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

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


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