Amidst the current crypto-crisis/downfall, I found this excellent interview of Nicholas Weaver by Nathan J. Robinson. The article is called “Why This Computer Scientist Says All Cryptocurrency Should “Die in a Fire””, and, as you can guess, is not really gentle with cryptocurrencies and the blockchain in general.
The interview talks about many topics and is really interesting. Here's a few passages I enjoyed.
Starting with Nicholas Weaver, in 2018:
Cryptocurrencies, although a seemingly interesting idea, are simply not fit for purpose. They do not work as currencies, they are grossly inefficient, and they are not meaningfully distributed in terms of trust. Risks involving cryptocurrencies occur in four major areas: technical risks to participants, economic risks to participants, systemic risks to the cryptocurrency ecosystem, and societal risks.
Briefly quoted in the article, Jackson Palmer, creator of Dogecoin:
After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight, and artificially enforced scarcity.
In an exchange later in the article:
Robinson: “I am sure you have heard people say things like “Well, blockchain technology itself has lots of potential applications, it’s really interesting, offers lots of possible solutions to problems.” But one thing you point out in your lecture is that often, they are pretty vague about what these uses are, and usually when you get down to the facts, there’s a much simpler solution to whatever problem it is that wouldn’t use blockchain.”
Weaver: “The thing is, the idea behind a blockchain is actually a 30-plus-year-old idea. It’s called a hash chain. And we’ve known how to build these for longer than most of my students have lived. But people who spout “Blockchain!” don’t understand the technology. […] When somebody says you can solve X with blockchain, they don’t understand X, and you can ignore them.”
Illustrated in this illuminating example:
So, this was an example given by a purported expert in a blockchain class at Berkeley: “Okay, we have the cold chain problem. Vaccines, you need to ship cold, and if they ever get out of temperature spec, you have a ruined batch. And we can solve this with blockchain.”
And my reaction is: “No”. The problem is you need to know when it got out of spec, and know that the receiver can know that it had gotten out of spec. And there’s an easy solution. It’s called a $1 ShockWatch label. So the ShockWatch group makes these temperature labels. You stick them on the package. And if it ever gets too warm, the color changes. No blockchain necessary.
The fact that somebody was purporting this to be a real-world application meant they had not even thought about the problem for five seconds.
In another exchange:
Robinson: “One of the things you’ve said, if I recall, is that the cryptocurrency space is “speed-running 500 years of financial history.” By which I take you to mean that all of the financial disasters of centuries past are playing out in short order, and then they have to rediscover the solutions that were put in place for those things not to happen.”
Weaver: “Yeah. […] The thing is, though, the cryptocurrency space itself has the object permanence of a horny mayfly. They simply don’t remember their own scams.”
Finally, Nicholas Weaver, concluding the interview:
That’s the problem, and that’s why I’ve actually changed my view over the past decade. Back in 2013, I thought it was amusing and silly, and I could get cool papers out of it. In 2018, I thought it was amusing, but pretty bad. [In 2022], it’s time to really think about burning it down. Now I just want to take the entire cryptocurrency space and throw it into the sun. I know astronomers will tell you it’s easier to throw something into the void of space than to throw it into the sun. But it’s worth the extra energy to make sure some alien doesn’t find this mental virus.