On Cryptocurrencies (2018)
jwmason.org
jwmason.org
Posting an article from 2018 with many rehashed arguments is fine, I guess, but there are many interesting (if not useful) things coming out of the cryptocurrency space. Of these, the standardization and development of cryptographic standards and libraries is perhaps the most applicable for the rest of the computing world.
I think a lot a people would be surprised about how much volume and demand there is from "traditional" investors in crypto.
Billions of dollars of volume and new exchanges popping up like wild fire.
Hell, you might have exposure to crypto through a pension fund, or fund of fund, or whatever.
It's here to stay.
That's whats coming out of the crypto space: a borderless payment system.
It's often criminals, porn businesses, then gamer, then teens, and then the rest who adopt new good tech. It's okay,it takes some time, those who don't see the value in crypto will eventually pass away.
Also in Venezuela there are people surviving thanks to cryptocurrencies protecting them from hyperinflation and capital controls.
To prevent more ordinary people from getting scammed either by ICOs or otherwise?
Cryptocurrencies have moved on from 2009
Wow... the Tromp. I’m blushing
Not uniquely useful, not very interesting, full of hot air: primo bashing material.
When you say you find it a waste, you are either saying:
a) There is a less resource intensive way of doing bitcoin
b) That the claimed benefits are not true or you don't value it
(a) has had plenty of tries without success.
In case of (b), you don't have to participate, it's an entirely voluntary system. There are plenty of energy use cases around the world which don't benefit everyone.
You say "you don't find valuable". Its not just me. People, in general, don't find cryptocurrency valuable. Nothing backs them up, and besides that you cannot widely use them in the clearnet/sneakernet.
What happened is it hasn't replaced the default currencies such as USD and EUR. Its been mainly adopted by criminals/crooks (e.g. drugs trafficking), tax evaders, people who live in banana republics (hyperinflation), speculators, and a bunch of libertarians/preppers.
So next time you say "you don't find it valuable", please realize you're talking to the vast majority of honest, casual people in the world. Of the above mentioned groups, the _only_ group I have respect for using cryptocurrency, is the people who live in banana republics (such as Venezuela).
I'd say every bank teller in the USA driving to work every day is a total waste of energy.
But yet it all seems necessary to build trust. Is it proof of work?
I highly recommend this piece (which I'm paraphrasing here) if you're interested in the topic:
https://unchained-capital.com/blog/bitcoin-does-not-waste-en...
Also, instead of complaining that you don't like what's being submitted, submit good articles about what you see as positive things? Good non-marketing-fluff submissions are dearly needed.
Zk-STARKS, which are fairly revolutionary and completely unknown outside magic internet money dudes. Non-trusted setup ceremonies and the newer Zk-SNARKs are also pretty much crypto-only. Bulletproofs arguably as well. Maybe verifiable delay functions; not sure of the history there. Most cryptocurrency engineering is evolutionary, and it's the combination of things (Mimble-wimble etc) that makes it worth something.
On the non crypto side, there are novel consensus algorithms, interesting data structures and contributions to distributed computation in general.
There's lots of social problems with blockchains, including carnival barker types overhyping things they don't understand. You could have said the same things about the internet in the 90s. The technology is pretty interesting, and making the things do useful work is one of the few actually innovative areas in software engineering right now.
There's lots of obvious places for this sort of distributed, trustless database that aren't just magic internet money. DNS is an obvious one. Identity is another one. Provenance of food/wine/art is another. Pretty much any place where database disintermediation is desirable, which is almost everywhere.
> The real solution, as I have argued elsewhere (and as many people have argued, back to Keynes at least) is for central banks to intervene at many more points in financial system. They have to set prices of many assets, not just one overnight interest rate, and they have to direct credit to specific classes of borrowers. They have to accept their role as central planner. It is the need for much more conscious planning of finance, and not crypto currencies, that, I think, is the great challenge and opportunity for central banks today.
You may not agree with a sound money economy, and you may like the idea of a central bank that manipulate the market to encourage spending and discourage savings.
But thankfully nobody is forcing you to use Bitcoin, and that's alone one of the main interesting point of it, it's completely and absolutely an open and voluntary economy.
where exactly?
For me its actually the opposite: I feel like crypto markets are much easier to manipulate- so its done more often. I would also expext that a currency is used in daily life and not saved as form of high risk investment
So while I don't think that Banks operate for the benefit of mankind, I don't see where Cryptocurrencies would help, either. And to be fair the most real-world contact I had with Bitcoin are All of criminal nature - So there is definitely a certain negative bias
What do you think it feels like you lived in Venezuela where the currency is devaluated faster you can look and you are being foreced (!!) to use that currency!
Would you have the same bias?
Sure you can say “that not happening to me”. But how do you know it won’t ever happen to you or your country (every super power country has had it down turn at some point (and with that often monetary crisis). Might change some time, but history won’t make you feel sure about that.
And Venezuela is not alone. There has been hyperinflation on average evey 2 year in some country around the world (until one day it reaches you).
That's not a HN thing, that's the mainstream view. The last time hard/sound money was in vogue was long ago, and even when it was based on physics and not software it came with a host of ultimately intractable problems for society. The current system is no utopia either, but poor returns on savings are not the fault of central banks but the symptoms of prevailing economic conditions. There are of course limits to monetary policy, but "sorry there's just no more money available for some arbitrary reason" shouldn't be one of them.
From a technology perspective, Bitcoin is an interesting invention, but from a monetary point of view it's a backward step. That's partly why there are so many skeptical voices about the prospects of basing the money system on cryptocurrencies here.
I say this as an early adopter and friend of the technology.
So sayth the people who want to borrow lots of money and not pay it back. The economists may have evidence to back the idea up, but that evidence isn't what is driving the political discourse.
The political discourse is driven because voters with loans go ballistic when rates go up. And so do wealthy businessmen who can't afford to repay their debts.
The intractable problems come when there’s a mismatch between economic activity and the money supply. In the case of shiny metal money, that’s usually deflationary, but not always: see the Spanish Price Revolution of the 15th Century https://en.m.wikipedia.org/wiki/Price_revolution
I don't think anyone is claiming that the US government is going to do a straight default on their debts. If anything troubles them they will use monetary policy.
> In the case of shiny metal money, that’s usually deflationary, but not always: see the Spanish Price Revolution of the 15th Century https://en.m.wikipedia.org/wiki/Price_revolution
I'm not going to see anything useful to me an economic event from 500 years ago in a language I don't speak, enmeshed in a foreign legal system, totally different technological and social conditions and potentially questionable record keeping with uncertain customs around law enforcement.
Even the frame there is incomparable; Wikipedia is quoting 1–1.5% inflation as 'high'. I wish that was considered high these days, I think low inflation leads to good results.
Honestly that just looks like supply and demand. Lots of new metal -> price changes. Hardly a problem.
Publicly traded companies[1] are starting to consider BTC as a reserve asset. MSTR converted 85% of cash reserves to Bitcoin(38,250 BTC).
AMMs[2], a novel idea in market making is growing popular.
[1] https://bitcointreasuries.org/
[2] https://medium.com/dragonfly-research/what-explains-the-rise...
"Let me just say how impressed I am with Ethereum...If Bitcoin is email ––a one-trick pony, so to speak, but obviously revolutionary–– Ethereum goes far beyond that; it's more like the internet."
Crypto feeds on opportunity asymmetries and financial asymmetries in society. There are people in our society who can earn millions of dollars without lifting a finger, while others have to struggle the extreme just to make ends meet. Is a dollar worth the same to both of these people? No.
A dollar is worth much more to someone who has to struggle to earn it. If you get a passive fiat income for free, then your dollar is worth hardly anything because it didn't cost you anything to get it... If there was once a struggle, then it is likely far behind you.
If a human gets a lot of anything for free and they can't figure out a good use for it, then it's basically trash to them. They may as well put it into crypto, gold, silver or other scarce assets which are known to soak up other people's surplus fiat currency.
The fact that crypto is a store of surplus currency is what makes it much more valuable and resilient than stocks.
It would be nice to put together a strong argument with numbers behind it.
Right now you can buy Bitcoin via bank transfers which the fee for it can be easily low as you as 5 USD depending on the provider, I buy with fee of 0.1% normally. So the transaction fee in the article is not true anymore.
You can also use bitcoin as a collateral for a loan. If you have bitcoin savings and suddenly you need to cash out temporary you can already do that.
And if you look into news you can see banks and trust funds holding bitcoin as an asset.
The cryptocurrency and decentralised market has to grow, it has a lot of problems, but there's a crazy amount of investments on it so problems are being solved and new things come out every week.
The article presented a well-structured argument. You may not agree, but then please at least try to respond properly. You are better than that.
That's the whole argument. Since everything that central bankers were doing is not working and falling apart, we need to take the dial to 11, and introduce a full central planing. A proper enlightened communism, for the people, by our omniscient leaders, who by precise control of asset prices and such will make sure everybody has exactly as much money as they should, according to their position in The Party, and prices of everything are "fair".
As long as people scream "communism" when they see anything related to planning and ignore the rest of the argument, you're never going to have a balanced or even nuanced debate and instead just dumb black-and-white rambling. Like your post.
No, thank you. You can keep it if you like. It's not Bitcoin people forcing their shit on anyone.