No public ledger means no independent verification of transactions (i.e., no mining). Satoshi wasn't stupid: he made this trade-off intentionally, because between the state and *everybody*, *everybody* is a bigger threat.
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The reason detergent is used as money is that it's a good cash substitute: 1) plausible deniability 2) no ledger 3) stable price 4) difficult to fake 5) easy to offload in exchange for currency of your choice (I'm pretty sure I covered all of these points in my essay)
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Digital currencies exist that don't have all the problems I outlined (for instance, paypal has a private ledger, so you can trade secrecy for trust in a single organization). They're not "cryptocurrencies" because they diverge from bitcoin's public-ledger model.
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Digital currencies *could* exist that eliminate all of these problems while still being distributed. Implementing negative interest & periodic jubilees is straightforward in some models. They would need to diverge from the public ledger model - no longer meaningfully 'blockchain'
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Replying to @enkiv2 @asglidden
Seriously, check out zero knowledge proofs. You can have a public ledger, POW mining, *and* financial privacy. It'll be easily usable in 1-3 years. Monero isn't bad either (different technical tradeoffs though).
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Also look at Grin! Neat monetary policy there
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Replying to @sonyaellenmann @asglidden
A ZKP-based system would absolutely solve the public ledger problem. It would also produce a structure that's different enough from the bitcoin model that it's arguably not a cryptocurrency at all in the way that's understood -though for once the 'crypto' part would be meaningful
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I want to reiterate: None of these are insoluable problems for alternative currencies or for digital currencies more specifically, nor do they necessarily require trusted oracles. (Could probably do something with homeomorphic encryption or shared keys or something too!)
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It's just that 'cryptocurrency' is used in a fairly specific way, to refer to minor variations on bitcoin's public-ledger-signature-chain model. (Though, I guess that's not such a hard and fast rule: lots of people who talk about it don't know how it works in the first place.)
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Replying to @enkiv2 @asglidden
I think "cryptocurrency" is a more general term than you're arguing. In common usage it basically means "digital token that involves cryptography." Like people call Tether or Ripple cryptocurrencies
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I am rarely willing to be prescriptivist but those people are wrong
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