An ITW where we talk a little cryptocurrency but especially blockchain:
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The big blockchain scam
NOURIEL ROUBINI / President of Roubini Global Economics
The technology behind bitcoin is presented as a possible cure for all ills, from poverty to starvation to cancer. But behind a discourse of decentralization and digital freedom, the blockchain hides a profit race for a minority.
Since the value of bitcoin has dropped by about 70% since its peak at the end of last year, the mother of all the bubbles has now exploded. More generally, cryptocurrencies have an apocalypse that is not so mysterious. The value of major currencies such as Ethereum, EOS, Litecoin or XRP has, in any case, collapsed by more than 80%, with several thousand other digital currencies falling from 90 to 99%, the rest being exposed to pure and simple frauds. No one should be surprised by the following figure: four out of five initial offers of tokens (ICOs) were a scam from the start.
In the face of the public spectacle of a bloodbath on the market, the actors fled to the last refuge of crypto-manigance, defending the "blockchain" distributed registry software that underlies all cryptocurrency. The blockchain has been announced as a possible panacea for all existing ills, from poverty to famine and cancer. It is actually the most overrated - and the least useful - technology in human history.
Libertarian ideology
In practice, the blockchain is nothing more than a spreadsheet that we would have glorified. This did not prevent it from becoming the motto of a libertarian ideology that considers all governments, central banks, traditional financial institutions and currencies of the real world as so many evil concentrations of power, that it would be a question of destroy. Blockchain fundamentalists see an ideal world in which all economic activities and human interactions are subject to anarchic decentralization.
But far from concretizing an ideal, the blockchain gave birth to a familiar form of economic hell. A handful of interested white men (women or minorities are rare in the blockchain world), claiming to be messiahs to the poor, marginalized and unbanked masses, claim to have created billions of dollars in wealth from nothing. . But it is enough to observe the extreme centralization of power among the "miners", stock exchanges, developers and managers of cryptocurrency to understand that the blockchain has nothing to do with decentralization and democracy; it is only a race for profits.
Anonymous cartel
A small group of companies - mainly located in countries well known as bastions of democracy, such as Russia, Georgia or China - control between two-thirds and three-quarters of all "mining" activity, and regularly increase transaction costs to increase their generous profit margins. Thus blockchain fanatics invite us to trust an anonymous cartel free from any rule of law, rather than central banks and regulated financial intermediaries.
A similar trend has emerged in cryptocurrency trading. No less than 99% of transactions take place on centralized stock exchanges that are regularly hacked. And unlike real money, once the cryptorichesse hacked, it disappears forever.
Moreover, the centralization of the development of cryptocurrency already contradicts the expression "the code is the law", the idea that the software underlying blockchain applications would be immutable. The truth is that developers have the absolute power to act as judges and jurors. When something does not work in their usual "smart" pseudo-contracts of bugs, and massive hacking occurs, they just change the code.
As it should appear obvious, the claim of a "decentralization" is a myth peddled by pseudo-billionaires to the control of a pseudo-industry. Now that the private investors who have been sucked into the cryptocurrency market have lost everything they had, the latest snake oil sellers are sitting on a huge fake wealth, which will disappear instantly as they attempt to liquidate their "assets".
The claim of 'decentralization' is a myth peddled by pseudo-billionaires controlling a pseudo-industry.
Regarding the blockchain itself, no institution in the world - bank, corporation, NGO or government agency - will enter its balance sheet, its transactions, transactions or interactions with customers and suppliers in decentralized public peer-to-peer registers. demanding no permission. There is no valid reason why such exclusive and valuable information should be publicly recorded.
The return of centralization
In addition, when distributed register technologies are actually used, they have nothing to do with the blockchain. They are private, centralized and concern only a small number of controlled registers. Their access requires permission, which is granted by qualified individuals. And, perhaps more importantly, they rely on trusted authorities, who have established their credibility over time. In other words, these "chains of blocks" do not really carry their name.
It is revealing to observe that all "decentralized" blockchains sooner or later become centralized databases requiring access when they are actually implemented.
No serious institution would allow its transactions to be verified by an anonymous cartel operating in the penumbra of the most authoritarian kleptocracies. It is therefore not surprising that, in all cases involving a traditional "blockchain" driving environment, it was either thrown to the wind, or turned into a private database with permission, until become nothing more than an excel spreadsheet or database.
Nouriel Roubini is president of Roubini Global Economics. This text is published in collaboration with Project Syndicate 2018.
the blockchain hides a profit race for a minority.
... we blame the tool and not the users?
It's like condemning a gun instead of the shooter!
Ahmed wrote:In this particular case, one can legitimately wonder about another possible use of a weapon?
Ahmed wrote:On the contrary, it is certain that the intention to harm others is potentially inscribed in its conception, manufacture and possession ...
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