The reason I started listing problems that I think crypto solves is because it seemed like many people were either not aware of or not acknowledging the existence of them. This was leading to lots of misinformed discussion. I'll summarize what I think are my least controversial conclusions, primarily for my own sanity.
Cryptocurrencies have the following benefits:
- No one (authority or otherwise) can seize assets that exist and belong to you on the blockchain, from the blockchain, without knowing your private key. People can seize your assets only outside the blockchain. People can lay claim to your assets inside the block chain, and attempt to coerce or induce you to transfer them, but they can't do it themselves. How useful can that be in practice? I don't know and am not discussing it. It's a discussion worth having, but only if people truly understand and acknowledge the prior statements.
- Some subset of all scams, namely those involving reverted and repeated transactions, become impossible. Because by definition blockchain transactions are "non-reversible" and prevent "double-spending". (control F either quoted term: https://bitcoin.org/bitcoin.pdf)
- Counterfeit is impossible (ex: you cannot fabricate a bitcoin out of nothing).
Cryptocurrencies have the following drawbacks:
- Immense energy consumption.
- Increased complexity over almost every existing financial system.
- A propensity to attract scammers that build scams on top of or around blockchain technology (but with a few notable exceptions, not IN it).
- Mistakes can't be fixed by an authority. They have to be fixed through the cooperation of all those involved.
The reason I started listing problems that I think crypto solves is because it seemed like many people were either not aware of or not acknowledging the existence of them. This was leading to lots of misinformed discussion. I'll summarize what I think are my least controversial conclusions, primarily for my own sanity.
Cryptocurrencies have the following benefits:
- No one (authority or otherwise) can seize assets that exist and belong to you on the blockchain, from the blockchain, without knowing your private key. People can seize your assets only outside the blockchain. People can lay claim to your assets inside the block chain, and attempt to coerce or induce you to transfer them, but they can't do it themselves. How useful can that be in practice? I don't know and am not discussing it. It's a discussion worth having, but only if people truly understand and acknowledge the prior statements.
- Some subset of all scams, namely those involving reverted and repeated transactions, become impossible. Because by definition blockchain transactions are "non-reversible" and prevent "double-spending". (control F either quoted term: https://bitcoin.org/bitcoin.pdf)
- Counterfeit is impossible (ex: you cannot fabricate a bitcoin out of nothing).
Cryptocurrencies have the following drawbacks:
- Immense energy consumption.
- Increased complexity over almost every existing financial system.
- A propensity to attract scammers that build scams on top of or around blockchain technology (but with a few notable exceptions, not IN it).
- Mistakes can't be fixed by an authority. They have to be fixed through the cooperation of all those involved.