The Blockchain Missing Puzzle Piece

[Caveman]

Per the subject title, I've been doing some research on Bitcoin, etc. and have watched multiple TED talks on Blockchain "technology". It's an interesting approach to a very direct user-made economy that gets rid of "institutions" by keeping a master ledger via the blockchain. I get that.

What appears to be the elephant in the room is any recognition of the real "institution" that will form out of this system: The Blockchain itself. In a sense it will be far worse than what we have now because there can be no "checks and balance", no choice of an alternate service. It will be THE Institution. What am I missing here?

 

[Bardock]

It's backed by math which is impartial and I mean what do you dispute about it?

 

[Caveman]

It's an entity to be owned. Nobody thought the internet could be owned either, but it obviously is "owned" in many aspects. Looking for an explanation of how a new monetary system will magically stay without ownership or "stay common". There will always be an owner - in this case a single owner (group). Why would any one want to move their trust from an institution called a bank to an institution called a blockchain?

 

[Bardock]

Say someone owns the blockchain. How is that a worry? What can this owner do to me, besides I guess make it a tiered access like they are trying with the internet (pay to play).

Now as I understand it if you own Bitcoin you have a wallet password and private keys. The blockchain is essentially a ledger. When you make a transaction and interact with the blockchain, you set your own transaction fee. I don't understand your worry and comparing it with banks.

Most people with large amounts of crypto are trading I would assume. They aren't your traditional savings account customer.

 

[Bardock]

And there are millions of alt coins (monero ect)

 

[agent00f]

Say someone owns the blockchain. How is that a worry? What can this owner do to me, besides I guess make it a tiered access like they are trying with the internet (pay to play).

Now as I understand it if you own Bitcoin you have a wallet password and private keys. The blockchain is essentially a ledger. When you make a transaction and interact with the blockchain, you set your own transaction fee. I don't understand your worry and comparing it with banks.

Most people with large amounts of crypto are trading I would assume. They aren't your traditional savings account customer.

The point of gubmint regulated banks is they can be trusted to handle money, unlike about half of all bitcoin "banks" to date.

Also most people with crypto aren't trading. Volumes are comically low and entirely indicative of hoarding which creates the artificial scarcity underlying their value.

 

[Bardock]

Bank regulations and government oversight have always been a shell game at best. It's a con. Game, to keep investor confidence up. Crypto is the same in this respect, it's apples and oranges to me but I'm distrustful of government and banks.

What do you mean Bitcoin bank, you don't need a bank with Bitcoin that's the whole point. You could be hacked in either case but with Bitcoin it's attractive because it's an alternative.

 

[Yakk]

Who and how could an entity decide to own bitcoin through the ledger, or any other way?

 

[Bardock]

If you buy some you own it. But the blockchain itself being owned would that effect anything? Idk.

 

[agent00f]

Bank regulations and government oversight have always been a shell game at best. It's a con. Game, to keep investor confidence up. Crypto is the same in this respect, it's apples and oranges to me but I'm distrustful of government and banks.

What do you mean Bitcoin bank, you don't need a bank with Bitcoin that's the whole point. You could be hacked in either case but with Bitcoin it's attractive because it's an alternative.

Tell that to Mt. Gox account holders et al.

The value of crytocoin is literally buoyed by that human gullibility and greed, which to be fair is abundant in supply.

 

[Bardock]

Same can be said for fiat currency. So an exchange was hacked that has nothing to do with security of Bitcoin. Only a fool would leave coins in the exchange to be hacked anyway. Banks can go insolvant, stock market has pump and dump, all investment has risk. Bitcoin has gone from $250 to over $2000 in one year, it's as viable an investment as anything else.

 

[agent00f]

Same can be said for fiat currency. So an exchange was hacked that has nothing to do with security of Bitcoin. Only a fool would leave coins in the exchange to be hacked anyway. Banks can go insolvant, stock market has pump and dump, all investment has risk. Bitcoin has gone from $250 to over $2000 in one year, it's as viable an investment as anything else.

Fiat currency is backed by actual laws/courts & officers to enforce them, which is why mt gox doesn't happen to real banks. Equity investment is backed by actual productivity and revenue.

Hilarious when shills looking up to pump up their nerd money accuse actual finance of being backed by nothing.

 

[Bardock]

How condescending and inaccurate!

https://www.cryptocoinsnews.com/why-bitcoin-value-doesnt-matter/

 

[agent00f]

How condescending and inaccurate!

https://www.cryptocoinsnews.com/why-bitcoin-value-doesnt-matter/

These people are worse than the gold peddlers.

 

[KateBrooks]

Per the subject title, I've been doing some research on Bitcoin, etc. and have watched multiple TED talks on Blockchain "technology". It's an interesting approach to a very direct user-made economy that gets rid of "institutions" by keeping a master ledger via the blockchain. I get that.

What appears to be the elephant in the room is any recognition of the real "institution" that will form out of this system: The Blockchain itself. In a sense it will be far worse than what we have now because there can be no "checks and balance", no choice of an alternate service. It will be THE Institution. What am I missing here?

Can you share the link to that TED talk?

IMO, the whole reason was that there is decentralization, and transparent ledger to transaction. Making an institution would be to make the system centralized, and private ledger. Some countries are trying to make it taxable by categorizing cryptocurrency as an asset. Do you think it should be categorized in asset?

 

[Caveman]

Hi Kate, thanks for your interest in the OP. No specific link to any particular TED talk as it was about 6 mos ago but I'm sure you can find some there... It would seem that the amount of computing power to required to make a blockchain work is indicative of its lack of transparency (transactions hidden behind roomfuls of 1080Tis, happily whirling around. I think the blockchain is here to stay. That said, one has to consider the ramifications of the institutional amoeba spinning out of control with a single group of owners where the majority wins. No, I don't see bitcoins as Assets.

 

[PowerEngineer]

Let me start by saying that my understanding of blockchains is pretty superficial, but the transparency is supposed to come from the fact that each new "solved" version of the blockchain (i.e. with new added transactions) can be crosschecked and verified by any number of independent players -- not just by a government or central bank.

The rush for massive computing power is to be the first to produce the solution for the new blockchain version thereby earning some coin (or fraction thereof). Other parties need to check the proffered solution to determine if it is the basis for starting the race for the solution to the next version of the blockchain; they will reject it if it is invalid. In this sense, then, the recording of transactions in the blockchain is transparent and supposedly resistant to tampering by malicious parties.

That said, I did read an article recently (I forget where) pointing out that Bitcoin solutions were increasing coming from large server farms expressly built for the mining of Bitcoins. This may be a development that its originators did not anticipate, but perhaps an unavoidable consequence of its (at least temporary) success. I do not see this tenancy toward a few large parties as a fatal flaw. In fact, I suspect that some uses for blockchain, such as money transfers between central banks, might limit the solutions to just servers run by the participating banks. This kind of blockchain for transactions would still be much more transparent than what we have today in the sense that many more banks besides the two involved in a transaction will be witnessing it.

At least that is my understanding. I apologize in advance if I have misstated something.

EDIT: Here's an interesting article:

https://www.theverge.com/2018/3/7/1...ptocurrency-meaning?google_editors_picks=true
https://www.theverge.com/2018/3/7/1...ptocurrency-meaning?google_editors_picks=true