The stolen USDT will likely be returned because Tether can do manual freezes like a traditional financial institution.
Where code is law the funds are just gone.
Like even in your example of the marketplace I don't see the benefits over having a central authority. Who determines who is a student or teacher? Who kicks out bad actors? Who resolves disputed transactions?
A decentralized network of wallets and balances doesn’t present an attractive target for hackers specifically because the payoff per wallet is so small!
It is exactly the centralization you are defending, which is at the root of the problem. In the decentralized case, no one has to determine who is a student or a teacher. If a teacher needs to pass KYC with a marketplace, they do it once, and from then on can permissionlessly receive their small payouts.
Centralization (on Binance) made the attack appealing, but decentralization (of crypto broadly) is the only reason it's possible, and centralization (of USDT et al) is the only path to recovery.
Re: the marketplace: we'd want to be able to revoke teacher access too, and sometimes we may need to roll back transactions (Goods not delivered? Wrong goods delivered? Wrong goods purchased?), and then I have to ask... why involve a blockchain at all?
The only compelling real world use case I've seen is helping people navigate hostile governments or dysfunctional economies.
That’s very naive thing to expect from code.
Indeed, very shortly since modems were invented, there was need for error correction. They were slow and clunky. The only reasonable conclusion is that the Internet is a fad and not worth discussing. Same as this newfangled decentralized cryptography stuff.
Indeed, very shortly after the Web came out, regular script kiddies could write php websites with blink tags. Credit card numbers were sent in the clear with http. This “e-commerce” thing was a dangerous joke, only idiots would send their credit cards over the Internet. It would never catch on!
Second, the crypto bros running Bitcoin have reverted 20+ blocks on at least two occasions when it suited them to do so, and Ethereum has famously undone the DAO hack. Oh, and then of course you have all the bugs in smart contracts that can't be fixed. So the notion that "code is law" is laughable, and the notion that it's desirable is misguided, too.
Third, there's the oracle problem. Keeping track of bits in a ledger is a solved problem and has been a solved problem for a long time. The issue is correlating it with the real world. In your example, what if the student pays, then the teacher doesn't teach? How is the money flow reverted? If the student can just revert it, what happens if the student pays, the teacher teaches, and the student then reverts the payment? You need the legal system, and external adjudication, one way or the other.
Crypto adds nothing but idle speculation and the circumvention of (largely sensible) rules and regulations.
I miss the old days of decentralized networks, and smart contracts that were audited. Forget the shitcoin memecoins and zero sum games mania, the NFTs and the prediction markets. There is so much positive sum that can be done:
Being able to leverage crypto on this scale requires everyone to either A) be technical enough to understand and use smart contracts directly or B) delegate a party that handles this for you. This is where the utopian case usually falls apart, because most people are B and this requires trusting a third party, which kinda defeats the entire point of the vision.
Because most people don't want to do the work of learning and managing crypto directly, a huge industry flourished to service these people, full of its own interests, corruption and various levels of criminality. And well-intentioned crypto people have no way to reign this industry in because the entire point is to operate in a deregulated way.
Ironically, the piece that makes crypto fundamentally unworkable 20 years in is capitalism.
Specifically, you had to claim your rewards in a certain time window or they'd disappear.
Very hard sell? This is effectively how the vast vast majority of people in the US have their money handled.
The means to afford LLMs? These are services that cost pennies.