Do you think irreversible transactions on blockchains are humane?
I have been considering this issue for a bit. Blockchain technology has the potential to erase hundreds of years social progress in the building of what I call the “legal-identity infrastructure”, a system where persons and bodies can be held accountable for criminal and fraudulent conduct before the law by means of legal identity.
With bitcoin, for instance, a hacker can steal your bitcoin and send it to their own wallet. Not only is this transaction irreversible on the bitcoin blockchain, but there is no certain way of associating their legal identity with the stolen bitcoin. Serving justice has become more difficult.
Contrast this to another payment network, like Visa, where charges on stolen credit cards can be reversed by a human, shipments to a physical address can be traced by a human, and if money is stolen, the names of the recipients of such money are on record.
With blockchains, identities are decoupled from legal names. No single human can reverse a fraudulent transaction, unlike on the VISA network. Decentralized, autonomous systems remove human agency – agency which can wright the wrongs of fraud and theft.
I think it’s vitally important for us to recognize that blockchain tech is nearly inseparable from the libertarian political philosophy it was born out of.
From the libertarian point of view, it’s better for the individual to be in full control of their own security and identity, not a centralized institution. If you choose to own bitcoin or whatever other crypto"asset" and store it on your computer, your hard drive is now your bank vault. Just like banks don’t cut out walk-up windows directly into their bank vaults, you probably would not want to connect such a hard drive to the internet in any way. Anybody who “invests” in bitcoin needs to seriously consider whether they actually want society to work like this. Instead of entrusting security to a corporation, like Visa, your security is on your own hands.
For the libertarians who invented Bitcoin, that is NOT a flaw - in fact it’s the main benefit of the technology. And for hardcore cryptography nerds like those original guys, a private key is probably safer in their possession than in the server of any financial company in the entire world. On the other hand, for everyday joe who impulsively spent a few hundred bucks on bitcoin in December 2017 while it was peaking, this is probably not true.
In any case, always remember that there is a distinct political philosophy behind the features of blockchain tech. Without heavy regulation essentially neutering the original intentions of it, that philosophy will continue to drive how the platform is used.
There’s a lot of potential problems with blockchain. On top of irreversible transactions associated with no identity, you also have “smart contracts” which are actually quite dumb, because they just trigger code as written, with no possibility for human judgment to interpret the contract in cases of contract dispute, ambiguity, or other imperfection.
There is an alternative to blockchain being developed, Holochain, that has identity as a central component of its design. It’s an agent-centric architecture, instead of data-centric, meaning that each user has their own hash-chain, rather than the entire network agreeing on one monolithic blockchain ledger. This architecture is ideal for building communities of accountable users who have their identities verified and tied to their own personal hash-chain. It could even be pseudonymous, which would give people privacy while still allowing for trust and accountability.
This is a good topic. Not sure what HoloChain is, but this is precisely what CalenDarer was designed for. CalenDarer will be introduced in a matter of weeks and will act as the architect needed to address this issue.
Decentralized Socioeconomic Digital Infrastructure for the Next Generation.
Hmmm. Since said stolen currency is on the same blockchain and has a corresponding ledger showing the transaction from one party to the other, I’d actually argue that it’s a lot more traceable than the equivalent in meat space. There have been documented cases of cryptocurrency thefts, and in these cases there’s at least evidence unlike most other cases today for justice … and in some circumstances where the theft (or “security flaw”) was validated, yes you can retroactively tag the currency as tainted money.
As far as identities and legal names go, fraudulent legal names have been rampant throughout history. People can legally change names all the time with the simple act of just using a new name in some jurisdictions. I think it’s easier to abuse that system than one where an account can be easily and uniquely identified as the holder of a questionable transaction.
Not to be a crypto-apologist. There’s a lot about the ethos behind some of the blockchain community that I do find problematic: i.e., that life would be so much easier if we just submitted wholly to technology and got rid of all the pesky, messy people. (A half-joke I made elsewhere about how some blockchain advocates view DAOs.)
But a blockchain is just a public database with a ledger. Let me repeat: a blockchain is just a public database with a ledger. People get so caught up thinking that it’s far more technically sophisticated than that when it is not. There’s nothing technically irreversible about them other than you cannot erase their log history. If the ledger reflects that illegal funds were seized and then returned, that’s what the record will reflect… albeit requiring human intervention to reverse things.
I think the question - and quite a bit of the thread - is wrongly conflating blockchain with cryptocurrencies. Although blockchains are a building block of cryptocurrencies, they have many different uses and criticising blockchains for problems with bitcoin risks confusion.
Building on gregs point - a blockchain is just a digitally secure ledger which is distributed across all participants. It does not have to be public in the way that bitcoin is.
There are all sorts of areas where blockchains might prove valuable. Being able to prove that a transaction took place in a way that is irrefutable can be empowering to the little guy as well as the powerful. It can help build trust between participants who do not know each other and oil the wheels of trade.
Let me give you an abstract example:
Bob currently run some IT systems, including managing the database. These systems process transactions between several parties and the data describing these stored is recorded on the database. Eve, another of the parties bribes Bob to delete a transaction from the database so that Alice, another of the parties is left out of pocket. Alice has no way of proving that the transaction took place.
Many IT systems are such that if you control the underlying systems it is impossible to prove that the transaction every took place. It has gone because Bob made it so.
A blockchain ledger solves this problem because Bob, Eve and Alice all have a copy of the blockchain which provides an irrefutable record of transactions and cannot be retrospectively edited. It therefore increases trust and transparency and reduces the space for bad actors.
I see no reason to think that this is intrinsically antithetical to human tech - and can be put to good use to help people with less power be less vulnerable to predation.
It is not yet clear whether blockchain backed cryptocurrencies will survive - but blockchain is one of those obvious with hindsight, genius ideas which is here to stay and will be used for good as well as evil.