Re: <nettime> Bankers on ecstasy (but is the party over?)

[Morlock Elloi <morlockelloi@gmail.com>]

The premise of smart contracts ("legally incorporated programs that
are at arms length from their programmers" that "core developers"
like to blather about) is nothing new: it is to create an additional
insulating mechanism between the victims and the perpetrators, for the
benefit of the latter.

It is a wet dream of any ideology/religion to get embodied in a
mechanism, and thus get away from the critical and ugly questions. The
mechanism simply *is*, nothing to see here, move on.

So far the financialization of life only perfected the medium (money),
but the medium itself is not a sufficient barrier: the legal and moral
responsibility is still on the owners, with a threat that someone may
go to jail. The medium itself is viewed as passive and neutral - no
one yet sued cash in the vault or assets of the hedge fund. The dirty
work is still done by humans, and that is the real problem that smart
contracts solve.

Smart contracts are doable in practice. It was unthinkable several
hundred years ago that paper money or numbers in the ledger will rule
the lives of the most. Today we can totally imagine that a computer
can send a debtor to the jail, with the same de-facto automatism with
which ATM agrees or refuses to dispense cash.

This is the driving force behind investments in the Bitcoin and
related superstructures. The fact that (in theory, not in practice)
Bitcoin is extra-territorial and out of reach of jurisdictions implies
that anything implemented on top of it will have the same attributes,
so complaining about the related fraud or injustice becomes pointless.

In the reality Bitcoin is neither extra-territorial nor distributed.
There are 9 (nine) mints that matter, and coercing all their operators
to do anything the coercer wants is cheap: for $20-30MM invested in
combination of clandestine and over-the-board operations, the mint
operators will:

- split Bitcoin
- terminate Bitcoin
- eat own shit for breakfast.
- etc.

Operators are fully aware of this and thus will preemptively comply
with prospective coercer's demands.

This creates the ideal setup for fixing the problem mentioned above:
while Bitcoin and related technologies are sold as ungovernable and
impersonal (no one to complain to), they are in fact very governable
and very personal. The working analogy that comes to mind is that the
wars are OK as long as the returning body bags contain 'contractors',
not 'conscripts' (note that both words begin with 'con'.) Public which
bought that will buy execution by a program (even smaller linguistic
intervention - 'of' becomes 'by'.)

The bright side is that these constructs (architectures, programs,
machines they run on, networks that connect them) could be too complex
to be effective, and may never achieve anything close to the longevity
and security of a $20 bill. Even worse, they may perpetually require a
substantial praetorian guard to maintain (today embodied in >100K/yr
employees of the 5 monopolies), and we all know dangers of having a
substantial praetorian guard.

But then I may be underestimating creativity of thugs and stupidity of
the meek.

On 6/18/16 3:44 , Jaromil wrote:
> But this is not the only problem to be noticed here.
>
> The Verge has adopted a critical take, surfacing some of my deeper
> concerns (somehow aired also at the time of the hackingteam) on how
> the techno-financial industry is toxic
> http://www.theverge.com/2016/6/17/11965192/ethereum-theft-dao-cryptocurrency-million-stolen-bitcoin
>
> the problem is not with youth experimenting new cool unstable stuff
> and getting all excited about it. i'd even argue this should happen,
> why not? it is also a known fact that hackers go through a "god
> complex" period in the phylogenesis of their personality. some are




#  distributed via <nettime>: no commercial use without permission
#  <nettime>  is a moderated mailing list for net criticism,
#  collaborative text filtering and cultural politics of the nets
#  more info: http://mx.kein.org/mailman/listinfo/nettime-l
#  archive: http://www.nettime.org contact: nettime@kein.org
#  @nettime_bot tweets mail w/ sender unless #ANON is in Subject: