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Is Crypto Finally Dead?
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this post was submitted on 19 Jun 2023
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Technology
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Looking at each piece in isolation it's hard to see the real world value. You have to put it all together. Let's do the airline ticket example.
Real world today, the information involved in purchasing a ticket is controlled by three parties: The customer, the airline, and the financial institute (assuming you didn't walk up and pay cash). Anybody involved here screw up or be malicious. You lost your ticket. The airline had a database malfunction. The bank/creditor improperly recorded the transaction. All parties are aware of these potential failures, so there are contingencies in place in case of a missing ticket, a ticket that can't be found the system, a bad or missing financial transaction. But these backup plans also open the door to fraud, so there need to be even more plans on top of the backups: How to verify the integrity of a seemingly real ticket, protocol for re-verifying a financial event, etc.
It's simple because it's familiar, but it's really ridiculously complicated and error prone.
Let's introduce NFTs and blockchain.
You buy the airline ticket and the following things happen:
The bank performs the transaction and records it to the blockchain, which is decentralized and owned by no one, so it is verified by all parties before anything else happens. Bank errors are now impossible.
You and the airline perform a mutual authentication, which generates an NFT proving existence of the ticket and attaches it to your identity. From your perspective, this would be unlocking your phone and clicking "approve."
Now you approach the airport kiosk and there's a problem.
Airline has no record of purchase - well, the blockchain does, so it's their fuck up and they have no reasonable argument. You win.
Airline can't match your ticket to their database - You show them your NFTicket, which their system verifies is a valid, unspoofable, immutable ticket for what you say it is. Again, it's their fuck up and they have no reasonable argument. You win.
Conversely, you say you have a ticket for today, they say it's for tomorrow. You inspect the ticket, it is in fact for tomorrow. You fucked up, no further argument.
The only way any of this goes wrong is one of the following:
Multiple forms of your identification are stolen - phone, password, biometrics. Obviously a lot harder than nabbing a CC number.
Multiple parties lose their records at the same time. Possible but unlikely.
State-level villains sabotage the entire system. Possible, sure, but this is an apocalypse-level event and probably an act of war.
It's effectively impossible for someone to steal or fake a ticket or transaction in this system, and because of that, anybody who has receipts is automatically proven right and you don't need to jump through any more hoops or threaten to sue anybody. It's complex behind the scenes but it makes life for businesses and consumers braindead simple. There are so many layers of trust in action that no individual party can reasonably claim something did or did not happen just because THEY messed up.
You're talking like this happens all the time though, or specifically the airline loses your ticket record. I can't even think of a bank error that would somehow be involved in a way that this helps you really - banks have every incentive to be as close as humanly possible to perfect in their record keeping, because when they aren't, they get sued, they get slapped with fines from the government, and they lose customers. The entire sales pitch of a bank is trust.
But what really seems to be happening here is you're suggesting that someone has both lost their ticket, and the airline at the same time lost their record of the ticket. This is exactly the same as
You can stand there with your NFT all you want, the airline can still say - we don't recognize it as valid due to a screwup in their system, same as they do with a CC receipt or a printed ticket I guess. They can and do bump people from flights they agree have valid tickets all the time. And now you're back to what? Complaining to customer service or suing them (cause you can't force a bank to get back your crypto from the airline like you can dispute a CC charge).
Maybe you're right and it's ticket forgery that this would prevent, but I really question if that's a big driver here of any issues for anyone.