You could substitute “trusted entities” for “banks”. Get ten banks on board, buy them each a raspberry pi, and you are up and running.

Yea .. no.

I have a hard time believing that you're actually trying to understand, which kind of trust the people who created Bitcoin meant and why they thought it's important.

Just claiming banks are in that sense trustworthy either neglects that banks exist in states and can be influenced or is plain naive.

We live in a world where states and central banks are constantly trying to achieve goals by changing money creation.

No matter if you see that as problematic or not, you'll hardly deny that currencies are subject to extreme pressures from economic actors (governments, banks, societies, businesses, ..). Therefore claiming that banks can simply be "trusted" to withstand these pressures (by strictly enacting some agreed upon policy) is a bit like closing your eyes on the real world situation of currencies.

You mean the type of trust that can be nullified by securing 51% of mining capacity?

You're welcome to provide a better approach.

Pointing out the limits of the currently implemented mechanism (in Bitcoin) does not equate to Bitcoin being inferior to the trust system of conventional currencies.

> currencies are subject to extreme pressures from economic actors (governments, banks, societies, businesses, ..). Therefore claiming that banks can simply be "trusted" to withstand these pressures (by strictly enacting some agreed upon policy) is a bit like closing your eyes on the real world situation of currencies.

I was merely pointing out that your statement about currencies also applies to (at least some) cryptocurrencies. Large mining groups refraining from securing 51%, or colluding with each other to similar effect, is the only thing stopping them from having the power to maliciously inject fraudulent blocks.

So yeah, BTC's proof of work scheme seems to have some conceptual flaws. I'm aware of innovation in the space, but none have caught on the way BTC or Monero have.

How do get the banks on board? Remember you only have the energy of a lightbulb between all of them and no way to pay them without incurring structural transaction fees of the sort the FA is claiming are solvable by this solution. Also remember the banks actively distrust each other and spend literally all day every day in every one of their businesses trying to beat each other in every possible legal/ethical way (and also sometimes some illegal/unethical ones). It seems somewhat implausible that out of the goodness of their collective hearts they will all decide to run your raspberry pi, play nice with one another and do the right thing.

Some problems are super easy to handwave away in theory but actually pretty difficult to solve in practise.

The reason you need to avoid trusted entities is when you want to operate outside the legal system. Which is why the use case for crypto is, and always will be, contraband and gambling.

Which is a fine use case. Those are very large and enduring sectors of the economy. But let’s not get confused about why things are as they are.

I have a detailed book on my shelf, published recently, where sworn US officials, took money and forged documents, then lied in court, multiple times, and it took years, many years, to get the evidence. Some attorneys involved were so mad about being lied to, with an unsupportive Federal Judge doing nothing, that parts of the case went to the US Supreme Court to challenge the authority itself. Read that book and get back to me.. 2010s era

edit the point here is - getting a "trusted party" is in fact, not easy, and certainly not "a bank" as a universal answer.. find your own copy of this book, it is repeated a hundred times, every decade.

1. How are we supposed to read the book if you never gave a name except "book on your shelf"? 2. How is deregulated monopoly money gonna solve what you just described? Seems like a easier path to do something unsavory.

It’s always “what they don’t understand”.

Here’s the facts: there are two types of people in this world, and which you are has nothing to do with intelligence.

You either participate in these types of activities, and you always have and always will, or you don’t, never have, and never will. It’s like it’s some weird quirk in human nature where God said, 50% of the people have to be this way and 50% have to be that way in order for this to play out.

The participants have an extra hurdle to cross though. They have to watch the zero sum gambling game play out where some people win and others lose and the winners paint themselves as financial geniuses. It’s hard to be around that type of company and not feel bad.

Again, I’m not saying anyone _is_ dumb. The crypto community have many fine people who add all sorts of value to society. But if you’re participating in this game, there’s nothing anyone can do to change your mind because you’ll always have counter examples to point to, and no one likes to admit when they’re wrong, especially to themselves.

You could map those two kinds of people maybe by how they would act in a prisoners' dilemma. Cooperate, so that everyone is better off long term, or just think of themselves shortsightedly, no matter the externalities.

the problem is that those "trusted entities", ie: banks have a high cost in terms of infrastructure, opportunity cost of all employees doing something else other than signing transactions, and the environmental costs associated with each bank employee's entire life. so while crypto energy costs are high, they arent as high as having humans existing somewhere hitting buttons for so called 'trust' and dealing with regulatory cruft.

Maybe he's a genius and solved distributed Byzantine generals with a single light bulb and majority voting?

> three to seven transactions per second, but with a centralized trusted entity

The byzantine generals problem doesn't apply when you have trusted entities.

> when you have trusted entities.

Except for the minor detail that you never do.

No, from a legal/state POV you do have enough trust.

Perfect solutions do not matter.

The only thing which matters is good enough solutions.

For a state (i.e. most states in the current world) federated validators are good enough.

And systems which go beyond that (wrt. byzantine generals problem) have properties states tend to not want.

(I'm not judging if it's ethical good or bad.)

The point he is making is that you do not have to solve it, federated systems might not fully solve the "Byzantine generals" problem but they are "good enough" for most use cases in practice.

Let me make a different point:

I mean think about it for "legal" (legal unrelated to ethical) use-cases a federated systems of banks and maybe some external non-bank validators is good enough, by far.

Not "legal" use-cases are not legal and as such them not being supported is in the interest of the state you use them in.

Many of ethical good use-cases of crypto currency are not "legal", ethical yes but not legal anyway.

Like circumventing suppression in totalitarian states.

The problem is for each state by themself a "Byzantine considering" crypto currency is not in their interest. It can be use-full to help people in totalitarian states, but then this states can also use it to help extremist groups in your state while forbidding crypto currencies internally. So... not necessary the best choice.

Now federated not fully "Byzantine considering" crypto currencies are a different thing altogether. Like use bitcoing but replace PoW with PoS except the validators are predetermined banks with most in your country (or union like the EU, they might still stack money as collateral) and from a state view the problems are mostly gone/manageable (from a legal/state POV) and you get most of the technical innovation you want (I mean it is 99% the same tech minus "Byzantine considering" and maybe minus some privacy protections).

Now I'm not saying it's ethical good (or bad) for states to ban crypto.

But I am saying that from a purely objective non-ethic-considering view for most states it's best to just ban fully "Byzantine considering" privacy protecting crypto.

It's byzantine consensus. It's slightly wrong since you need 3f+1 for byzantine consensus (so 7/10 not 6/10) but the basic point is valid. There are some crypocurrencies based on a similar model, but they aren't as popular.

Holy cow you're right he should start a crypto currency based off this model.