I'm sorry but this is so absurd. They are doing the equivalent of printing their own monopoly money in the garage and then selling it for real currency... dollars.
Sounds fitting, huh?
> Pretty much what the central banks are doing around the world.
Exactly. So why choose the currency of a couple of dudes over the central bank's one? Show me an ethical cryptocurrency with equal opportunities for everyone and no taxes in a form of pre-mining, decreasing block rewards & other stuff like that and I'll be the first one to use it.
Basically, a new form of fast finance has emerged, connected with a blockchain technology which enables the financing mechanism as well as potential applications that are financed. It is not monopoly money as much as it is speculative vendor financing.
It's massively parallel, with smaller hash-producers/stakers having nearly the same profitability as large ones, and nearly no minimum investment required to enter.
This is diametrically opposed to any central banking scheme, which is extremely hierarchical, with the representatives of regional banks sitting alongside high-ranking political appointees to create monetary policy and make decisions as significant as buying a trillion dollars worth of privately owned assets from large privately owned financial institutions.
The current centralized monetary scheme is the reason 42% of corporate profits since 1972 have been earned by the financial sector.
>decks out Monopoly money with a bunch of smart-sounding technological bells and whistles
...ephemeral hyper-velocity funny money!
Obviously valuations have far outpaced the present usefulness of these technologies, but because the pie is so enormous it would be irrational not to overpay. Right now prices are too out-of-whack with reality so it's inevitable that there will be a correction, but it's entirely understandable why this is happening.
It's sad though that most people on HN have now apparently become the older generation representing the entrenched interests, rather than being the disruptors.
Blockchain is also a new network, and the math for analyzing its value is the same as the math for analyzing the value of any other network. In this case I would say that it's going to be the most valuable new network since the rise of global shipping during the age of sail.
That could eventually turn out to be true. But that's not inconsistent with all these new coins that pop-up from nowhere being problematic.
Holy cow are you serious? The most economically important in the last 500 years?
So the steamship, the airplane, the automobile, the railroad, the telephone, the printing press, nuclear power, vaccinations, electricity, radio, radar, the semiconductor, television, the cell phone, penicillin, the Gregorian calendar, pasteurization, the refrigerator, the microscope, the telescope, electric lighting, the transistor, the Internet, the microprocessor, and pretty much everything that makes modern life possible is somehow less important than the block chain?
Even is you limit this to just banking, you have widespread checking, credit cards, credit reporting, interbank transfers, wire transfers, mortgage lending, and more. And the blockchain is more important than all of those?
I get it. *coins are cool, but it has a LONG way to go to even be in the in the same league as the greatest inventions of the last 500 years. Let's reasses this in 50 years or so and see where we are before declaring blockchains more important than penicillin. :)
500 years ago was 1517. This is just a bit into the Age of Discovery. We hadn't even managed to sail all the way around the world yet (that wouldn't come until 1522). The Enlightenment was still a couple centuries away. Feudalism was still a thing, plagues still routinely struck. Absolute monarchs reigned over lands. Most people still lived on subsistence agriculture and would starve is there was a bad harvest. People routinely died of things that we don't even think about because of modern medicine.
Now, compare that to the world we live in now, where satellites and cables beam information around the world in milliseconds and childhood deaths from diseases are much rarer now. I could be in China in less than a day if I wanted to. And I'm not likely to starve this winter and I never had smallpox as a child.
Blockchains MAY someday be important. But it is the height of tech arrogance, not to mention a gross lack of awareness of history, to put a yet largely unproven technology that most of the human population has not even heard of on the same level as vaccinations. A LOT has happened in 500 years, and it is WAY too early to be making those kinds of pronouncements.
(As a side note, two of the most underrated inventions of, let's say the last 100 years or so: the pallet and the ISO container. Both of these are so crucial to the modern economy that they blend into the background.)
I said 'economically important'. The couple years they add to our life expectancy is great, but vaccines weren't really associated with an enormous transfer of wealth on the same level as, say, the railroads or the age of sail. (And wouldn't have even if Salk had patented the polio vaccine.)
How do you predict wealth will transfer differently under blockchains than with usual state backed currencies. Not the literal (you don't need a bank), but societal?
If block chains were to completely replace US currency, but society used them exactly the same, then they wouldn't be a transformative tech. They'd need to change society economically to do that. How do you see it doing that?
What I would say though is that blockchain has nothing to do with currency, that's just a red herring out there to trick people into not seeing its transformative potential. It's about reaching consensus and being able to make decisions at a society-wide level. I blogged about the implications of this is a little in 2006, before any of this was even invented: http://www.alexkrupp.com/fourwebs.html
If this was really true, I could see how important that would be. Having better ways to govern ourselves, and putting 35% of GDP to better use than it currently is being used, would have tremendous impact. But, the Government and the majority will never in a million years allow this to happen and thus none of this "consensus" will ever matter (because it occurs outside the scope of our operating government). The real key to achieving what your alluding too is a massive political innovation which I don't see how bitcoin can bring about.
Clearly this stuff needs another 5 - 10 years until it's ready for mass adoption, and requires lots of new mathematics and technologies that haven't even been invented yet.