Crypto Market Crash Leaving Bankrupt Startups in Its Wake
bloomberg.com
bloomberg.com
Lol that makes it sound like they had a choice. Because essentially none of the ICOs did KYC/AML, none of them were allowed to create bank accounts anywhere worldwide so they had to keep their money in ETH.
That’s why they’re just starting to go bankrupt and will mostly all go bankrupt in 2019. If you think it’s a bear market now, the real crash hasn’t even started yet.
If you want to see something typical, here is what Jez, the founder of FunFair, wrote one year ago on Reddit:
"in the august company announcement we said we were holding more than a year's running cost in cash and thats still the case. our holdings are approx $6m in cash (dollars), and several million in bitcoin (which keeps going up in value!) and a lot more in eth. in short, we have capital of more than $30m, at current valuations. we're not going to starve in 2019, unless bitcoin and eth values plummet which seems unlikely. bitcoin is more than double the price of the time of our token sale in june."
When I contrast this with the end of Bubble 1.0, the biggest difference I see is the lack of actual use. 2000 was an incredible bear market, especially in tech. Even good startups died, and the ones who weren't creating value died quickly. The Internet, though, still had hundreds of millions of daily users. Things like email and the web browser and downloadable MP3s made people's lives better, and they weren't giving them up.
But who uses Bitcoin for anything but speculation and maybe some light financial crime? As best I can tell, approximately nobody. The NYT tried using it for daily life back in April and it was a bust. [1] The few major online retailers who offered to sell you things in it have removed it again. Even major Bitcoin proponents admitted it was terrible as a currency.[2] And as far as I can tell, none of the zillion other coins have significant real-world use either.
I think there's truly nothing to sustain an "industry" here. Valuations are going to drop to (and probably below) whatever can be justified by cash flows, which in turn is based on economic utility to people outside the bubble. If that number isn't zero, it's at least very, very small. So as you say, this is only the beginning of the end.
[1] https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l...
[2] e.g., https://avc.com/2017/08/store-of-value-vs-payment-system/
Black-market drug sales probably won't be too affected by the crash, they already had a network before Bitcoin.
But ransomware! Oh man, that's nowhere near as easy nor as profitable without a high-value cruptocurrency. If the crypto crash ALSO took out ransomware developers, that's two birds with one stone, as far as I'm concerned.
A low valuation might affect coinminer malware though.
That'd be great, but so long as there is some nominal value in cash to some cryptocurrency, wouldn't ransomware just ask for the same amount of underlying money? That is, just increase the number of coins required for ransom? The big benefit in cryptocoins for ransomware isn't the increasing value, but the fact there is no intermediary that can turn off accounts or rollback transactions.
It's the same with the dark markets. It's not like dealers are suddenly going to charge less money for drugs now just because the intermediary transaction currency is worth less.
Banks are much happier to deal with you when your source of income is "The Apple Store", instead of a crypto exchange.
Hopefully one day it will stabilize enough to be worthwhile as a currency. We're certainly not there yet, but it's improving. Despite the spectacular fall in values, this isn't as severe a crash as has happened before, percentage-wise.
However, the SEC also just settled with AirFox for selling unregistered securities, so that didn’t exactly go as planned!
None of your crypto comments are coherent, I can tell they are intended to be cynical but they also dont make sense
http://tmbw.net/wiki/Oxymorons,_Paradoxes,_And_Contradictory...
There certainly seem to be a lot of charlatans who flippantly throw incoherent terms like that around as if they had any meaning, even though they're utter nonsense, don't you think?
https://cryptonews.com/news/usd-133m-stablecoin-basis-is-rep...
USD 133m Stablecoin Basis is Reportedly Closing Down
The well-known stablecoin project Basis is shutting down operations and returning what is left of the funds they raised to investors, The Block reported citing undisclosed sources with “direct knowledge of the situation.”
The shut-down reportedly follows regulatory problems, although details are sketchy at this point. According to sources, an announcement had to be made by Basis some time Wednesday evening. As of press time Thursday morning, no such announcement has been made.
Basis did not respond to a request for comment.
But a lot of other people commented, for example:
TwitBot @vasilipoupkine1; Replying to @AriannaSimpson: I’m kinda pissed they are blaming US Govt instead of their frankly utterly nonsensical stable coin design. Algorithmic stable coin is a nonsensical concept. There is no law, though, that somehow prohibits it. Lame.
They could have simply kept their assets in stable coins, like Dai, Tether, etc..They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken). Another option would have been to open a hedging short position on say, Bitmex. There's lots of ways they could have cashed out, effectively.
To turn into dust?
>They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken).
And trust Kraken then.
>Another option would have been to open a hedging short position on say, Bitmex.
and trust bitmex then.
There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter.
Oh, you mean the 'dust' that is worth exactly $1 at this moment, where Ethereum has lost 90% of its value? That dust?
> And trust Kraken then.
Yep, the exchange that's been trustworthy and operated seamlessly since its inception, sure. And still does.
> There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter.
You may not sleep perfectly, but you'll sleep a lot better than if you're holding it in crypto. And that is my point. And if you wanted to use Dai, you could actually sleep perfectly. Dai has held up perfectly well, and you can hold it off-exchange.
The most common disclaimer in finance, but equally applicable to all things in life.
However, if you would like to discuss probabilities then the history of the crypto market only reinforces the trend of failure as discussed in this thread.
Gemini, Coinbase?
Exchanges have also been suspected of manipulating prices to liquidate future positions, there’s literally a twitter account dedicated to force liquidated Bitmex position.
When every player is operating in bad faith it is very hard to come up with a legitimate way to protect yourself other than not participating.
Those suspicions have always been extremely poorly grounded.
> Exchanges have also been suspected of manipulating prices to liquidate future positions, there’s literally a twitter account dedicated to force liquidated Bitmex position.
Not by anyone serious. Sure, people get liquidated all the time because they don't have enough maintenance margin. The risks are very clearly defined, and all you have to do is read them.
> When every player is operating in bad faith it is very hard to come up with a legitimate way to protect yourself other than not participating.
There is no evidence that the major exchanges are operating in bad faith. And even if they were, what is your point? My point is that they could have neutralized the currency risk of their assets. And that point is absolutely true.
I am really quite ignorant on the issue, but they seem to me like reasonable suspicions when Tether’s purported “audits” are anything but.
If the case is that Tether is actually insolvent, then history gives us a very good example of exactly what’ll happen once the run starts.
My point isn't that the market is rational or perfect. My point is that they could have hedged.
I believe for a while Bitfinex would let you wash trade with your own account, that’s how poorly run these markets were.
My main worry now is that some of the people will have been damaged by this. Some of the interest we can write off as irrational exuberance; hopefully some will have gotten their fingers usefully burned and will be more careful choosing what they work on next time. But a lot of the field was somewhere between chasing a bubble and outright scammy.
It reminds me of people I've seen burned by MLM schemes. Some say, "never again!" But some really buy into the get-rich-quick thinking and will keep on making the same mistake in different forms. "This time it will be different!" But it never is.
Why wouldn't you call it novel? It's only 10 year old technology at this stage.
I honestly can't think of a single crypto startup that's had a compelling product.
Edit: typos.
Your impression that the "vast majority of crypto/blockchain thing are either outright scams" is a personal opinion for which you can't find supporting evidence. The SEC has only issued a hand full of notifications and LOST the only court case I've seen so far.
Ten years into the Web we had Google, Amazon, Geocities, eBay, Flash games, and thousands of existing companies moving their operations online. What is a single blockchain-related success we can point to other than cryptocurrency exchanges?
edit: I looked through the site and most of the "scams" seemed more like basic phishing sites than actual blockchains or cryptocurrencies
Funny that you trust and parrot Bitcoin scammers, but you don't trust a list of Bitcoin scammers. Afraid some you've invested in, hyped and promoted yourself might show up?
I've pointed out that most of the scams didn't actually involve a blockchain or tokens, as the SEC cases against a few of them show.
The question of who manages the list is important so we can tell what method was used and what's the motivation to keep it. One of the areas I'm most interested is cryptoeconomics and of course fairness and transparency matter to me which is why I wonder why would you defend this site as if you knew it to be true and accurate.
Nothing I said in any way was a defense of the site. Where did you get that idea?
You're obviously not reading anything that I wrote, and just trying to be contrary to make it sound like you're making an argument. Please don't bother replying if you can't understand what I'm saying, and make stuff up that I didn't say.
The most charitable reading of the crypto tech timeline is to say that the bubble popped at the protocol layer instead of the application layer. In that case, we're somewhere around 1989-1993/94. Maybe we're still waiting for a Tim Berners-Lee.
Who knows.
If crypto is money, can I:
Spend it at Amazon? My grocery store? My corner deli? Pay my rent? Pay my employees?
If crypto is a store of value can I trust it will have any rational storage value over any time period?
YES on all accounts.
The others depend on whether they choose to accept it or not. It's not the same as legal tender, where they must accept it.
https://www.cryptocompare.com/coins/guides/how-to-buy-on-ama...
edit:https://www.bbc.com/news/av/business-18827269/a-brief-histor...
In many jurisdictions (including the US and the Eurozone, as far as I know), almost no business is required to accept legal tender as payment. Legal tender is only required to be accepted when settling a debt, and even then there can be restrictions (such as a maximum denomination or number of banknotes or coins, a maximum amount that can be settled in cash, or contract obligations).
It's not about debt, it's about payments. If there is no agreement to the contrary, then you must accept legal tender. You also don't have to accept anything else.
Amazon have chosen not to accept Bitcoin, and instead to accept payment via certain credit cards. Saying that they accept Bitcoin is false.
Trying to pay people unexpectedly in Bitcoin or chickens or something else will not go well. They can demand legal tender, unless there are other agreements in place.
Therefore Amazon does not accept legal tender.
Yes, businesses like Amazon could demand payment in legal tender (or credit cards, or Bitcoin) but they are under no obligation to accept any of those forms of payment.
Bitcoin is no different than credit cards with respect to legal tender.
Currently there are zero real world practical use cases for cryptocurrency that aren't associated with illegal activity. If anyone knows of legal applications of cryptocurrency, feel free to respond. I'd love to be proven wrong.
Another obvious difference is that from the first moment they were on the market, they had some practical use, and the amount of use grew quickly. If we count from the Kodak DCS 100 introduced in 1991 at a price of $20,000, then ten years later we see that they were being bought at the rate of 18 million units a year and rapidly rising. [1]
Bitcoin, in contrast, has very little practical use 10 years after introduction. Its merchant adoption peaked years ago. That's far short of what an actually useful digital payments product can do. Look at M-Pesa [2] for contrast. It was introduced only a year early than Bitcoin. It has tens of millions of active users, and processes up to 900 transactions per second, with an average of 160 per second. [3] A huge success compared with Bitcoin's average of 3-4 transactions per second, most of which are speculative rather than practical. [4]
[1] https://www.dpreview.com/articles/5474101424/pmaresearch2003...
[2] https://en.wikipedia.org/wiki/M-Pesa
[3] https://www.nation.co.ke/news/MPesa-transactions-rise-to-Sh1...
[4] https://www.blockchain.com/en/charts/transactions-per-second
Kodak invented digital cameras in 1975.
> Kodak invented digital cameras in 1975.
DigiCash was founded in 1990 based on a paper from 1983.
And with M-Pesa versus Bitcoin, they're both digital cash, so I think it's even easier to see how badly Bitcoin has done.
There are different types of cryptocurrencies and the one you are looking for is known as a "stable-coin". I suggest looking into Bancor and Maker DAI to get a better view of how these currencies keep their value over time.
is my thinking flawed somewhere?
There are useful things to come out of bitcoin even though I want the whole idea of alt-coins to die: the blockchain is novel and I think could have some really good uses.
Bitcoin burnt a lot of energy for very little net value. One could argue that proving distributed consensus to be a viable tool in world trade was worth the cost.
Uh. Glad this bubble has popped. Of all the things I want in a phone, "trade and use crypto" isn't quite a requirement. Besides existing phones trade and use crypto quite well
Besides, if all you're doing is some kind of chain of authority you could do it through fdroid which enforces a constant key. No need for a standalone phone which will anyway have the same components as any other phone.
Think of it like selling a mail-order gold bar cozy. 100% of your customers have a physical item that's vulnerable to crowbar enhanced recovery.
I personally find that more risk than benefit, but traditional banking's security mechanism seems adequate for many people.
If crypto currencies cannot offer the same level of convenience/security, then how can they compete in the mass market?
You could use BTC online wallets on Apple Phones, but it was difficult to find one where your iPhone itself stored the wallet.
also, all that money spent on human work ended up in someones else pocket to spend further. In a way it is a "bitcoin tax on capitalist (or wanna be capitalists)"
>also, all that money spent on human work ended up in someones else pocket to spend further.
Broken window fallacy. There is no benefit from useless jobs. They are strictly worse than non-useless jobs.
granted - having both traditional and crypto financial system at the same time is net negative, but we can't really switch one on and another off instantly.
Edit: Some truly depressing figures here [1] including this
> Number of U.S. households powered for 1 day by the electricity consumed for a single transaction: 16.54
EDIT: Lightning Network potentially will be able to process much-much more transactions per second than visa network with the same usage of underlying bitcoin blockchain. Essentially Lighting Network allows you to create easily scalable and distributed version of visa network.
The bear market has been brutal and some very good teams were caught off guard because they lack to experience and know-how to balance a treasury or keep a startup alive. Many of us here are also equally unqualified to succeed though.
In the aftermath of the 99 crash, Amazon shares were trading for a few dollars and so were many other companies that today are huge monopolies. I believe that many of the blockchain native companies that survive this crash likely have the same growth.
Beanie Babies are collectibles, cryptocurrencies are money. Both have had bubbles but only one of them is tied to a brand name and there have been plenty of great new collectibles that have taken its place since.
Cryptocurrencies on the other hand are a new solution to a new problem (digital native representation of value) and even if the current offer isn't perfect their development hasn't stoped or even slowed down in any considerable way and there's no reason to believe we won't continue to grow and make better products and solutions. Money isn't going away anytime soon.
It's been established over and over again that cryptocurrencies are not money. They are a collectible like Beanie Babies. Cryptocurrencies vary too much in value to be used as money. Would you go into a Starbucks and spend $4 USD dollars to buy a coffee, if there was a chance that the $4 might gain 10,000% in value over the next year? Of course not.
There have been dozens of good articles over the last two years comparing money to cryptocurrencies and detailing all of the differences. If you still don't understand the differences, at the end of 2018, then you are keeping yourself willfully misinformed, and I suspect no comment on Hacker News will be able to change your mind.
Sorry but that's not true. You may be confusing "money" with "currency" though.
There's at least one US state that allows paying taxes in cryptocurrencies and there are a few countries here in Europe where cryptos are legal tender.
Legal tender must be accepted to extinguish a debt, by any party.
Just because bitcoin is not illegal doesn't make it legal tender. It may be used if all parties agree.
I understand the first link you gave says that Germany accepts Bitcoin as legal tender, but that is from a misunderstanding of what legal tender is. German vendors are within their rights to refuse it and insist upon real legal tender.
Yes I have linked to it.
edit: In German: https://www.scribd.com/document/372651554/2018-02-27-Umsatzs...
The European Commission says [1]:
"Within the euro area, only the euro has the status of legal tender."
"Yet...contractual parties are free to use...virtual currency schemes (e.g. Bitcoin). Although these are not official currencies and have no legal tender status, parties can agree to use them".
Germany has not made Bitcoin legal tender. Don't fool yourself.
[1] https://ec.europa.eu/info/business-economy-euro/euro-area/eu...
The link I provided is jurisprudence in Germany but it doesn't impact the whole of the EU. Malta might soon join though.
The German source says that for some purposes it is "treated equally to legal tender" and that "exchanging virtual currencies to legal tender and back is tax free". Neither statement makes sense if it were legal tender.
Its status for some purposes is similar to that of other non-Euro currencies (e.g. contracts between private parties agreeing on it etc), none of which are legal tender in Germany.
Bitcoin and other cryptocurrencies are treated equally to legal tender in Germany.
I’m sceptical that you spent 20 years in fintech without learning the definition of legal tender.
If you go to a restaurant, eat your meal (thereby accumulating a debt) and slap legal tender on the table, the restaurant must accept it. They may also accept other things, like Visa credit cards or Ethereum. But they aren’t obligated to. The former is legal tender. The latter is a way to pay. Obligations around settling debt are the sole defining characteristic of legal tender, so it doesn’t make any sense to say one thing is “treated equally” to legal tender if it lacks this core characteristic.
If you travel abroad you may have to exchange your currency to pay for a meal, because your coin is not treated equality to legal tender locally, and the defining characteristic is that it settles the debt at the time of exchange. I believe that's a function that cryptocurrencies fulfil by design and if the court states they are to be treated equally to legal tender that seems to prove my point.
If there are "a few countries here in Europe where cryptos are legal tender" then this is a big deal and you need to provide a reference.
Otherwise you just come across badly. Terms are important.
For those reading along, a useful baseline to get you straight on legal tender is in countries where fiat currencies are just broadly assumed to be valuable any legal tender laws are basically just ornamentation. Scotland, for example, doesn't have any bank notes as legal tender, just some old coins. Nobody in Scotland doubts that the notes they have are valuable, but its laws don't bother explicitly privileging this as "legal tender". Nevertheless if you get on a bus in Edinburgh with a goose and some shiny rocks and try to barter, well, you'll be lucky if the other passengers let you back off in one piece, let alone to get an actual ride. "Exact cash fare only".
I'll bite. "Digital native representation of value" isn't a problem, it's a solution. Cryptocurrencies are a medium of facilitating that solution. No one would think to themselves, "I have a problem: I need a digital-first store of value or currency, now how can I do this?"
Instead they might think to themselves, "I have a problem: I need to do <thing>; this can probably be accomplished if I use a digital-first store of value." I don't see why you would care about how your money or asset is being represented unless you have another problem that forces you think about it.
With that out of the way, this leads me to my actual point - what is an actual problem you see being solved by a "digital native representation of value"? For example, a common one I see a lot is distrust of governments due to control or censorship.
How about HTTP 402?
https://en.wikipedia.org/wiki/List_of_HTTP_status_codes#4xx_...
Randomly posting a quote and a link is not discussion, nor is it an argument.
I posted a link that people who are familiar with the development of the internet and HTTP will remember that there was a big problem back then.. we didn't have a digital native representation of value and all digital data structures can easily be copied so the fear of double-spends is what caused Digicash, Bitgold and a few other earlier digital currencies fail.
In modern times, credit cards and the like provide an adequate solution the problem (there's definitely strong dislike over things like fees, though). Early digital currencies failed because they weren't trustworthy as third parties, or they failed to gain a wide enough userbase to keep fees low. But it's not like they all failed--PayPal is with us today. Bitcoin and other cryptocurrencies suffer as a payment method in that they don't solve the customer's problem, particularly in cases like ransomware where there is strong reason to doubt the seller's ability to deliver.
Except blockchain based currency can't solve the "402 problem" as you call it. They are far to expensive and would never scale to the transaction volume required.
And if you are going to say "oh yeah well Lightning Network will save us!". Lightning Network is the biggest pile of vaporware I've ever heard of. It's been "just around the corner" to save bitcoin for almost as long as bitcoin has been a thing. ...I do love the solution to scaling the blockchain is to not use it--a real ringing endorsement of Satoshi's Glorious Block Chain if I ever heard one!
The solution may be new but the problem is not at all new. The first solution to that problem was proposed in the 1980s and there is a large body of academic work on cryptographic approaches that preceded Bitcoin.
The way I value currencies, the size of the network and the number of projects built on top of it is what matters and in that view Ethereum and Bitcoin are definitely worth much more that their current fx price.
I take HN user's reaction to Web3 to be within expectations for any revolutionary technology. If von Neuman criticised FORTRAN for being too high-level and not needed for serious computer science and IBM failed at capturing the web, Warren Buffet didn't invest in Microsoft, Apple or Google, then this to me suggests that the bigger the paradigm shift, the more those who created or benefit from the status quo will fight it. It's my belief that the web as we know it was developed without security or privacy in consideration and that this is the ultimate reason why we have the current "surveillance economy" and the cyber risks affecting people, businesses and nation states and that the Web3 will offer a cryptography-first alternative within the next two years.
We could go through my comment history and you'll see that for the most part I try to share my knowledge and experience in a positive way and never assume others are irrational, but a few interactions were generally negative. I do get a gut reaction to comments that insinuate my line of work benefits criminals, for instance, and lashed out once or twice at terrible articles or blogs that were shared here and were taken as authoritative when in fact they were complete nonsense for anyone _working_ in the space. I regret those but won't delete them. This is my work and I sustain a family with it so yes I am biased but not uninformed or incapable of learning new facts.
More broadly, I'm familiar with how trends work and some aspects of the blockchain community can be off putting and the technology itself is often misrepresented as simply a "distributed ledger" but I'm also confident that anyone who cares enough to try and join a developer focused meetup (Ethereum!) or event will see the side that I try my best to represent.
ICOs were created precisely because these projects aren't supposed to generate profit.
If Bitcoin’s are worth 1 cent each then cash flows in USD can also turn into large Bitcoin cash flows. But, Bitcoin cash flows could not turn into large USD cash flows.
Further, if Bitcoin’s value is dropping at say 15% per year then loaning them out at 10% per year is losing money vs converting them to USD, and doing nothing.
The core problem is Bitcoins are not a productive asset. They can't produce any cash flows.
Suppose you sell it in six months or sixty years. Then, you can compare USD to USD and say it was a good or bad investment. Alternatively, you could say you wished you had waited a year to buy the stock.
This is important for bitcoin as you have people that buy in and have yet to sell and can’t yet say if they made a good or bad investment for them. However, with dividend stocks you can hit the point where dividends are greater than total investments thus even if nobody ever sells becase it fails the company was still a positive net investment across all investors even if some lost money.
Long story short it’s possible for companies to a net positive investment, it is not possible for Bitcoin to be. If it’s value hits 0$ then you look at all the investments and people spent X buying it, payed Y keeping the network running, and made X - Y selling it which must be less than X.
TLDR: Individials can make money in the lottery, from perymid schemes, or from Bitcoin, but on net they are all poor investments.
Your last statement is interesting because you use the term "money" yet I'm not sure you have questioned the nature of the "money" you are making with your investments. If you imagine yourself in a glass bead economy, and you replace all of your notions of money with glass beads. You are making your investments with glass beads and making net positive glass bead investments from dividends. This is all fine in your glass bead economy. However, the day that the Venetians come with technology to make glass beads, they will subtly buy up all of your wealth because you chose a poor for of money - that you were making so much of with your investments.
https://en.wikipedia.org/wiki/Trade_beads
Alternatively, Bitcoin could be the trade beads (despite the fact they are disinflationary), but the point is the same about the assumptions being confined to the context of a single economy and currency.
That’s the Bitcoin model. If you want to use Bitcoins as your money then it’s even more obvious. If I sell 10 bitcoins to somone they get 9.99999 of them and miners get that .00001 or whatever bitcoin. Wait 1000 years an they are still our that .00001 or whatever coin.
Miners also got coins from the original 2.1 Million but rather than pay people they payed overhead spending electricity and depreciation on hardware. That money is simply gone never to be recovered. Sure, they can sell coins to other people, but that money is new investments.
PS: Bitcoin as a useful service is fine, people lose money to Visa every day but trade that money for other forms of utility.
It’s talk of Bitcoin as an investment that is more troubling. You can make money buying gold or whatever at the right time, but it’s a hedge not an investment. Holding gold has real costs and their is no dividend just the next buyer.
I don’t think it has failed as a medium of exchange though. I used it yesterday as one. That said, it hasn’t filled as niches there, specifically the major ones.
Ten years and you still have no accepted standard for valuation. Hmmm.... what does that tell you about the entire space?
They chose to operate at a loss because they couldn't generate enough business to do anything different. Their shareholders wouldn't have allowed for it otherwise.
Now name a single crypto currency start-up that is making able to even cover their own operating expenses, let alone invest their cash flow into growth.
Cryptocurrencies don't compare.
You got to be kidding me. Even today Amazon sells by undercutting profit margins from competitors!
With this blockchain startups, where's the equivalent? They never made any revenue. They never had a real market. What money they did make was predicated entirely on the continued solvency of the existing coin markets.
Fun how that works.
I will keep on working, crash or not, because I like what I do.
"Company X looks exactly like Amazon when they only sold books."
"Company Y is like an early Google, but with a larger addressable market."
If you want us to believe crypto will be like the internet, support that belief with real evidence. But don't uses these cheap FOMO tricks to manipulate people into buying in. Tell us why "many of the blockchain native companies that survive this crash likely have the same growth."
Some blockchains allow smart contracts. Smart contracts sound like a nice idea, but when you think about potential use cases, you quickly realise they actually have no utility. Any application for a smart contract requires information from outside the blockchain which must be supplied by a trusted authority. This being the case, why bother with blockchain at all?
Should we have a discussion on what the internet is and what blockchain is? I mean, you define a blockchain by its ledger component while I believe that's only a small part of it...
There will be more, but the design process is hard. The reason Ledger was cracked first is because ledgers are pretty simple.
Saying blockchain is “just a ledger” is like saying the web is “just a bunch of nerds uploading documents about their hobbies”. That’s where it started but after many years we learned to solve other problems with the same ideas.
Many games can be implemented as a blockchain
Evidence:
Ledgers have been implemented as a blockchain
There you go. Now the burden is on you to provide evidence that it’s impossible for any game other than a ledger to be implemented as a blockchain.
I'm sorry to be snarky but if this level of reasoning is representative of the cryptocurrency community then there's a reason it's failing.
That’s pretty mean. I tried to engage your criticism in good faith, and you’re treating me like I’m too dumb to even talk to.
Feels bad.
Face it. Blockchain is going nowhere. It was stillborn the day it was created. It's had 10 years and nothing about it has fundamentally changed (as many bitcoin advocates love to point out as if it was a positive thing).
Normal people who say "yeah, blockchain might have a use" are just being polite. They don't want to state the obvious. Beyond its current use case as a magnet for scams, fraud, pump & dumps and get rich quick schemes there is no use for the blockchain at all.
The usecase is censorship resistant financial transactions.
It is working right now, for people in Venezuela, for example. It is working for people who are attempting to make financial transactions, across the world, quickly and cheaply.
Tell me a better way to make censorship resistant financial transactions, over the internet, if you think this is useless.
A ledger is all it is, not an "app".
> Both the pro- and anti- proponents are moving sideways throwing the same memes back and forth at each other.
Oh the irony.
Btw it's funny how you have written this back to back without flinching.
For instance you might have a company that's looking to reforest an area and you can have a smart contract that takes donations and sends them to the company if some image recognition software scans satellite images and sees the area being reforested(lots of technical complications there).
Or you might have a company that's looking to reduce some poverty indicators in a given city and the smart contract is controlled by statistics published by the local city(though it's not clear government statistics are released frequently enough for this to work, at least they are reasonably trustworthy in developed nations).
Now, why do these types of contracts need to live on the blockchain? Ehhhh. But there's certainly a case to be made for smart contracts, in general as more and more real world information is digitally published in real time.
I agree that there may be uses for that kind of automation, but probably you’re going to want human oversight and ability to intervene, and blockchain actually hinders that.
What has the crypto industry actually done other than replicate some basic currency transfers through a highly inefficient and unintuitive trade of virtual points? It's a great research concept but it had no purpose in its creation, and finding some utility to bolt on top has so far proven to be futile in practicality and feasibility.
I have a feeling there will be a steady demand for this in the future, but I'm not sure how the bitcoin <-> fiat exchanges are going to avoid government attention.
It was useful but it was not understood to be useful by a large majority of people.
The crypto industry has developed novel crowdsourcing (ICOs, DAICOs, etc), fungible and non-fungible tokens, transparent voting mechanisms, token curated registries, oracles, prediction markets, state-channels, distributed time service, Zero Knowledge cryptography, leaderless consensus in distributed systems, fraud proofs, algorithmic stablecoins and a lot more.
We're also discussing whether it is actually useful or not, not whether it is widely understood to be (which depends on it being useful first). So the question remains, what utility do cryptocurrencies provide so far?
The underlying technology is actually pretty worthwhile. Ethereum is providing a base layer protocol for apps that never go down, never fail, and are fully trusted. That's something that future generations will take for granted but HN is largely ignoring right now. Even Google goes down (sometimes once or twice a month). Take a moment to imagine a few of the things you could do better if you had 100% reliable hosting that was safe and private. And basically free. (Either the user pays a penny or two when using your app or you pay a penny or two for each user).
You wouldn't look at the internet in the early 90s and say it was useless because all it does is carry short messages on Usenet which take a while to appear. The tech was being improved. Those short pieces of messages evolved into images and then later video and now we have the internet of today. This isn't going to happen overnight but it's going to happen faster than the improvement of the internet since Ethereum is just software and no hardware needs to be rolled out.
Go ahead and ignore it right now. It's still building time. But don't assume it's useless or beanie babies. In a few years the layer 1 protocols will be good enough for something useful and I would bet that we see something truly unique come out of the blockchain space that we never before knew we needed.
That quote is a product of its time, and only seems foolish or misguided with the benefit of hindsight. There is no shame in skepticism, even if it ultimately ends up being incorrect (likewise I'd have no misgivings about making a wrong decision rationally). There is also an element of survivorship bias: many such quotes about things which did fail were wagered on similar amounts of information, but have since fallen into obscurity. I don't think it's fair to call the author of that quote a Luddite.
Speaking as someone well acquainted with the technicalities of distributed systems and cryptography, I am deeply skeptical of blockchain technology. I think the vast majority (but not all) of it is "lame"[1], for lack of a better word. I would happily accept being quoted for a decade or two if I'm wrong.
___________________________
1. I'm skeptical for reasons I'm not going to try to defend, because they've been rehashed on Hacker News over and over. The justifications will likely not convince anyone who remains unconvinced.
"Only"? There were top-level comments in that very thread [1] that pointed out why it was misguided and foolish. Hindsight is not the requirement that some want it to be.
1. https://slashdot.org/story/01/10/23/1816257/apple-releases-i...
Haha you're funny.
On a more serious note, I don't think the current generation of blockchains is "The Future". They offer basically nothing more than what you can achieve with a publicly hosted git repository with post-commit hooks that enforce signatures. Actually, Ethereum is far worse, because all computations are repeated by every node (as far as I know), which is a huge waste of energy. If you want reliable distributed computation, you need to make sure there's some way of smart distribution of work... e.g. offer exponentially diminishing returns for each "duplicated" evaluation of the same piece of code beyond the 2nd.
For high-throughput computations, Golem is being developed, where there is (generally) no computation replication. www.golem.network. The repository is here: https://github.com/golemfactory
> Ethereum [...] apps [...] never fail
Just...
wow.
Listen, distributed ledgers are useful.
Breathless hyped up nonsense about "flaw-proof technologies that even YOU can use if you just give me 10 bucks!!!" (in used car salesman voice) ... yeah ... that's not so useful.
These people just can't seem to see the difference.
> Breathless hyped up nonsense about "flaw-proof technologies that even YOU can use if you just give me 10 bucks!!!" (in used car salesman voice) ... yeah ... that's not so useful.
> These people just can't seem to see the difference.
To be clear, are you claiming the GGP (Sargos) can't see the difference between these two things?
Are you suggesting that Ethereum apps can have 100% uptime (never go down, never fail), and are completely secure (fully trusted)?
Because if so I've got some shares of a bridge to sell you.
It's great for evergreen software. Imagine a backpage that can't be shut down, for instance.
I mean, I understand the idea that Google wants to increase their uptime because every lost query is lost revenue, but OP seemed to imply there's some intrinsic benefit that's more than just the incremental benefit...
Blockchains don’t have that simple path of development. They fundamentally don’t make practical sense compared to centralized services. There’s a reason that everyone gets their power from a small number of centralized power plants instead of everyone throwing a few solar panels on their roof and trading their power on the marketplace to create a decentralized power grid. It sounds really cool but it’s just wildly illogical in the real world. That’s blockchain.
Sure satellite dishes are worse in latency and cost than running a cable but if the cable gets too unreasonable in comparison you can tell them to get bent and switch to satellite.
> For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem. From Windows or Mac, this FTP account could be accessed through built-in software.
The flip side is handing over control over everything to Silicon Valley which is slowly coming to roost. Wonder what'll happen if the Discord store doesn't make enough money to pay for servers and investors demand RoI?
Source: worked on one such team at Amazon in 2017.
Slack is not an alternative.
A lot of large open-source projects have Slack communities, often alongside IRC ones. Take Clojure for example, with its 14k-members “Clojurians” Slack project.
Yes. It’s free for non-profit orgs.
I wasn’t clear. It’s free for non-profit orgs. Open-source communities that aren’t registered organizations are by definition not non-profit orgs.
The first assessment isn't wrong but limited in its scope to people like them. The blind and illiterate might 'overvalue' it as a priority. Getting the actual value is hard to tell prior to knowing the whole state of the market with a lot of work. It might become a best selling memetic "gag item" like the horse head mask or be useless even in the target market practically.
When ETH was hundreds of dollars, the cost of running code on the blockchain (gas price) could get up to $50 during these attacks.
Imagine adding a column in a database table cost $50. Forget about it.
I recall the founder of CryptoKitties saying that the transaction cost was significantly higher than the kitty cost. Isn't that a failure state for the network?
it depends on what you define as a failure state. Technically, the network is still working - but business-case wise, it failed.
HN dislikes the never ending and unsubstantiated breathless hype surrounding cryptocurrency, this is painfully obvious if you actually engage genuinely instead of pretending that everyone is an idiot because they don't fawn over what has amounted to a novel and interesting but mostly useless technology.
> No wireless. Less space than a nomad. Lame.
Using hindsight to cherry-pick historical examples of when naysayers were wrong is obviously terribly flawed logic yet it is a routinely common defense among cryptocurrency enthusiasts. It should be obvious to any engineer that this proves nothing and I personally take this reasoning as a sign that you might be arguing in bad faith.
> Ethereum is providing a base layer protocol for apps that never go down, never fail, and are fully trusted.
A base layer for apps that nobody cares about. Give one example of a useful Ethereum app. I define "useful" as a product or service that has demonstrated market success but is cheaper or somehow improved through cryptocurrency. I don't count it as useful if its a niche use-case that is impractical or has no market demand (e.g. avoiding taxes). Also, the idea that these systems never fail is laughably absurd as they have failed to the tune of multiple millions of dollars at this point (i.e. badly written code that failed to do what it claimed, resulting in funds being stolen).
> You wouldn't look at the internet in the early 90s and say it was useless because all it does is carry short messages
This absurd comparison of cryptocurrency to the early internet has been so thoroughly debunked that it barely merits a response. Please stop saying this.
> In a few years the layer 1 protocols will be good enough for something useful
Only in cryptocurrency software land is "in a few more years it might be useful" a defensible explanation of why cryptocurrency is the greatest innovation since the internet. Why can't you wait till its actually useful before broadcasting your condescendingly cliche cryptocurrency judgements regarding how HN is full of Luddites who are incapable of understanding technology? I'm sure cryptocurrency is just so complex and so new that todays engineers are just too dumb to understand it, it takes a special breed of elite hacker to fully grok the amazing potential of this new technology, Luddite software engineers be damned.
The iPod was released at that point and you could hold it in your hands and see for yourself.
Can you give me some examples of real world applications of Ethereum's protocol that you think are being undercounted?
I recently looked for some using smart contracts but all I see is hype and a lot of VC/bitcoin money thrown at things that haven't been able to deliver and don't even need blockchain. I saw Dubai putting property records into a blockchain but not sure it has smart contracts. Perhaps something will come up in the future, but what does it have to do with excessive crypto-profit and hype money being put into startups that lack fundamentals? I am not saying experimentation is bad, but I felt like we were/are reaching dotcom pets.com levels of hype and mania.
If you ask me, HN mostly seems to be saying that the hype has been out of control over blockchain. I don't see people saying blockchain technology is lame or unreliable, do you? I have seen comparisons of bitcoin to tulip mania and ponzis, but that's not the same as discounting blockchain technologies.
A stablecoin run in a contract is pretty amazing and becoming more and more popular.
Most "stable" coins are trading at over $1 right now, presumably as people try to flee sinking cryptocurrencies and have no practical and/or legal means to turn them into real money.
Even if we were to grant that these claims are true, we still have to ask what classes of application benefit from slower, more expensive distributed systems. Blockchains solve only one problem, which is consensus formation on ontrusted networks. They do not solve politics, governance, downtime, and certainly not application failure.. these things all exist on blockchains.
Essentially none of the application ported from centralized systems to Ethereum or even Bitcoin actually face Byzantine consensus issues when deployed as centralized systems. Bitcoin can be used as a 24x7x365 global collateral and value transfer instrument - such a system would face consensus problems if implemented on top of traditional banking infrastructure. That's hugely valuable, but pretty much the only problem-solving application to date.
For things like asset ownership and transfer, any kind of voting, real estate, IPOs, etc, most people still have to deal with incredibly bad centralized systems, that would be amazing if rebuilt as centralized node.js apps that talk to a MySQL database. This stuff is low hanging fruit that's a huge pain for massive swathes of humanity. And despite the fact that no Palo Alto real estate broker is talking to the city's land deed system over unreliable networks, where enemy messengers might swoop in and assign your deed to the wrong buyer, there's this myth that we need distributed consensus for this and other problems best solved by... databases.
Nobody denies its slow, its a waste of resources, its buggy, its hyped. its a lot of things many early systems was. Its all challenges that people try to solve. What is interresting is if those things can be solved. And i dont understand Why so many dont see a benefit if we could one day build true decentralized systems... its not the distributed or avalibility thats important. Its not like goverments or companies always have the peoples best interrest when they make decissions.
A lot of people deny all of that, actually.
> slow
They say "there is no faster way to achieve distributed consensus".
> waste
They say "it's not wasteful because its securing the network".
> buggy
They say "unlike all other software systems, it's never been hacked!".
> hyped
They say "it's literally the greatest innovation since the internet"
> And i dont understand Why so many dont see a benefit if we could one day build true decentralized systems
I have no idea, I guess most engineers are just too jealous of early adopters getting rich to be willing to give cryptocurrency a chance. There are so many problems that can be solved right now with cryptocurrency if the community would just give cryptocurrency a fair shot instead of always trying to say that it doesn't solve any real problems.
Note: the previous paragraph is a satirical portrayal of a cryptocurrency enthusiast attempting to explain why the entire software community isn't hyped about cryptocurrency.
> open-source
Blockchain software is an amazing example of open-source software, but blockchain is ultimately unimportant with respect to the entire open-source movement as whole.
> decentralized
Blockchains are decentralized, but they can't "decentralize the world" because they don't exist in the world so they necessarily require outsourcing any real world effects to untrustworthy humans who do not have to respect the state of the blockchain in the material world.
> free information
Not sure what this even means, but whatever market incentives exist that might keep information from "being free" will always exist, regardless of blockchains.
> patentless
The patent system is a political institution that will exist regardless of blockchains.
> nobody can rewrite history
As has been demonstrated many times, blockchain history can be trivially rewritten given the appropriate political influence of those who control the nodes. The DAO is a classic example of that.
> force a monopoly down our throath
Blockchains do absolutely nothing to stop this.
> be unaccoubtable for their actions
Blockchains do absolutely nothing to stop this.
> censor us or run us around like sheep.
A government can effortlessly censor you and doesn't really care if are able to flip some bits in an arbitrary digital ledger.
> One day we stop shooting ourselves in the foot and pee our pants and stop being blind to the tech giants like they have our best interrest
The cryptocurrency community does not have our best interest at heart.
> A true decentralized system might be nesssary one day to avoid us being enslaved in democrazy
This is the height of cryptocurrency delusion. I regret that I have to sound so dismissive but I think the monumental assertions you're putting forward are fundamentally disconnected from history and our current reality.
Im thinking about civilations destroyed or Winners of war rewriting history, or powerfull companies and poltiticians covering up information that was already out there... eg recently we found out its easy to delete from waybackmachine. If you cannot Imagine we Can build true decentralized tamperproof systems or could ever have a neeed for one i suggest you study human history.
Admirable goals but lots of us have aspirations. You need to demonstrate how your suggestions can actually help, and at this point, explaining it is not enough, you and your community need to stop talking about it and actually do something. No other software requires so much vocal defense.
None of these are engineering or technical problems. They are all extremely complex meatspace-based problems that get solved (if they are even solvable at all, or even actual problems) well outside of the realm of computer code.
Bitcoin and Satoshi's Glorious Blockchain is, was, and always will be a solution in search of a problem.
In regard to bitcoin it works pretty well for a lot of things and not so much for others. Just as everything. Personally it served me well.
And Having background in lottery abd payment industries i Can tell you we are already using it.. current systems are a terrible mess Which Anyone who ever had to implement against visa mastercard banks etc can tell you All about. Private blockchain ledgers like in the mentioned corporations is already in use and even more in the future.
HN has, like many other circles, gotten sick of the breathless vaporware hype and scams.
They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown. -- Carl Sagan
Most of the nobles he asked for money were actually better educated than him, so the error was obvious to them. And since noone could know about America's existence it was reasonable to assume that Columbus will simply run out of supplies and starve to death in the middle of the ocean. Which almost happened, they've found the land at the very last moment.
Instead of playing on our heartstrings to convince us that cryptocurrencies are useful, how about actually making something useful? We've been told for years that it was about to pay off, that "it's still building time". You've had billions poured in ICOs and pre-mined coins and you have nothing to show for it besides glorified pyramid schemes and currencies that are useless as currencies.
Comparing cryptocurrencies to the early internet is frankly absurd. Maybe people didn't imagine how huge is was going to become but the practical usefulness of being able to share data across the USA (and then the world) is obvious. Besides the Internet grew fast and was useful almost from day 1, even though it involved a complex and expensive hardware infrastructure. By the 90's the Internet wasn't mainstream but it was definitely very useful. Sci-fi writers had expected something like the Internet long before ARPA, it's just immediately obvious that being able to connect to the entire world in real time would be greatly valuable.
Furthermore what prevented a more mainstream adoption were mainly hardware limitations. Internet on dial-up wasn't fun at all. Remember having to wait for a full minute to have a progressive JPEG load up? I do. It was clunky but there was nothing else like it. Once technology improved and got faster and cheaper adoption exploded. What's slowing down progress in CryptoCurrency? The infrastructure is there, yet hardly anybody wants to use it. And unlike the Internet, there are plenty of alternatives for the vast majority of the services offered through a blockchain.
>I would bet that we see something truly unique come out of the blockchain space that we never before knew we needed.
That's faith, not reason.
Replace "data" with "money", and "USA" with "anywhere in the world"... do you see any value in that?
I had this problem one time over a long-weekend, and the only solution I had was to use Western Union. Because I didn't warn my bank that I wanted to use my own money, they disabled my account until they were open again (3 days).
> relatively fast
Maybe 5 days is relatively fast to you, but it's not to me. 1 horsepower was relatively fast to people before cars were common also.
Wait, wait, I thought the hype peak is far behind us. Ever heard about 51% Attack?
dapps nobody uses? ICO pump and dumps? you lost the crowd there Sir.
We are not luddites, I don't think you fully comprehend what that word means.
You are assuming blockchain right now, in it's current shape and form, a ReallSlowDatabase(tm), with no real Fortune 500 or the military using it to power their major operations, the so called ledger already exists in Datomic and now AWS, the alleged decentralized PoW tx verification process is bullshit, mining pools have centralized, every fucking meetup I go to I get people like you getting in my fucking face telling me why im a fucking idiot for not buying to their pump and dump schemes that SEC is looking into, it's litearlly the ultimate hyperereality-using social media accounts to shill and attack unbelievers for not HODL, blindly calling any piece of fact or reality as FUD or FakeNews(tm)
Shut the fuck up.
Seriously. We are not luddites, HN users range from NASA engineers to lawyers, who all exercise common sense and have seen this type of pump and dump of technological hype probably far far longer than most blockchain thumpers.
God. I don't care if dang bans me for this post, I just had to get this off my chest. A fucking cult has hijacked the internet.
That's human behavior, not technology. Fiat cash could easily (and has) replace cryptocurrency for this purpose. The argument is irrelevant either way: it doesn't prove that cryptocurrencies are bad and doesn't prove that cryptocurrencies have use.
I believe in Bitcoin and the recent developments in both cryptography and distributed systems which are underlying many cryptocurrency projects. I think the skepticism of Hn is rational, valuable to the community and often correct. The cryptocurrency space is a great space to work in, but it requires a constant investment in skepticism and critical thought. I hope Hn always remains skeptical of technology.
> The underlying technology is actually pretty worthwhile. Ethereum is providing a base layer protocol for apps that never go down, never fail, and are fully trusted.
I disagree with this statement. Ethereum DApps can fail, Ethereum can be rendered unavailable via: scalability issues, forks, bugs or failures in the P2P network. Furthermore the additional infrastructure that many DApps rely on can fail as well. Ethereum is not a solution for achieving high-availability, high-availability is probably harder to achieve with a DApp. Ethereum is a solution for building and managing assets outside the control of a single party or company. This intentional loss of control comes with many costs and does not provide universal business benefits.
1. lack of developers to adapt to cheap 51% attacks,
2. cheap 51% attacks will lead to those coins getting delisted from exchanges since attacks will cheat exchanges via 51% double spending attacks (something which has happened a few times already)
3. With no ability for people to safely buy or sell coins those coins will die.
I don't think this will happen to BTC or ETH. I think Ethereum will look very different in 5-10 years.
When you hold Bitcoin...you don't hold anything which can convert into something useful at the end of the day - you hold the useless result of expended computing power. A bitcoin isn't a password which unlocks anything, it doesn't convert back into computing power - it can't do anything into the future.
1. is that you can pay your US federal and state taxes in USD
2. and many companies and individuals will accept USD in trade for goods and services.
Measuring BTC by that same rule you'll find:
1. You can pay your Ohio state taxes in Bitcoin [0],
2. and you can trade BTC (Bitcoin) for some goods and services (overstock for example).
Thus if USD has value by the measure above than BTC must share some of that value. The value of BTC might be significantly smaller than USD but it must be non-zero.
>When you hold stocks you hold actual ownership of a productive corporation
Not every company is productive. The stock is worth what someone is willing to pay for it now or at some future point. Companies have issued stock as cryptocurrency tokens.
>When you hold Bitcoin...you don't hold anything which can convert into something useful at the end of the day - you hold the useless result of expended computing power
You raise an interesting point here. Should currencies have a use other than being a medium of exchange? For example you can burn paper money to generate heat or melt down coinage into useful metals. Does having that property make paper money or physical coins better as a currency? Goldbugs would say yes, I'm less sure.
[0]: https://www.wsj.com/articles/pay-taxes-with-bitcoin-ohio-say...
>>2. and many companies and individuals will accept USD in trade for goods and services.
First of all to have USD someone needed to borrow it first and they need to return it. The USD you hold is useful for someone else to pay their debt back. This is much more important than taxes.
>>Thus if USD has value by the measure above than BTC must share some of that value.
No, the reasoning is based on missing the point of fiat currency: someone else owns USD to the central authority with a lot of power.
>>For example you can burn paper money to generate heat or melt down coinage into useful metals. Does having that property make paper money or physical coins better as a currency? Goldbugs would say yes, I'm less sure.
The point is that USD represents someone's debt. They will need to come up with goods/services to pay that debt back if they don't currently own enough USD. BTC represents wasted power and its only value is a hope someone wants to accept it as payment even though no one really needs to (unlike USD).
This is a novel concept to me - could you please elaborate on that or provide suitable search keywords?
Most stock today doesn't pay dividents and has no direct relationship to the company's assets. You own some tradeable tokens and you bet on them going up or down in value. Implying stock ownership gives you something that's tangible and non-speculative is the real pretending.
https://www.dividend.com/investor-resources/sp-500-companies...
To me there are strong parallels between the cryptocurrency boom and the previous P2P boom. P2P technology was exciting and super interesting, but people assumed that it would magically be the solution to a million problems just because the tech was awesome and decentralized. But that didn't happen, instead Netflix happened. Netflix found a way to solve the actual problems that people were having and at the end of the day the underlying technology didn't matter.
I expect to see something similar happen with a lot of the current crypto use cases. More centralized solutions like Amazon QLDB[1] will provide the majority of the benefits that people really need: a transparent, immutable, and cryptographically verifiable transaction log, while also being performant and highly available.
Many people see decentralization as the solution to all problems because it will finally make things fair, a level playing field for all. I just don't see it happening. Not because of some sinister world order trying to retain control, but simply because that is not how human interactions and trust tend to work. I think we can continue to move towards more decentralization, but it shouldn't be the end goal in and of itself and we should always be skeptical when there is more focus on that than there is on solving the problem at hand.
This, one thousand times this, it is always this. People have problems and they want solutions, they don't care about particular technology architectures.
(p2p wasn’t illegal, but what people wanted out of it was)
I can't believe that Netflix didn't seriously consider P2P. I imagine they didn't do it because there are issues with consuming limited upload bandwidth that doesn't belong to NF, and having poor control over the resulting complicated network flows and the ultimate customer experience (think about what your first customer service action for a customer having video quality issues would be).
No doubt there are many managers and system engineers who shy away from P2P because it's associated with bad actors. But there are sound reliability engineering and customer-facing reasons not to use it, too.
Unfortunately Bitcoin provides much less anonymity than cash or credit card payments. Bitcoin provides excellent censorship resistance, in that Bitcoin lets anyone who has Bitcoin send Bitcoin to anyone that wants Bitcoin (assuming of course internet access and fairly technical users). Additionally Bitcoin lets people custody Bitcoins like cash or gold and also lets those same users send Bitcoins digitally. This is a new development and something people couldn't do before. We are still in the early stages of seeing how people use this new capability. Check back in 20-100 years.
Smart contracts, especially legally enforceable smart contracts, have existed well before cryptocurrencies, however cryptocurrencies provide a fairly natural setting for them.
>Did not happen, because finance is still largely a business of relationships and trust.
Relationships and trust mean a high cost of doing business, both because trust is expensive and because relationships are not able to be automated. Cryptocurrencies and smart contracts offer a technical substitute for trust. This substitute is not good in all cases and has some serious tradeoffs. However there are some areas in which it is a clear improvement.
You generally have to give up your ssn and lots of private data to get a credit card. Your name is tied to it.
Cash is great, but does require you or someone to physically deliver it.
But crypto can be laundered through a mixing service over a tor connection and when done properly and carefully, would be essentially untraceable.
Credit card transactions are private between you, the merchant, the processor and your bank and anyone those parties sell your data to. Whereas Bitcoin transactions are recorded on a public immutable ledger.
>But crypto can be laundered through a mixing service over a tor connection and when done properly and carefully, would be essentially untraceable.
You can certainly obfuscate Bitcoin transactions. I even wrote a tumbling protocol for Bitcoin[0] and have been involved with other cryptocurrency privacy projects. I believe that cryptocurrencies can achieve a high degree of privacy, but we aren't there yet.
Note you can do similar things to make credit card payments more privacy. For instance by buying and trading gift cards or store credits.
At the end of the day if you buy physical goods online you have to have them delivered to your house, drop site or PO box. That means giving out a physical address which greatly reduces your anonymity.
As a side comment, just two hours ago I paid an IPTV service with BTC using coinpayments.net and it was easy (scan QR code and click send) and quite fast (at first I was going to pay for BCH because usually it is faster, but I only had BTC in my wallet).
Really cool as payments technology if you tell me.
I think following the reasoning of many BTC optimists, your quote is equivalent to saying "PPP (the one in OSI layer 2) is a shitty way to have globally distributed, secured real-time chats"
Censorship resistant, electronic, financial transactions.
You can make an electronic payment to anyone, and nobody is going to stop you. No transactions are currently being censored on most of the big crypto platforms, so we have provable evidence that it works for this usecase right now.
Care to make an actual wager? longbets.org
Well, as long as the underlying monetary policy of the cryptocurrencies is well tried and failed directly from the medieval times, I would personally:
1. Be quite careful who I blame being luddites. 2. Not holding my breath waiting for any kind of success as a currency.
This model can work with existing tech producing just some logs that can be hosted on CDN's, checked with hardware acceleration on commodity hardware, and even hosted on $5 VPS's if you want. That's a total cost of $5 per suspicious party running checks if minimizing costs and energy use. Current payment methods work at POS with 16-bit MCU's and such. The signed checks can themselves be sent in as just extra database transactions. The organizations should be non-profits or public-benefit companies whose charter, licensing agreements, and contracts make specific behaviors either mandatory if good or prohibited if bad. Possible sign auditing agreements with organizations that defend consumers with severe penalties for anything shady. Start with credit unions, though, combined with non-profit, payment processors with lean operations.
If you're wondering, the common pattern of my methods is to use the simplest, fastest, most-proven components, whether technical or legal, to build the improved version of current tech that solves the specific problems most people worry about. Nine times out of ten, it's just a shady, for-profit company being assholes due to their incentives. Just changing the model over to a public-benefit Paypal or Venmo with multinational implementation cross-checking each other by itself gets past most of that. Plus, using existing databases, crypto acceleration, and tamper-resistant smartcards keeps performance high with checking cost, hardware and energy, very low.
As I read cyptocurrency and blockchain stuff, it's like they never thought about any of this before going onto solve problems 99% of people with checking accounts and credit cards don't have. Volatile currencies, exchanges getting robbed, and no chargebacks allowed are good examples where most people wouldn't trade their bank and plastic. The folks working on these things should start with user requirements, look at existing solutions, enumerate problems, find simplest changes that fix those problems, deploy solutions, and iterate from there. Strangely, the exact advice YC gave to the startup founders that made it big.
And yet the iPod has been totally supplanted by products that came afterward.
I have been using Google since 1999 and I've never seen it down once in more than 19 years.
I've been hearing this argument for years, but you that doesn't take away that global broadcast doesn't scale to any kind of useful TPS rate unless you're willing to decrease the network diameter, which implies centralization.
All the wishful thinking in the world can't change the laws of mathematics and physics.
Or we were just chalking it up to "Irrational Exuberance." Instead of addressing initial concerns economists had about it, most proponents were arrogant in their belief that old school economics wouldn't apply to cryptocurrency.
And that gets me to the second point. The people arguing for cryptocurrency weren't transparent in their holdings of it. And that seems to be what created the bubble. Now people are questioning where the basement price is on bitcoin, and it seems like there's nothing but arguments like "It's the money of the future".
That is the exact thing that everybody warns about for deflationary currencies so of course they were skeptical about it. Combine the gratuitous use of processing and power for speculation you can see why they would be less than sanguine about it even before money laundering got involved.
> Well being a medium for exchange is what gives bitcoins value.
I do want to separate out the concepts of "utility" vs "market value".
Probably a good example for this is a hammer. It has a great amount of utility for pounding in nails, securing lumber, etc. It's just not valued on the market though. $5 bucks maybe? You will save a bunch of time using one. However, being able to pound in nails doesn't justify a high cost in and of itself, since the market is flooded with them.
If, however, the utility of bitcoin(medium of exchange) is the only thing that is lifting bitcoin's market value (price), then its price depends upon it outperforming other cryptocurrencies and instruments of money. And the marginal cost of creating another cryptocurrency is maybe a weeks worth of time?
Because there appears to be an unlimited supply of numbers and algorithms, the market value of any cryptocurrency should approach zero over time even if it has great utility.
Literally nothing more.. its why it doesnt work financially. The idea is cool though indeed
Is immutability not a powerful programming concept? Is it not valuable to be able to prove that a piece of data is exactly how it was years ago? Or to be able to prove that a given signature was created before the corresponding private key was lost/compromised?
https://motherboard.vice.com/en_us/article/j5nzx4/what-was-t...
I mentioned some random examples below showing that people stayed exploring and pushing the useful concepts again without all the bad stuff:
Use Git. It doesn't even require a small nation's worth of electricity to operate and it probably even has a substantially higher transaction throughput!
Most of the money wiped out during the last few years is not coming from wealthy “smart money” investors.
The money has come from the middle class and mom and pop investors.
Less evidence and more historical precedent
(Having said that, I would love to hear a recording of any such calls.)
Lottery winners are not known for their wise investments.
When something goes well but mom and pop are excluded, the rich get richer.
And now even more of it is sold to institutional who dont have bills to pay
Next!
https://www.techspot.com/news/77566-nvidia-share-price-plumm...
[0] https://etherscan.io/charts
If they had been promising to make regular products and didn't ship then there would be front page scandals and outrage on consumer rights TV shows. But nobody cares, cryptocurrency has become a dirty word, normal people reading cryptocurrency stories don't get past the headline as they know the story already.
It will probably take a few years before documentary film makers make sense of the shenanigans that has gone on. There are no good stories though, at least with the dot.com crash you could tell the story through the lens of a company that was there at the time for it to have storytelling value. Shame Tom Wolfe is no longer with us, the crypto experiment needs someone of his character to do the story justice.
Good luck building software, testing it, writing documentation, producing a go to market strategy and executing it without a lot of capital.
I keep getting nil. I keep searching independently and getting nil.
The closest I've found is the Sia storage network but it's hard to set up and not competitive with cloud storage. If I want privacy I can just encrypt locally before using S3, Backblaze, etc. If I want redundancy I can use two cloud storage services in parallel.
Regardless of whether or not blockchian and cryptocurrencies end up being pivotal technologies in future, one positive fallout is that we are asking "how can we do this better" of some very traditional and established industries.
As far as I'm concerned, gaming is a drain on human productivity, often a drain on long term happiness, and provides little economic utility.
Also I’m certain gaming would have created more economic opportunity than it would have destroyed via lower productivity
This was just the crypto version of the dotcom bubble. The webvans and pet.com mistakes needs to be done.
Next generation crypto startups will bring more value because the infrastructure is going to be much further. Give it a couple of years and we will start seeing companies build on top of blockchain rather than building blockchain companies.
Some of the types of industries we believe are going to be is anything in "digitally created" i.e. things that are born digital and thus can be born on the blockchain (think game assets, images, text, art, code) and then infrastructure technologies such as security tokens which can be used to validate inter-businesses data relationships.
But the infrastructure is still being built.
1. web.archive.org/web/19980610100009/www.redherring.com/mag/issue55/economics.html
Ends up it's hard to run a business when you no longer have 'free money'.
Regardless of the internal structure of Consensys, I don't think that blaming it on them or the big ponzi scheme of crypto is the answer. Reductions happen all the time across many different industries. Especially in technology. If anything, Consensys is doing the responsible thing and 'trimming the fat' when times get lean. Remember, there is still >1000 people that were not affected by the reduction.
Look inwards before blaming outwards.
Early adopters benefit because they incur more risk than later adopters.
I don't understand this reasoning: is "X is bad but Y is worse" supposed to convince people that X is actually good?
I think everybody with sufficient information would agree that we should limit both harmful mineral extraction and the runaway energy usage of cryptocurrencies.
Maybe don't read things that are not written or said? My point is that you think cryptocurrencies have a negative impact on global warming so I think you probably feel the same way about mineral extraction.
Most people will fight any new information that contradicts their held beliefs so I won't suggest you look at the use of renewable energy in cryptocurrency mining or try to convince you that most miners optimise their costs by using solar and hydro power.
Phrased as such, it sounds like you're calling me or the GP a hypocrite. But to be clear, I do care about mineral extraction, and I try to make choices as a consumer that limit my (relatively small) effect on the overall market.
I have quite a few friends who work in the cryptocurrency space (either at ICO'd firms or as professional auditors), so I'm familiar with the economics of choosing clean energy sources. But that neither factors in the net increase in grid demand nor the double-bind of hydro power in places like China. So I don't think we're off the hook, morally speaking.
The additional energy draw is using renewable sources for most of the mining hashrate
What a lot of people forget to realize when they talk about how much energy crypto uses is how much energy the systems that are currently in place are already using, which crypto has the potential to replace.
One such example might be property ownership and title companies. Title companies are big business. They have large buildings, they have many employees. The sum total of the resources being used by title companies have a huge carbon footprint.
Crypto could eliminate title companies. A blockchain is the perfect solution for storing records of property ownership in a way that is incredibly well-suited for the mostly digital age we find ourselves in, and would be vastly more efficient than the way we currently manage property ownership and transfer.
If blockchain tech becomes relevant to the point where we should be concerned about its carbon footprint, that means it's replacing things which currently exist which already have a huge carbon footprint.
Ah yes, nothing like losing the title to your house because you can't remember the password to decrypt your private key.
The more relevant aspect of blockchain in this example is the hashed distributed ledger, not the transactional nature of it. In fact, there is no reason you'd need to use PKC type transactions at all.
All the banks in the world expend far, far more energy than any small country, probably any medium country as well. And banking is only one of the many things that could be changed by blockchain tech.
There are thousands upon thousands of banks around the world. Each one of these banks is going to have at least one branch. Some have tens of branches. Some have hundreds. A few might have thousands. Each of these branches is going to have at least a handful of employees. Some will have more like 10-50. Then there are the corporate structures to the banks, entirely outside of retail locations. Thousands upon thousands of corporate employees for the big banks, hundreds as you go down.
The result is hundreds of thousands of retail bank branches (if not millions), and definitely millions of bank employees.
That is just relevant to the people and building upkeep (air condition, lighting, etc) for retail locations.
Then you have the fact that big banks will have their own datacenters. Any bank with online banking will need to be consuming a lot of electricity to host those services. Any bank with telephone banking needs to consume energy in order to keep those phone lines available. A lot of these banks will then either be integrating with each other or integrating with a 3rd party for more modern settlement. Either way, this process consumes electricity.
Then there is the amount of paper / other supplies that these countless banks are consuming. It's a lot. All of these things have an associated energy cost.
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But you think there is the slightest chance that bitcoin/ethereum/etc are consuming an equivalent amount of energy and resources? Really?
Throw in the fact that a lot of mining operations are utilizing waste energy and you have yourself a consumption comparison that is laughable considering how tiny blockchain is compared to banking.
Bitcoin is not meant to be used by the people in p2p exchanges. It is meant for large institutions. If country A wants to send country B, 5 billion, are they going to just wire it to them??? No that’s very difficult to do and Bitcoin solves that problem.
Historically kings were the ones that controlled the money supply, but now that has fundamentally changed.
But I knew and just like physics, all increasing bubbles eventually burst. Afterwards it was the bankers fault. All various conspiracy theories etc...
Nobody can ever describe why you'd even want this as a thing.
There’s no value in a currency that is unstable either up or down because it’s not possible for those who wish to use it for its intended purpose to keep track of the fluctuations.
Plus, it was another way for monsters to destroy the planet, as if we needed another one of those.
When will you self-centred fucks understand that your personal profit does not justify destroying the planet?
In long run if you aren't accounting for inflation/deflation then you are on losing end. For example, how often we hear that $10000 for that period..buy much more in today's world.
PS: I am not trying to argue but putting across a counter point. I am not an expert niether in crypto or in economics.
When the singularity occurs and all human consciousness merges into a single, altruistic meta-being?
Just more liquid!
So therefore I'm not sure why an article that mentions 2 downsizing companies, and 2 discontinued companies, amongst 1,180, is treated as validation amongst the hackernews crowd.
I think its really strange how separately this particular buzzword sector is treated here.
It'll require a different class of entrepreneur, one who is patient, has a longer vision, and is willing to build boring companies. (Look at the companies that survived the dotcom bust)
My app relies on people being interested in trading. Right now there is a lot of volatility in the markets (which means people are watching them). But most people have gotten burned hard in the last few weeks, it's not looking great if the markets keep going down like this.
With the leveraging currently going on, albeit at government level, i wonder how long it will be before next financial mess happens that would resurrect these deflationary, government currency decoupled instruments.
I'm by no means an expert here but this seems... very not true.
https://en.bitcoin.it/wiki/Genesis_block
Scroll to "Coinbase".
Unlike counting numbers in circulation and hoping purchasing power will be broadly proportional to it, this standard definition of inflation has practical relevance. The number of now-defunct Zimbabwean dollars in circulation turned out to be eventually constant, but it didn't mean they didn't turn out near worthless because people strongly preferred payment in other currencies instead.