Speedrunning 500 years of bad economics
May 12, 2018 2:03 PM   Subscribe

Blockchains and Cryptocurrencies: Burn It With Fire (SLYT) Berkeley researcher Nicholas Weaver explains all you need to know about the entire bitcoin/cryptocurrency/blockchain space: what it is, why it's horrible and how governments and black hat hackers can attack it.
posted by floatboth (33 comments total) 49 users marked this as a favorite
 
I work in an area of tech where lots of folks are apparently on "X, but on blockchain" drugs. 99% of them have no idea blockchains actually are. The blockchain-for-everything bubble is going to burst so hard.
posted by ArmandoAkimbo at 2:57 PM on May 12 [21 favorites]


He gleefully claims that for a moderate amount of money anyone can spam a cryptocurrency to death, by forcing the use of spam filters. If that is so, then anyone can short a coin and then run their spam and win big.
posted by Brian B. at 2:59 PM on May 12 [1 favorite]


If a computer-naive user asks me what they can do to stay secure on the Internet, I tell them to keep passwords written down (which they usually already do), and that's fine. But nowadays I also have to tell them to avoid cryptocurrency / bitcoin / blockchain anything — because the more they look into it, the more likely they are to get their computer coopted / infected / hacked by people who want to get rich quick, just like they do.
posted by crysflame at 3:02 PM on May 12 [10 favorites]


If a computer-naive user asks me what they can do to stay secure on the Internet, I tell them to keep passwords written down (which they usually already do), and that's fine.

I use a $1.99 address book from the card shop, it's got A-Z indices already!
posted by mikelieman at 3:22 PM on May 12 [9 favorites]


I use a $1.99 address book from the card shop, it's got A-Z indices already!

I prefer a box of 3x5 index cards so I can "edit" more easily, and I write all the "data" in longhand script because now days that qualifies as cryptography.
posted by Alter Cocker at 3:48 PM on May 12 [24 favorites]


What does it mean about the state of Capitalism that someone had to go and invent artificial scarcity?
posted by 1970s Antihero at 3:55 PM on May 12 [20 favorites]


I agree wholeheartedly with criticism of blockchain and cryptocurrencies as basically being the 21st century version of Tulip Mania, but I still want to invest in JimCoin.
posted by SansPoint at 4:11 PM on May 12 [6 favorites]


Recommended by YouTube, John Oliver's take for those who haven't seen it yet. Less detailed but funnier.
posted by suetanvil at 4:11 PM on May 12 [3 favorites]


i can haz transcript?
posted by lalochezia at 4:17 PM on May 12 [6 favorites]


A key element of a long term useful currency is stability. Currently the only effective mechanism that seems to be found is large governments establishing national banks (The Federal Reserve in the US) and they still often get it wrong (hyper inflation among other glitches).

Bitcoin is perhaps the most incredibly successful *prototype* ever in any field. It was not designed to be a new international currency and it'll probably have an end of live fairly soon.

There will be a cryptographicly secure currency at some point. May even have some technical elements that include the blockchain data structure. But probably not a mint (creation) method that is exponentially expensive. Key management will continue to be the biggest difficulty.
posted by sammyo at 4:23 PM on May 12 [3 favorites]


@lolochezia you can playz bak at 1.5 times speed. klik on the gearnut...
posted by Fupped Duck at 5:39 PM on May 12


Referencing the talk, sammyo, precisely what aspect of being more secure can a crypto currency achieve over a standard currency, while remaining useful as a currency?
posted by idiopath at 5:54 PM on May 12


This is a good fpp title
posted by DoctorFedora at 7:05 PM on May 12 [3 favorites]


So I still don’t really understand blockchain and Bitcoin, but I understand it better now, and I feel like my only thought is ... pay with cash instead?

Obviously that’s simplifying because how are you going to pay a kajillion dollars cash to your friendly neighborhood ransomeware criminal, but still, it seems like they’re overthinking it.
posted by Grandysaur at 7:07 PM on May 12


but I still want to invest in JimCoin.

Investment opportunities will always be open to Mefites.

I have actually had an offer from a blockchain consultant to use my literal blockchain to teach about the real blockchain. I turned it down because I felt that that would go against the spirit of what it was originally meant for.

Though I did park a domain for it. I'm not a total idiot.
posted by bondcliff at 7:13 PM on May 12 [16 favorites]


For an endless supply of buttcoin news (it's backed by gold: comedy gold) I highly recommend the /r/buttcoin subreddit.
posted by AlSweigart at 7:23 PM on May 12 [4 favorites]


Recommended by YouTube, John Oliver's take yt for those who haven't seen it yet. Less detailed but funnier.

Oh God, the comments.
I can not believe there are people who use "normies" unironically.
posted by bongo_x at 7:32 PM on May 12 [1 favorite]


I didn't like John Oliver's take- it felt way too credulous and friendly to Bitcoin, as though the jury were still out.
posted by Pope Guilty at 8:53 PM on May 12 [2 favorites]


From Cracked, "16 Surefire Predictions For 2018"
"In 2018 a token breakthrough in quantum computing will create an investor-led Bitcoin panic, and we will all move on to the next bubble."
Consider the source, but this sounds reasonable.
posted by Marky at 9:40 PM on May 12 [1 favorite]


"In 2018 a token breakthrough in quantum computing will create an investor-led Bitcoin panic, and we will all move on to the next bubble."

If SHA-1 is broken by quantum breakthrough then Bitcoin will be just a footnote to the... call it "fun"?

anyone can short a coin and then run their spam and win big.

Shorting coins is the problem. You need to find someone who trusts you enough to lend you lots of a shitcoin so you can sell it on, kill the coin and end up ahead. But hardly anyone lends out shitcoins- you sell them, anonymously, over the internet. It's just barely possible to short Bitcoin now.
posted by BungaDunga at 10:53 PM on May 12 [2 favorites]


Well, they could also break the encryption on the wallets, which is *googles* ECDSA. Wait, really? I thought everyone knew elliptic curves were an NSA op.
posted by ckape at 2:27 AM on May 13 [4 favorites]


There will be a cryptographicly secure currency at some point. May even have some technical elements that include the blockchain data structure. But probably not a mint (creation) method that is exponentially expensive.

I can totally see a government backed cryptocurrency being established at some point. As you note, key security is an issue but not an unsolvable one. And I'd expect such a hypothetical currency would use an extremely simple mint method. Time, date, and a serial number perhaps fed into a simple hash function and then encrypted by the private key.

We've already got most money represented as bank values rather than physical currency. That's dependent on bank security. Switching to a more cryptographic method could have benefits for everyone, and make bank breaches less of an issue.

It could also totally mess up everything by putting all your economic security into a single cryptographic basket which would instantly be the focus of anyone who wanted to either mangle your economy or get rich quick via crime.

OTOH, with sufficient key security and a crazy long key it might be workable.
posted by sotonohito at 5:47 AM on May 13


We've already got most money represented as bank values rather than physical currency. That's dependent on bank security. Switching to a more cryptographic method could have benefits for everyone, and make bank breaches less of an issue.

If only the government could regulate the operations of the back office of the bank, so they could wrap this better tech in an API, and I didn't have to do any extra work. Shit I have 20 year old non-revoked PGP keys still out there...
posted by mikelieman at 6:38 AM on May 13 [1 favorite]


I swear the only reason Bitcoin got big is because its proponents in the US had never experienced a banking system that works. I mean shit, I hear you guys only got chip-based credit cards recently, and that some vendors still make you sign for stuff. In that environment, it makes sense that someone might think a system that takes minutes to process a transaction with the equivalent of a $20 fee would be “useful”.
posted by Jimbob at 7:07 AM on May 13 [12 favorites]


I didn't like John Oliver's take- it felt way too credulous and friendly to Bitcoin, as though the jury were still out.

I hear you on that, but he comes from the place that most potential BitCoin victims are: without the background knowledge to actually understand it while at the same time afraid of missing out on a chance to become genuinely wealthy. If you replaced BitCoin with Quatloo Futures, the same advice would still apply, only you and I would actually benefit from it.
posted by suetanvil at 9:58 AM on May 13


Also: I really enjoyed the FPP video, but I think Weaver is a little too negative. Certainly, existing cryptocurrencies are worthless garbage that must be destroyed, but he may be too eager to write off all applications of blockchain. It's possible that something useful will come out of it.

Also also: I find it interesting that he didn't go into what I consider the main underlying problem with cryptocurrencies, the myth of self-reliance that it provides. The Big Lie of cryptocurrencies is that you can opt out of finance (and, to a lesser degree civilization) and still do your own thing. I think this is incredibly harmful because it distracts from the realization that we really need to fix things. Government and finance must be made accountable and that's what we as a society should be working on.

Finance is horribly corrupt, say BitCoin proponents, but cryptocurrencies let you opt out of the system. But they don't; they just end up handing your time and money to the same old corrupt oligarchs. And that's time and money that could have been spent on fixing the problems with the existing financial system instead.
posted by suetanvil at 10:11 AM on May 13 [4 favorites]


suetanvil: I took the "solution in source of a problem" and "this is nothing new" criticisms as addressing the possible usefulness. Yes, public key encryption is useful, we've had this for ages. What we haven't found a really good use for is combining that with accelerating CPU usage in order to cooperate without trust.

Experience tells us that picking a technology or technique, and looking for a way to use it, tends to lead to bad designs. We have a survivor's bias about innovation and systems design, you never hear about the massive numbers of technologies and systems that are never useful, because there's few reasons to discuss most of them. Seeing something with so little practical use, with this much hype and interest around it, should be a huge red flag.
posted by idiopath at 10:43 AM on May 13 [6 favorites]


The only Bitcoin vending machine I've seen in person was in Estonia, which by all accounts has already digitized everything already. The initial wave of Bitcoin people were, I think, ideologues and cypherpunks who really believed that crypto could be used to subvert entrenched power structures.
posted by BungaDunga at 11:10 AM on May 13 [1 favorite]


I swear the only reason Bitcoin got big is because its proponents in the US had never experienced a banking system that works.

Most of them in the US, as libertarians and tea-partiers, are also keen on bringing down the federal government, whose existence is supported by the central bank or Federal Reserve (aka Illuminati). The speaker in the video identified Pyongyang and Sochi as cryptocurrency centers of activity, which share the same goals for the US government.
posted by Brian B. at 1:15 PM on May 13 [4 favorites]


ideologues and cypherpunks who really believed that crypto could be used to subvert entrenched power structures.

Yeah but they missed their target. The problem isn’t paper money or the Fed. It’s capitalism.
posted by Jimbob at 1:36 PM on May 13 [14 favorites]


Jimbob: Aaaand, thread.
posted by SansPoint at 3:17 PM on May 13 [5 favorites]


I swear the only reason Bitcoin got big is because its proponents in the US had never experienced a banking system that works

I think it's the exact opposite. They'd never experienced one that failed. Banks just sort of work and if someone steals your money the government gives it back and you can't be locked out of your bank-account because you forgot your password (not permanently, anyway) and that's not how money works normally. It only works that way for us because we have laws and businesses and infrastructure that makes it work that way.

So bitcoin comes along and a lot of people assumed "Oh hey, it's money, only virtual, and it lets me be all edge-lordy" and assumed that it came along with all the other things they associated with money, because that's just how money works.
posted by It's Never Lurgi at 4:24 PM on May 14 [3 favorites]




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