Questions and Remarks From A KryptoNoob Enthusiast !

Disclaimer: I’m addressing to the english speaking crypto community because such a community didn’t really exist in my language. I’m verry sorry for my level in english, I’ll hope that I’m understandable enough to be comfortably read and to participate adequately to the debate.

Hi there !

(kind of a second disclaimer :) ) My nickname is Sybille and I’m a KryptoNoob, I keep asking myself cryptonoob questions, because I want to understand what all of this fuzz is about. I’m reading a lot of articles about cryptocurrency, blockchain, coins, ICO and all that jazz in the cryptoworld.

Sometimes I even dare to put a comment or ask a question on a medium article, but without having much answer, so far… That’s telling me that maybe I’m so noob that I’m asking questions that no one would bother to answer, that I’m not the center of the world (and that’s a shame), and maybe that my english isn’t good enough, and that while I believe that I can express myself in this language, I’m in fact leaving in a fantasy world where my ideas and speeches appear clearly in my mind and sounds as a strange borborygmi for others.

But you know what ? I’m a cryptonoob enthusiast ! So enthusiast in Fact, that I have invested 1 000 euros in the cryptogame (and I’m doing it even if the french government tax any capital gain in crypto up to 60% !). I wanted to wait until I have fully understand what it is about and I’m still trying to learn things about it, but I have read so much blockchain enthusiasts saying that it’s the thing of a generation and even a new cycle in the way social life is organized since we stop being hunter-gatherer and began to live in large centralized and vertical community were the power is so much unequally distributed, that finally I just fell for it. And also (maybe it is the true untold reason, but not for long…), I want to be super rich without working too much (Don’t judge me — Well, I’m not sure that 1 000 euros will be enough though).

So here it is : the blockchain !

Decentralized wide community, that create trust beyond verbal and written promises. A technology that promise to bind our words by the magic of computing (it’s probable that computing machine will be magic to me for the rest of my life). That sounds really great and exciting to me ! And I want to believe in it, and I want that computing make our communities, exchanges and life better. Technologies, social rules, laws and cultures define how wealth and power are distributed and organized. The question of the distribution of wealth and power is the central, the only question, that must govern our thoughts when we think about politic. Isn’t it ? And this time, technologie seems to be able to redefine how the whole system works.

So I still have my noob, unanswered critics, questions, beliefs and remarks that I wan’t to share with the cryptocommunity :) ! Here they are :

About blockchain in general :

The big problem : the centralisation of computing !

(so, is it a problem ? Maybe you can tell me ?! :-) )

**What I think I have understood :**There is a mining process that guarantee the transactions, the decentralized system of computing and validation of the blocks partly guarantees the openness and security of the system, and the ones who are giving there computing power are rewarded by coins.

Why is it a problem :If it works like this the main risk is the centralisation of the whole computing process, I see it happening for 2 reasons : 1. Because there is a scale advantage about doing it this way ! Like in the mining world of gold, in the beginning, everybody tried to mine it by him-herself, after a while giant companies emerged and optimized the process, and now the top 10 companies control one third of the production. For the blockchain it’s even more likely that the centralisation of the production will occure, because there are no geographical issue in the computing process. And it’s already happening, for the Bitcoin at least. If, say, an oligopole of blockchain minning companies appears, the system will be no more a decentralized one, and we can even imagine that the two or three main companies could easily manipulate the market or the ledger for their own profit.2. Aren’t we going to go to a world where most of the computing power will be concentrate in the hand of the GAFAM ? Especially with the 5G ! As I see it, if we get a powerful, worldwide (or at least countrywide) and reliable Mobile Internet System, we won’t need to keep the computing power on our devices, and a centralized computing system will be more efficient and cheaper to run. In this case the computing power will be centralized, just cause it costs less, and the same risk as in point 1 will emerge.

Question :Wouldn’t this 2 factors, or to sum it up the centralization of the computing power, jeopardize the future of any decentralized blockchain system, or is this not a problem at all in a blockchain world ? Or maybe you think that it’s a problem but that it won’t happen ? Teach me ! I’d like to know !

A question about the smart contract :

What I think I have understood :SmartContracts execute themselves and permit to avoid any third party that are normally needed to secure the transaction, it’s a bit like if the words of anyone become even more reliable as the ones of my most trusted friend ! sounds great :) !

Question :When we make a smart contrat how is it executing itself automatically ? I didn’t understand it fully ! Cause, I mean, in a contract you have to get a human validation like : ‘hey I have well get the product !’ or : ‘the service has been delivered in the quality and quantity expected’. Doesn’t the contract still need the validation of a third party if people disagree, just like what Amazon, the banking or the judicial system are doing ? For exemple, if I buy a Bitcoin by myself how does the blockchain know that I have paid for it ? So, again, teach me ! Which part of the contrat is executing by itself, or by the blockchain process ? As you can see I’m missing something. But I don’t know what…

About Security :

What I think I have understood :It’s so secured and well designed that its not even worthwhile to attack it !

But :The infrastructure around the blockchain, seems to be very unsecured ! Very good, you can’t forge the blockchain, but you can steal the coin during the ICO or you can steal it from the wallet. I don’t know for sure if Bitcoins is less secure than the USD system in proportion of the level of exchange and value, but it seems like it.

Question :Maybe the security and guarantee of the infrastructures of the companies around the blockchain aren’t yet at the level of the bank system ? But well, isn’t the blockchain created to precisely avoid the bank system ?

I think that the absence of central authority and identity recognition at a social level (in the Fiat world, we have for exemple the banking system and the judicial system) poses several problems to secure well the blockchains coins, cause for a cyberburglar this kind of value, anonymous and untraceable seems to be the perfect target. What is your opinion about this question ? Maybe the blockchain itself could be program to be better secured ? Or is this an invalid question ?

About Bitcoin in particular :

I see a lot of problems about bitcoins that might jeopardize the possibility of using it as a world currency :

The concentration issue :

What I think I have understood :40% of the bitcoins are owned by 1 000 people, and the Bitcoin could hit the million dollars mark.Remark :Won’t we have a 1000 of Jeff Bezos if this currency hit the Million Dollars mark !? And Satochi will be 10 times richer than Bezos…Isn’t it a big inequality issue ? And also, just something that won’t happen because it’s seems unlikely (I know that it’s a very feeble argument… but it’s the one frome my guts : maybe my guts aren’t ready yet).Question :If 40% of the market is owned by 1 000 people, it’s easy for them to manipulate the market and the prices if there is not an independent regulator. How could we prevent the main Bitcoin’s owner to manipulate the market (like doing a lot of transactions between there own wallets at a high price and selling some for real to cryptonoob like me) ? And won’t the risks of this concentration appeal for a new and less concentrated Bitcoinlike currency ?

The costs to operate the Bitcoin blockchain :

What I think I have understood : The blockchain cost a lot to be operate. But Bitcoin can change to be more efficient to operate.Question : Is such a change likely to happen ? About the cost in itself does it costs more to operate than the USD ? for example, USD needs : The Fed, Printed Money, Police, Army, ATM, banks, a judicial system… ? Is there a fair comparaison between the cost of Bitcoin and USD ? Or maybe again this question is irrelevant because we cannont compare the two ?

So here it is ! Here are (some of) my remarks and questions about the blockchain.

I thank you very much in advance if any reader is willing to help me understand more about it. I’m aware that those questions and remarks might just be irrelevant and dumb from the point of view of a blockchain expert. I hope that she or he will explain to me (and my fellow cryptonoob) why and what is that I’m so wrong or not, or direct me to the right content that might help me to understand better all of this. Because I genuinely want to understand how blockchain works and what it could be.

Kisses,

Sybille