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Comment by Xixi | Hacker News Reader

If ownership of a house is decided by contracts, written by lawyers, then adding a blockchain will only add issues, since it can get out of sync with reality. And if the blockchain is the source of truth, it means that stealing your house-token will result in you losing your house.

Do you use an intel processor vulnerable to Meltdown/Spectre, or with a vulnerable IME? Do the people you know and love know and understand about these? What if you lose your token? You can't sell your house anymore? Custody of crypto-currencies is a giant headache. It feels like moving away from bank accounts and payment cards and going back to gold coins and bearer bonds. Great for people in the business of selling vaults, sucks for everyone else.

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One end goal of blockchains is indeed that they become the system of record, and that legal agreements are English translations of what the code says rather than the other way around.

That might sound scary, but I'd point out a few things:

1. That future is still a long time away. The legal system is very conservative.

2. These systems don't have to be perfect, just better than what we have today.

Yes, I certainly wouldn't trust ownership of my house to a general purpose laptop or smartphone on which I install lots of other apps and which are optimised for high performance and low cost. I wouldn't trust ownership of my house to any computer today.

But the idea that bank-run paper based systems are 100% secure is not true - they routinely go wrong just through basic mistakes and screwups, let alone actual fraud.

Consider all the cases of ID theft in America. There's a specific kind of ID fraud where someone literally steals your house:

https://www.lifelock.com/education/deed-fraud-losing-your-ho...

Or how about this case where convicted murderers learned how to forge their own release paperwork whilst inside the prison, and then successfully got themselves released:

https://www.cnn.com/2013/11/06/justice/florida-inmates-mista...

Possible because the only thing authenticating prisoner release orders was easily duplicated patterns on a piece of paper.

Blockchains aren't better than what we have today for property.

At least the victim in your deed fraud article was able to recover their property, albeit at significant cost. How are people going recovering funds from the Mt. Gox theft?

Let alone the oracle problem, people keeping a digital asset secure and safe for decades, the chance of the software being 100% bug free first time, the total lack of incentive to run a blockchain node on a registry chain, or the complexity of rolling crypto when the current algorithm becomes too weak in 10-15 years…

Nope. This is yet another problem blockchains are hopelessly ill-suited to tackling.

Just as many blockchains are actually much less private than traditional financial tools, blockchains can actually make theft much more difficult than traditional financial tools.

Banks and paper based systems don't have to be perfect because when they go wrong I have recourse to fix it. The blockchain technologies that everyone talks about have no recourse because they are peer to peer. Because they have no recourse the bar they have to meet is significantly higher than the bar that a bank run paper system has to meet. They effectively have to be perfect. Without that perfection they will have to build in some form of recourse and as soon as you do that you are on the road to duplicating the very things= they claim to eliminate, centralization.

> But the idea that bank-run paper based systems are 100% secure is not true - they routinely go wrong just through basic mistakes and screwups, let alone actual fraud.

Nobody expects bank systems to be 100% secure. Banking -- and in fact the entire free market economy -- would not happen if it was required that the systems be secure. It's just the opposite: it is assumed that bank systems will fail or be abused in all sorts of strange and unexpected ways. This is why market participants will only invest if they have the right to appeal to neutral third party representative of justice.

> One end goal of blockchains is indeed that they become the system of record and that legal agreements are English translations of what the code says rather than the other way around.

It's safe to say that blockchains will never become some sort of indisputable system of record. That is, blockchains will never become sovereign. To be a sovereign and force others to obey your laws you need armies. We have already seen in cases where disputes rise on the blockchains that they get settled in real courts of the real sovereigns. In cases where crimes are committed but the blockchain hides identity you get investigations by, again, real LEOs of real sovereigns.

Blockchain enthusiasts suffer from very fundamental misunderstandings of how economic activity actually happens. This isn't surprising: the vast majority of people have absolutely no idea how the modern global economy actually works. But the blockchain crew are betting real money based off this misunderstanding and, frankly, they're going to pay for it. Nothing costs more than ignorance.

That's not to say that the underlying technology is hopeless. I expect we will see strongly permissioned and heavily regulated blockchains that build upon existing laws and institutions. Corda [1] et al have the right idea. These blockchains don't really replace anything, they're just distributed computing platforms that can greatly lower existing transaction costs. There are enormous inefficiences in global trade because buyers and sellers from different regimes don't trust each other and the cost to establish that trust is very high.

[1] http://corda.net/

I'm glad you like Corda, given I designed a lot of it ;)

These topics have a lot of nuance. I didn't mean the end goal of blockchains is to actually replace governments; as you point out that's impossible because software systems don't have armies. But it's perfectly possible for a digital system to become a system of record and for what's on that system to be enforced by the courts however. Consider that the main way we make payments today is electronic, courts have no problem reasoning about or enforcing such payments.

So we have to distinguish between system of record, and system in which the final judgement rests with humans. You can certainly write a contract-as-code which still can be broken or overridden by judges.

I think it would be much much worse to have a blockchain be the system of record.

If someone sneaks into your house when you leave your computer logged on, and transfers your house to them, do you legally have to move out immediately?

I didn’t say that all the problems have been figured out, but I feel like you are being a little close minded with regards to the idea. Maybe properties would use some form of multi signature transactions so a single person hacking it would not be able to take over ownership. Perhaps there would still be some sort of intermediary.

I am not saying just add a blockchain on top of the existing infrastructure. That does not make much sense. I’m saying replace the existing infrastructure completely.

Ten years ago people didn’t think solving the double spending problem was possible. It’s silly to try to imagine the future of blockchain innovation when thinking about it only how it exists today.

That’s like in 1995 saying that no one would ever want to watch videos on the internet because the download speeds and quality would be so poor.

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