Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts

by David Gerard

Computer programmers are highly susceptible to the just world fallacy (that their economic good fortune is the product of virtue rather than circumstance) and the fallacy of transferable expertise (that being competent in one field means they’re competent in others). Silicon Valley has always been a cross of the hippie counterculture and Ayn Rand-based libertarianism (this cross being termed the “Californian ideology”).

PayPal was explicitly intended to be an anonymous regulation-dodging money transmission channel, with an anti-state ideology; in a 1999 motivational speech to employees, Peter Thiel rants how “it will be nearly impossible for corrupt governments to steal wealth from their people through their old means”10 – though they quickly realised that being part of the system made for a much more viable business.

In this context, and particularly in Bitcoin discourse, you’ll see many words that look like English but are actually specialised conspiracy theory jargon. “Liberty” means only freedom from government; “tyranny” means only government; “force” and “violence” mean only government force and violence; “open societies” is a code word for “free market without regulations”; “freedom” means “free market without regulations” and only that.

You can use Bitcoin to buy drugs on the Internet! This one is completely true and accurate, but Bitcoin advocates don’t seem to like mentioning it for some reason.

As a financial instrument born without regulation, Bitcoin quickly turned into an iterative exploration of precisely why each financial regulation exists. A “trustless” system attracts the sort of people who just can’t be trusted.

Both Anne Frank, and Ross Ulbricht created dark markets to help people hide from violent oppressors who were trying to hurt peaceful people. – Roger Ver

lmao

Unfortunately for Ulbricht, the prosecution had a powerful weapon on its side: overwhelming evidence.

Ulbricht’s fans and family remain unshakably convinced of his innocence and virtuous character: he didn’t do it, you can’t prove he did it, what he did was harm reduction in the war on drugs, he was jailed just for running a website like anyone could, the murders didn’t actually happen so paying to murder people and all their roommates isn’t a crime and shouldn’t have been mentioned in the other trial, he hasn’t been convicted of procuring murder so it probably never happened and he’s really a good guy, he was entrapped into paying hundreds of thousands of dollars to murder someone and all their roommates, the government ignores the Constitution, also freedom.

I regret to inform you that Alex Winter was also taken by this narrative.

I’m done with Bitcoin. It was easy money, but it wasn’t worth the (literal) heat. >had 4 machines with multiple overclocked 5850s in my bedroom >fan speeds at 100% >room was warm, but tolerable >weather suddenly gets hotter one day >get severe heat stroke while I’m sleeping >get taken to the ER, get covered in bags of ice and drink tons of gatorade and water >finally cool down after what seemed like forever >find out I have minor permanent brain damage now because my brain was hot and swelled a lot I wish I was joking.

givin' myself severe heatstroke to own the central bankers

The stolen bitcoins are slowly being sold off through other exchanges,269 which is very like a bank accepting a big bag of dye-marked notes known to have been robbed from another bank and deciding they don’t care.

ICOs: magic beans and bubble machines There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. – Hunter S. Thompson, Fear and Loathing in Las Vegas

lmao

Computer programmers work in an area where everything can be determined cleanly and clearly, if only in principle. So using computers to sort out all those annoying grey areas in human interaction is tempting: if you don’t understand law (which involves intent) but you do understand code (which does precisely what you tell it – though maybe not precisely what you meant), then you may try to work around law using code.

Smart contracts work on the wrong level: they run on facts and not on human intent – but legal contracts are a codification of human intent. Human intent is inexact, but contracts assume they will be running on human minds in the context of human institutions, for human purposes.

The purpose of law is not to achieve philosophical or mathematical truth, but to take a messy reality and achieve workable results that society can live with.

Even Vitalik Buterin has acknowledged that for smart contracts to work as advertised, we would need to create a human-equivalent artificial intelligence to understand what people meant the contract to do334 – what people were thinking at the time is a key issue in resolving many a contractual dispute. “Intent is fundamentally complex.”

Technology and business journalists writing about non-cryptocurrency use cases for smart contracts never seem to mention that their “trustless” system will still involve trusting humans wherever it touches the physical world.

This illustrated the final major problem with smart contracts: CODE IS LAW until the whales are in danger of losing money.

It reads like an end-of-term assignment written in a single desperate overnight caffeinated tour de force.

Everything to do with cryptocurrencies and blockchains is the domain of fast-talking conmen. If anyone tries to sell you on either, kick them in the nuts and run.

Proof of Work: A consensus model in which you compete to write the next block in the blockchain by just wasting more electricity than everyone else. This is as terrible as it sounds.