In April 2023, I had been having another look at crypto currencies and I came across an article called “Crypto: My part in its downfall” by David Rosenthal, published on his blog. While I had come to the conclusion that crypto-currencies are untrustworthy and at the end of the day insecure and I last expressed my views on my blog in this article, [or on Medium] which was prompted by “ Learnings of Bitcoin “ on this blog, I was shocked at the litany of crime and fraud listed in Rosenthal’s article together with weaknesses in the fundamental design and implementation models. Here are the lessons I got from reading the blog and some of its supporting references, more than one of which is also from Rosenthal’s blog.
Proof of work and the absence of trust
Proof of work concepts were developed before bitcoin. They are designed to be expensive so as to inhibit people from pissing about. Bitcoin solves the cost by rewarding the miners but Rosenthal argues, citing Eric Budish[1], that “to be an effective Sybil defense, the cost imposed by Proof-of-Work had to be vastly higher than the cost of the functions it was defending.”.
Rosenthal also makes the point that while proof of work was designed to eliminate trust, the bitcoin/blockchain implementation failed in this goal; he cites this Darpa paper, “Are Blockchains Decentralized? Unintended…
