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Is Crypto Finally Dead? (beehaw.org)
submitted 3 years ago by to c/technology@beehaw.org
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Yes, I know that it still exist, and yes, decentralized currency which utilizes distributed, cryptographic validation is not actually a strictly bad idea, but...

Is the speculative investment scam, which crypto substantially represented, finally dead? Can we go back to buying gold bars and Pokemon cards?

I feel like it is, but I'm having a hard time putting my finger on why it lost its sheen. Maybe crypto scammers moved on to selling LLM "prompts?" Maybe the rug just got pulled enough times that everyone lost trust.

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[–] 4 points 3 years ago (1 child)

How does crypto stop identity theft or transaction fraud? Crypto does nothing for credit, which is basically what identity theft is, and if you're missing how widely there's transaction fraud on crypto you haven't been paying attention.

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  • [–] 1 point 3 years ago (2 children)

    It's not the cryptocurrency itself that prevents fraud, it's the surrounding technologies such as blockchains and NFTs.

    Using NFT to own the address to a PNG is hilariously stupid and worthless, but what it's actually great for is receipts. If I buy a donut and get an NFT proving that I now own the donut (along with metadata about where and when I purchased the donut) and months later I am on trial for murder, I can prove to the court with absolute mathematical certainty that I couldn't have killed anyone at that time because I was eating a donut halfway across town.

    Using blockchain similarly is great for proving your transaction history. Maybe I somehow faked that NFT about the donut? Well, I couldn't have, because it was months ago and blockchain history is cryptographically impossible to spoof.

    These are obviously contrived examples, but when applied at scale it becomes an extremely powerful way to verify truth. Yes, I did in fact buy those tickets, here's my NFT, now let me on the plane. No, I did not spend $3000 on knock-off accessories, here is my blockchain. The odds of someone being able to fake these is extremely low.

    But, again, this will never come into practice, at least not in the near future. As @beefcat pointed out, implementing these systems would be expensive for the established financial institutions, and would present new challenges for them to create new processes for handling. An awful lot of work to create something that is stronger and safer when there is little motivation for them to do so.

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  • [–] 3 points 3 years ago (1 child)

    I don't know, this sounds a lot like DNA evidence. Sounds great in theory, but doesn't actually mean what TV implies it to mean. In terms of a receipt, you still need to tie that to a person, or the wallet to the person. Given how easily people have lost their wallets, it'll be a similar issue to "My credit card was used at that time". Yes, the wallet / CC was used at a place at a time, but who was the person using it? In either case, they'll want to use the security video or clerk witness testimony to tie it together.

    I'm not even sure what situation you're thinking that the airline would not accept their own printed ticket or shot of the ticket PDF or whatever they send you today, but the NFT would make all the difference. Again, either the Airline system reads your ticket data, whether it's NFT, barcode, or traditional digital and can tie it to a sale in their system or they can't. They can lose the NFT link just as well as the barcode link, and the gate agent isn't going to understand or care that you have an NFT that cryptographically proves "blah blah blah". They're already checking ID. For someone to fake the barcode version, they would also need a fake ID or Passport to match it.

    I sort of see what you're saying if you went to court, and the airline wouldn't do discovery or purposefully shredded their records of your ticket for some reason, but we already have receipts and bank statements and the like that do the same thing, and an NFT doesn't change needing to prove you bought it in this case, presumably via linking a wallet rather than a bank account, though wallets don't have the ID requirements bank accounts do, so in court that could actually be rather harder to do.

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  • [–] 1 point 3 years ago*

    Looking at each piece in isolation it's hard to see the real world value. You have to put it all together. Let's do the airline ticket example.

    Real world today, the information involved in purchasing a ticket is controlled by three parties: The customer, the airline, and the financial institute (assuming you didn't walk up and pay cash). Anybody involved here screw up or be malicious. You lost your ticket. The airline had a database malfunction. The bank/creditor improperly recorded the transaction. All parties are aware of these potential failures, so there are contingencies in place in case of a missing ticket, a ticket that can't be found the system, a bad or missing financial transaction. But these backup plans also open the door to fraud, so there need to be even more plans on top of the backups: How to verify the integrity of a seemingly real ticket, protocol for re-verifying a financial event, etc.

    It's simple because it's familiar, but it's really ridiculously complicated and error prone.

    Let's introduce NFTs and blockchain.
    You buy the airline ticket and the following things happen:
    The bank performs the transaction and records it to the blockchain, which is decentralized and owned by no one, so it is verified by all parties before anything else happens. Bank errors are now impossible.
    You and the airline perform a mutual authentication, which generates an NFT proving existence of the ticket and attaches it to your identity. From your perspective, this would be unlocking your phone and clicking "approve."

    Now you approach the airport kiosk and there's a problem.
    Airline has no record of purchase - well, the blockchain does, so it's their fuck up and they have no reasonable argument. You win.
    Airline can't match your ticket to their database - You show them your NFTicket, which their system verifies is a valid, unspoofable, immutable ticket for what you say it is. Again, it's their fuck up and they have no reasonable argument. You win.
    Conversely, you say you have a ticket for today, they say it's for tomorrow. You inspect the ticket, it is in fact for tomorrow. You fucked up, no further argument.

    The only way any of this goes wrong is one of the following:
    Multiple forms of your identification are stolen - phone, password, biometrics. Obviously a lot harder than nabbing a CC number.
    Multiple parties lose their records at the same time. Possible but unlikely.
    State-level villains sabotage the entire system. Possible, sure, but this is an apocalypse-level event and probably an act of war.

    It's effectively impossible for someone to steal or fake a ticket or transaction in this system, and because of that, anybody who has receipts is automatically proven right and you don't need to jump through any more hoops or threaten to sue anybody. It's complex behind the scenes but it makes life for businesses and consumers braindead simple. There are so many layers of trust in action that no individual party can reasonably claim something did or did not happen just because THEY messed up.

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