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> There are businesses that the public doesn't trust that could be disrupted by blockchain technology. Take a look at the studies on trust in casino and poker games. The public is very skeptical.

Why is blockchain more useful here than a commitment scheme (e.g., the dealer publishes a salted hash of the order of cards, plays the game, then reveals the salt once all the cards are played)? The commitment scheme doesn't involve waiting for proof-of-work calculations or interacting with an existing global network / file.

It makes sense to use a stateful structure for a ledger of money, because the question of how much money I have depends on how much money was transfered to me since my account was opened. But how one poker game is played is not affected by how any previous poker game was played.

beautifully explained.

Where is the automated dispute resolution in the system you are describing? What is preventing the house from cheating?

The commitment scheme solves "cheating" in the sense of "dealing cards in a different order depending on how the game goes".

There are other types of cheating, e.g., leaking the order to players and perhaps picking a non-random order in advance. Those will take longer than a parenthetical in a conversation about Bitcoin to address. Do you think that a blockchain is capable of solving any of these types of cheating more than some offline stateless scheme could?

Does the process you are referring to automatically give a refund to the player? It's hard for me to follow your logic because you mention Bitcoin which doesn't have a smart contract language like Ethereum.

Check out the FunFair project.

https://funfair.io/how-it-works/whitepapers/

Oh, I was going off this thread being about Bitcoin. Ethereum is probably a better example, sure.

If your constraint is "I want a transfer of money based entirely on the output of this algorithm on this data," then a blockchain platform is probably the right approach, sure. But I think you only need that for an internet gambling site... if you're trying to restore trust in a physical casino, the wagered money is right there on the table, it's clear who should get it. (The other participant trying to physically attack you to get money they don't deserve is out of the threat model, I think.)

FunFair looks cool but I think it mostly follows this design: the actual game is off-chain and it's only settlement that happens in Ethereum itself, if I'm reading right. You're doing a commitment scheme on your shared RNG, you're just also adding in a smart contract that can verify the game (or a partial game, hopefully) and determine who should get what money. If all players trusted a third party to escrow the funds (where the third party could be an API or a table with a pile of money), then you could do the game with no blockchain at all.

> Consider the example of origin / provenance tracking. That's not a problem that needs to be solved by blockchain unless the company can't trust its own audit logs and database team.

It is if:

* you want if you want more than one company to cooperate

* you want participation to be permissionless

* you want it outlive the life of the particular corporations involved.

* you want join ownership

* It is also desirable if you think they could be hacked, or have downtime--ie, to remove the company as a single point of failure.

A bitcoin-style blockchain outsources trust to the participants with the most computing power. It does not magically eliminate trust.

This means that it's only a good idea if either a) you can limit the participants, and you somehow trust the participants with the most computing power than (e.g.) a simple majority of authorized participants, or b) you do not limit the participants, and you trust anyone in the world with the most computing power more than you trust anyone you would pick for some other reason.

For some applications - e.g. money for people who don't trust their governments or aren't well-served by the inter-government norms around currency exchange - they're legitimately in situation B. Sending and receiving bits to literally anyone is better than not being able to send and receive currency at all, and since a 51% attack will be noticed, it's unlikely to be used on any individual small-time user.

For provenance tracking between a set of companies identified in advance, I have difficulty understanding how you can be in situation B, and you're not in situation A.

If you instead want a cryptographically-verified immutable append-only log, there are lots of non-blockchain structures for immutable append-only logs that permit only a finite set of writers. Certificate Transparency is one of them: issued certificates cannot leave the log, and there are mechanisms for pre-logging certificates before issuance, but the only things worth logging are certificates from trusted (or partly-trusted) certificate authorities. Anyone can participate in the trust process, but transactions themselves only come from a limited set of participants, so you get to completely bypass proof-of-having-more-computers-than-everyone-else.

If you instead want a cryptographically-verified immutable append-only log, there are lots of non-blockchain structures for immutable append-only logs that permit only a finite set of writers

Yes. I actually like the concept of Bitcoin, but it's very annoying how so many of its fans seem to think Satoshi Nakamoto invented Merkle trees.

I'm actually okay with using "blockchain" to mean "distributed Merkle tree" if that's what people want. Just be clear about what properties you want so nobody builds mining into your system when unnecessary.

Hold up. That's really reductive. It isn't just a merkle tree. It's a merkle tree that you can look at and say "this merkle tree would cost 2 billion dollars to forge." This is valuable because if someone hands you one, you can tell if you're looking at a fake.

I didn't say Bitcoin is just a Merkle tree. My point is that Bitcoin is a system that combines different pre-existing components - like Merkle trees and Proof-of-Work - in a novel way, but people then split that system, and call those components "blockchain". Some user here in HN actually wrote "Git is a blockchain".

But the best example is that nonsense of "permissioned blockchains".

icebraining's claim is that Satoshi did invent something, but the thing he invented was not Merkle trees.

If you have an application where forging or forking the tree isn't meaningful (e.g., any possible Certificate Transparency Merkle tree can be merged at any point into any other one), then the thing that Satoshi invented is not useful to you, and having it cost $2 billion to build such a Merkle tree is a waste.

I don't really understand how a blockchain allows participation to be permissionless (how do you know what's written there corresponds to reality?) so maybe that's where the magic is, but every other point has been solved for decades - the DTCC does essentially what you're talking about for stock ownership.

> * you want if you want more than one company to cooperate

There are many companies that interact with API services from other companies.

> * you want participation to be permissionless

Is this something CTO's are requesting?

> * It is also desirable if you think they could be hacked, or have downtime--ie, to remove the company as a single point of failure.

The blockchain can be hacked as well.

> * you want it outlive the life of the particular corporations involved.

The corporations are the ones who would be driving this.

> There are businesses that the public doesn't trust that could be disrupted by blockchain technology. Take a look at the studies on trust in casino and poker games. The public is very skeptical.

I would love to read those studies. Do you happen to have a link or even a list of authors I could look up?

https://pdfs.semanticscholar.org/048a/195bcf921fdd25f267eab2...

Couldn't the same argument be made against fiat currencies? Nations don't have a great track record for trust.

I don't see why a data-backed currency wouldn't completely flip the economy. I mean, the definition of fiat currency is basically: "it has value because you say so"

It has never been "it has value because you say so" by itself. It has value because it has a huge war machine behind it. Why does the gold coin of the realm have the king's face on it? Why didn't the king just keep the gold instead of using it to pay his soldiers and demand the coin be used to pay him his taxes from the formerly free peasants?

Money _is_ trust. I really wonder if people trust a traditional banking system less than an algorthm implemented by a group of programmers whose code they either can't read or can't understand or both.

Cryptocurrency seems to have struck a chord with those who do not see much chance for advancement in the current state of affairs and perceive it as a way out - this seems to be common among all the people involved I've seen interviewed from South Korea to Eastern Europe. There's little discussion of the advantage of system of traditional money versus cryptocurrency, though that may be a function of how short the quotes used in the article are.

https://www.npr.org/sections/parallels/2018/04/23/597780405/...

http://money.cnn.com/2017/12/12/technology/south-korea-bitco...

A single person working at bank can flip a switch and take my money. A developer can't do that with my Bitcoin.

The government can ban anybody from converting those bitcoins into something useful. The value of your digital baubles is now zero.

And then I transfer that to a different country and convert it their.

You don't need 1 government to do this. You need EVERY government to do this.

This is useful, in the sense that someone in venezuela is at serious risk of the government taking their money if it is in a bank, but they really couldn't do that to their Bitcoin.

Yes, if it is the US government doing the banning, you are significantly less likely to get around the ban.

But the world is not US centric. There are many governments would try to oppress their population by using the power of the banks, but would be significantly less effective against crypto transactions.

People are using crypto right NOW to get around many currency control laws implemented by governments. So they are successful getting around financial censorship that is already happening.

So now you have currency in another country. As long as your country doesn't allow you to repatriate, you still have nothing. It's the same as holding US dollars in a US bank while living in another country that regulates getting the money out (except worse because fewer people will accept BTC vs. USD). As long as you cannot spend it, it is worthless.

They are still spendable. Or sellable to private party.

Who will accept them if they cannot be converted back to usable currency?

If they are spendable they are usable currency. Perhaps of more limited use though to your point.

When was the last time this happened? Was the bank uninsured or unregulated? What did the police think of the matter?

It's a particularly bad week to make that argument - many TSB customers have no access to their money right now as we speak. (No doubt in the fullness of time those people will be repaid, a regulatory investigation will occur, and a scapegoat will be found, but that's cold comfort to those people right now).

That seems to make the argument stronger: TSB customers will get full compensation and there will be legal penalties for the incompetent management. That seems a lot better than “everything is irreversibly gone” failure mode of Bitcoin which hopes that the victims will successfully track down and sue the culprits, as seen in the many failures so far.

It also sounds completely unlike the naive framing above alleging that bank employees are able to take your money

> That seems to make the argument stronger: TSB customers will get full compensation and there will be legal penalties for the incompetent management.

Customers will get "full compensation" of what was in their accounts, eventually but their consequential losses for not having money in the meantime are unlikely to be covered.

> That seems a lot better than “everything is irreversibly gone” failure mode of Bitcoin which hopes that the victims will successfully track down and sue the culprits, as seen in the many failures so far.

I don't really disagree, but bitcoin does give you more control over your own destiny. If you're smart and hardworking enough to store your own bitcoin securely, you can do so, and no-one can take it away from you.

> It also sounds completely unlike the naive framing above alleging that bank employees are able to take your money

That was those customers' experience - someone at the bank pressed a button, and now they can't exchange their money for goods and services. Eventually the wheels of law will grind away the bank and return those people's money, but that doesn't necessarily help them right now.

> I don't really disagree, but bitcoin does give you more control over your own destiny. If you're smart and hardworking enough to store your own bitcoin securely,

Which is so far beyond what normal people will ever be capable of doing!

> That was those customers' experience - someone at the bank pressed a button, and now they can't exchange their money for goods and services.

No, the claim was that it was 'gone', it's not.

> No, the claim was that it was 'gone', it's not.

If their balance is showing negative and they try to withdraw money and fail, I think it's fair to say their money is gone in every meaningful sense. Likely they'll get it back sooner or later, but at the moment it's gone.

I don't, sorry, I think that's a false and very self serving equivocation.

> If you're smart and hardworking enough to store your own bitcoin securely, you can do so, and no-one can take it away from you.

It seems very unrealistic to assume to 0.5% security and operational expertise for anything pitched as a general solution.

They have a problem accessing their cash right now, sure. It's not 'gone'.

And any number of developers have done exactly what the other poster said with bitcoin - exchanges have gone bust or just scammed an 'exit', wallet services get compromised or scammed, people's computers get infected, all sorts of stuff.

Tell me honestly, should I prefer a system where if it's gone, it's really gone forever and completely unrecoverable? One where the security advice tells me to keep multiple computers, one of which has never been networked, and perform laborious procedures with USB keys to use my money? And one in which the community will tell me I was wrong, sorry for my loss, and move on?

Yeah, they're in a bad place right now, they won't be forever. This is better than Bitcoin.

Well, this literally effected me back in 2010 when I tried to donate to Wikileaks.

Visa and mastercard and all the banks banned transactions to Wikileaks even though no laws were broken.

They successfully censored transactions to them, without going through the court system.

The police did not force visa and mastercard to allow transactions to these places.

It is worse then that actually. The police PARTICIPATE in taking away money from people who haven't been convinced of any crimes.

Did you know is that if the police merely suspect you of "money laundering" or drug crimes or whatever, that they can just take your assets? They don't need a court order. They can just take the money that you are carrying, and in order to get it back you have to prove your innocence.

It is literally guilty until proven innocent with regards to police asset forfeiture. It is possible that you will never get that money back, even if you are never charged with a crime.

This is just one example though. The banks censor financial transactions ALL the time, even though no laws are being broken. You know, private company that can do whatever they want, and all that.

Or for other examples, just Google PayPal horror stories, of some administrator arbitrarily freezing people's money.

And I am talking about people who have broken zero laws, or have been convicted of anything in a court.

Someone at PayPal can just freeze your money, and who knows when or if you will get it back, without a court order. And this really does happen to people all the time.

> Well, this literally effected me back in 2010 when I tried to donate to Wikileaks.

Clearly it didn't because someone at the bank didn't press a button and make your money disappear, which was the original claim.

> Did you know is that if the police merely suspect you of

US problems, you need to sort out your laws.

> This is just one example though. The banks censor...

I don't know what you're involved in, I've never, ever had this issue, and it wasn't the issue we were talking about either.

> PayPal horror stories

Also not what we were talking about.

> I really wonder if people trust a traditional banking system less than an algorthm implemented by a group of programmers whose code they either can't read or can't understand or both.

To be fair: How many people do actually understand the fiat money system that's going on, with all of its finer points and at scale?

I wouldn't be too surprised if quite many people only understand the "Government prints money" part but nothing else about it, which is pretty much my extent of understanding.

Compared to that something like BC seems actually rather simple and straightforward to wrap your head around (at least for me): A finite amount of coins, coins need to be farmed, once they are all farmed people will make money through transaction fees.

Don't need to understand all of the math to understand the basic principles at work. Just like you don't need to understand everything about the fiat money system to use it.

Simplicity is kinda nice, but it's not very indicative of a good solution all the time.

Especially given the counterintuitive results behind fiat currencies and the relatively low correlation between all the moving parts, it's difficult to even say if the simpler model is better because the complicated model has so many side effects.

I don't understand how my car works but it sure works better than my easy to understand bike.

> I don't understand how my car works but it sure works better than my easy to understand bike.

That's an interesting comparison:

- The car might work better by certain metrics (speed, distance, force) but the bike can still outperform it in some situations (high traffic, cost efficiency on shorter distances, terrain)

- If the car breaks I'd need help fixing it, with the bike, I could probably fix most issues myself.

That's why both, cars and bikes, do coexist as each of them fills a specific need/niche. Trying to apply this to monetary systems sure seems difficult to imagine, but maybe something like that might be the actual solution?

Yeah after posting I thought about this too. It's not that a car is "better", but it's better in certain instances.

A simpler solution is better in cases where you want many participants to operate the "backend" (the printing of money/distribution of money, so to speak). The biggest issue is that if your model is too simple there could be an easy way to game the system.