Understanding Crypto 7: Nicholas Weaver: A Computer Scientist's Perspective on Cryptocurrencies and Blockchain

Jul 15, 2022

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INSIGHT

Decentralization's Appeal

Public blockchains aim to create decentralized payment systems, theoretically avoiding money laundering laws.
They facilitate activities banned by the traditional financial sector due to inherent instability.

ANECDOTE

Crypto's True Success

Cryptocurrencies excel at facilitating illicit activities like online drug purchases and ransom payments.
They enable securities fraud and Ponzi schemes, benefiting promoters while harming participants.

INSIGHT

Decentralization vs. Distribution

Decentralized systems lack identifiable participants, requiring proof-of-work or proof-of-stake to combat Sybils.
Ironically, these systems often become centralized, with a few mining pools holding significant control.

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Dr. Nicholas Weaver’s well-known lectures on cryptocurrencies explain why he believes it needs to be “burned with fire.” Today, we speak to Dr. Weaver, an expert in computer science and a long-time observer of the cryptocurrency space. He holds a BA in Astrophysics and Computer Science and a Ph.D. in Computer Science from UC Berkeley, where he was also a lecturer until recently. His primary research focus has been network security, among other topics. His interest and search for comedy “godl” have also resulted in published papers on cryptocurrency. In our conversation, Dr. Weaver untangles the complexities of the perceptions of cryptocurrencies with the actual technology. We talk about decentralization, if cryptocurrencies are achieving it, and the underlying concept of blockchain technology, as well as whether or not blockchains are secure and what the potential benefits of cryptocurrencies are to developing countries. We then go into detail about why Dr. Weaver thinks the crypto space is not beneficial, why prestigious academic institutions are teaching about it, and why he thinks it will never work in the log-run. Please tune in for a truly eye-opening, no-holds-barred episode as we learn the harsh truth about cryptocurrencies with expert, Dr. Nicholas Weaver!

Key Points From This Episode:

What public blockchain technology can achieve that was not previously possible. [0:02:51]
How well the original concept, introduced by Satoshi Nakamoto, is living up to its theoretical promise. [0:04:06]
Weaver explains and outlines the general appeal of decentralization. [0:04:57]
He elaborates on his perspective on trusted and honest authorities. [0:09:39]
An explanation of how Lightning Network attempts to solve throughput limitation. [0:10:36]
We find out if major blockchains like Bitcoin and Ethereum are decentralized. [0:13:08]
Differences between how nodes and miners influence the network. [0:16:23]
How secure public blockchains really are. [0:17:45]
Whether a facility for censorship-resistant transactions, like Bitcoin, is a good thing for society. [0:20:30]
Potential benefits of cryptocurrencies for people in countries with limited access to banking and a good legal system. [0:24:35]
Steps governments can take to regulate and control cryptocurrencies. [0:26:47]
Weaver’s opinion on why the regulation of cryptocurrencies has been so slow. [0:29:17]
Outline of how Dr. Weaver sees cryptocurrencies developing in future. [0:31:38]
How to incentivize miners not to attack the system to retain the value of Bitcoin. [0:38:24]
Weaver on how stablecoins fit into the crypto ecosystem and if they’re decentralized. [0:39:18]
A rundown of the new properties the blockchain data structure provides. [0:45:59]
Find out if Walmart using a private blockchain is just marketing hype. [0:51:20]
Why the popularity of cryptocurrencies amongst venture capitalists is rising. [0:53:12]
Why prominent schools like MIT and Cornell are emphasizing blockchain programs. [0:55:23]
Weaver explains what the smartest way to invest is, in his opinion. [0:58:34]
Who the technologists in the crypto-space are that he respects professionally. [0:59:51]
He tells us whether he has heard any compelling arguments for cryptocurrencies. [1:00:31]
A discussion about Dunning-Kruger economics in relation to cryptocurrencies. [1:04:38]
What the general opinion of other technologists is on crypto and blockchain. [1:06:23]
We end the show with a final takeaway from Dr. Weaver. [1:07:31]