this post was submitted on 21 Sep 2023
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Crypto and NFTs are complete scams, change my mind.
I would argue 99.99% of crypto and nfts are complete scams. But Blockchain is a change in how we manage and distribute data, and can remove centralization of power from humans that we would otherwise need to trust for managing autonomous systems like the data in a banks public ledger.
It’s a common misconception that blockchain gives trust. If you control a majority of nodes in a Blockchain system you decide what the truth is.
This opens the door for illicit players to manipulate things their way.
Lack of trust doesn’t replace trust.
Central, provable/accountable, trust is needed for financial systems to work.
Everything else is “Wild West”.
It's also a misconception that some illicit players can take over a large enough Blockchain system.
The cost to run a 51% PoS attack on Ethereum, as of today, is $20 Billion
(current staked total of $40 Billion)... that is, $20 Billion, if you already had them. Buying that much of Ethereum, with an available liquidity of $670 Million... is just impossible, there is not enough on the market, simple as that. If you tried really hard, you could maybe convince some HODLers to part with some of their hoard for a high enough price... unless they decided to stake and try to stop you. How high would you want to go to prevent that? $200 Billion? $200 Trillion...? Then after proving you can pull a 51% attack, the price would instantly crash down to $0. How much spare cash do you have to burn?
Let's do Bitcoin
Running a 51% PoW attack on Bitcoin, would mean either hijacking half of the current 400 Million TH/s hash rate, or adding your own 400 Million TH/s to the network. The most recent and cost effective mining hardware does about 250 TH/s for $8500 (plus power), so you'd only need 1.6 Million of those at a cost of above $13 Billion. Sounds easy, until you realize there are no 1.6 Million miners on sale. If you tried to buy those many, fat chance the manufacturer wouldn't keep 50% of the production to themselves. Then comes the kicker: on a network without smart contracts, you can only double-spend your own coins, or block others from spending theirs... for how long would you be able to keep that 51% attack, before people realized what was going on and just kicked you out of the network?
Trust is trust in the inability of anyone to successfully attack a financial system.
Blockchains are absolutely provable/accountable to everyone everywhere at any time, which central systems are not.