Thinking too much can be bad for you (2012)

Re:Thinking too much can be bad for you (2012) by WJW on Wednesday February 10, 2021 @04:08AM (#26087006)

There are quite a few places in bitcoin where trust is required. For example, the software is developed by a relatively small group of core devs and 99%+ of bitcoin users will never read that code (and its dependencies) to see if it contains backdoors. We just have to trust the devs to "do it right" and not get compromised by either greed or blackmailed by external parties. If you presuppose a sophisticated enough attacker, the distribution methods could be MITMed so that the distributed binaries are not what is in the source code. The various miner pools could be compromised as well so that they run different software than the "main" bitcoin branch (but with a similar interface). If you accept that crypto exchanges are essential to bring down the barrier to entry, they need to be trusted as well. For any transaction also involving an exchange of goods or services not on the blockchain, you need to either trust the counterparty to actually fulfill their obligations, you have to involve a (trusted) clearing house or you have to trust the legal system to enforce the contract.

Tbh, trustlessness in payment systems is pretty much unachievable at scale. And if you are going to need trusted parties anyway, why have a blockchain in the first place? You can get a much better solution with a centralized database managed by the trusted party.

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Re:Thinking too much can be bad for you (2012) by Robotbeat on Wednesday February 10, 2021 @12:17PM (#26091970)

I agree. You have to write your own software (offline, perhaps), not use a mining pool, plus not use an exchange to be trustless. And you’re still having to trust the other end to actually deliver on what they’re paying for, although they don’t necessarily have to trust you. That last sentence is one of the few changes that Bitcoin makes: it moves power from the consumer (who has ability to charge back if the goods are not received) to the one accepting payment (who now cannot be charged back). I’m not convinced this is a good move.

And I agree with your overall point. The only issue is when you end up having unnecessarily high transaction fees, as we do now. Satoshi was trying to fix that part. But unfortunately, Bitcoin isn’t better on that front.

Bitcoin has high transaction fees because of the lack of scalability of the blockchain concept at scale while Visa has high transaction fees (although for most daily transactions, less than Bitcoin) due to network effects allowing them to charge near-monopoly rents.

What we need is government action to enable instant ACH/payments. And to make that common. Visa ought to be unnecessary.

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Re:Thinking too much can be bad for you (2012) by Layke1123 on Wednesday February 10, 2021 @01:53PM (#26093225)

So new taxes to support the infrastructure that allows feeless ACH/payments? Not saying I'm for or against, I'm just trying to understand your argument in full. It seems like the logical way that your idea would be funded.

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Re:Thinking too much can be bad for you (2012) by Robotbeat on Wednesday February 10, 2021 @04:57PM (#26095352)

The Nordic countries have instant payments. It doesn't actually cost anything extra (just the usual flat fee, maybe $0.20 to $1... although for smaller payments like for a candy bar, you could choose a 0.5% to 1% fee which might be cheaper...), except for companies that gain from rents they charge for wire transfers, etc. Here's an example from the Nordic countries: https://nordicpayments.eu/p27-the-payment-gamechanger/

Actual expert on the topic: "For truly "instant" clearing and settlement the main hope is the RTP network, which already has extensive coverage. (FedNow, its rival, is 3 years away). The Fed can also quicken payments by (1) having Fedwire and NSS operate 24/7 and (2) easing FinTech Master Account access." https://twitter.com/GeorgeSelgin/status/1356937488871358465?...

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Re:Thinking too much can be bad for you (2012) by Layke1123 on Thursday February 11, 2021 @04:19PM (#26107386)

Ahh, so transaction fees fund the infrastructure. Makes sense. I guess what do we do with any excess generated by those fees? Reinvest into the infrastructure? Have it in a safety box for a day when the fees can't cover the cost in the short term? Interesting things to consider I think, but that does flesh that idea out more. I wonder, do they also offer state run accounts instead of private banks holding cash?

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