Cryptocurrency Immutability and Irreversibility, are Frauds?


BEFORE I LAUNCH THIS LATEST ASSAULT against the failed integrity of many types of Cryptocurrencies, I just wanted to let you know, dear readers, that I hold no particular crypto as sacrosanct.

There are simply too many problems in this space and much of it the result of overbearing governments, but some of it is the result of the moral bankruptcy of those who develop and manage cryptocurrencies.

In fact, some coin mills attempt to confuse and obfuscate.

The problem often stems from the concept of immutability of the blockchain. The concept is often used as a floating abstraction and it appears to be both an asset and an extreme liability.

In the past, like many, I have hopped on the bandwagon of several cryptocurrencies but as I have delved, often unwillingly, into the inner workings of them, I was left with a sense of vacillation.

For whatever reason, the developers of these systems (coin mills) often steered clear of concrete principles in favor of range of the moment thinking on par with the likes of  Niccolò Machiavelli or as we understand today:

The ends justifies the means.

In the digital kingdom and I’m speaking of cryptocurrency in general, there is this thing called the blockchain. The blockchain is often said to be immutable, under ideal conditions.

This property of the blockchain (many of them) is also said by many, to lend it “trust,” but it is not the only way blockchains can become trusted. And in fact, immutability can make the blockchain utterly untrustworthy if it uses the excuse that changing it would somehow destroy its integrity and therefore, its user trust.

Nothing can be further from the truth.

Picture for a moment, the real money (fiat or otherwise) in your possession. In your mind now, convert your money into a digital format.

For the sake of simplicity, we’ll call this currency it egold. Egold is just like bitcoin, let us surmise.

But this egold is made by The Blockchain Safe Company, in this example. I’m sure you’ve heard of them.  I haven’t. I just made the name up.

Now let us suppose that while you were out of town, someone broke into your esafe (made by The Blockchain Safe Company) at home and stole your egold coins (also manufactured by The Blockchain Safe Company).

In fact, the burglar scaled your outer wall, killed your guard dogs, bulldozed your front door, and even disabled your burglar alarm.

What would you do?

Naturally, you would call the police. They would come, conduct their investigation and try to find the suspect.

Now let us suppose that the police were at a loss. They could not find the burglar.

He is “in the wind,” as the saying goes. They tell you that the burglar used a special secret combination to fool your esafe. It just popped open and released all of your egold when the burglar keyed in the correct sequence.

The Blockchain Safe Company is not at a loss, however. They know exactly how the burglar stole your egold from your safe.

They can see that your egold disappeared and that it went to other safes, also made by them, but they have no desire to retrieve this stolen egold on you behalf.

What?

Did you her that right? Yes, you did. You lost. Suck it up.

In fact, they (The Blockchain Safe Company) state that the theft (or hack — hack sounds less naughty), was the result of a flaw in their ‘combination software,’ but they have since issued a patch and now everything is fine.

What? Say that again?

Have they patched the immutability or the irreversibility? Does it matter?

And what would you do now? Call the police again? Find a lawyer?

Good luck.

But you would complain, right? I mean, if you lost a lot of egold. You would state that it is the manufacturer’s fault. That their faulty design allowed the theft to occur in the first place.

On top of all of this, it turned out that they (The Blockchain Safe Company) knew exactly where your egold was and they can use a retrieval “mechanism” to return it to you.

Wait. Seriously? You know where my egold is but you refuse to reverse charges?

Yep.

So, you took all reasonable precautions to protect your esafe with a high wall, guard dogs and steel doors. You even had a burglar alarm. And The Blockchain Safe Company refused to use their retrieval “mechanism.”

You got it.

The Blockchain Safe Company gave the excuse that if they use the retrieval “mechanism” it will destroy the trust in their company.

Not your problem, you say.

Further, doing so will possibly cause the value of everyone’s egold to fall. That their duty is to the whole, the majority, and not one person. Not you. Especially, if that one person (you) happens to be wealthy.

That’s supposition you say. It didn’t happen with the DAO Hack. Why should it happen now? You would, like Ethereum earn more trust.

No, they say. Not gonna happen.

They, the representatives of The Blockchain Safe Company, also remind you that using the “mechanism” is tantamount to centralization and that will, possibly, destroy the faith depositors have in them.

Remember, they say, irreversibility must be honored and obeyed.

But you just want a refund. You want your egold. You don’t care about their faith…


Okay. So this was an exercise. The point is The Blockchain Safe Company cannot cop-out on code. If they have the capability to retrieve the egold, but fail to act in good faith, they are liable.

If the company does not have the “mechanism,” however, the burglar gets away. He uses “immutability” and “irreversibility” to his advantage.

You might to avoid those kinds of coin mills. And I use the world company loosely here.

So, what’s the answer?

Honesty. Morality. What’s right.

And not: convenience, robot-think and laziness.

The Blockchain Safe Companies of the world, be they unincorporated or otherwise, are developed by individuals.

These individuals cannot not escape liability using the “Coding Flaw Defense.”

And they cannot hide behind “irreversibility” and “immutability” in the name of the majority.

And they cannot claim that “the amoral God of Decentralization did it.”

If they undo the transaction, if they do what is right, the sky will not necessarily fall on their coin.

If it does, oh well.

Their excuse is said to be “amoral.” They do not think in terms of right and wrong (or human) but what is best for the largest number of accounts.

But don’t people own these accounts. Aren’t people focused on right and wrong? Moral and immoral?

If robbing the minority is required, as The Blockchain Safe Company insists, so be it, they say.

It is, in the end, the amoral robot-think excuse.

And this is why the “Immutables” and “Irreversibles” will fail. Pure democracies always degenerate, as do purely tyrannical kingdoms.

Humans must be allowed to undo what other bad humans did. It’s man over code, not the code, over man.

And codes are not anything like moral laws made to protect the rights of man. Codes are instructions given to machines.

Men and women should code wisely.

Men and women who have no grounding in free and fair trade will taint the code they write.

And then it becomes “immutable,” Comrade.

 

Have a good one,

Jack Shorebird

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Categories: Bitcoin, Capitalism, Cryptocurrency, finance, Fintech, Freedom, Gold

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