the US and China, with one of the involved causing an prolonged interruption in the communications between the two countries, as they have significant numbers of nodes/miners in most blockchains.
I'm afraid blockchains actually depend on the normal functioning of society with all its governmental structures in more ways than most crypto enthusiasts are ready to admit.
The US and Canada could block each other and it wouldn't affect Ethereum at all. Everyone in the world including those two countries could still use it.
I guess it depends on what you mean by cataclysmic scenarios. I can’t imagine many cataclysmic scenarios with working electricity and internet, to say nothing of mass-produced phones/personal computers.
The world needs a form of money that is not under the control of any one sovereign power or group of sovereigns. Understanding this may necessitate reading some books, but in short, sovereigns have historically proven to be untrustworthy, so a trust-free form of money is a powerful notion.
Of all the world ills I can think of, none are caused by money as means of exchange or by trust systems more broadly. Crypto isn’t going to do anything for global warming or for rampant inequality caused by the unstoppable compounding growth of big capital (in fact it may do the opposite).
The premise that trust systems have failed humanity is flawed. I am willing to be persuaded otherwise but I doubt this will come from reading “a couple books” because as it stands I firmly believe that the idea is complete nonsense.
This book is the best summary that I can give you to being persuaded. Bitcoin's price movement is just a market signal that there's something deeply wrong and unfair with the current financial system. The more you learn about it, the more you can profit from the huge value transfer that's going on in front of your eyes. If you want a link, I suggest hope.com as well (as I could suggest many others, but what's important is that the ROI of learning about the reason for Bitcoin is huge).
> Bitcoin's price movement is just a market signal that there's something deeply wrong and unfair with the current financial system
Sorry but this sounds like the conspiracy drivel commonly heard in crypto circles. To a reasonable person, Bitcoin's price movement is a market signal of people speculating and trying to become richer - simple as. Occam's Razor, and all that.
That's true of every asset in the world. But it doesn't explain why Bitcoin is the best performing asset in the history of humankind for more than 10 years now. Bitcoin as a software is very simple, you can code it in a day in a high level language. But if you don't take the time to go deep on monetary history to see why a money takes over another (or not), you'll miss out on huge gains.
All reasonal people start as Bitcoin skeptics BTW, that's fine.
> Crypto isn’t going to do anything for global warming
Actually this is a pretty good example of a problem that quadratic funding has a good chance of helping with. It's really hard to coordinate all nations on Earth but not actually that hard to coordinate people from all over the Earth. https://wtfisqf.com/
so instead of sovereign powers, we should hand our monetary policy to the neo-nobility that is large stakeholders (PoS) or the sovereign granted patents in ASIC mining in PoW coins? I feel like we're just shifting who to trust and not the fact that we all have trust; haven't even touched the whole idea of having to on-ramp/off-ramp fiat on central exchanges with sovereign backed currencies.
This may not be the case with any crypto currencies soon. The entire asset class is already way beyond 'let the geeks play with it' stage. It's taxed,it can be seized and banned all together,if that's what governments want. Not quite the freedom tbh..
sure, I can agree, but surely a form of money that fluctuates like crazy and needs people to read books about it to understand it is not going to convince the people that need this kind of system the most.
I am not arguing either way about the need for crypto currencies, but don't you think its an unfair thing to ask for a new technology [1]? Not everything can be explain in simple terms, not if you really want to explain those things. Sometimes it takes time to figure out the language to explain stuff.
[1] I know this thing is more than a decade old, but new and old are very distorted terms in technology and honestly only become apparent post facto.
You need to put in a little effort to learn new things. Your comments are not going to age well. Your comments will read like somebody complaining/rejecting email in the early 90's.
I'm looking for an explanation in plain English that shows why any of this matters.