Fire (and lots of it): Berkeley researcher on the only way to fix cryptocurrency
Nicholas Weaver says bitcoin and other digital coins recapitulate 500 years of failure.
Nicholas Weaver made no bones about it: he really, really dislikes cryptocurrencies.
Speaking at the Enigma security conference in Burlingame, California, last week, the researcher at UC Berkeley's International Computer Science Institute characterized bitcoin and its many follow-on digital currencies as energy-sucking leeches with no redeeming qualities. Their chief, if not only, function, he said, is to fund ransomware campaigns, online drug bazaars, and other criminal enterprises.
Meanwhile, Weaver said, there's no basis for the promises that cryptocurrencies' decentralized structure and blockchain basis will fundamentally transform commerce or economics. That means the sky-high valuations spawned by those false promises are completely unjustified. He also said investors' irrational exuberance just adds to the unviability of cryptocurrency....MORE
Summarizing a talk titled "Cryptocurrency: Burn it with Fire," Weaver told an audience of security and privacy experts:
In conclusion, it is a dismal space. Private and permissioned blockchains are an old idea—a good idea—just with a new buzzword on it. The public blockchains are grossly inefficient. The cryptocurrencies don't work to provide anything against drugs and ransoms and stuff like that. Smart contracts are an unmitigated disaster unless you like comedy gold. And the field is just recapitulating 500 years of failures. So in the end, the only winning move is not to play—unless you like playing with flamethrowers.To support that conclusion, Weaver recited an oft-repeated list of supposed benefits of cryptocurrencies and explained why, after closer scrutiny, he believed them to be myths. That list included:
Myth: Cryptocurrencies are useful for paying for things.
In fact, Weaver laid out a variety of reasons why cryptocurrencies make a poor substitute for the use of payment cards, checks, and old-fashioned cash to pay for goods and services, either online or at brick-and-mortar businesses. For instance:
Cryptocurrency transactions are expensive. Because cryptocurrencies are supposed to have no central authority that can reverse a transaction, they are "fundamentally incompatible with the modern financial system." As a result, obtaining digital coin requires (1) giving an exchange cash and waiting around until the exchange converts it into dollars, (2) being given credit by the seller, or (3) holding onto cryptocurrency balances over an extended period of time and being subject to turbulent swings in valuation.
People who try to bypass the exchanges and the waiting game they require risk ending up like Apple cofounder Steve Wozniak, who last year lost more than $70,000 in a bitcoin transaction....
