Cryptocurrency Is an Abject Disaster
drewdevault.com
drewdevault.com
If we, for example, had a team of 20 working on our CI offering, we would have re-allocated at least 50% of them to work full-time on combating the miners. And this trend is not slowing, it is only accelerating.
One week, we may have a breakthrough and find some common heuristic in running binaries that identify _this weeks_ miners, but next week they will have figured out that we have figured it out and make the requisite changes. It's something akin to the early days of anti-virus software, but given the 2021 scale of the internet, the iterations are moving at warp speed in comparison.
If you care nothing of the environmental impact (IMO you should), then take a second and ask yourself what your life as a creator of _things_ be like with no free access to CI tooling? I guaranty you that changes to the free tier of ALL CI services are on the way, and I heavily suspect that when that happens, the miners will take over any service offering paid CI where the return outweighs the price. This will lead to an escalation of pricing such that side-project, FOSS, and anything less than large profitable software will be priced out of hosted CI and be forced into a different model.
Stake: No crypto stake of any kind
* Electricity
* Now hard drives? (some asshat made a "proof of space" system)
* CI
* Graphics cards
* Any general computationBram Cohen, the inventor of BitTorrent. I've rarely seen a first-idea to second-idea decline that bad.
I fully agree with the article, but perhaps naively am optimistic about Chia.
I see it as a comparatively ethical alternative to other currencies.
Now let's take this to the extreme: What if you mined cryptocurrency by burning medicine? The more you burn, the richer you are. Clearly that's evil, as it rewards you for destroying the world.
In a perfect world you would mine cryptocurrency by making progress in peace on earth, good will towards man.
But if you can answer this: What useful resource, that's expensive to produce and has an environmental impact, do you want to incentivize destroying in order to further your greed?
Can you think of anything? Is it not by its very nature evil?
But consider even what happened under Imperial rule in India: Locals were rewarded for every dead snake they proved to the British. What happened? Obviously they started breeding snakes!
So now you have MORE snakes! You actually made the problem worse!
either way, it's literally wasting something to show commitment, and that's bad for every reason in the essay
There just doesn't seem to be a vendor offering something in-between "enterprise CI/CD solution" and "free"; it probably costs more to track that kind of usage than it would be worth to bill?
Starting up crypto miners, on the other hand, is a very low-risk endeavor. The worst that happens is you have to sign up for a VPN due to getting your IP banned. You probably won't make a ton of money (unless you do some major automation), but you will get something out of it that could dramatically increase in value, and it's probably small enough that it's literally not worth the time for affected companies to have their lawyers draft strongly worded letters, much less pursue you in court.
So, while law enforcement has a very limited number of terrorist groups to infiltrate, groups of crypto-scammers form and dissolve overnight, making it much more difficult to be proactive.
If I had a penny for every time someone said "X may be the killer use case for cryptocurrencies"...
Couldn’t it just be a binary yes or no?
Disclosure: I own some crypto.
Stake 0.05 BTC, 1.2 ETH
Skin in the game works both ways. FOMO is a real thing.
And I am not sure what "both ways" means but of course you have to disclose if you have taken a short position in the matter.
If the chair of the SEC comes out for or against crypto (or any financial product) of course we should know what investments he holds.
We’re arguing about a subject on a message board. It’s not going to have any influence whatsoever on the price or whether it fails or not.
I would hate to have to disclose the exact amount of Toyota stock I own anytime I argue with someone the merits of Toyota over Ford or Honda.
There might be value in a discussion that asks for disclosure. I’m not sure this discussion is working as intended though, judging the amounts of disclosures in the comments. Just an observation.
Besides, my original position was that it was bad form to ask for the exact amount of crypto someone holds.
I don’t ask for the exact amount of stock someone holds in Tesla when they are talking about how great Tesla is.
But yes, maybe it would be better to say "none", "a bit", or "my retirement depends on it". (or whatever scale you want to use)
Just because you're not a journalist doesn't mean you can't be ethical.
I think this is my favourite HN comment of the year so far!
It'd be a bad idea to only listen to opinions from people who won't put their money where their mouth is. If anything, objectively analysing something is much more important to those who have stake than those who do not.
I'm not even sure why there's still a pretense of innovation behind most coins these days - every time I hear or see any new fad of cryptocurrency I can already smell the greed from miles away, and the smell is unbearably intense. More recently there's been lots of obvious scams going around social media where bad actors are hacking accounts and replacing them with content shilling their coins and scamming people into sending them coins. When this shit starts invading your personal feeds you know things have started to get really bad.
How many people really bought GME just to stick it to the hedge funds? How many people really liked the stock?
People see the impact and success of technology in their lives. They start looking into cryptocurrencies and go "Wow, this must be revolutionary! This will eventually become as big as the internet!" Most don't care about the practicality or details, just that technology is a winner and that's where they should put their eggs into. And the ones that do care are probably so engrossed and invested into it that they're no longer rational about it.
Once people are invested it's in their best interests to propagate their ideas so they can succeed, regardless if those ideas are actually beneficial or not. I'm no psychologist but I feel like this is instinctual on a human level, which is why I say peoples rationality can get "hijacked". Anecdotally, talking to those who are invested and seeing the ridiculous amounts of irrational goalposts and whataboutisms being thrown around just reinforces this even more for me.
It's showing a demand for an asset that isn't linked to the central planning of government where they continually and arbitrarily inject as much extra currency as they want whenever they catastrophically mess up sovereign budgets.
That's not greed. It's an interest in safety from a drug-addict-like government that opens the floodgates on a whim.
That's not why people buy BTC. They buy it because it's going up.
Is that because, so far, if you were to measure since its inception, it's outperformed any other hedge against inflation?
Drew is right that proof of work mining is expensive and has serious negative externalities.
Drew is also right that cryptocurrency, via its growth, hype, and decentralized and self-sovereign nature, is often an ideal vehicle for certain kinds of criminal activity, including pump-and-dump fraud or ransomware.
Drew is right (perhaps indirectly) that many or most well-meaning crypto projects will end up losing money for most of their investors.
But, there's a lot more going on in crypto. At this point, if you think crypto is wholesale a scam, bad for the world, or a fad, you're simply misinformed.
As Drew observes, Bitcoin has a cost problem. For that reason, many crypto insiders think that BTC's reign as the #1 top crypto will come to an end within a few years.
More reading on Bitcoin's cost problem https://twitter.com/RyanBerckmans/status/1386505715938775044
In contrast to Bitcoin, the Ethereum community is actually building many useful things and will soon stop proof of work mining, replacing it with proof of stake. As a result, Ethereum earns enough actual revenue that ETH is expected to generate lots of cash, like a Buffet stock, in the coming decade.
Today, much of Ethereum's revenue is what we may call "reflexive" or insular, in that the revenue is related to cryptocurrency services or speculation. That might make Ethereum's apps appear to be "not useful" or "scams". However, I think it'd be a mistake to conclude that just because most early Ethereum apps are related to crypto, that they'll all be. Ethereum apps are increasingly connecting with the regular economy, and that's the primary growth opportunity.
Further reading on Ethereum's cash flow https://ethereumcashflow.com
Disclosure: I hold ETH and no BTC, and am the author of both links.
No wait, I can - and it sucks.
edit: just to add on - would you call somebody who was excited about the Internet in 1995 a salesman? Just because I have an easy time seeing where crypto is heading and am excited about it should not be considered "salesman" behavior.
That sounds much less like an ethusiast and much more like a salesman.
According to your own words: Because you are trying to explain your position and enjoy talking about it.
“0.0037 btc to usd”
The comments section is for discussion, why not discuss?
Whether this was achieved or not in this case is debatable, but that doesn't nullify the base premise. (OTOH, quoting forum rules is almost universally boring. ;))
Could you inform us, instead? Nothing you said contradicted this.
Today, two of the most promising app ecosystems are
- Decentralized Finance (DeFi). Here's a community favorite 3rd party leaderboard for DeFi apps https://defipulse.com/
- Non-Fungible Tokens (NFTs). NFTs are popularly known as digital collectibles, but may represent any kind of non-fungible property. We can see some of the top digital collectibles here https://dappradar.com/nft . But, there is a lot more to NFTs than just collectibles or art. For example, the Ethereum Name System (ENS) uses NFTs to represent domain name ownership https://ens.domains
Another interesting Ethereum use case is https://www.eco.com/ . Eco is a mobile app that's a cash wallet and payment method. Eco is a competitor of Venmo, Cash App, Visa, and Apple Pay. Eco is not a crypto app, there's no tokens or anything like that. Instead, Eco is like if you took Venmo, added Apple Pay to it, and then completely cut out the banks by using the USDC stablecoin backboned onto ethereum to connect to an industry group of financial services that have also cut out banks, and in return Eco is able to offer their customers 5% APR and 5% cash back, because of the savings from cutting out the banks and other middlemen.
If you are interested to dip your toe into the ethereum pond, here's a great weekly newsletter that's aimed at developers
The biggest reason why Bitcoin works, and other established coins work, is because of demand from the developing world. If you don’t have reliable banks or governments then Cryptos are at least as good or better than your local banks because even if it collapses you can still access it. For a lot of countries with unstable governments and banking system this is the differentiator. Bitcoin will never be a “currency” but a long-term “store of value” seems quite likely.
It’s pretty clear to me now, long term, Musk knows/thinks that the energy used by the coins’ networks will be free from renewable sources.
I don’t think cryptocurrency is an abject disaster. I think it’s something with a lot of potential to do good and a lot of potential to do bad. I can agree we’re just gonna have to wait to see...
E.g. someone investigated the "bitcoin in venezuela!" claim. Actually going there and tracking down use. Turns out it was a bitcoin investor who went to venezuela to do a transaction for the sole purpose of screaming "bitcoin in venezuela" to pump up the price.
The use case in Venezuela is wealthy Venezuelans getting their wealth out of the country.
When bitcoiners say "refugees" as a use case, they mean rich people looting and running.
I'd say if you have enough money to be a capital flight risk, there are far less cumbersome means to get your money out of the country than crypto.
From my perspective, it is not propaganda but it is my opinion. I didn’t come to the conclusion through any scientific rigor, but rather through observation. I have seen a spike in crypto discussion over the past year or two by, my obviously small sample, of thought leaders and entrepreneurs in primarily in Africa. The talk isn’t ever of get rich quick schemes, but instead focuses on generating long-term family wealth. It’s pretty inspiring to be honest. Investing in general moves your focus (or should) away from the now and to the future. For a lot of folks, myself included, a “future” never seemed possible. Maybe it’s silly but I started taking better care of myself once I started investing recently. I’m lucky, I live in the USA, I make decent money and have easy access via apps like Robinhood. What if I only had access to brokers who aren’t regulated or require deposits well exceeding anything I’ve ever saved? Truly, it pains me to say, but crypto markets are maturing and while they may not be stable compared to traditional 1st word financial markets they’re a lot better than many other alternatives.
Lastly please don’t see this as a recommendation to buy crypto. I wouldn’t unless you just wanna show off your diamond hands. Fwiw, I have to date ever owned exactly zero Bitcoin and only have a few lite coins mined years back (all of which have still not paid back the costs, but are close... Amazon or Tesla would’ve returned better in my case). I might not find it useful myself but it’s pretty hard to deny a lot of other people do find it useful.
Someone basically tricked her into buying lottery tickets. (who knows, maybe it'll work out just fine)
That's not even close to "using bitcoin". To a rounding error nobody is actually using bitcoin (even less the other cryptocurrencies, since it's even more rare to be able to), except to commit crimes.
I have made money from cryptocurrency too, that's not at all relevant. (I exited when I became too disgusted by it)
Decentralized currency on the blockchain? Great! But a currency's much more useful if its value is stable, so if you want to maximize its usefulness (assuming you don't want to tie its value to an existing currency, as existing "stablecoins" do) you probably need a mechanism to increase or decrease the money supply in response to changes in demand. Poof, there goes the speculative potential.
Or consider another potential use case that I've thought about a lot, raising funding for co-ops: it's hard for a startup to raise capital without issuing equity, and decentralizing that process could create realistic alternatives to the stock corporation ownership structure for big nonfinancial organizations. Or similarly, as an example that might be more familiar or important to folks on HN, it would make a lot of sense as a decentralized funding mechanism for FOSS development. (Yes, there have been attempts to do this, which I won't link here.) But no one's content to just build a protocol that lets people put (say) ETH in a pot to fund business investment or software features and then let others claim that ETH in exchange for implementing the stuff. No, you have to create your own DecentralizedFundingToken with a structure that's contrived to create speculative potential to reward "early adopters" and then do an ICO.
I currently own no cryptocurrencies. I owned <$10k in Bitcoin between 2011 and ~2014 (no, not at mtgox).
Cars were also dangerous, unregulated, expensive and excessively polluting. It got a lot better on all these points, and not all due to the cars: some of it was a mind shift that mankind had to make.
Same will hold true for cryptocurrency.
Crypto may not be the answer, personally I'm sure Bitcoin is not. But the problem is real.
Ironically this is also why gold-backed currencies are not an acceptable replacement for dollars either - just substitute China with Australia (which is of course politically a far more benign country than China, but you're still outsourcing control of your currency).
The problem of currency stability is real, but crypto is not a solution at all.
Cryptocurrencies just don't. It's all smoke and mirrors, where everything would be better without the blockchain. Without irreversibility. Without everything about it.
There are whole books about how terrible and useless it is.
And please do what the article said: How much of your own money is dependent on you selling the lie of cryptocurrency or smart contract to the next level in this multi level marketing?
I sold my BTC when it was at $15k, because I felt disgusted in participating in this super-immoral going-nowhere-moral tech, so my balance is 0.
I made a profit, sure, but regret touching it at all.
> Same will hold true for cryptocurrency.
By this logic you could start kicking puppies, because "eventually something good will come out of kicking puppies", and just as baseless reasoning.
This is so true: cars have massive externalities but the 20th century was spend rebuilding the world around them because they were useful. You saw that immediately and the true costs only became more apparent years later.
Cryptocurrency is as if Robert Moses had redesigned NYC around pet rock warehousing on the theory that someone would later find a use for them, and the warehouses needed to burn coal continuously.
Many things do. Cryptocurrencies don't.
TBL transformed the world in a few years for a tiny fraction of the cost despite much higher barriers to adoption.
(obviously ignoring fees and such but they also dont go into anything its just paying someone for providing a service)
If you look at crypto as the huge trading space and you dont see it produce anything is simply because its not supposed to. You look at the space that just exchanges stuff. If you look at a grocery store and you dont see anything produced you are right. The store is just where people exchange stuff. Its not where value is created or where you would find innovation in producing something.
Your grocery store analogy illustrates why there are so many skeptics: I don't have to ask people whether they use a grocery store because they have food on their shelves and there's a steady stream of people entering and leaving the store. Blockchain systems, on the other hand, are never mentioned other than by people who have a vested interest in selling the system rather than doing anything with it. People say they're going shopping to buy something for dinner, but it's extremely hard to find someone saying they're buying cryptocurrency because there's something it helps them do faster/better/cheaper rather than just hoping they'll be able to sell the same token to someone else for more than they paid for it.
I'm certain millions of dollars has been spend and probably nothing or not much came out of it so far but there is no metric and nothing to compare it to so how can people come to the conclusion that too much was spend for too little return? I assume they look at hype and trading and all that and this is what leads to the concision. Whether the conclusion is wrong or not, we dont know but the reasoning is wrong.
Even trough there is nothing to compare it to, a huge junk of VC money is spend for things that eventually fail to give return. Its part of the game. And any sane person would agree that if it fails people stop to put more money in for the same ideas. So how do people think that VC are just stupid and shovel money in stuff for 10 years and counting with no return? Maybe just maybe this is not really the case and there is tremendous change coming for the way financial system work. Its just not something that happens quickly and it certainly not some ETF or anything the public talks about because they see numbers in $ value. That's just people playing around with what these systems allow them to make. Its like the chain-mails or ascii-art and all that stuff that hardly anyone could see as solving any problem but then again e-mail did solve a problem even trough the tech was (/is) horribly bad.
>Blockchain systems, on the other hand, are never mentioned other than by people who have a vested interest in selling the system rather than doing anything with it.
You dont hear people talk about how crypto helps them because it does not for the most part. They don't use it. Its also for the most part not meant to be used by them (the end user). They may use a product that's build on top of it some day. Or even already do [1] without knowing. DLTs are just global distributed databases where everyone can verify the state and rules. We have no clue what kind of problems this can solve but its probably not solving much of peoples everyday problems or if so only indirectly without them knowingly using the system. Just like most people never notices that they use TCP/IP. TCP/IP was once a very stupid idea if you would have tired to tell people what it is. They would have told you that phones already work and that TCP/IP at that time would not even allow you to make a phone call. Why would you encode some tiny messages to send over a wire if you could just call the other side instead.
One of the end-user focused ideas that may become reality in the next years is web monetization [2] where your browser steams fraction of cents while you watch anything on the web. Maybe its payed content only or may it removes the ads if you pay. The idea itself is old (subscriptions). But subscriptions do not scale. No one wants subscription for every website and online service. If you could pay them directly as you use, it would work for all who implement this. No prepaid or monthly billing. Pay as you use or donate as you use. This stuff is pioneered by "crypto people" because it relies on p2p value transfer. The current way we move value can not handle micropayment. You can not stream fraction of cents to someone if everything has to go to a third party first and that third party has to find a way to get the money to the recipient who may or may not be a customer of them. Its slow expensive or completely impossible due to d incompatible jurisdictions and such stuff. Its kinda works like phones did once and it should move on to work like the internet does.
[1]https://twitter.com/mercury_fx_ltd/status/108591501163618713... They are using crypto to settle peoples transaction within seconds. Obviously their customers wont know or care but if they pay less is somewhats solving a real problem.
[2] https://webmonetization.org/ Proposed as a W3C standard.
Well, no, not really.
While cars do have non-zero usefulness, the reason we rebuilt the world around them was because of car manufacturer lobbying, not because of some shared revelation about their value to society.
That's the problem with these kind of things: the early adopters see benefits but probably not the costs, that convinces other people to join them, and it quickly reaches the point where the easiest/most profitable is to continue down that path. If you're the average suburban homeowner, you might hate the effect that sitting in traffic has on your health and time but if you can't afford to live next to the office you're probably going to treat it as inevitable since dramatic changes affect your property values.
(Disclosure: I hold no cryptocurrencies, nor have any financial stake in the industry)
Is there value in nonreversibility? No, that "feature" has negative value, and it's the reason people trust credit cards.
Value in anonymity? Not at this scale, no. On net that feature just is not workable in a society built on anything other than libertarian-anarchy. And most people actually want a structured society, not fiefdoms.
Take KYC and AML laws, for example. What percentage of people do you think would say we should abolish them, if you explain what they are, and what they are for.
Open Source? The functioning of our traditional economy is pretty open in its working. It's complex, yes. But you are welcome to understand it, and participate in the process.
The "code" that the economy works on is legal code. I think where I disagree with you is that computer code is inherently more suitable. I say that as a professional programmer, who's been programming for decades.
Here's the thing: "The programs" was never the problem.
I can illustrate this best with smart contracts. They're a solution to a non-problem, while making the actual problem much worse. Contract disputes mainly come from disagreements about what the contract means, and errors in codifying intention as text.
Ability to enforce was never the biggest problem. Never. And by forcing the enforcement by using a smart contract it's actually making the problem worse, where "that's not what I meant". Yes, the default action in a real contract, without contextual evidence, is to take the wording of a contract literally (and oxford commas matter). But if there is other evidence, then yes a court will take that into account. Do you not want that? Do you honestly want a maliciously injected underhanded bug in a contract to be enforced, with no recourse?
I think the problem with your question is that people who ask it don't actually know what they're asking.
In the libertarian-anarchist utopia based on this infrastructure the enforcement methods are beyond the reach of the police. So what do you do when someone robs you? When someone uses a bug in a smart contract to take your house?
Just as a reminder (from someone who admittedly knows little about cryptocurrencies aside from this): BTC and other cryptocurrencies are not anonymous. They are, at the most, pseudonymous, and because of their very nature, the trail linking whatever online identity you used to make the transaction lives forever on the blockchain.
The aspect of direct "peer to peer" electronic cash, coupled with plausible deniability of ownership and no need for trusted parties, are tremendously positive characteristics in poor, corrupt and developing nations where everyday crypto adoption is running high.
There is nothing else available to solve many of these problems, hence Bitcoin and others filling the void.
There are many other potential positives too, but to say there are none - even right now - is ill-informed.
https://decrypt.co/49088/us-government-use-usdc-stablecoin-b...
Also, the US government sending cryptocurrency to South America honestly doesn't sound like a definite positive. Even recently, the US doesn't have a great track record with their interventions in that region of the world.
https://finance.yahoo.com/news/us-government-enlists-usdc-gl...
Regardless of a given view on the politics of this particular intervention, accepting the intervention occurs at all, also accepts crypto's utility for this purpose of circumventing systemic centralised corruption, which was the point of the example.
> super-immoral going-nowhere-moral tech
lol what? Is US dollar moral? Is it not also "smoke-and-mirrors" by your definition since it's just paper that we all believe has value?
What exactly is your argument?
> Is it not also "smoke-and-mirrors" by your definition since it's just paper that we all believe has value?
USD is backed by the mostly aligned incentives of the whole world in general, and the biggest company in the world in particular, and by the largest military might and nuclear arsenal, ultimately.
USD is paper and bits we believe has value. BTC is bits that most people believe doesn't have value. And that everyone knows will never displace USD because (see above) won't allow it.
Speak for yourself.
> BTC is bits that most people believe doesn't have value.
This is changing rapidly, is it not?
> Speak for yourself.
Raaa-haaaight. Next time you don't believe USD has value you'll skip picking up that $100 bill on the street. When you get robbed you'll laugh and give the robber your worthless USD and say "good luck using this for anything!".
>> BTC is bits that most people believe doesn't have value.
> This is changing rapidly, is it not?
I wouldn't say so, no.
And then you are fine with it.
Good luck with the ignorance.
US Dollar and other "real" currencies are and can be used for payments and transactions (money in exchange for goods, services etc.). Cryptocurrencies are only converted to/from other currencies to make profits based on speculation.
I was curious about this comment, because I know FOREX is a massive market. According to [1] the daily volume of FOREX in USD is $6.1 trillion. According to [2], the average 'consumer unit' (ugh... I guess that means 'person'?) in the US spends about $63k per year. Let me know if my maths or methodology here is wrong because, and I cannot stress this enough, I am a moron acting in good faith but a moron nonetheless... (63 000 / 365) * 330 000 000 (the US population) = 56958904109.6, or $57bn. That's a lot but it's only (conveniently) about 1% of the volume of the FOREX market. Which means what, the vast majority of USD changing hands is in the form of 'converted to/from other currencies to make profits based on speculation'?
Again, please let me know if my methodology is broken, my sources are shit, whatever.
[1] https://www.compareforexbrokers.com/forex-trading/statistics... [2] https://www.statista.com/statistics/247407/average-annual-co...
A rich person can move more money than whole towns combined. We are left with the question: Which one does better reflect the "actual" usage of money? 2-3 rich people doing speculations or thousands of "regular" people (living expenses, entertainment, work supplies etc.) with way less money?
Compared to that there is the problem that something like bitcoin is actively harmful towards practical usage due to the extremely high transaction cost, slow transactions, volatility, absolute lack of privacy, extremely high energy cost (that already surpasses whole countries with only very few people using it).
[1]: https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...
Surely it means 'household'? There's no way the average American spends $63k per year. That's more than the average salary.
Cryptocurrencies are not currencies. Bitcoin might be priced at $63,000 today (or $48,000 or 53,000 or oops 30,000 tomorrow?) but it's worth is $0.
You dont get to decide what has value. The market does. Crypto apparently has value.
> By this logic you could start kicking puppies, because "eventually something good will come out of kicking puppies", and just as baseless reasoning.
Worst argument I've read all month.
If you dont see potential in crypto: feel free to do without. Others do. Thankfully we have some freedom.
Cryptocurrency has had plenty of time to find a legitimate use and has completely failed. It is not a functional currency and it does not solve any real problems for non-criminals.
Not only does it waste energy and computing resources, it has helped fund a significant amount of the digital threats that the average person will encounter.
This is not theoretical. This is happening. Its destroying any service which dares to offer free tiers of generic compute. Its had a significant impact on a global silicon shortage the likes of which we've never seen, impacting products from graphics cards and work computers to cars and defense hardware.
That's it; there's no other correct opinion, only incorrect ones. If you support cryptocurrency, you support the environmental collapse of our planet. We don't need it; its die-hard supporters are either profit-motivated or have nothing beyond a grade-school understanding of historical macroeconomic trends and the broad, undeniably negative impact immutable currencies like Gold & Silver had on the average person's standard of living during economic downturns.
Cryptocurrency invents value out of nothing. It's a scam, a fraud, a ponzi scheme, and nothing more than counterfeit money. And it should be treated as such by the governments of the world.
Mostly it was due to regulation.
"Cryptocurrency" is also kind of a dumb term. Everyone seems to still think this is about creating new currencies. Really we are talking about tokens that represent some component of a system. Yes that is general because the base for experimentation with tokens is absurdly vast. God we need to move beyond thinking about Bitcoin! Really this article is saying "Fuck Bitcoin" and well, I'd agree with that at this point.
I wouldn't say so. The multi-level marketing ponzi scheme things would still be present.
> "Cryptocurrency" is also kind of a dumb term.
Yes, but "crypto" means something else.
> Everyone seems to still think this is about creating new currencies.
It's not. It's about greed and creating money for yourself. Currencies are just more direct.
Everything else is just either incidental, or propaganda.
Yes, there are scams. But even in 2017 ICO days these were easy to spot - wailing and teeth nashing over ICO scams was dumb then and still is now.
> Yes, but "crypto" means something else.
I'm sorry but words mean what people who use them want them to mean in order to communicate ideas between them. Meanings evolve and words are co-opted and probably people should get over that.
> It's not. It's about greed and creating money for yourself. Currencies are just more direct.
I guess I can agree if what you mean by greed I replace with self-interest based mechanism design. I don't believe this needs to be zero sum, though. Maybe we'd differ on that.
Yup, which is why I use the words how I want them to mean. See?
> I don't believe this needs to be zero sum, though.
Absolutely not. I'm a capitalist.
But bitcoin is clearly negative-sum. And (I don't want to retype too much from other comments) so's other cryptocurrencies.
And negative-sum is clearly bad.
Am I not supposed to be doing this? I mean I have rent to pay and food to buy.
Bitcoin speculation does not create value.
The stock market does (e.g. see research on potato and onion futures).
After seeing a few of your replies on this thread I'd like to comment on this: what I see is someone who's using their own personal beliefs as justification on why something isn't useful, failing to understand others have their own beliefs and situations that make the technology useful to them.
For me, and others, there is a deep value in a decentralized, fault tolerant, fast, global, user controlled, immutable ledger of payments and store of value. You might argue that we have existing centralized solutions to these problems, which you believe are better, but that doesn't invalidate the inherit value I (and others) attribute to such a system. Being able to transact across the world in seconds for less than a bank wire and without a central authority is useful. Yes a centralized authority like PayPal can do it faster and with less resources, no that doesn't mean the decentralized method is useless.
Holdings: 5% of my net worth in various proof of stake coins, hoping to recoup money I lost to inflation not playing the equities game so I can afford a home.
It's rare I see such a massive amount of hype, complexity, computation, articles, blather, bullshit, etc deconstructed so powerfully with a simple phrase.
Surely everyone would agree that putting our collective intelligence into 100-year timeframes for lifting all of humanity would be a great boon.. .
And yet we're stuck in Black Mirror world of fraud, exploitation, misinformation, "eff you, got mine" shenanigans.
Really exhausting as someone who grew up with a twinkle in his eye about changing the world through technology.
My tainted opinion: I think the criticisms of Proof-of-Work are totally justified here. There are perverse incentives for "miners" to execute work in the cheapest way they can, whether that is JS miners, bot farms, abuse of free services, hacked AWS accounts, abusing favorable tenancy conditions etc. and even if the miner isn't downright stealing, there's a good chance they are operating in an environment where the cheapest electricity isn't going to be exactly "green" either.
Practically all of these mining efforts are not done out of some kind of altruistic, utopian goal of shutting down central bankers, but are simply done to make money.
What I think is unfair of Drew is to categorize cryptocurrency as a whole as an abject disaster, when in his own article he writes "attempts at reform, like proof-of-stake, are viciously blocked". Well proof-of-stake still falls under the cryptocurrency banner, doesn't it? Perhaps it's better to say that cryptocurrency is facing an identity crisis.
My opinions on proof-of-storage: I always expected that the price of these coins would naturally level out because you'd have to remain competitive with the likes of Backblaze or S3. I don't know enough about the incentive structures of Proof-of-Storage coins, but if there are incentives to have empty spinning rust then these are the wrong incentives and I'd say those protocols are likely broken. Rewards should be heavily slashed if there's wasted storage (ie. empty storage), so as to disincentivize miners from over-provisioning hardware (hoarding disks).
Disclosure:
I'm currently holding roughly a pay check each of Harmony ONE and Polkadot and have a small, locked stake in ETH2. All of these projects are Proof-of-Stake.
I also own pocket change amounts of Stellar Lumens which are used between myself and a friend to keep track of who's paid for lunch. As I understand it, the Stellar consensus protocol is not computationally intensive when compared to Proof-of-Work.
Thieves using my service to make money is what pushed me over the edge into writing this piece, but I have a well-documented history of criticising cryptocurrencies. Here are some examples on HN:
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
Do you believe that cryptocurrency as a whole is an abject disaster? Do you support efforts to reform consensus with alternatives to Proof-of-Work (eg. Proof-of-Stake, Delegated Byzantine Fault Tolerance, etc.) or do you think cryptocurrency is a lost cause?
I think I have been pretty open with my own perspective in TFA.
>Do you believe that cryptocurrency as a whole is an abject disaster?
Yes. I just published an article titled "Cryptocurrency is an abject disaster".
>Do you support efforts to reform consensus with alternatives to Proof-of-Work [...] or do you think cryptocurrency is a lost cause
I addressed both of these in TFA, too.
Perspective and bias are two different things.
>I addressed both of these in TFA, too.
No you didn't, or I wouldn't have asked. You mention proof-of-stake in passing. You also seem to continue to conflate proof-of-work with cryptocurrency in general.
You seem uninterested in discussing these topics further than what you've laid out in your article, which is totally fine. Thanks for taking the time to write and share.
Backblaze and S3 cannot conjure storage space out of thin air. If proof-of-storage coins make hard drives more expensive, that also increases the capex for those services and thus their prices. In the end, they're just shitting on everyone's lawn, no matter if you're using your own purchased disks or storage-as-a-service.
Stake: I hold EUR and have never held crypto"currencies".
The same goes for Proof-of-Storage miners, right? Whoever has the most buying power wins.
How would eliminating all Proof-of-Work cryptocurrencies and shifting entirely to Proof-of-Stake eliminate the incentive for miners to monopolize every last bit of computing resources they can?
My understanding of cryptocurrencies and blockchains is still fairly limited, but I'm struggling to see how any system that allows for conversion of computing resources into a saleable commodity can avoid that problem, whether or not it finds a way to avoid the "electricity-consumption-to-money" pipeline.
I guess the point here is that you could effectively stake on a Raspberry Pi with a 256GB SD card for the next 5 years or so, and you don't need more Raspberry Pis or SD cards to stake higher amounts. The main limiting factor is typically you need to be a full-node, which means syncing the entire blockchain.
If that's not really green enough for you, you can also do delegated staking. One person could run a staking service on their Raspberry Pi for 1,000 people, etc.
Or if you have a link to a good resource for explaining how proof-of-stake works in a way that would clarify this, that would also be fantastic.
Essentially, because there is no computationally intensive work being done. Proof-of-Stake is kind of like saying:
"I have 100 of these coins staked in the network that I can't spend, because of my faith in the network, I'd like to validate this other transaction of 10 coins, the network should award me with 1 coin for validating this transaction because I'm being a good validator.".
Another validator has an incentive to prove that those validations are invalid, because if they do, they get the reward instead, and usually an additional fee.
"Not so fast, I have a copy of this ledger as well, and I can see that this transaction could not be possible. I also have 1000 coins staked, so the network should trust me even more than it trusts you! Not only should I get the reward instead, but we should all agree that you'll get no more rewards in future until you clean up your act."
The rest of the validators, along with their stake, then essentially vote on who wins the dispute. All of this is not computationally expensive. The person staking 1000 coins and the person staking 100 coins can do so both on the same hardware, but yet one of them has more "voting" power on the network, and can net more rewards by having more validation throughput.
That's all very over-simplified, but I think it covers the basics.
If you don't mind, then, can you explain what does allow for staking more coins at a time? That is, if I wanted to increase my rate of mining by 100x in a PoS system, how would I do it?
If you want to stake more coins than you have, then you need to acquire coins by other means (ie. buy them off someone who doesn't want to stake them).
Stakers also have an incentive to trade some of their rewards instead of re-staking them, because they want the network to get utilised rather than simply be 100% staked.
It absolutely wouldn't - as we see from Proof-of-Space trashing the hard disk market recently.
Also Proof-of-Space != Proof-of-Storage (seems a lot of people are conflating the two in this thread as well).
It's not difficult to be negative on crypto when it personally brings you nothing but grief. Our point of views are unequivocally tainted by our personal experiences; I'm sure had I been born in a reasonably free country, with competent social structures and the means to actually own the fruits of my labor, I'd probably hold a different view on the entire ecosystem: I'd see nothing but grifters and scammers polluting the planet while taking advantage of gullible fools.
And as the article says, I'll disclose my stake (Even if I see it as pretty spiteful): I sold off the majority of BTC I had when it touched $60k but most of it is in stablecoins, so I'm still part of the ecosystem. A considerable part of my net worth is in cryptocurrency I've been slowly accruing over the years, converting however much I could save up in local currency to a minority in cold hard cash and the rest in crypto, and it wouldn't have been possible for me to save up otherwise. Yes, I am in one of those so-called "isolated examples of failed national economies" that maybe aren't nearly as isolated nor as uncommon as he seems to allude to.
Replacing either one completely is probably impossible and any change to them will probably have to be iterative improvement, not replacement.
He’s conflating all crypto with PoW based systems. A more accurate title would be "Bitcoin is Making My Life Complicated”.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
"This is not an objective take, his family is being affected. Malaria is not a problem."
You managed to turn OPs argument into a strawman, while also making an appeal to emotion and poisoning the well.
Would you prefer an example of 50 companies being hacked, them advocating for better cybersecurity measures everywhere, and someone pointing out they're now un-objective and should be dismissed? That this doesn't indicate anything about how cybersecurity measures are needed?
I also find it hilarious that you're accusing me of playing "bingo" while half your argument is:
"logical fallacy", "strawman", "appeal to emotion", and "poisoning the well" in quick succession.
Although I'm hoping it's just good sarcasm if it's impossible to distinguish.
Here's a better analogy for you.
This post may as well be talking about how household electricity is the worst invention of the 19th century because of how inefficient long distance DC power transmission is.
In my mind, the people who make this pitch that we shouldn’t blame crypto, we should blame proof-of-work sound a lot like Elon telling me that Tesla will be Level 5 any day now. Yea, it would rock if we could suddenly have the perfect thing, but I don’t see any evidence that PoW is actually being replaced by PoS for real world transactions.
Currently the three largest PoS networks that I know of are Polkadot/Kusama, Harmony and Fantom. They are functional insofar as being EVM compatible. Theoretically anything running on ETH could be ran on these networks.
Stellar Lumens is an example of something which does not use PoW, it uses FBA which is considered much more efficient than PoW (and possibly certain PoS systems too).
Certainly, almost all crypto assets right now are tied to PoW systems in that their value is somewhat propped up by a general interest in crypto, of which the large majority (in terms of market cap) is currently Proof-of-Work based (BTC, ETH, LTC, BCH, DOGE, XMR, etc.)
I suspect we will see a natural shift towards PoS alternatives as they are much cheaper to run and entry into these other markets is cost prohibitive.
We should also see a huge shift in value if/when ETH2 is released (which some estimate could still be several years away).
The elephant in the room will be BTC. It remains to be seen if people will still consider BTC to be a store of value in the crypto world, akin to gold bullion in traditional markets. Certainly many people holding it would like you to think so.
Does anyone know how to get in contact with these informal working groups?
Should be named mining is a disaster.
PS: I have no stakes in anything that requires mining not even gold.
Anyway my mininga statement was more of a joke because people would not trow gold into the rant about mining but are fine adding all other coins that have no mining at all.
Also not big fan of PoS as it has some of the same unwanted properties. So I dont intend to buy any PoS coins. I prefer FBA.
I believe your analogy is correct, but not in the way you intended.
Yet burning gasoline like a deranged madman is apparently constitutionally protected in every country.
Infrastructure spending is literally dependent on the continued ability of peoples to transport themselves quicker by sacrificing their grandchildren’s future.
How did this complete brain fart become policy? It’s far, far more destructive than “cryptos”..
You're free to disagree whatever you wish to, but from this to "I'm ashamed to share an industry". Hey man, who are you? Then I'm ashamed to share the web with you. It's fine to disagree/agree/comment, but I'm little bit triggered of your words.
TL;DR: "cryptocurrencies is evil", but you are not understanding that it's not the technology that is evil. Cryptocurrency is a tool, and as a tool, many aspects of it depend on the people that use it. Let's then rant about AI (that is used for military scopes, so must be evil!) and IoT (ahh those chips that can not be found!!1111! Crisis!).
You're not ranting about cryptocurrencies, you're ranting about attackers. I would personally remove your last words about "ashamed".
[spoiler: I work with cryptocurrencies, sorry]
And he's right, that is so stupid as to be (colloquially; literally, "that it ought to be") criminal. The technology itself is evil to its roots.
LOL ouch. Selling prior to 2016 must sting. It makes sense that somebody who made this mistake would be bitter.
This guys take of:
> It has failed to be a useful currency, invented a new class of internet abuse, further enriched the rich, wasted staggering amounts of electricity, hastened climate change, ruined hundreds of otherwise promising projects, provided a climate for hundreds of scams to flourish, created shortages and price hikes for consumer hardware, and injected perverse incentives into technology everywhere.
is so bad and off the mark and missing the reality that is it even worth a well-thought reply? This reminds me of people who would shit on the Internet in the 90's because of porn and scams and this and that. The Internet had and will always have negative components but it's worth fighting for because of all the good. Crypto and decentralization is exactly the same way and in many ways even more important.
Please name one good thing crypto helps people accomplish that doesn't involve breaking the law (or speculation.)
- DeFi
- decentralized data storage.
- a decentralized & censorship resistant video streaming platform.
- Artists getting compensated fairly via NFT's.
- Banking the bankless
- DAO's (btw, how can DAO's work better without being decentralized? hahaha)
- A decentralized and censorship resistant social network
- Sythentics. What is a better solution to tokenizing assets in your opinion?
and on and on..
Ask Argentinians, Turks, Venezuelans, Zimbabweans, etc. what they think about their central banks.
If your national isn't as stable as you like, you can more easily use a different national currency. If your country has capital controls that prohibit this, then you are using cryptocurrency to break the law.
My contention is that so far the only use cases cryptocurrency has been successful in are illegal. If the legal restrictions in those areas were removed, cryptocurrency would no longer be useful there.
https://fred.stlouisfed.org/series/M2SL
Did you expect 20% of all US dollars would have been created in 2020? 4x in the last 20 years. That doesn't sound stable to me. When your currency can be debased by 20% in a year, with no democratic process or recourse; 6 board members appointed by Presidents, serving 14 year terms, decide what the price of money is, and how much of it exists. Alternatively Bitcoin's supply schedule is transparent, auditable, open source, mathematically provable.
If your national isn't as stable as you like, you can more easily use a different national currency. If your country has capital controls that prohibit this, then you are using cryptocurrency to break the law.
And what happens when the ultimate reserve currency (USD) is broken? People flee to gold. Well, Bitcoin is digital gold; its more secure, cheaper to carry, has better supply stability. Your solution to escaping a sinking ship is essentially jumping into a more slowly sinking ship.
My contention is that so far the only use cases cryptocurrency has been successful in are illegal. If the legal restrictions in those areas were removed, cryptocurrency would no longer be useful there.
The use case for cryptocurrency is escaping government monopoly of money, returning a savings rate to individuals and institutions.
People who dump money into gold are idiots or speculators (or hedging larger positions.) I have lived with the ups and downs of the gold industry and it is very much not stable.
The US dollar has far more infrastructure and institutional support preventing it's collapse than bitcoin. Currently the collapse of the dollar would destroy the world economy to such an extent that I highly doubt the bitcoin network would survive intact.
If the law is your baseline standard for what is moral, then you should probably try a little harder and put some thought into whether or not cryptocurrencies deserve to actually be illegal. For the most part, it is not illegal to own or trade in cryptocurrencies in the developed world.
The US dollar has far more infrastructure and institutional support preventing it's collapse than bitcoin.
We've seen this attitude before. Too big to fail, FDIC insured, Fannie Mae/Freddie Mac, auto industry bailouts, airline industry bailouts, investment bank bailouts. Debt increases perpetually. Money creation increase perpetually. Mortgage rates going to 0. Treasury yields going negative.
All this is completely normal.
If the US dollar fails in the near future, your bit coin will be mostly useless because the global system that generates wealth and handles logistics will have broken. People will be starving, bartering and looting. nobody will want to give you anything of value for some stupid worthless ones and zeros.
Bitcoin as a hedge against the collapse of the dollar is a ridiculous investment.
If the US dollar ends up hyperinflating, assets like gold, bitcoin, stocks, housing, etc. become very, very expensive. They become expensive because everyone seeks to escape USD into safety of assets that are inflation resistant.
So you have it backwards: people will give EVERYTHING of value to get those assets, because those are the only things they want to be paid in. They are the only things capable of storing value.
Its funny you think nobody will want to trade for "stupid worthless ones and zeroes", because today they trade for "stupid worthless paper with President's faces printed on them", and before that, they traded for "stupid worthless shiny yellow rocks".
Hard assets with long track records of value will beat bitcoin hands down.
You’re just betting against network effects, betting against metcalfe’s law and generally the digitalization of physical things.
This being HN, it’s ironic you would so short sighted take that position.
Selling bitcoin prior to any time must sting (and in fact that's a very strong argument against bitcoin as a currency). This argument holds no water.
In retrospect, those people were ahead of their time.