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“Cryptocurrency and Blockchain: Explaining the Fraud in Four Slides” – Twitter | $7,041.83

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Fact Checker

Cryptocurrencies are provably inferior when you don’t require censorship resistance.

  • Any volatile cryptocurrency transaction for real-world payments requires two currency conversion steps
  • Any stable cryptocurrency requires any entity to convert dollars to tokens and vice versa at par

Blockchain “security” guarantees are horribly inefficient and overrated

  • A “private blockchain” is trivial to implement append-only log: just cryptographically sign a hash claim
  • “Publick blockchains” protected by proof-of-whatever promise a “no central authorities”  & “fully distributed trust” append-only data structure. This is a lie.
  • Any lottery-based reward creates mining pools
  • The code developers also can do act as central authorities
  • And protection is limited to the amount of money wasted

Limited capacity fee death spirals: Fun for the whole family…

  • If the number of transaction < capacity, the transactions may be cheap, including cheap for spammers who want to occupy space forever
  • If the number of transaction > capacity, fee auction death spiral starts, where the price/transaction goes from $0-$30+.
  • Either option is exploitable by a moderately-funded adversary

Eulogy made by Nicholas Weaver

Source

Zsofia takes care of our readers’ questions. Zsofia started mining Bitcoin, then some altcoins with the available AMD GPUs together with her brother. Although her mining activity has stopped by now her passion for blockchain technology and cryptocurrencies remains.

View all Posts by Zsofia Elek

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