[Note: This comment comes from friend David Rosenthal. DLH]
From: “David S. H. Rosenthal” <email@example.com>
Subject: Re: [Dewayne-Net] How Society Will Be Transformed By CryptoEconomics
Date: May 20, 2015 at 07:53:12 EDT
Disintermediating Banking and User Accounts
The revolution in progress can generally be described as “disintermediation”. It is the transference of trust, data, and ownership infrastructure from banks and businesses into distributed peer to peer network protocols.
A distributed “world wide ledger” is one of several technologies transforming our highly centralized structures. This technology, cryptically named the “block chain” is embodied in several distributed networks such as Bitcoin, Eris Industries DB, and Ethereum.
Through an encrypted world wide ledger built on a block chain, trust in the systems maintained by third party human institutions can be replaced by trust in math. In block chain systems, account identity and transactions are cryptographically verified by network “consensus” rather than by trust in a single third party.
These techno-optimists never seem to ask “what could possibly go wrong”?
To quote from this blog post:
“Since then, there has been a flood of proposals to base other P2P storage systems, election voting, even a replacement for the Internet on blockchain technology. Every one of these proposals for using the blockchain as a Solution for Everything I’ve looked at appears to make three highly questionable assumptions:
* The blockchain guarantees anonymity.
* The blockchain is automatically and permanently decentralized.
* Providing adequate mining power is someone else’s problem.”
There have been times in the past when a single mining pool controlled
more than 50% of the mining power, and thus the blockchain. That pool
is known to have abused their control of the blockchain.
As I write this, 3 pools control 57% of the mining power. Thus a
conspiracy between three parties would control the blockchain.
What could possibly go wrong? Don’t get me started …