Bank wires let you send money to the wrong place and are largely irreversible. The solution is for your bank to double check your transaction and refuse to send a wire with a typo'd destination.

Likewise, the solution for crypto is for your wallet software to check your transaction and refuse to send it if it has an exorbitant transaction fee.

I trust my bank and the legal framework more than wallet software and a loose band of SWEs running a blockchain or DLT.

If funds are wired to the wrong person in your jurisdiction, you can sue to recover it if the sending and receiving institutions can't claw it back. With crypto, you're SOL. Technology doesn't fix trust and legal issues, and a judge is going to laugh an immutable ledger out of a courtroom (or hold you in contempt).

https://www.youtube.com/watch?v=15RTC22Z2xI [HBR: Blockchains Are a Bad Idea (James Mickens)]

This is a ridiculous take. There’s plenty of problems with crypto but this isn’t one of them. The payment protocol has no reason to be irreversible, why would you ever want that. Reverse transactions should be handled by institutions, and institutions should use the protocol. If they make a mistake while using the protocol, they work together with the other institutions to fix it, exactly as happens with bank transfers.

Yes it’s stupid to use a crypto currency network to send personal raw transactions, but the tech is still young and a lot of people do it. Eventually that won’t happen.

Yes you can burn currency by sending it to an invalid address. You can also burn cash. Build controls so that people won’t do it.

The closest example is modern databases. If you let users run sql directly they could drop their own database. That’s an irreversible transaction. The solution is to abstract that power away so that it’s extremely hard to do extremely dangerous things.

If institutions are going to run the network, and the transactions will be reversible, and you're not going to run your own wallet, why crypto? It's a solution for a problem that doesn't exist. The database works just fine.

Anyone can join the network and start a new institution. Good luck starting a bank

You're not an institution unless you have a banking or money transmittal license, crypto or not. The nation state still makes the laws, a DLT node doesn't change the law.

I entirely agree it's hard to start a bank, but your problem won't be solved through technology, only through policy and regulation updates.

https://www.npr.org/sections/money/2017/02/10/514577243/epis... (Planet Money: Blockchain Gang)

https://cointelegraph.com/news/charges-reduced-charlie-shrem... (Charges Reduced: Charlie Shrem Agrees to Plea Deal)

> Before getting locked up, Shrem had run the company BitInstant. BitInstant made buying Bitcoin as easy as purchasing a money order. By the time he was 22, Shrem had hired dozens of employees, found a brand new office in Manhattan, and was processing a million dollars a day.

> Shrem though ended up helping some of the wrong people trade dollars for Bitcoin: buyers and sellers of illegal drugs on the website Silk Road. As he was getting off a plane from Europe to New York, Shrem was arrested. He was convicted of aiding and abetting an unlicensed money transmitter, and sentenced to two years in federal prison.

Absolutely agree, but what’s exciting about blockchain is that it makes the network accessible across country boundaries by default. Definitely countries can opt out by banning it, but the hope is that this interconnection becomes so valuable that banning it has too many negative consequences, just like with the internet.

You still have to obey the laws of the company you operate in. So if you want to act like a bank, you have to obey banking laws - including all the capital and auditing.

Yes but different countries have different laws. The hope is the technology forces the laws to change eventually.

What happens is that you need to obey both sets of laws. This is both good and bad.

e.g. one country requires you don't allow transactions with terrorists. So neither end can be a terrorist org.

additional e.g. one country says LGBT orgs are illegal so neither end can be an lgbt org.

etc.

Why couldn't you sue to recover the crypto?

Lack of KYC (Know Your Customer [1]) and AML (Anti Money Laundering processes [2]) makes it more difficult to know who to pursue legally. Your US bank account or brokerage account is tied to your social security number and other PII. Who and where to process serve is much more accessible.

[1] https://en.wikipedia.org/wiki/Know_your_customer

[2] https://en.wikipedia.org/wiki/Anti-money_laundering_software

Why would you send currency to an address if you haven’t verified its identity. The tools are young, if there aren’t enough controls for you yet then don’t use them. I don’t, but I respect the power of the technology and it’s future potential.

Because there is no meaningful proof of identity for a bitcoin address? If someone on twitter says “here’s my bitcoin address for donations” they may have been hacked, or they could claim that they were hacked, and you can’t find who controls the recipient account. By design.

What if they are wired to the wrong person outside your jurisdiction?

An international wire transfer requires even more checks than a domestic one, and you can always sue in the recipients jurisdiction.

Don’t do that. If you don’t trust yourself not to make a mistake, use a third party with better controls. If none exist yet, wait.

The fact that those controls haven’t been built yet doesn’t mean the whole idea is flawed.

This wouldn't happen with a bank wire, because you don't set the fee. You choose where to send, and how much to send. And that's it.

Yes, you can send to the wrong place, but for example, in Brazil, to transfer to another person, you have to specify:

- Name

- bank

- bank branch

- bank account

- CPF (government national ID)

if anything doesn't match, the transaction doesn't go through.

Is a bit harder to wire a large amount As bank make it a bit different than sending etransfers, in crypto, there is no limit, all transfer for any amount goes through the same interface.

With a wire transfer you have to provide a swift or such routing number a bank name, an account holder name, and an account#. All of which have to match.

Then there is a processing period during which it can still be cancelled.

Finally the dispute resolution process (the law) can force the transaction to be reversed - taking money back from the recipient account.

None of that exists in bitcoin. Especially given you can’t necessarily identify the miner or recipient to contact to reverse the transaction, even if they wanted to.

We’ll just ignore crypto transactions taking $$$s per transaction, taking minutes to hours to complete, and consume more power than some countries.

I'm not convinced that is true. Tools can be written to validate amounts carefully.

Wire-fraud is also relatively common and often not reversible but people and businesses still wire money frequently.

Also happens with HFT: https://www.bbc.com/news/magazine-19214294

> Can a Transfer Be Reversed After Being Accepted? Once a wire transfer has been accepted by the recipient's bank, there are only a few circumstances that allow for the reversal of the wire transfer under the Uniform Commercial Code.

> The only available options for reversing a completed transfer are if the sending bank made a mistake, if the payment order was a duplicate of a previous order, or if the order is for an amount greater than the beneficiary was entitled to receive under the transfer. In those cases, the beneficiary's bank will recover the funds improperly paid to the beneficiary.

https://budgeting.thenest.com/time-frame-reversing-wire-tran...

A general use currency != HFT.

Can is a large word, you need to standardize it, which is what’s needed and it’s a long way to go.

It is reversible. If you make a mistake like this oftentimes you can rely on law enforcement/bank to force the money to be given back. Not sure if this is possible with crypto.

Often it's not reversible in practice, if the destination bank/jurisdiction is not cooperative.

This is why you hear people losing their life savings to scammers in Nigeria, instead of just successfully suing them to get it back.

Yeah but usually that's not the case. Usually you can get it back.

I would say more often than not it's reversible.

If anyone read, it was reversed at 50% the cost.

It wasn't reversed. The beneficiary just agreed to give half of it back.

Same as with bank accounts and transfers.

Pretty sure I'm not just at the beneficiary's whim when it comes to bank transfers.

As soon as it is out of country, it is up to them - there is no one who could force them.

If you hand someone a million in cash. Then find out they gave you bad goods or an empty container, how do you get $$ back if they're long gone?

want safety here? you'd probably use escrow or something.

Not a bitcoin fan, more because of its fluctuating values, but this specific reasoning doesn't set itself apart from cash.

This doesn't seem drastically different from your bank working with you to get back money you wired to the wrong account.

It wasn't a wire to the wrong account. In ETH, you set the fee yo are going to pay the miner for the transaction.

Imagine this: you want to transfer $1000 to your your friend. You put your friend's correct account, $1000 as transaction fee, and $10 as transfer.

Your friend receives $10, the miner receives $1000.

Never going to happen with a bank, as you don't offer a transaction fee to someone.

Well, you do offer a transaction fee to the bank (if you're in the U.S. where these transfers aren't free of charge), but presumably the bank has a fixed fee schedule for that and you don't specify a fee of your choice.

A closer analogy might be a service where you can offer a tip by typing or writing a tip amount. In restaurants, if paying by credit card, you have to manually add the tip amount to the total in order to guard against mistakes in your intention (both through fraud and through your own error). Some online services like food delivery may let you specify an arbitrary tip just by typing it in, and I'm sure people make mistakes in the amount all the time (e.g. $44 instead of $4, or $80 instead of $8.00), though the web sites probably also have a limit on the tip value, so you'll usually only see mistakes of one order of magnitude rather than six.

They are not free of charge, but it's not up to YOU to type in the value, right?

At least in Canada and Brazil, the fee is set up/calculated by the bank, depending on the type of transaction and value. So you choose the transfer type, input value, and they tell you the fee. And it's NOT going to be $2 million (at least for $100 transfers)

Yes, that's exactly right.

In what way?

The future of Crypto's are in free transactions, like IOTA and brothers.

I have never seen anyone able to explain why IOTA isn't nonsense and a scam. They seem to claim that trinary encryption and trinary processors are going to be revolutionary for some reason. They have been claimed decentralization is coming since it was created, but there has never been an explanation for how that will even work.

IOTA is vaporware and gives all blockchain projects a bad reputation by association. You are right on your points and forget that they rolled their own elliptic curve so you cant use a wallet twice.

Complete BS, of course you can use your wallet twice, but not the receiving seed, that's why you have to generate for each transaction a new seed.

EDIT: In other words every seed could just be used for one transaction...but that has nothing todo with your wallet-seed

EDIT2: And its not a elliptic-curve but a direct acyclic graph

https://en.wikipedia.org/wiki/Directed_acyclic_graph

Elliptic curves are a type of cryptography and directed acyclic graphs are a type of graph. They have nothing to do with each other at all.

Also all crytpo currencies are essentially DAGs that are synchronized by the ordering of the transactions by whoever mines the block. IOTA pretends that there is something different when the real difference is that they can't decentralize how to synchronize transactions.

Just half true, read for your self:

https://www.gibraltarlaw.com/directed-acyclic-graph-vs-block...

>can't decentralize how to synchronize transactions

No one ever said that, of course they have so synchronize to the network...what else? Entanglement?

>Elliptic curves are a type of cryptography

Yes and it was NOT a Elliptic curve but a type of winternitz-ots.

The point was that you didn't know the difference between where elliptic curve cryptography would be used and a directed acyclic graph. Also a ledger is by its nature a directed (one direction) acyclic (no cycles) graph of dependencies, it just depends how you visualize it. Just like instructions on a computer are in a sequence, they can be separated into graphs of dependencies which may be woven together.

Other crypto currencies are able to synchronize in a decentralized way with different miners mining each block. As far as I know IOTA's structure makes this impossible, even though when they created it everyone else had already done it.

elliptic curve is a type signing algorithm (like blake2b or sha). if you dont understand what an EC is i dont think you also understand why rolling your own would be a bad idea. the wallet/account seed (your post is semantics in my opinion, whichever seed it is you can only use once, which is a flaw) is directly related again to this issue.

Its not a elliptic curve but was a type of winternitz (Curl-P) before, then blackhat came:

https://i.blackhat.com/us-18/Wed-August-8/us-18-Narula-Heilm...

And then they changed it....and no you create a iota seed just like that:

cat /dev/urandom |tr -dc A-Z9|head -c${1:-81}

And talking about scam....ethereum-classic? Bitcoin-cash?

Your talking about a flaw when you just can use a receiving seed once? Please just read the DAG article, and understand what winternitz-ots means hint (one time signing)

EDIT: Here the winternitz paper: https://eprint.iacr.org/2011/191.pdf

With master-nodes, all the coins are already there, you pay (in form of calculation) for the transaction/generating/signing the seed:

Everything is FOSS you can read it for yourself:

https://docs.iota.org/docs/getting-started/0.1/network/iota-...

But for the iota-foundation...that's definitely unfortunate..that's why the fork.