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Comment by drpancake | Hacker News Reader

I strongly suspect that you would enjoy the writings of Izabella Kaminska over at the FT:

  Techies look upon the financial world and find its messy structures
  hard to reconcile with the physical reality around them.

  Which is why we’re going to propose that the blockchain fad is mostly
  about putting finance in terms that are understandable to techies — i.e.
  as something absolute – and having them learn for themselves through
  trial and error why that’s actually a flawed assumption in finance.

http://ftalphaville.ft.com/2015/10/30/2143506/if-you-call-it...

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It's like how bank accounts are always used as an example when describing transactional systems, despite not working that way in reality (two near-simultaneous transactions can result in you having a negative balance, and this is a feature not a bug). Naive assumptions about how the world works can certainly produce software that is clear, logical and wrong.

However, what I hear there is "oh sure, you might be able to write software for all of these other things, but not this thing that I'm an expert in, that's way too complicated". Many people have been wrong about this in other domains, and it seems to me that essential complexity can only delay the point at which software can usefully automate things, not prevent it entirely.

>The study of money, above all other fields in economics, is the one in which complexity is used to disguise truth or to evade truth, not to reveal it.

-John Kenneth Galbraith, Money: Whence it Came, Where it Went

It would be good if there was a way to bet against Blockchain technology in general. Prediction markets seem like the only option currently available...

Maybe it's my problem, but that essay just sounds confused to me. Can you summarize what she's saying there?

Basic idea of double entry bookkeeping is that if you borrow money, it represents both an asset to you which you can spend, but also a liability (for the lender the reverse is true) because you have an obligation to repay it later, and that any accounting system should reflect all this lending that goes on. Knowing what they owe and are owed in future is as important to banks as knowing what payments they've just received and just made.

She's contrasting that with a "techie" view where all that matters is securely and immutably recording the fact that a borrower has received the "coin" (which represents mainstream blockchain implementations, though I'm sure blockchains could be designed to reflect debt relationships and even enforce debt repayment), and suggesting that what the distributed consensus actually records is only a subset of the relationships a centralised accounting/clearing system deals with.

She also pointed out that our financial system being built around debt relationships actually guarantees there will be some non-zero level of demand for dollars/Euros/Yen etc in future, whereas building the Bitcoin ecosystem around who holds the Bitcoin at a given point in time doesn't actually guarantee people will still want them tomorrow (especially if they owe repayments on dollar-denominated debt to buy BTC or mining equipment)

OK, that's essentially what I got, but that seems to refute the idea that blockchain should be used to replace all accounting(!), which is something that I never saw anyone advocate for. Bitcoin is just electronic cash, and that's how it was presented. And which can be, or not, tracked by accounting systems.

It just reads like a poorly structured argument against a huge strawman.

It's not particularly well structured and veers in the direction of straw man.

But most arguments in favour of blockchains as a superior way of doing things are centred around the idea that replicating cash is the most important thing about building a monetary system, when cash is actually the least important (and most likely to be deprecated!) part of the monetary system the world today is built on. If you still need a separate authority or method of reaching consensus to reconcile debts, then making the record of who controls the assets independent and immutable is a bug of the monetary system rather than a feature.

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