blockchain and Bitcoin explained

a YouTube post from July 20, 2020*

from a comment on the video by the speaker, Ron Ballard:
Bitcoin was the reason that blockchain was invented, and Bitcoin remains the biggest blockchain, with the largest market capitalisation. Bitcoin has 62% of the market and the remaining 38% is divided between the other 2,600 or so blockchain-based currencies. Then, allegedly, there are also non-currency applications of blockchain.

So that is why I focused on Bitcoin. Being the biggest, Bitcoin also is the most harmful to the environment, and that is my main gripe against it. I'm retired now and hopefully the climate crisis will not damage the world too spectacularly in my lifetime. But I have a child and five grandchildren and many young friends and relatives who will suffer under the climate disaster that Bitcoin is hastening. And I do spare a thought for the billions of young people I do not know.

In my talk I looked at all the claims of the advantages of blockchain and I was unable to be convinced by any of them. Gary Nuttall[*] says that the “real advantages of Bitcoin [are] censorship resistant and peer-to-peer transactions.” This puzzles me. What does "censorship" mean in terms of financial transactions? The only thing I can think is that it is the prevention of transactions that are fraudulent or illegal in some other way. If that's it then "censorship" sounds like a good thing to me – I want illegal transactions to be prevented. And peer-to-peer transactions seem to me to be non-existent with Bitcoin. Every transaction goes through a miner. The miners can decide which transaction is processed and which is not. If my bank refused my transaction I could challenge it; if a miner refused my transaction I would not be able to find someone to hassle.

The conventional financial organisations are far from perfect. They do billions of successful transactions and when they fail they can cause a lot of grief. I would like them to be more strongly regulated and for any perpetrators of financial crime to be punished much more harshly than they have been so far. Blockchain was supposed to make such financial crimes impossible, but instead it facilitates speculation and massive actual crime. It is not worth making each transaction cost 600,000 times as much, just to get another flawed system.

As for non-mining currencies, that takes away my biggest complaint, but what is the point of them? For currency and non-currency applications, I have not seen one that could not be implemented in other technologies with the same or more functionality and massively less cost.


2022-01-18T20:47−08* / January 18, 2022

*a link; see a note on notes and links and a disclaimer; see also the about post and the archive of miscellany or notrehta posts

for a PDF of slides for this presentation and much else of interest, see The Data Studio*
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