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Comment by cblconfederate | Hacker News Reader

It is ironic that cryptocurrencies are becoming a vehicle for more centralization instead of decentralization. Having banks as middlemen between transactions introduced inefficiencies that actually act as a level of opacity that prevents total and absolute control of the transaction ledger. State-regulated cryptocurrencies facilitate all kinds of large-scale economic control, from money printing to sanctions, ostracization etc on a scale that that even systems like SWIFT cannot.

Call me when paypal sells gold, in physical form that you get to keep in your property. Make no mistake that paypal will ban any crypto that cant' be 100% subject to the whims of governments. These centralized "mainstream" cryptocurrencies are going to kill the anarchic ecosystem and consequently outlaw it. The playbook "save the children/our enemies" is such a popular routine nowadays that i wonder why there's not a startup for it.

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It's never been a goal of incumbent financial institutions to prevent cryptocurrency from becoming dominant... they just want to slow down its adoption and use until they're prepared to co-opt it, just like power companies are doing with grid tied solar panels.

It's becoming a pattern now

Internet -> Centralizing

AI -> Centralizing

Blockchain -> Centralizing

Is Technology cursed to give us 1984?

Technology isn't doing the centralization, it's the people who are building and managing systems centralizing them.

In that sense, we're doomed to give ourselves 1984 unless we consciously and continuously fight everyday to not slip into a dystopia.

I think that the economies of scale enabled by tech lead to centralization.

There's also very little friction to prevent centralization. With physical goods, there might be geographic/logistical reasons why a dominant player can't easily be competitive in every market, but this largely isn't true of tech.

And given the short time-frame needed to bring a software product to market, how possible is it really for a small player to compete with any of the software giants? Even if you come up with something really innovative, how likely is it that your product can't be replicated by an organization with infinite resources?

Historically, this is probably one of the easiest times for a small player to compete with the giants. Is it really harder to compete with big tech than it was with Rockefeller's Standard Oil, Carnegie's steel industry, Vanderbilt's railroads, AT&T's national phone network?

It's much easier to compete against tech and we have evidence as small players like TikTok, and even Snapchat have done it successfully.

Sure you can name a couple of unicorns, but tiktok and snapchat themselves occupy spaces where there are maybe 2-3 competitors at most.

Is it beneficial for there to be more than 2-3 competitors? That may be sufficient from a market POV.

There are also areas that are ripe for competition. For example gmail hasn't changed/innovated in nearly a decade.

Atlassian's Jira is the leader for bug tracking but is pretty terrible.

> Is it beneficial for there to be more than 2-3 competitors? That may be sufficient from a market POV.

Lol I don't know what markets you are talking about, but definitely not from an economist point of view.

Interesting, is there an optimal number of competitors from an economist pov?

I saw a paper once saying that in any market where the top four competitors controlled more than 60% of the market, they'd act as a de-facto cartel. (I wish I could find it again).

Also network effects. Facebook and Twitter aren't king because of their scalability, they're king because you use Facebook/Twitter to connect with the two billion people who are already on Facebook/Twitter. Not even Google managed to sustain a competitor to Facebook.

Relevant: https://en.wikipedia.org/wiki/Metcalfe%27s_law

Solve et coagula.

First position the goal posts where the revolution or disruption is oriented towards freedom. Next, use the disruption to centralize power where you want it.

The strategy is centuries old at a minimum.

Agreed on Internet and Blockchain -- however ML on embedded systems is poised to decrease reliance on ML inferencing in the cloud which cuts out a few certain big players from hoarding massive amounts of potentially sensitive information. One key way to ensure IoT security is to not transmit that data in the first place (on top of the massive energy efficiency improvement that is a driving force behind embedded ML)

Centralization = lack of "Critical Thinking" taught in education systems.

I'd say this is more tied to people not being taught to question power, and less to do with technology.

That's because centralized systems are more efficient than decentralized ones in most of the metrics that matter to end users.

It's also why nation states exist. More centralized organizations can subjugate and absorb, or just out-compete less-centralized ones.

A basilic

> It is ironic that cryptocurrencies are becoming a vehicle for more centralization instead of decentralization.

It's about having the __option__ to go without the middle-man if and when required.

With more centralized institutions adopting these decentralized tech, it gives the entire network more credibility in the short-term (adoption phase).

It's interesting how people don't seem to understand this. For the majority of people, dealing with banks is no big deal and in-fact, preferable because the bank abstracts a lot of things most people don't want to deal with. Having the option to not use a bank, however, is a game changer for the few people in which banks act as a gatekeeper to the economy or those who are more involved and want complete control over their money. This is a good thing.

Don't see how another option moving into the ecosystem is more centralization. Paypal has absolutely zero say over anything at the protocol level. They are simply acccepting payments in that format.

Bitcoin not accepted by mainstream institutions - “It will never work! Visa does a billion transactions a second!”

Bitcoin now accepted by mainstream institutions - “Wow what a joke! They subverted the point of bitcoin! What a stupid thing!”

Can’t bitcoin be accepted by everyone, decentralized or centralized mainstream players?

This is why we have Monero.

Thank you fluffy pony.

I agree in sentiment and can't find the link now but just yesterday I read an article saying the doj or fbi or someone like that had stated that just using Monero or zcash is suspicious behavior. I think this is part of changing the narrative from cryptocurrencies are bad to these ones are good (btc, eth,...) and anyone who uses any other ones is therefore definitely bad

Using large amounts of cash is also suspicious behavior. They're not calling on a ban, they're just stating a fact.

Didn't they say the same thing about general encryption not long ago?[0]

[0] https://www.techdirt.com/articles/20180111/12215438987/fbi-s...

It's all PR work that the compliant media laps up. Most of us live in a world where guilt needs to be proven, not implied.

But it's optional. I can keep my sovereign money and buy from shops. What's the harm?

Money is a social contract.

'Most' of those things that we do to manage it, particularly around fraud, insurance, reporting are to maintain the real integrity of the currency and system.

If you are concerned about the integrity of a currency due to 'money printing' then simply don't hold it as a store of value - just use it as a currency (as it was intended!).

Crypto currencies, without the systems in place to back the fidelity are toys - neither stores of value, nor currency.

Other than perhaps some of the ugly, bureaucratic cobwebs of financial regulations which have not caught up with the times ... there's no point at all to cryptocurrency, it's just a novelty.

Maybe BTC (because of chinese miners) but how is ETH subject to the whims of governments? And how is PayPal's offering stopping you of using crypto in its "purely decentralized way"?

It's not really ironic when btc was never really decentralized to begin with.

How so?

OP may be referring to ledger growth and mining costs mean fewer and fewer miners have the ability to compete. I believe this leads to "de-decentralization" when resource costs continue to grow far beyond what only the biggest investors can afford. At least that's been my understanding of BTC's shortcomings when applied to nation-sized populations of users over multiple generations.

What's the evidence this is happening? That miner centralization is continuing?

I was hoping for someone to jump in and clarify if I'm right or wrong. The evidence I have for this are the self-evidence reduction in mining rewards, the known issue of exponential ledger growth, and the amount of GPU required to be an effective miner as measured by miners moving closer to natural resources for cheaper energy, such as in The Dalles, Ore.:

https://www.wweek.com/news/business/2018/02/21/bitcoin-miner...

You're not making sense. Reduction in mining rewards is not correlated with centralization. The Bitcoin ledger does not grow exponentially, it grows linearly. Higher hash rate is also not correlated with centralization. Despite exponential hash rate growth, hash rate distribution among mining pools has become more decentralized, not less.

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