It's time for us in the tech world to speak out about cryptocurrency
twitter.com
twitter.com
I can see how people in their twenties would fall for this argument because they can’t remember. The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access. Email and ftp alone were killer apps. A bit later came Usenet and IRC and MUD gaming. There were things to download, people to meet, flame wars to participate in. People would stay up until 4am to get a chance to go online in university shared facilities.
With cryptocurrency there’s nothing to do. You could pay $100 to buy a “cryptokitten” or whatever, but then you’d be stuck shilling it on somebody else somehow. The community is a mix of Scientology-like groupthink and multi-level marketing sales pitches. The early Internet was infinite times more fun.
- The Internet emerged from a community in which it afforded real and tangible benefits, without any one single locus of control. (Research universities, along with a number of government departments and a few major tech and defence contractors, principally.) Perhaps an alternate payment mechanism might emerge similarly.
- The Internet tools which did emerge ... were well-suited to a small-world network in which local reputations could be assessed and acted on (loss of campus-based access with administrators overseeing populations of a few dozens to hundreds, rarely more than 1,000, through the early 1990s). Effectiveness at larger scales and in more hostile environments has proved ... problematic.
- A clear statement of the problem(s) posed by present currency and payment systems is still lacking. Statements as do exist tend to be ... weakly grounded in emperical truth, strongly ideological (not necessarily a fault, but often one), and strongly resistant to actual demonstrated superiority after decades of effort.
Bitcoin followed this pattern for a while. But then at some point it started to regress on that axis. You could no longer buy a pizza with it, you could no longer mine it, and it got too flooded by scammers to use safely. There's nothing to really DO with blockchain unless you buy into the subculture. That's very different from early internet, early web, early radio, you name it.
“Why did it regress” is much less interesting than “why did anyone ever fall for this?”
What's interesting to me is that the original idea was clearly brilliant, but never found any of those lateral steps. It's kind of a string theory for programmers now.
First, the underpinnings of Bitcoin are ideological, namely in Austrian economics. This means that any change that caused any inflation would be socially resisted.
Second, most of the issues with Bitcoin stem from the lack of a central authority to do things like chargebacks and handle conflict resolution. It is not possible to solve many of the issues of Bitcoin without a central authority, and that was not going to happen for obvious reasons.
As soon as it claimed to be money, then it was all about the money. If you look at early BitcoinTalk, you'll see a pile of scams that are extremely similar to the jargon still used in crypto to this day - the scammers got in very early indeed.
The problem is that delivering AR with enough fidelity to fool the eye is capital-H Hard. Michael Abrash had a good series of blog posts on this.
So... like git?
And that algorithm is indeed novel! It also has a lot of drawbacks that ultimately makes the whole system not worth the trouble.
I hear that darknet markets tend to use cryptocoins. Which while probably mostly illegal, isn't a Ponzi scheme and isn't (necessarily, depending on what's being sold) fraud.
Amusingly enough the darknet use of crypto may only be possible because of the Ponzi-beginnings. Criminals are unlikely to accept Pokémons as currency until after they see others doing it.
The actual interesting and novel thing about crypto-coins was solving the "trust problem" of a distributed ledger. But this solution, to be honest, is quite clumsy: PoW. But nobody ever found a better solution until now. Any other proposal is kind of centralized somewhere.
The question that needs to be asked is now "Do we really want, or even need, a fully decentralized 'value moving system'"?
In a world where you could ultimately trust someone else the answer would be clearly "no".
But when there is on thing to learn about humans than it's "never ever trust someone ultimately as you're going to be scammed by those people eventually". Just look at what government do around the globe…
As long as this fact doesn't change (and it won't change until we create a new species of intelligent beings, better than us) there will be room for something like BitCoin. And as those are distributed systems there even doesn't need to be any agreement on that point.
And then there is what we do know about what happens in practice:
https://www.cnbc.com/2019/03/22/majority-of-bitcoin-trading-...
https://www.theregister.com/2018/11/30/blockchain_study_find...
"We found a proliferation of press releases, white papers, and persuasively written articles," Burg et al wrote on Thursday. "However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development."
Only if you have a wildly incorrect view of what a blockchain is.
Merkle trees are part of a blockchain, but they are not blockchains on their own. What you’re missing here is that blockchains also include something to determine which branch is the correct one, to protect against double spend attacks. This is why “blockchain” gets a different name rather than just being called Merkle trees.
I'm pretty sure that if I posted a fork of Linux somewhere, approximately everyone would know that it's not the correct one.
I thought that Monero at least served some purpose as a currency even if it goes against the wishes of some countries' governments. The fact that there are people that talk down cryptocurrencies that are actually being used as a currency really put things into perspective.
It's just multi level marketing schemes all the way down.
https://theintercept.com/2021/03/24/andrew-cuomo-covid-ibm-b...
"Blockchains are typically public, their contents transparent to anyone with an internet connection, but the one behind Excelsior Pass will be private, meaning only parties sanctioned by IBM will be able to check the contents."
But the blockchain is the protocol for updating the information where other players aren't trusted. As soon as any "party" can be "sanctioned to be able" there's just no need for blockchain at all. It's just selling of snake oil, and yes, IBM is indeed doing it.
Now who'd expect that? The technology company uses the hyped technologies to sell their services and products, even if the said technologies don't make the products any better?
Of course, blockchain promoters would tell you that "there will be something else, comes Really Soon (tm) which won't use "proof of work"."
One can more efficiently use public key cryptography, hashing and signing without the blockchain for any other problem than "implementing bitcoin."
https://en.wikipedia.org/wiki/Paxos_(computer_science) An old algorithm used for sharding big-data databases.
https://en.wikipedia.org/wiki/Raft_(algorithm) A simplified version of paxos.
http://www.scs.stanford.edu/~dm/home/papers/losa:stellar-ins... The new paper about SCP which allows replication with subjective notions of trust (no central participant-stake list like paxos/raft).
ps: actually i remove "chained" from the idea. If you want to keep the whole authenticated linked-list thing and do it right you'll end up somewhere near https://irmin.org/ (a generalization of git), which is very useful, but doesn't tackle the "strong decentralized commit". You'll probably want to either centrally manage the "lastest-hash(s)" (like git is usually done), or pair it with a state-machine replication protocol. In that last case it may seem useless to use the chained thing if you already have a real replication protocol, but it is much like using public-key crypto for encrypting small ephemeral symmetric keys and encrypting actual data with symmetric crypto: it's an optimization.
Of course, PoS like Ethereum's takes much inspiration from byzantine paxos. But I wouldn't call this a solve problem, and crypto has innovated in this space. We can just debate whether or not the innovation has been worthwhile ;).
This is gold, I'm gonna steal it
Cryptocurrency seems like that for endless numbers of tech nerds. It’s even worse than the impossible shape they were going to use on the Borg since it plugs right into humanity’s biggest cognitive vulnerability: gambling.
Maybe it’s a weapon sent by aliens to make halt our technological progress. 25 years from now cryptocurrency will have soaked up all surplus capital and locked it into a Ponzi and all our best minds will be churning out increasingly Byzantine coin hacks. Then the hypervelocity impactors start arriving…
Sologenic DEX [1] is an modern UI for a DEX to trade. Cutting out the middlemen was once a key point of p2p and decentral systems. It was kinda lost with all the non tech savvy people storming the crypto space.
[1] https://www.sologenic.com/ecosystem/sologenic-decentralized-... (The DEX runs on the XRPL, Manticore Securities AS(the company behind sologenic) has no control over it)
What do you mean by saying people fell for "this"? I assume you mean it's a scam but I will wait for your reply.
For a payments system, the fact that all transactions are final is pretty bad. I'd say this, by itself, makes the system unusable in the real world.
SWIFT international wires do cost the DI more, but not several orders of magnitude more. I don't happen to know that number off hand.
Some retail banks charge a lot for wires because they can - people don't use them frequently (as to your point its not what people want most of the time) and usually only for bigger purchases so the fee matters less.
However, if this is something you do more often, banks offer steep, steep discounts over sticker.
The slow transition away from “mass adoption soon!” is extremely entertaining to me.
Why, pray tell, for a currency would developers matter more than end users?
Multisig escrow is also better in every way if people want to involve a third party in case of a dispute
There are already a large number of crypto projects partnering with existing businesses to address real problems. I don't see a minority ideology standing in the way of this.
Here's various businesses running oracles for smart contracts including Deutsch Telecom: https://chain.link/ecosystem/data-providers
Here's Ernst & Young's take on the technology: https://www.ey.com/en_us/blockchain
They are not. They're offering a pre-paid card that users can top up with their crypto.com wallets. [1]
The Crypto.com Visa Card is a prepaid card. Broadly speaking, prepaid cards are the same as debit cards. The difference is that debit cards are linked to your bank account, but prepaid cards need to be topped up. In our case, you can top up using bank account transfers, other credit/debit cards, or cryptocurrency.
And Deutsch Telecom isn't using a blockchain either. They're selling data to a company that then puts the data on a blockchain. That's not using a blockchain.
And Visa clearly said: that Anchorage will be its “digital asset settlement agent” and that it will “integrate [its] treasury systems with Anchorage.”
“After further testing and additional conversations with clients, partners and members of the regulatory community, we hope to launch this capability for other partners in the year ahead,” Visa said in a blog post about the news.
Read it from their official press release, a couple times: https://usa.visa.com/about-visa/newsroom/press-releases.rele...
The fundamental issue is that creating scalable, cheap credit infrastructure for mass economic activity is fundamentally in opposition with creating an investment that will continually gain in value. You see this really clearly in Ethereum, where’s gas fees can be exceptionally high compared to traditional financial institutions.
Or https://compound.finance/ also a great project.
Ethereum's gas fees have nothing to do with the price of the base asset: it has to do with limited block size availability. When the network is congested, block size is limited and this causes transactions to be bid up in an auction format to get in first.
This is one of the costs of decentralization. However, recent advances in Zero Knowledge Proof cryptography has paved a path for Ethereum to take to get to VISA scale and beyond and be able to process 200K transactions per second (at pennies or less per tx): see https://zksync.io/ and https://starkware.co/.
With technology getting faster, I regret not mining a few coins.
I even bought the sound cards?
A life if regrets because I didn't follow my gut feelings, or let people sway my decisions?
(Would I invest in Bitcoin now. Hell no, but years ago yes. It will deflate, along with NTF's, and the stock market soon.)
Not be able to reverse transaction is not a feature, it's a fundamental flaw. There is absolutely no advantage to the consumer or the producer to have all transactions immediately permanent.
The rest of your comment reveals your bias: You don't really care about it working technologically, you just wish you had made money on it.
And BTW no we dont need bitcoin for this at all its depreciated tech. But other DLT can be very usefully. There is a reason CBDCs are a huge topic in global finance.
That's just what humans do to each other. New tech is always like this when there are gains to be made.
Some folks look at the trend that central banks have been on and the creep of financial surveillance and think purposefully going backward in some areas isn't silly at all.
In the end, it's software you don't have to use. Nobody is forcing anyone to opt in, right (you know, like the credit bureaus who in America force you to opt in if you intend to... I dunno, participate in the economy in a meaningful way)?
Humans have been using credit systems for millennia. The implication that in the olden days people only walked around with bits of gold in their pockets is a bit of “retconning.”
Paper currency is a couple millenia older than the printing press, using woodlblock printing.
If we're talking specifically about credit cards, the credit card went from new invention to ubiquity in a couple of decades. But I think that's too narrow a scope to look at, to be honest.
Early credit systems did not depend upon the printing press; think of the widespread use of tally sticks in medieval Europe to enable illiterate low-technology credit systems.
It's really hard to approach this anthropologically, IMO, because so many other variables change. Less complex economies do fine with "local communism" and person-to-person debt, but it's hard to imagine using such a thing to order from Amazon. Conversely, coinage historically was useful if you had to exchange with someone with whom you didn't have a personal relationship (say, you're traveling to a faraway land and you can't just provide an IOU), but that's somewhat obsolete now.
I guess my conclusion would be that these historical analogies don't shed a lot of light.
This article includes some interesting tidbits: https://www.newyorker.com/magazine/2019/08/05/the-invention-...
https://www.amazon.com/History-Money-Jack-Weatherford/dp/060...
Second, adoption is way up and btc is only one cryptocurrency. It gets first-mover advantage in this market (unfairly, probably) and so continues to be a bellwether despite the fact that it is a relative dinosaur, technology wise. I'm fine with that, personally, despite the problems with the technology.
That you haven't adopted the tech doesn't mean that adoption is failing, you know. There are more users every year (this is difficult to pin down for obvious & good reasons, but the indicators are solid) and no technology with millions of users globally, including institutional adopters, can be said to be failing.
Further, to call any payments technology 'mildly popular' which safeguards USD 1.5-2.5 trillion (total cryptocurrency market cap, BTC accounting for over 760 billion alone, despite the recent corrections) in deflationary wealth undermines your argument to the point of bad faith. Is the cryptocurrency market overheated and full of nonsense? Of course. But let's do the analyses with level heads at least.
In Europe credit cards are not very common, and debit card transactions are often not reversible.
A generalisation like this is no better than the frequent occurrence of HNers posting articles headlined with "the nation" which mean "the USA".
Anyone who has worked with payment processing can tell you how rare debit card chargebacks are, this is because they’re usually vastly more difficult.
I don't use dispute resolution unless someone actually stole my credit card number like when my card info was jacked at a gas pump one time. Credit cards are quite insecure and we still have to type in all our personal info online every single transaction which is dangerous and dumb and makes the whole system vulnerable to credit card fraud in a way that crypto isn't. When you use crypto you simply sign a transaction message, you don't have to give away your private keys to make the transaction occur.
And no, your comment on Ethereum is about 4 years outdated.
That a transaction is final is not a flaw but one of the main features.
Many people are certainly buying in to crypto with the intent of selling it later at a profit. But that’s unrelated from its utility.
Usage as in number of network participants. People investing time, energy, risk into the system. Miners, traders, validators, second layer operators. Similar to members of facebook, servers in the internet. Price as in market price. And I'm only talking Bitcoin here.
First I've heard of this. Do you have more information?
And the idea that miners have a god-given right to make $100 per transaction, $40m per day, and therefore if the mining reward halves, the price of BTC must inevitably double, is obviously preposterous.
It'd be like if the number of Facebook accounts kept rising, but hardly anyone posts content anymore. If I were a Facebook investor, that would worry me.
I agree with you. Both versions of this argument have to stop in favor of actual discussion (which, it seems, there is a good amount of in this thread)
Most technology companies should hold it on their balance sheets and employ a contributor.
Note, not speculation in Bitcoin, usage of it as an actual currency.
Curious what you landed on, though.
The NFTs that just point to a painting or a youtube video, I don't think so. They don't do anything and I don't think owning them will be valuable.
The NFTs of, like, NBA clips I can sort of understand as digital trading cards. Being purely digital I think they're inferior to the baseball cards I collected as a kid, but I can kinda see it. But 1) they don't need a blockchain; a public database would probably work better for everyone and 2) I don't think sports trading cards are generally a good investment.
There's something maybe interesting in the "creator economy" angle where like a new podcaster auctions off NFTs of the episodes to early fans, who then become invested in its success. If the show takes off, newly minted NFTs will go for more and more money benefitting the creator and the secondary market will appreciate for early supporters. To be clear, I don't think this is actually a good idea for a lot of reasons... but it's interesting.
All the games and pets and racehorses seem like junk.
Like, sure, NFTs hypothetically make it so that ownership of Top Shots can persist regardless of whether the company that operates it survives. But would the actual Flow blockchain survive the demise of Dapper Labs? I kind of doubt it. And where would the Top Shots I supposedly own continue to be hosted? It's effectively just a centralized marketplace.
I've tried to think about what would truly be unique and interesting about decentralized NFTs, and to me, they make sense if they hold credibility independent of any producer. So, something like a tradable auth role that is respected in many spaces. Kind of like an identity, except that I think the concept of a role makes a bit more sense as something that people can trade. Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
To me, that's where it starts to enable something that's unlike what's existed before, but it's still hard for me to imagine a real use case. And that's core of the problem of the crypto world: the technology solves problems that don't map on to existing B2B or B2C services. It's literally a solution in search of a problem.
They don't confer copyright or licensing or anything at all other than a URL. This means it would be illegal to build a site that displays such content, and it would get instantly DMCA'd into oblivion.
My issuing an NFT of the Mona Lisa is basically me grabbing a museum map from the Louvre, circling the Mona Lisa on it, signing my name, then selling that map to you for big money. The map doesn't given you a license to display the Mona Lisa. It's just a set of instructions re: how to find it alongside my signature. If they move the painting to a new location, it gets stolen, destroyed, or the Louvre is shut down - well, tough. And anyone can do it, with any map of the Louvre.
> Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
Event tickets have one issuer and one point of redemption. Generally, Ticketmaster is on both sides (they own the issuance via Ticketmaster and they own the redemption side - the venues - via Live Nation). It's not in their interest as a business to relinquish even the tinies bit of control.
Also, consider that in NFTs, the only one selling an NFT to the Mona Lisa is Leonardo.
No. Copyright must be explicitly assigned.
> Also, consider that in NFTs, the only one selling an NFT to the Mona Lisa is Leonardo.
Nah anyone can do it any time.
No one is talking about assigning copyright. The question is about a license to display the content on a website. I am fairly certain you have heard of non-verbal contracts before. For example, here is what the UK government has to say about an implied copyright license:
https://www.gov.uk/guidance/license-sell-or-market-your-copy...
> Nah anyone can do it any time.
Anyone can also sell a signature of Clooney. And yet no one does, nor would anyone buy it. This is not something that plays into a serious analysis of the NFT space, and so I am not sure why you would want to find it interesting to talk about.
Agreed on the unlikelihood of NFTs supplanting event tickets. I'm just speculating on the type of novel product/ecosystem the technology enables. But building a compelling experience around this concept is a whole other challenge. It remains to be seen whether someone eventually does. Even if that happens, it doesn't mean we're talking about an entire new market of significance.
I guess I'd just say absence of evidence isn't evidence of absence, when it comes to the utility, but a level of outside-the-box thinking is required that no one's motivated to do when you can simply mint NFTs of URLs and sell them for absurd sums of money.
Agreed that the artificial scarcity is a tell that there's not a particularly impressive amount of innovation.
And, yeah, 13 years after the internet's invention was 01982; not only couldn't you get so much as a weather report online, much less IRC, but many of the early interesting experiments like NLS at SRI had shut down, and more and more places were disabling guest access to their hosts — you couldn't run so much as a game of ADVENT without getting a username. And a password. Things were seriously regressing. The only people you could talk to on the internet were other people who really bought into the subculture, of which there were a few tens of thousands.
So why does Bitcoin have tens of millions of users 13 years after its inception, instead of only tens of thousands like the internet?
If you live in a country with a highly functional banking system and no kleptocracy, Bitcoin is probably a bit puzzling unless you have family in Cuba. But it’s not puzzling at all for those of us who live somewhere in the middle of the broad spectrum between Switzerland and Somalia, because most places have a little kleptocracy. Argentina is a stable democracy, far from being “a failed state,”† but if you want to send US$500 abroad via non-Bitcoin means it’s basically impossible, and the only broadly available savings vehicle is real estate (“ahorrar en ladrillos”), which of course grossly inflates real-estate prices, with a substantial part of the capital city occupied by empty apartments someone bought “as an investment”. Historically, Argentines have saved by buying dollars, but that’s limited to US$200 a month now, and then only if you have a non-under-the-table job (about a third of total employment is under the table):
https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-...
You can see that in September 02019 when this measure was imposed the price of a dollar was AR$63.50; now it’s AR$155. So whatever savings you had in pesos in 02019 have lost 59% of their value to peso devaluation.
In 02001 a lot of Argentines had saved dollars in their dollar-denominated bank accounts. This did not preserve their savings through the financial crisis that year; the cash-strapped government limited withdrawals to a trickle, then converted dollar deposits to pesos at a one-to-one rate, then released the exchange-rate peg, at which point peso went overnight from being worth US$1 to being worth US$0.25 before settling at about US$0.31 for the next few years. The US did something similar in 01933.
Some might suggest using “alternatives to banks like credit unions where customers—as owners—hold more power,” but Credicoop depositors suffered the same two-thirds confiscation of savings as depositors in for-profit banks. And they pay the same 3% tax on bank transactions including checks. That’s more than a fast Bitcoin transaction fee of US$15 for transactions over US$500.
But we’re not a failed state. There are no gangs of bandits roving the streets in Argentine cities (though there are some pretty bad slums where you’ll get robbed if you wander in without knowing anybody). Courts, free public hospitals, and roads continue to function, though there are more potholes than a year ago. Argentine infant mortality is 10 per 1000 live births, down from almost 20 in the late 01990s and the same as the late 01980s in the US; life expectancy at birth is 77 years, worse than Switzerland’s 84, but the same as China and Hungary, and better than Saudi or Mexico. (Somalia is 54.)
Most of the world is worse off than Argentina, although not necessarily in such a statistically transparent fashion. About one fourth of the people in the world are unbanked, 51% here in Argentina; even advanced countries like Russia, Hungary, and Uruguay have roughly a quarter of the population unbanked:
https://www.gfmag.com/global-data/economic-data/worlds-most-...
And if your family lives in a country like Iran or Venezuela subject to US sanctions, and you live in the US? Good luck sending them an ACH, instant or otherwise!‡ It’s well known that Bitcoin is very popular in Venezuela, which kind of is a failed state, so one of the Venezuelan governments is trying to tax Bitcoin remittances at 15%.
Bitcoin handles a few billion dollars per year in such remittances. This might seem like a trivial amount of money to someone in a rich country, but in poor countries, it’s enough to keep several million people alive.
Even in the US, it’s common for the police to confiscate large amounts of paper currency just because they can (“civil forfeiture”); US bank accounts are probably fine for US$100K but probably somewhat risky for US$10M if the bank thinks you don’t seem like the kind of person who ought to have it. US$10M in US$100 bills fits in a box you can wheel around on a dolly, but Bitcoin is a lot more practical. (And of course US$10M in dollar bills loses about US$200k per year to inflation.)
Transaction fees are usually high enough that you wouldn’t want to use Bitcoin to pay for a can of Red Bull or even a restaurant dinner. But it’s extremely practical as an alternative to Western Union or US$100 bills or gold, even with the current very high transaction fees. At the moment, the Bitcoin transaction fee is very low—the median Bitcoin transaction fee in the last block was 0.00678 millibitcoins, which is US$0.25:
https://btc.com/0000000000000000000778ef382c1697706e34634696...
Three months ago it was at what I think of as a more normal rate of 0.31 millibitcoins, US$11, which is lower than the 3.4% spread you’d pay to a jeweler or black-market money changer for transactions over US$350:
https://btc.com/00000000000000000000476ab57eea9be8ada36e2680...
So, Bitcoin doesn’t have to be a cypherpunk utopia to be a big improvement on the status quo ante. For those of you living in stable countries where your worries are things like “instant and extremely low-fee ACHs” and “decentralized utopia”, this may be very confusing, but try to remember that most of the world lives in places with much more pressing concerns, concerns that Bitcoin helps a lot with. And you may live there too, soon—the loyal subjects of Kaiser Wilhelm in 01913 certainly didn’t expect that in 15 years they’d be in the middle of a hyperinflation episode that remains legendary a century later.
I think that, by providing workarounds to the people who need them, cryptocurrencies probably not only ameliorate the most immediate and pressing concerns of poor parts of the population like Venezuelan immigrants, but probably also adjust the power balance in a more liberal and democratic direction. This will improve the chance of those concerns being ameliorated by public policy over the next decades as well. But it's hard to tell what will really happen. The potential disaster scenario is that, by making most taxation impossible, cryptocurrencies destroy the modern welfare state without providing anything to replace it. So the public hospitals close, the enormous police force starts to support itself by extracting tribute, and the infrastructure decays. Pretty similar to what's happened in the US over the last 50 years, in fact, only more so.
However, at this point I think the modern welfare state is already doing a good enough job of destroying itself without any significant help from cryptocurrencies—as evidence, I can point to Maduro, Macri, Bolsonaro, Trump, and Brexit, and metonymically to the social changes they betoken. So at this point I'm more worried about cushioning the collapse than preventing it.
(I posted an earlier version of this a couple of months ago at https://news.ycombinator.com/item?id=26654767.)
____
† We’ve remained democratic since 01983, electing presidents from three different political parties (UCR, PJ, and PRO), and there’s no serious insurgency. It’s the economy and government policy that are ruinously unstable, to a point that seems satirical to anyone accustomed to the US, but is lamentably common worldwide. Rich people sometimes say they don't know of legitimate uses of Bitcoin outside of “failed states”.
‡ Family remittances are specifically exempted from the US sanctions on Iran, but good luck finding a US bank that’s willing and able to take that risk: https://www.wiggin.com/wp-content/uploads/2019/09/26580_advi...
I've already addressed your point about governmental change.
The reality is that it's just another means for the wealthy (and criminals) to evade currency controls.
Currency controls are actually preventing the recovery of the country. They are a short term fix for a short term problem but they create long term problems in the process and those long term problems are definitively the worse poison.
What is unclear to me, is how these remittances work in practice. I get that in the US you can exchange USD to Bitcoin with a credit card and then send that to a person in, say, Venezuela (or share the wallet password). But how is it converted back to Venezuelan Bolivar? I can't imagine you buying a pizza with bitcoin in Caracas.
Side question, why do you write your years with a leading zero? I've never seen that before and it has quite a cognitive strain for me.
Not OP, but I had the same question and did a few seconds of cursory searching to no avail. But rather than cognitive strain, I found it opened up a much larger vista on the perception of time and our seeming place in it. While I am unlikely to adopt it, perhaps the experience would be even broader with a few more zeros tacked on! ;-)
One thing I do know is that a lot of overseas Venezuelans whose remittances are via Bitcoin don't know Bitcoin is involved. They know a storefront where people transmit money to Venezuela, and the guy there tells them where to instruct their family members in Venezuela to pick up the money. How the agent in Venezuela gets paid is no concern of the customers; they only care that the money they give the guy arrives safe and sound.
https://news.bitcoin.com/venezuelans-can-now-use-bitcoin-to-...
That's likely a Long Now reference: https://blog.longnow.org/02013/12/31/long-now-years-five-dig...
How do you turn your Bitcoin into food, housing, utilities, and other necessities?
> And, yeah, 13 years after the internet's invention was 01982
The Internet was not available to virtually anyone in 1982 much less 1969. Nor was the ARPANET of 1969 even remotely similar to the Internet. TCP came about in 1974. IPv4 in 1982.
> So why does Bitcoin have tens of millions of users
It doesn't. It has a lot of speculators, and a handful of users. And no one knows or could possibly know how many there are.
etc.
I sell it for dollars to people in person; some of the dollars I have to change into Argentine pesos before I can spend them. Isn't that how everybody does it?
> The Internet was not available to virtually anyone in 1982 much less 1969
It was available to almost anyone who knew someone who had access, which is the same situation as Bitcoin. Precisely what Maciej is complaining about is that so little of the economy is hooked up to Bitcoin is that most of us can't buy a pizza with it without going through intermediaries.
> Nor was the ARPANET of 1969 even remotely similar to the Internet
It was remotely similar; it provided telnet over a packet-switched network, with routing. You could argue that substantial technical changes happened in Bitcoin over the last 13 years, too. Maciej did, in fact, make that argument: he pointed out in particular the dramatic shift to centralized intermediaries like Coinbase (the ANS.NET of Bitcoin?) and from CPU mining to GPU, FPGA, and then ASIC mining, as well as the proliferation of alternative cryptocurrencies. We could also mention segwit, the BCH schism, Lightning, BIP39 and Electrum seed phrases, and lightweight clients like Electrum. Those changes are not over yet. So the situations are in fact quite closely parallel.
No, most people just spend their currency directly on the things they need to purchase, actually.
> It was available to almost anyone who knew someone who had access
That's not even remotely true, and is also a tiny number of people.
> It was remotely similar
But... it wasn't. As I already have shown.
The ARPANET, then the Internet, have all gone through steady evolution. It has not spent 13 years stagnant or regressing in terms of either design or use.
Just because you read somewhere that "ARPANET was the predecessor of the Internet" does not mean that ARPANET was the Internet.
If you care to see, it’s in my comment history not long ago. And the thread is fascinating because at best the replies just cherry pick and do semantic tricks like this.
Crypto has a wealth of interesting uses. Tech company co-ops, incentivizing content curation, new and organic stock distribution mechanisms for open source projects, and of course the giant one of providing a far better investment and transfer vehicle to the non-first world countries.
I mean, I can totally see the arguments that it is wasteful, or a bubble, overhyped, and not reaching its potential. But the ones who say it has no or next to no uses are in my opinion on the same plane as Krugmans “the internet will be less useful than the fax machine” or the classic Slashdot iPod “less space than a nomad” comment. It may take even 20 years to prove it, IMO that’s not unreasonable, but it will be claim chowder I’ll be happy to revisit.
If proof of stake works out, there’s no doubt the next Google will be a crypto company that gives revenue back to the user base to incentive good contribution. Content sites absolutely will be totally disrupted. Well look back at writing reviews for the Yelps and Googles as being anachronistic, “why did we used to give all this content to the largest company in the world for free”. Instead, a crypto-based Yelp or Reddit that used a coin and distributed it fairly in relation to contribution would absolutely blow up.
I think VC is also better done with coins in general. Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock. That’s a 10x more incentivized early adopter because they actually could make something more than lunch money.
The reason crypto is blowing up isn’t because it’s a ponzo scheme. It’s because laws around accredited investing are truly the most egregiously disgusting instantiation of class warfare ever to exist, and finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it. All the “pure” crypto companies are total bullshit, minus many BTC and ETH, because they have no product. That I agree with. But in time you’ll see a huge growth in companies that are simply normal tech companies with novel tech/uses, but who build in community ownership, rewards and incentives that actually share profit with their user base.
Again: why do people not get paid for contributions to Pinterest, Yelp, Reddit? These are companies paying millions of dollars to employees, and 100% of their content is given to them by users. In a better world they are actually run by the community, owned by the community, and developed in the open.
Any company could do this with fiat currency today. "Crypto" has nothing to do with it.
> Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock.
Likewise, there is nothing stopping a company doing this today without "crypto".
> finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it
You're ignoring the existence of the stock market, index funds, exchange-traded funds, fractional share purchasing, Robinhood no-fee trading, etc.
And your final response is an absolutely perfect example of cherry picking. I said VC, you reply with index funds. Laughable.
This is nonsense. Sure, on a technical level, you can ensure that Google2 will only have 10,000 crypto-shares, and will never issue any more. Regular Google can issue new stock and there's not much that can be done.
But the volume at which public companies or even private companies trade stock is so huge that there's no use case you can imagine that would tank the stock. You're talking about micro-payments -- Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google). Google1 could issue a million new shares of the stock to pay its moderators, and all they'd do is tank the stock price. But all their most valuable employees are paid heavily in stock. They wouldn't be happy and would quit or riot. It's a soft-regulation on that kind of silly behavior.
Despite 20+ years of "pay users to use the site" being an obvious conclusion, almost no site has done this in a meaningful way. There are hardly any even paying people in funny money / company scrip. All I can think of are Eve Online and Steam. You can't convert money OUT (regulations) but you can use their chuck-e-cheese tokens to buy stuff within their business. On Steam, the money you get per value the user puts in is a pittance. Valve takes a 30ish % cut on almost everything you do, even "secondhand" trading card transactions.
You can speculate that financial regulations are preventing it, but I think it's more likely that the owners of Google2 would much prefer to keep as much capital for themselves and not let its users/"staffers" get a slice. Similarly, Google1 pays its low-level moderator staff very little (compared to an engineer or upper level manager). Most corporations turn a profit. That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin. If you can't fork the coin, then it sounds like regular stock or company scrip.
https://money.stackexchange.com/questions/18843/how-does-a-p...
> Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google)
Google pays tons of content people, they also have 130 billion in cash.
Google2 may make the mistake of being greedy, but GoogleN may not because they have a team that realizes less greed = users paid more = more incentive. Forking is a feature not a bug.
Success being correlated with fairness in equity distribution, users having stake and say in the platforms they use, creators having contracts with how they earn their living that can’t be changed on a whim, and if they ever do change, it’s by a democratic process, and creators then being able to vote with their feet to fork.
Seems like a good thing.
> even they have ad dollars siphoned off by Google
> That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
These are arguments for crypto.
> https://money.stackexchange.com/questions/18843/how-does-a-p...
GoogleN can design the coin/share pool however they want, so I don’t see what the argument is.
Looking at the current front page, seems like a Wikipedia2 would work too https://www.dailydot.com/debug/wikipedia-endownemnt-fundrais...
To be clear, I think these companies need to be non-profit but still pay their team well (a fixed rate to some sort of inflation basket that tracks competitive engineer salaries, for example).
Safeguarding hard physical cash is something most everyone, old and young, technically literate or technically illiterate, poor or rich, intrinsically knows how to do. And when it is stolen or lost, there are viable approaches to pursue with favorable probabilities of a happy resolution: tell a police cop to see if they can catch the thief using detective work, you could try looking around if you think you might have misplaced it, etc.
With BTC on the other hand, ensuring your wallet isn't had by committed and technically proficient bad-actors or that your wealth isn't all erased in the blink of an eye with a hdd crash or a distressed acquaintance wiping your data away, you can't expect normal people to be up to the task of combatting all of this. And retrieving stolen BTCs from bad-actors living a continent away is a task that police cops are not up to doing or even the slightest bit capable of. You are a really smart guy kragen, I'm sure you won't forget your computer's password one day or have your wallet compromised, but someone like my mom or grandma would, and the thought that simple mistakes and viruses and computer illiteracy could and probably would be the thing that leaves someone's wealth irretrievably erased without much avenue of recourse saddens me, and makes me wish that people in our profession who understand this would stop encouraging its usage.
I come from a nation that ranks lower than Argentina in stability. My family went through this very dance of receiving money from abroad and having to go to WU to get it. The risk of a bad accident happening is infinitesimally small in that than with BTC.
With either banks or Bitcoin, you can hedge your risks by converting to fiat currencies. But with fiat currencies, you can hedge your risk by converting (partly) to Bitcoin.
So maybe you should buy your grandma a Trezor. What country does she live in?
In comparison to getting your wallet compromised by viruses searching for it (and they will probably become more aggressive and adept as BTC usage increases), the chance of this happening I feel is exceedingly low. And avenues of recourse exist: there are clear leads to follow on for an investigative team.
> I've had my bank ATM card cloned by a skimmer on an ATM while I was traveling overseas
I know that my credit card covers me for this and I would get my money back if such a thing were to happen to me.
> I've had WU give me ridiculously unfavorable exchange rates, and there was nothing I could do about it
And BTC transaction fees are ever-increasing. And so is its environmental cost.
My grandma lives in .pk. I fear she would not be capable of understanding the concept of BTC or Trezor as she can barely understand how a TV remote works. She does very much grok the concept of cash money though, and is quite fond of exercising her freedom with it.
The second time, I explained it, they didn't get it. The third time, I sat them down, and made them learn how to run full nodes, run a few commands on the command line, and use bitcoin. Western Union is certainly not guaranteed, nor tyranny proof. If the governments of Argentina or Pakistan need the USD bad enough, they will every dollar Western Union is holding for recipients. To keep the story quiet and the money flowing in, they may imprison the recipients and their families. Desperate times call for desperate measures.
But that money isn't free, you may for it through higher merchant fees and lower bank interest rates.
The irony with the GP’s post is that I can’t see using Bitcoin, with its current incredibly-high power usage and associated environmental destruction, as long-term thinking in any way, shape or form.
https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...
Now, at some point in the future, Bitcoin might become an environmental problem; the cheapest ways to get energy have been environmentally destructive in the past, and they may be so again. Maybe in 50 years we'll have to campaign against Bitcoin miners who want to convert the mass of Jupiter into energy with their fusion reactors or black-hole clusters. But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
For the forseeable future energy production cannot be carbon-free. All uses of energy, including Bitcoin mining, will continue to impose an environmental cost. For those of us who believe Bitcoin achieves nothing useful that can't be done better some other way, that cost translates into a pure negative.
I ctrl-F "subsid" in your link and don't see any source for your claim. Bitcoin puts a dollar value on (subsidizes) -ALL- energy. If there's a dirty coal plant you can run in your backyard without the government shutting you down, Bitcoin wants to know about it.
Your claim is (1) bitcoin takes energy (2) renewable is cheaper than nonrenewable (3) bitcoin is causing tons of new renewable capacity.
If that were true, why isn't every power plant in the US renewable? How on earth did Bitcoin manage to get this capacity that nobody else has? Money talks, right? Why aren't the mayors of San Francisco, New York, Chicago etc. trumpeting their new 100% renewable grids?
Then you might say that Bitcoin is tech-enabled and decentralized, you can run a mining rig near any energy+internet source. But that's equally true of a cloud compute farm. The fact that bitcoin is pointless hashes and not cloud compute is a historical quirk. Any Bitcoin node/farm could be replaced with an identical-power-usage server farm and do more good for society.
I'd like a source on your Bitcoin only uses renewable claim. I think if I run a miner on my home PC, which I believe has some natural gas in the energy mix, that argument fails.
https://arstechnica.com/tech-policy/2021/05/private-equity-f...
> But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
I wrote this whole comment without getting to the end of your inane post. We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy). But your wordsmithing here is bad faith. Your argument is basically "governments thought people wouldn't be complete jerks, and Bitcoin sure proved them wrong!" Yeah it's human nature and perhaps inevitable, but 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Bitcoin is an ongoing real time climate catastrophe. Get back to me when China and the US ban all forms of carbon-emitting energy production. Until then, those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find. I suggest cloud computing as a baseline. "environmental destruction right now" is exactly the current state of things.
I don't think bitcoin is "causing tons of new renewable capacity", if by that you mean inducing people to bring up many new power plants; its overall power usage is estimated at only about 12 GW. By comparison, PRC installed 71.7 GW of new wind power in 02020; at China's historical wind capacity factor of 22% that'll be 15.8 GW, more than the entire bitcoin network. Including the parts that are running off hydropower and the parts that are outside China.
> We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy)
I wasn't talking about implicit subsidies, which aren't enough to make fossil-fuel power price-competitive with renewables. I was talking about explicit subsidies. Like when I was in Venezuela you could fill up the 20-gallon gas tank on an old car for 19¢, because the gasoline was subsidized. That's the kind of subsidy that can make fossil fuels cheaper than renewables: you can run your bitcoin farm off a gas generator. It's not just "failing to tax them".
> 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Yeah, that's not what I'm talking about.
> those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find.
Not really. I mean, a little? That 01967 Buick swilling that 1¢ per gallon gasoline is producing almost exactly the same amount of CO₂ as if the gasoline were getting burned by a nice new Honda motorcycle (or generator), and it's also producing a fair amount of unburned hydrocarbons and even methane. That matters a lot to the kids with asthma who live next door, and the global warming potential of the total horrific exhaust cocktail is a bit higher than if it were cleanly burned to CO₂ and H₂O. But, from a climate-change point of view, the high-order bit of the problem is that the government was subsidizing the burning of fossil fuels, which results in a lot more fossil fuels getting burned.
So the real problem is not what the energy is getting used for, but that the subsidies make it attractive to get that energy from fossil fuels instead of solar, because you pay for solar but the government pays for gasoline. If bitcoin mining could bring those subsidies to an end by making them suddenly much more costly, which I doubt, then so much the better.
But really, zooming out a bit, Venezuela is not the main culprit in climate change. Whatever happens there isn't going to have a big effect on climate change, one way or the other, until things chang a lot. Europe and the US are the main culprits.
> Bitcoin is an ongoing real time climate catastrophe.
12 GW is about 0.07% of total world marketed energy consumption. There's an ongoing real-time climate catastrophe, but at the moment Bitcoin is almost as much of a distraction as plastic straws. Not that it couldn't get bigger.
I'm from Canada, and moved to Australia. I was moving money from Canada to Australia, it was easier, faster, and cheaper for me to move that money via crypto (I used Eth rather than Bitcoin at the time) than going through the banking system.
Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.
At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.
Deflation is good. Every wage earner becomes more wealthy as their rate of pay buys more. Sticky wages arent a problem with deflationary money. Hell, at least half the complaints about the modern economy are the result of inflation. But, no, deflation would utterly destroy the economy.
Income is not the same as wealth. Savers become wealthier, debtors (such as anyone with a mortgage) lose wealth.
> Sticky wages arent a problem with deflationary money.
Um, what? Your last sentence was all about how deflationary money guarantees wage earners increasing pay in real terms. That makes the sticky wages problem much worse.
If you want to change the amount of wealth low-income earners have, stop focusing on the units. This is not JPow's fault, it's a job for congress - it's social and fiscal policy not monetary policy. This is just a quixotic quest against the wrong opponent.
If you want to help low-income folks, advocate for unions (so labor can push back against capital), advocate for wealth taxes, higher marginal taxes for the rich, minimum wage indexed to inflation, a strong social safety net and national zoning laws to stop metros from preventing adding enough housing supply to meet demand. Things that would help.
https://www.forbes.com/sites/realspin/2013/10/09/measured-in...
The author suggests you cannot measure inflation except by dividing by the spot price of gold. This is false, and why we have the CPI.
[1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
You will get wage cuts because it becomes harder to employ you at your currency salary or you just get fired. If you can't find a job, deflation will have made your life a lot worse. You are also incentivized to stick with your first job because future jobs will pay less than past jobs. Basically you hope you build a stash of cash in your 20s because your potential to earn money shrinks with every single year but your wealth gains in value from doing nothing.
We are running into that problem with Bitcoin and land. Do you really think that if you signed a contract to get paid 10 BTC per year in 2017 (when it was $20k) that you will still get 10 BTC today? (at $38k). No, you will get 5 BTC this year.
>Hell, at least half the complaints about the modern economy are the result of inflation
Pretty much all of the complaints about the modern economy are about inadequate attempts to fight off deflation. The Fed has reached a point where it cannot do anything to fight off deflation, it takes a pandemic to fight off deflation, that's how bad the situation is.
Just take a look at Japan, they have deflation and nobody is jealous of their economy.
Yet, people keep buying computers. Why?
I would argue deflation has been the most significant driver of the IT industry in the last 30 years and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
On the other side you have inflation that kills savings. And since most people save with a goal in mind, not because it's fun and exciting, the higher the inflation, the longer they will have to save before they reach that goal.
The majority of wealth is owned by the top 5%. Are they really spending a significant fraction of that wealth on computers? Deflation is never about what people buy, it's what they keep.
>I would argue deflation has been the most significant driver of the IT industry in the last 30 years
No it hasn't. The IT sector drives deflation and there is nothing wrong with productivity improvements. You just got cause and effect backwards.
>and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
Inflation increases future incomes. If computers cost the same but you get higher salaries that's a good thing.
Bitcoin is limited by the block size and the lack of working L2 solutions (lightning is permanently broken).
But other currencies, like BCH don't have that problem, and can easily represent the whole US economy.
90% of all bitcoin ever have already been mined. If your solution to the limited number of bitcoins is rampant deflation you probably don't have a viable currency
You might have difficulty measuring out two atoms of gold to change hands, but that's dwarfed by the difficulty in measuring out two Satoshis - given that they aren't a physical thing at all. So, if you can keep track of it with Satoshis, why couldn't you keep track of it with gold atoms?
That is, if your position is "Bitcoin isn't limited like gold because of Satoshis" then the same argument works equally well for gold with atoms, doesn't it?
That is, gold can't represent the entire economy because nobody would pay so much for a gram of gold, but why would they then pay that much for a quanity of the even less physical Bitcoin?
A counter-position from the Austrian/Chicago school is that supercharging growth drives malinvestment, and they can't be entirely wrong about that - I've seen tons of dumb money flow into dodgy companies during tech booms.
Inflation incentivizes investment because you are going to lose 2% per annum if you don't.
Fiat offers you the maximum flexibility because you can back your personal economy any way you want - if you want to back it with gold, just buy some. If you want to back it with crypto, bless your heart, buy some.
This is a false narrative.
Interest rates are low because everyone is saving, nobody is borrowing, nobody is investing.
Wealth is a verb, not a noun. The wealth of nations is measured in how much they do, not how much they have.
The US arguably defeated the USSR via looser monetary policy. China is now doing the same to the US.
Gold didn’t have a rep as the hub of black market transactions before bitcoin.
You can read some of their public reports here: https://blog.chainalysis.com/?tab=articles-tab
If I wanted to be more optimistic I would look at the level of adoption today as insane compared to 5y ago.
I have bought a lot of pizzas with BTC (and other cryptocurrencies), as the local food ordering platform accepts it. Worked grear, but at some point the crypto payment processor started requiring KYC. I'm not gonna upload my passport to pay for pizza. I dont know if this problem is because of crypto or excessive regulation.
Bitcoin "regressed" (really, specialized) because it got so big that it became speculators' favorite, which made it too expensive for anyone but speculators to interact with. Then, other cryptocurrencies that aren't so expensive to move around were created, and people who wanted to use cryptocurrency as a medium of exchange moved to using those instead. So now the ecosystem supports two applications (investment, exchange) using different tools specialized to those purposes, each better at that thing than a single cryptocurrency trying to "do it all" would be.
Which is, y'know, also the story of the Internet.
Complaining about nothing to do on Bitcoin feels like complaining how empty the gopher server are after everyone’s moved onto the web.
The reason is that blockchain can only offer its trustless, decentralized and permissionless guarantees to things that are wholly representable on-chain. As soon as you try and sync it with the real world, the real world is the source of truth and the chain representation is meaningless.
Further, by boat anchoring solutions to the fundamental inefficiencies of blockchain, you leave your chain solutions at a material disadvantage to centralized, permissioned solutions anyways. This creates huge adverse selection bias, leaving only the criminals and scammers using it.
Concrete example: Sia has 800TB of storage - total! - in spite of an $800M market cap and millions spent on R&D. You could achieve the same result with a half of a 1U rack of hard drives and $40,000 - or a few bucks on AWS. Why? Because why on earth would anyone use it?
On the other hand, Chia has 1.5 exabytes of wasted hard drive capacity loaded up with bingo cards lol.
This is crypto.
DeFi is particularly fun, it's basically just decentralized 2008, a way to extend way too much leverage to people who simply should not have it, in exchange for fanciful 3-digit percentage APR to lenders.
It's all a damn mess.
I think what's being lost in this discussion, since almost no one posting here is either passingly familiar with the past decade of crypto-economic research, or with the current state of the art in "crypto" technology (almost none of which revolves around or even involves Bitcoin these days). Almost all of the promising new networks provide at least 1000X transaction throughput at 1000X+ transaction efficiency while retaining decent Nakamoto coefficients and allowing some level of computation ("smart contract") and composability. (Yes there is also plenty of useless stupid stuff that sadly is a huge waste of resources, but hey, we survived Dotcom Bubble. It's just part of the process.)
I don't begrudge anyone who doesn't see the potential there, just as I don't worry about anyone who might have said that the Internet's impact would be no greater than the fax machine (in fact, a single Nobel laureate chimed in early on to both of these sentiments) - whether this turns out to be true will depend largely on the people who choose to build their vision and prove people wrong... or not.
Also, there's no question it's all a damn mess, but much more broadly than crypto.
It solves a technical problem - the byzantine generals problem - but does it solve a problem people have? I don’t know anyone who’s had the Byzantine generals problem personally.
Having said all that, I still can't figure out what the hell to do in the DeFi world. It seems like all I can do is lend my assets to people who also have nothing to do besides speculate or themselves lend their assets to other speculators. I can't figure out anything to do that pushes out of the speculative bubble in any way. Maybe you can help me?
One of the most interesting aspects of crypto to me is it's like printing money - having held some bitcoin and having it in an account is rather like the government printing it and giving it to you as a grant. It doesn't directly create goods or services but it does have an effect for better or worse.
I’d put that deflationary crash right at the point you mention. I remember it. Bitcoin ran up to crazy levels in 2017 while it was simultaneously abandoned, which is what a deflationary currency collapse looks like.
Bitcoin’s designer(s) were brilliant cryptographers but crank economists. There’s a reason nobody takes that kind of superficial pop Austrianism seriously. It would be possible to design a viable cryptocurrency but it won’t happen until the current crop of cranks and scammers goes away. Right now anything actually workable in the space is tainted by the nonsense.
Same with LAN parties. I was thrilled to buy my first network card, and a tee connector.
Even the fact that the first half of the day was mostly wasted with trying to get IPX and NetBEUI to work and TCP and UDP, and promising each other that we would not change anything until the next LAN party, and of course next time nothing worked either at first try. But it was fun nonetheless.
(The second half of the first day was obviously swapping all those music and video files)
Internet and Ethernet were useful immediately.
https://www.hpe.com/us/en/insights/articles/the-birth-and-ri...
Living on the edge !
My parents still have fond memory of seing skinny teenager bringing computers on well barrel in their basement to play video game.
They were suspicious at first. But then they concluded they we were indeed playing video game.
You couldn't Google that. Because there was no Google, and you were stuck in a basement.
Fun and exciting times :)
https://www.sandbox.game/en/ https://decentraland.org/
These are 3D virtual world environments and people are using crypto to build an online economy. They are trading property, buying virtual artwork and creating galleries, setting up clubs and meeting spaces, etc.
You can also explore decentralized finance, act as a peer-to-peer lender, provide liquidity in a marketplace, fund an idea you're interested in, whether that's a game (https://illuvium.io) or a commission for a comic book series (https://www.one37pm.com/nft/art/punks-comic-pixel-vault-cryp...) or start a DAO and raise money for charity or open source software (https://gitcoin.co/).
This all happens in Second Life and doesn't need to burn the planet to do it.
Anyway, none of this matters because Bitcoin exists and is the dominant shitcoin (due to first mover advantage). All these other shitcoins can claim whatever efficiency, but it doesn't matter because that's a very isolated view of the problem. The shitcoin economy as a whole will still be fueled by mining unless somehow Bitcoin gets dethroned and the whole mining thing just goes away. I can't imagine that happening without the whole economy crashing completely into the ground – but that would bring all these efficient coins down with it.
And already more transactions and more daily volume is settled on Ethereum than Bitcoin, see https://money-movers.info/ and https://cryptofees.info/ (pink lines are Ethereum DeFi applications)
Also for your other points - the games in this space are universally unfun to play with hardly anyone actually playing them; I can pay normal money to commission artwork; and I can use a zillion platforms that already exist to raise money.
Second Life was awesome! This Metaverse trend is pushing that concept much, much further and it's giving ownership and utility to the makers.
>you can buy a digital artwork at a Christie's auction and display it in Decentraland and have it be verifiably authentic
I can't imagine anyone would give a shit about someone's virtual art being "authentic" for whatever meaning of authentic NFTs pretend to claim. This is basically receipt porn at this point. Truly we're talking about bragging about wealth, one of the shittiest traits a person can have.
From a competitive standpoint, why would I want Activision's digital locks (you can only import NFT'd content) instead of something like Second Life which is more open?
If Activision really wanted purchases to carry over, they could've made it happen. No NFT needed. An open standard does not imply NFT, and vice versa. The 360 era was probably the peak of the 'gaming interoperability' trend, and it went almost nowhere. Your Xbox gamer picture would show up in some games. Everyone knew it was authentic because MS uses cryptography and doesn't let you sideload third party images. No NFT needed.
Same reason my company doesn't like me displaying awards from my last company. The obstacle is entirely social rather than technical.
What you're describing here is Roblox (2006), which was launched 2 years before Bitcoin was conceived, and has attained a market cap of >$50 billion without any cryptocurrency nonsense. Or Second Life (2003). Or RuneScape (2001).
Cryptocurrency doesn't enable online trading with virtual currency -- if anything, it's dramatically _more_ difficult to use than either real plastic, or virtual currency sitting in a SQL table.
What it enables is theoretical trust in a shared ledger (handwaving that a Sybil attack isn't attempted by any of the massive mining pools); but this trust is assuming you're a computer scientist capable of auditing the clients and contracts. Yet, even professional programmers have lost hundreds of millions of dollars worth of crypto with programming mistakes and security flaws in their smart contracts and clients! If even professional crypto software developers can't take advantage of cryptocurrency's supposed benefits, how are the players of an online game supposed to?
The answer is of course that they have to relegate trust, in the same way that online shoppers relegate trust to Visa/Mastercard. The important difference being that only Visa/Mastercard guarantee your funds are returned if you're defrauded.
Sybil attacks would be detected in an open network first of all. If you can pull it off, I invite you to try: there's hundreds of billions of dollars on the table protected by nothing but cryptography and game theory. Knock yourself out. I'm sure all the people in this space are idiots and haven't seen the holes you claim are there.
I'm old enough to remember when using a credit card was a hassle or seen as predatory on consumers and many people either refused to use credit or accept credit in their businesses. For several decades using a credit card wasn't any more convenient than using cash or check even. Over time, the scanners got better and faster, Visa and MasterCard integrated with ATM debit cards, and then mobile phones and swiping plugins enabled it all to get better. Now it's ubiquitous. But that ubiquity will make it all the more easier for merchants to adopt crypto.
It turns out there is already crypto insurance protocols like Nexus Mutual and Cover that will cover you if a loss occurs. Insurance is really just a business problem that is easily fixable.
On the plus side crypto is far more secure than Visa or MasterCard, because it works on public/private key cryptography and you simply sign a transaction rather than enter your name and address and all the same information you'd need to commit a fraudulent credit card transaction.
The point is that no-one needs to adopt crypto for payments because the existing payment platforms work fine, better than crypto. Making transactions immutable, requiring users to maintain perfect IT security, currencies swinging in value by 20% every time Musk tweets about them, etc, are regressions.
What group are you talking about when you accuse them of "Scientology-like groupthink"? What comparisons can you draw? I think it's important you back up and explain what you're saying.
The main attraction is Bitcoin and recently Dogecoin. BTC is slow and costly and mostly a speculative play. Dogecoin is a joke, but also worth billions.
Also these coins are speculatively often first, and useful second. Not all but many. Thus instead of being useful for exchange, they become methods of speculation.
It is also used for fraud a lot -- both various types of pump-and-dumb, Ponzi and money laundering.
And on top of all that it is usually inefficient.
So what we need are digital currencies that are fast, stable, and that can implement smart contracts (but these tend to be buggy as hell with no roll back.)
But that isn't what cryptocurrency is all about these days. It has been overtaken with speculation.
If we could get the benefits I outlined, that would be amazing, but it seems that very few are actually interested in that.
"It's just overtaken" is not a great take. The problems are way more fundamental – the whole concept of trustless irreversible digital cash just does not work in the real world for normal transactions.
Lots of meme coins have launched -- does not delegitimize everything else.
> ...whole concept of trustless irreversible digital cash just does not work in the real world for normal transactions
Layers will be built on top to provide that. Your vision is limited.
Yes there is a lot of money in BTC, but its not more than half, and doge coin is not #2.
In the case of cryptocurrencies, people are doing existing things that can already be done quickly and efficiently vastly less efficiently, in a system that is purposely designed to be less efficient, where efficiency is in fact actively counteracted. Databases and online money transactions were possible before, at a fraction of the total cost inherent to the system and at vastly higher performance.
When theorizing about societal/political benefits, take into account the societal/political problems cryptocurrencies created by inventing a machine that allows converting resources directly into money of miners' digital wallets without regulation.
Your sending any amount of money, actual practicality and realizability aside, comes at the cost of a lottery, where miners perform literally 100.000.000.000.000.000.000 computations per second whose outcome is completely thrown away, unless they are lucky enough to be one of the 6 computations per hour that win. This cannot be made more efficient: If computing one hash costs less energy, the difficulty will be adjusted to require more calculations to keep the target of 6 hashes per hour.
By the decentralized property of cryptocurrencies, it is by design not possible to regulate where the energy for this lottery is coming from.
Many other Proof of Stake blockchains like Cosmos have been live and working fine for years.
I have many other doubts against the usefulness and sensibility of blockchains in general, e.g. I have doubts how smart contracts actually succeed to reach their goals in a reality where humans make mistakes and courts are used to settle disputes and ambiguities. But these concerns then only affect the viability of technologies that I and others are not forced to participate in.
Proof-of-work on the other hand, as long as it continues to exist, affects everyone in that in incentivizes burning resources directly for money without regulation, no matter how dirty or wasteful.
That said, I think everyone should be able to buy electricity and spend it on what they want, even dumbfuck videogames that waste their life away. If we play the "your electricity is bad, my electricity is good" game then it leads to the majority restricting the minority.
Instead, we should price electricity based on externalities and let purchasers use it as they want. If electricity is 100% clean and the buyer chooses to mine bitcoin, that's their value decision, just as you playing videogames is your (very stupid) decision, but I support your right to waste electricity on it.
That being said, I still see proof of stake and proof of coverage as interesting way to maintain said ledger integrity in the like… 3 actually existing use case where a blockchain is superior to a SQLite instance with good security.
https://support.circle.com/hc/en-us/articles/213560643--Iden...
You have to account for transaction fees into cryptocurrency, the blockchain transaction fee itself, and the conversion into the target local currency.
You left 2/3rds of that process out, conveniently.
"Myanmar’s government shuts down internet indefinitely" - https://www.theverge.com/2021/4/1/22362767/myanmar-military-...
"Bangladeshi government shuts down callphone/internet access in Rohingya camps" - https://www.hrw.org/news/2019/09/13/bangladesh-internet-blac...
"Democratic Republic of the Congo shuts down internet and SMS" - https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?N...
"Indian government shuts down internet in Kashmir" - https://www.hrw.org/news/2019/08/28/india-restore-kashmirs-i...
"Iranian authorities shut down internet" - https://www.hrw.org/news/2019/11/27/iran-deliberate-coverup-...
"Independent group observes 'near-total' shutdown of Iraqi internet access" - https://www.hrw.org/news/2019/11/08/iraq-teargas-cartridges-...
"Sudan's ongoing internet shutdown" - https://www.hrw.org/news/2019/06/12/sudan-end-network-shutdo...
"China bans ICOs, shuts down domestic exchanges, and uses great firewall to block foreign exchanges and crypto websites" - https://www.yahoo.com/news/china-enlists-apos-great-firewall...
That, literally all by itself, would be enough for me to think building the internet was worth it.
You kids have no idea how much fun it was to go downtown to a travel agent just to find out how much it would cost to fly home from college for Christmas.
Phones were out, too?
("You kids" should realize that most of the stuff done on the web today was done by mail or phone during most of the XX century, especially in a country as spread out as the US. Ring up the merchant with the order, sing out the credit card, done, was the MO from the 70s to the late 90s.)
Obviously there were variations on how people would do things and mail order existed but I’m speaking literally, that’s how we used to do it and when the internet came along it got way way better.
Darn, no mail service either. That's harsh.
In the context of technological state (how brittle and obtuse the tools are), the comparison between the two is right on the money IMHO.
I once configured SOCKS on Windows 3.1 so I could connect to the internet over a 9600-baud modem. In those days, unless you were in Academia, you didn't know anyone with an email address. Early Usenet and IRC had very little to offer someone who wasn't a nerd. FTP? MUD gaming? Come on.
You and I found the early internet interesting precisely because we were nerds to begin with. Don't mistake that sentiment for that of the general public. They mostly found it frustrating and boring.
In contrast not even nerds are actually using Bitcoin or Ethereum for anything that interacts with the real world. All proposed applications are self-referential shell games like NFTs, staking schemes, etc.
If this is a superior platform for finance, where’s the real economic activity? Handwaving about “probably they use it in Venezuela” doesn’t cut it.
Also completely irrelevant for any of the cryptocurrencies and smart contract systems.
1) You just flatly contradicted yourself without even realizing it. The top level comment said "The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access.". When challenged, you moved the bar to "Well, it eventually became useful to everyone!".
2) You're condescending "I can see how people in their twenties would fall for this...", "Handwaving", "Shell games".
3) You've got some internal benchmark about what qualifies as useful that appears to mean "if it's not useful to me, then it doesn't count" (see comment about Venezuela).
4) You seem to think of yourself as some kind of gatekeeper or authority on nerddom.
I'm not going to change your mind about anything. I've been around the internet long enough to spot people pretending to want genuine engagement when they really despise your ideas and just want to publicly slam dunk on you.
Not interested.
You can also tell me, as a nerd who has lived through both eras, why my experience doesn't count?
Initially only nerds had access and they couldn’t get enough. When access expanded to the general public, they couldn’t get enough either.
“You’ve Got Mail” is a 1998 movie starring Tom Hanks and Meg Ryan. The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
My whole family had access. And the families of all my friends. They hated it. It was boring and complex. If you mean "everyone who sought access" then it's a self-fulfilling prophecy isn't it? You're either misremembering or engaging in disingenuous word play.
>The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
So 16 years is the benchmark? Seems arbitrary (because it is). Bitcoin is 12 years old. When the Internet was about 12, what did Newsweek say?
>If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
The discussion wasn't whether Crypto is a more important technology than the internet. It was about how clunky and shitty it was at the beginning. Nothing more. Stop trying to "slam dunk" on people.
AOL was a bonanza. I didn’t use it but that started getting big enough in the mid 90s. I got on the internet as a kid barely in school in 93-94. It was vast to me. To my older brother, etc.
—
Your attitude and anger appears to be doing exactly what you’re claiming others are doing. Liken slam dunking on people.
If all the speculative activity isn't real enough, how about the ransoms being paid to ransomware authors?
https://en.wikipedia.org/wiki/Financialization
https://en.wikipedia.org/wiki/Real_economy
Now for some of the more useful/interesting stuff I've seen:
Gitcoin has been pioneering Quadratic Funding for open source projects for some time now: https://github.com/gitcoinco/quadratic-funding
They recent launched a governance token and DAO (many other projects have been experimenting with various types of on-chain governance models).
Both of these pursuits are widely applicable for creating sustainable models for funding and managing distributed common good projects.
Brave has over 25M active users and has built a model on their token to pay website users and creators for ads, as well as allow in-browser tipping, etc.
Many DeFi projects are experimenting with various novel forms of tokenomics (hold X tokens to access Y features; yield earned w/ Z tokens accrue to the developers) which are interesting alternatives for creating sustainable development/operational models for software.
There are projects that are doing interesting work bridging digital and physical assets (particularly in harmonizing the legal mechanisms for property) like Mattereum, but I'd argue even the simplest types of digital-only tokenization become interesting when it can be made composable with other dapps (eg, fractional ownership of projects that can later be made liquid on the open market or that can be collateralized). This ties back to the domain of not just coordinating, but incentivizing distributed collaboration/human resources.
If your argument is that crypto would decentralize it, and guarantee a cap on coin totals, I don't buy it. That's not the reason a site owner wouldn't join a coin plan. "I would love to get paid, but I hate inflation too much to consider your proposal". Fantasy land.
Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO. While it may have a market value (it certainly has some value for those who want to participate), but there is a different purpose to this type of token (the same for utility tokens).
Fraud reduction by looking at the open market ("nobody's selling these $1 tokens for anything above a nickel!") isn't plausible either - you can do the same thing today by looking at YouTuber payout rates. Those aren't public but it would take the collusion of 10,000+ top tier YouTubers, many of whom don't like YouTube very much, to lie. If YouTube were ever threatened by a more open model (ex. on Patreon, you can see actual income for some creators), they might switch to stay competitive.
> utilize your newly acquired cyber-chucks to generate yield by providing liquidity, collateralizing it, etc).
I can do this with USD so we're really talking about that X day period where my tokens haven't become USD yet. Maybe there is or will be a crypto coin or five that do what Bitcoin was supposed to do - low fees, high volume, easier and cheaper than ACH or Paypal. But if those fees are low enough, I don't necessarily need to keep by cyber chucks as cyber chucks. I could convert to USD and then back into cyber chucks, if cyber chucks is the token of choice. But I think it's far more likely that out of the hundreds-thousands of current coins, the one you pick is going to be a loser in terms of long term utility. Safer to convert to USD and then into whatever today's hot coin is.
Even today, some stock options have surprisingly little price discovery (low volume, big difference between bid and ask price). And those are real, regulated financial instruments with a direct objective relationship to present and future value. I think they can be traded across the whole market too (buy at broker A, sell to someone at broker B). I don't get how, outside of speculation, Company X's coin is going to be worth more than that. Nor will it have better price discovery - there are multiple billion dollar companies who trade stocks and options.
In current "company scrip" modes (ex. casino chips) people generally don't hold onto the not-cash. They exchange it for USD within days. If MGM decides to screw over their customers and cut the conversion rate by 10x, (1) that might be illegal, (2) the % of total customers in history that will be affected are small.
We're also generally proposing micro- or mini-payments - if it's high dollar like a salary, you'll just get USD from working at a company. How many people would take a job at 1-to-1 equivalence in a crypto token instead of a USD salary? Today, I can buy stock in my company using the USD they give me. It's much safer to me because I can choose how much to put in. If I got paid in CompanyCoin that would be a return to the company scrip days. I'd be tied up in risk for minimal gain. If the coin is stable it doesn't matter if I can only invest my USDs every payday.
I admit I don't know much about ERC20 specifically. I still don't see why you can't make a useless token on ERC20. Analogous to making an app that works with all bank accounts that nobody wants to use.
> Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO.
People talk about using crypto for democratic community governance. I said this in another comment chain:
> You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin.
Open source is generally driven by a small core of contributors. I don't see crypto voting being anything but a rubber stamp on the current pool of high activity users. I don't hate the idea here but I also don't see much point.
You could issue those tokens in a centralized way, but with Ethereum, a 1000 such tokens can interact.
The question is rather, if you wanted to do a cyber chuck e cheese, why wouldn't you do it on a (performant) blockchain?
If the question is why do we need all those tokens for, and this is a good perspective on it:
https://insights.deribit.com/market-research/why-i-have-chan...
I don't see value here over JP Morgan Chase operating the market as a neutral third party. Maybe Chase won't really be neutral because they want to steer you to USD and not tokens. But there's gotta be some neutral party that can govern it, something like Coinbase.
Boring old databases and the tech of 10-30 years ago are more efficient than blockchain in all cases, afaik. No matter how efficient, the design of blockchain requires distributed workers verifying each other's transactions. On Chase's server farm, server A can trust server B. All I need is a ledger of how many tokens I have, and a way to convert to USD, the tether of the real world. I can use USD to get into Ether and those 1000 tokens any time I want.
> a 1000 such tokens can interact.
It's basically an API / standard for tokens right? Today I can make an app that uses the IMDB api, but if nobody cares, the app is useless. You can make an app that uses the latest hot tech (raytracing in GPUs) but if nobody likes what you made, it's useless. Same with ERC20, if I understand correctly. I can stand outside Chuck E Cheese and try to make a secondary market in tokens. Nothing illegal about that. Tokens are traded using the hand-to-hand protocol. Yet the number of such businesses is close to zero.
Gift cards for places like Walmart and Amazon are nearly as good as cash on eBay. Nobody buying them is worried about those companies issuing too many cards and crashing the currency.
But to that I would say that the banks haven't built it, and I don't see it happening or gaining adoption. Whatever they build will by definition not be an open network, and will likely not cross too many geographic borders.
It is sort of inconceivable that some 16 year olds would be allowed to run a lending protocol on the Chase blockchain, or even a random adult, for that matter. Plenty of people would find that positive, no doubt, but it is even hard to imagine a platform being built where companies in say India could get access to on the same terms as those in the US.
Ultimately, the permission-less nature of Ethereum is what has built the DeFi infrastructure we have today, which for all its flaws, is pretty impressive.
Fidonet was always, on a technical level, a worse experience than the internet.
BBSs have their charm, but were absolutely obviously worse at what they did that the internet.
Cryptocurrencies are just awful at solving real problems, compared to existing solutions.
Why are you talking about the general public? Are you equating "well the internet was only cool to nerds, solving their needs" with "Bitcoin is only good for its MLM speculation properties, and to buy drugs and murders"?
"Unless you were in academia"... So you admit that it WAS useful? And how it WAS much better than what it replaced? Because that's the opposite of Bitcoin.
You can hate crypto and still agree with me on the above point. It's a pretty innocuous observation.
I'm not going to engage the rest of your argument which has no bearing on the point being made.
You’re giving a completely wrong impression of how the early web was and the early internet. I wasn’t around for that so I won’t personally give my input but for the time, each iteration every few years was great.
If domain knowledge wasn’t needed by the 90s. When was serious domain knowledge needed? When did that stop?
Some people found the internet hard to use and found it required more domain knowledge than they had every single year since the internet snd web have been around. Including in the 2020s.
Comparing cryptocurrencies to the Internet is about comparing its usefulness, not it's understandability. I won't argue that people in general understood the Internet.
Take my example of Fidonet. If you were not a computer expert then you had never heard of Fidonet. BBSs? Maybe you'd heard of it in some news clip about the dangers of computers.
Hell, the only time non-experts even saw anything close to a BBS was probably the movie Wargames.
> You’re giving a completely wrong impression of how the early web was and the early internet.
In what way?
> I wasn’t around for that so I won’t personally give my input
You don't know, but you know I'm wrong about it?
For your last point. Were you around for the development of Arpanet? I don’t think there are many people who were adults in the 69s in the few places arpanet was developed at.
—
So not being around for something doesn’t exclude you from being able to discuss internet related things.
-
For understanding internet. I don’t think 99.9% of the population understands the difference between the internet and protocols like the web. Not sure that’s relevant any way tho.
Is your argument "it's hard to use, and therefore it's useful"?
If not, then I really don't understand what your point is.
Holy crapballs, yeah it was! I remember when I learned HTML in 1996 and put up one of those blinkety animated GIF homepages on the hosting space given (for free!) by my local dial-up ISP. They had a local chatroom and I spent hours and hours chatting with locals from the same city--even met some of them! I read the hacker's manifesto and about phreaking and all of that stuff, found Usenet, played Quake over 33.6kbps dialup with a 300ms ping and still wiped the floor with people. I remember when mp3's came out. It took me 5 mins to download my first one. C&C music factory--everybody dance now!
But that's just nostalgia part. The reality is that nowadays the internet is ad-laden crapware/spyware that is scheming every second of every day to get you to do something--sign up for something, buy something, like something, rate something. Your eyeballs, your likes, your hates, your friends, your vices and quirks, are worth billions to multi-national corps who hope to never have to give you customer service, who keep you at AI-defended arms-length, but will happily sell your attention (won through their latest crack-like invention) to the highest bidder.
It feels like the internet is infested with the worst of human carnival barkers and con-artists these days.
(It was 15 USD so costed almost as much to cash in Europe as it was worth)
If someone was doing anything commercial over e-mail or usenet you could contact their "sysop" or their upstreams and have them removed.
Then you haven't looked deep enough or maybe the subject matter doesn't interest you. Don't extrapolate your experience to everyone else. I find the DeFi space and the scaling issues and layer 2 projects being built pretty interesting. Web3 and the protocols being built around that are also worth a look. Sure, there are a lot of scams and vaporware, but that's also true of the early and today's internet.
i remember i believed in it in 2013 before becoming disillusioned. but there’s people who first bought it in 2020 who tell me i don’t understand ot
Perhaps useful in 1% of contracts, useless otherwise.
haven’t seen anything where it’s actually needed or better. and basically all examples end up with some sort of trust needed at some point.
such as gambling on the outcome of a sports game. it would still require a dependency on some sort of Api to provide the sports results and then you’re trusting the api to give uncorrupted correct results… which defeats the purpose of “trustless”
Futures contracts so they can easily sell their products at a good price regardless of market fluctuations, transfers the risk to the investors.
Smart contracts are still in super early days, the first foundational building blocks are being laid. Soon many more things will be possible.
Will it improve the established market providers for sports betting? No. But that's the point. It enables people to make a small business betting shop
Edit: first thing bought on the internet apparently was weed https://www.smithsonianmag.com/smart-news/what-was-first-thi...
The more time passes, the shriller the cries of skeptics become, leading me to believe that skeptics are emotionally invested to the extreme in the failure of crypto. I rarely see any carefully considered, informed opinions just tulips and drugs and money laundering lol. You know what is used for drugs? Cash. You know how money is laundered? Banks. You know what is worthless? Venezuelan currency. Sure, crypto, just like any fungible asset, is used in these ways... but none nearly as much a fiat is.
I’m becoming convinced that naysayers are more and more afraid of having been wrong and missing the boat as time goes on.
Every day Bitcoin fails to go to 0, it gains legitimacy as a store of value and means of payment.
I guess that is pretty nerve wracking if you made a hasty decision early on to pretend it wasn’t happening, and now it seems like you’re being left in the dust, still preaching from your soap box.
It’s been more than a decade. It’s here to stay. It will get better, but it’s not going anywhere.
Bitcoin is a horrible store of value. It might not go to zero, but it’s fluctuates wildly.
I think for people who predicted from a decade ago that this was all nonsense, the case is there that it is.
Realistically, what are we looking at? What runs on smart contracts? What is being bought and sold with Bitcoin.
This answer is not nothing, but…I mean really? This is the revolution?
As far as legal uses, the only one that has any amount of traffic is speculation. That’s it. Are there other people using it occasionally for other things? Sure! But then we’re looking at, checks ledger NFTs?
All of this while burning through tremendous amounts of electricity. We’re talking over half a percent of the total energy consumption of human civilization.
What have we gotten in return? This isn’t like people pushing back against airplanes or paper or rice. There’s no denying that a lot of money is thrown around, but you can only talk about people being “left in the dust” if you can point to something worth, again, >0.5% of electricity consumption of the PLANET.
BTC as a means of payment is a joke. Most Bitcoin fans I engage with have actually given up on that. In fact, the scaling limitations of Bitcoin transactions are now touted as a good thing because that bounds the eventual energy usage of the network.
The Bitcoin cult is strong enough that I have no doubt Bitcoin is here to stay. It's sad, but it doesn't bother me. On the other hand it's obvious why Bitcoin HODLers have a deep financial interest in crypto being "here to stay".
You can't just pile up gold and then expect to get something for it if everyone else is dead. You need a group of people (aka economy) willing to work for the gold.
All people mean by this is the demand and supply for Gold is very predictable, relatively speaking.
https://coinmarketcap.com/all/views/all/ I clicked "load more" until I saw 1400 cryptocurrencies, if Bitcoin is 12 years old, that's averaging a new cryptocurrency every 3 days since Bitcoin's creation. There's probably a lot more than that.
Oh, I am also worried about not completing that robotics project I started, because I don't have enough time.
Thanks for your comment.
That's exactly what it does.
Most electrical power plants are still coal-, oil-, or gas-fired.
I have no regrets investing in broad market index funds, because I know what they represent, how they work, and how even if Amazon drops to 1/10th of its value I still own a small slice of the company. If bitcoin drops I own a bitcoin, which no adherent can explain the purpose of.
There's no "there" there. It doesn't do what it's supposed to do, most of the adherents don't know what they're buying, the "store of value" argument just makes it a worse version of fine art, gold, or real estate. The economic case for bitcoin is anti-fiat. Fine, but that's a minority opinion. Hundreds of millions of Americans buzz along in a fiat system and don't seem much worse for the wear. The massive COVID bailout kept millions out of poverty, kept food on the table, kept businesses open, etc.
"Failed states print money and crash the economy so they need bitcoin". Why Bitcoin and not another crypto? I can never answer that. Hardly anything in tech is forever. BASIC was once cool, now it's Python. Would I bet $30,000 that Python is the language of choice 50 years from now? No. Bitcoin is a cool proof of concept that is eclipsed tech wise by dozens of other coins. I'm still skeptical of other coins, and hardcore skeptical of PoW when the W is useless (hashing). Bitcoin is the top of the skepticism pyramid. There's no point.
"Bitcoin value has changed 200,000x in a decade and just halved in a few weeks."
"You're envious because you didn't get rich quick."
"I thought this wasn't a get rich quick scheme?"
"It isn't, how could you suggest such a thing? It's a currency used to buy groceries in Venezuela."
"Then why do you care about it - do you put your savings into the Mongolian Tugrik because it's a currency used to buy groceries? Do you go round singing its praises on the internet?"
"No, because they won't get me rich quick. It's still a currency, deal with it."
"Doesn't that rapid change in value make it a poor thing to use as currency?"
"It's unquestionably better than a hyperinflationary fiat currency in a collapsing state."
"Almost anything would be."
"You're just dissing it out of envy because you didn't get rich quick. Look at that - over $30,000/coin, nothing that valuable could be nonsense or scammy!"
"Tulips?"
"That's all you ever say, Tulips, Madoff, Ponzi, Pyramid."
"They were all things that had high valuations and were nonsense. At least tulips have some inherent value, unlike Bitcoin, you can't grow or eat Bitcoin."
"Ah! Ah! You can't eat gold!"
"Indeed you can't. If you like that kind of thing, do you hold any gold?"
"No, gold won't get me rich quick."
> "It’s been more than a decade. It’s here to stay."
I guess this is why you're religious - it's been here for a long time, many people believe in it, that's enough to convince you, yes?
(Hey, couldn't it be something like one potential upvote per comment I read, in stead? And then I could give several of those from comments I don't deem worthy of upvoting to those I do.)
BC has value because it a limited supply of a unique item that can be mathematically verified, even if it never solves all problems its advocates claim to want to solve in the world.
It might not have value to you personally, but it currently does to some people. Just like you might not value Micheal Jordan's rookie card, it is after all a supposedly limited supply piece of printed thin cardboard, there are plenty of people that do.
Let's pretend crypto currency tech didn't exist. Your local gov't wants to develop a digital currency that is verifiable, devoid of simple fraud and counterfeit, and is completely traceable by the general public.
All the smart people in the country would get to together and would come up with system that would end up looking a lot like block chain. The gov't would control all the nodes of course. They would contract out server maintenance (mining), charge fees on transactions (sales tax) and banks would hold your digital currency and give you interest (staking). Instead of stocks, companies would probably just issue, I dunno, something uniquely tied to them that equates to value, like a ... token?
It's not much different from what we do now, it just doesn't involve a bunch of baggage paper money has been carrying around for hundreds of years.
But complaining about something without taking the underlying behaviors in good faith and synthesizing alternatives doesn't really offer much for the people who are looking for the good things. That's why you won't get many good faith actors interacting with this, because it's better for them (and implicitly, the negation of your premise that it's all scams) for them to negate your arg by building more and more new things with crypto.
It felt futuristic, here to stay.
Bitcoin feels like a great experiment and proof of concept. And someday a useful cryptocurrency may arise from the lessons learnt. But it won't be Bitcoin.
That's quite an absurd statement to make. I can easily find people right now that find no interest in the current internet, it's literally impossible that in the past it would have been different with way less interesting things to do on it..
There's a huge bias in what you state. I have no doubt that plenty of people who got access at the time found it interesting, but the thing you ignore is that theses are the one that found it interesting that got access in the first place.
Like sure email are incredibly useful, but to send to who? It's is right now that I can send them to 2 billions users, but in 1996, that was 16 millions... kind of much less useful, the chances are most people you knew, didn't knew anyone that was on it at the time... thus literally useless. FTP are nice, but plenty didn't used computers at all, sharing files meant nothing. I know so many right now that have trouble sharing files, yet FTP still exist... no chance they would have shared any in the past.
You are now on that team, the ones that don't have any use for it right now. It's fine that you don't find it interesting, but please don't be that old grandpa that scream "get out of my lawn" please...
> The early Internet was infinite times more fun.
Curiously, I've seen tons of people having fun with cryptocurrencies, in different ways, you are just not part of it...
I too got on the Internet in the early 1990s with e-mail, FTP, Usenet, and MUDs. I'm not actually an early Internet user. That'd be folks like my friend's dad, who worked at BBN in the 1970s, or the folks at Symbolics, who registered the first domain name in 1985.
People donate to CoS as well as "invest" in crypto; this practice has tangible benefit to the recpients of the funds. These beneficiaries do not want the benefit to end. They wnat it to grow. The suppression of "negative" commentary about crypto online is frightening to watch because it honestly seems to work. It is some sort of community-based censorship.
Personally, I would like to be able to (legally!) program against my money and do stuff with it without being beholden to big banks. I think it would be cool if I could automatically send 1% or whatever of all my transactions to a charity of my choice, or if I could do my own "micro-finance" lending to farmers in developing countries, or other things like that which currently require a bank to implement it and me to use whatever they implement. But it is far from clear whether all this cryptocurrency and DeFi stuff is either necessary or sufficient to do any of this kind of stuff.
I'd argue you just haven't explored enough around its possibilities. I just read this today. https://twitter.com/mcuban/status/1400459822080819204
I think we're just beginning to get to the good stuff.
> A lot of intelligent observers look at cryptocurrency, see that it makes no sense, and reasonably infer that they must be missing something profound on the technical level. Tech culture has a nice tradition of not deriding new ideas, but we need to break it here and speak out
> [non-tech people] don't see the huge silent majority of tech people who know it's a scam. That's on us
It is on us. I never realized this before today. I'm pretty sure it's nothing but a pyramid scheme, but I always gave the enthusiasts the benefit of the doubt. After all, Elon is so cute when he's enthusiastic! But yeah he probably knows it's a scam too, what was I thinking.
So go find out? I’m quoting you here for the “pretty sure” part. Do a deep dive. I’be done deep dives on Bitcoin, Ethereum, Cardano, Monero, Nano, Iota, Hyperledger, BSC, Uniswap, Tether, Chainlink and cursory glances at dozens of other coins/tokens.
I’m a tech guy. I work on an operating system/embedded systems. Nothing about blockchains, DLTs, crypto, at its core is a scam to me. The author saying the “silent majority tech people” know its a scam is such nonsense to my experience. Every tech person I know thinks either A) its neat/super cool, or B) they don’t know anything about it besides memes.
Sure there are tons of misinformation, scams, and bullshit going on. That’s everywhere and is not special to crypto.
But while his claim is true, in a Boolean sense, I don't know what exactly we're supposed to conclude about the world based on it. This isn't a ratio I've ever seen talked about before.
I'm guessing they're insinuating that the size of the feds balance sheet is somehow related to inflation, which it is only in a fairly loose sense.
Counterpoint: most "tech people" I know — including people who have worked in crypto — both know about it and also think it's a scam.
If someone only knows crypto from stories in mainstream press or cable news, they’d probably incorrectly assume “tech people” are almost universally for it.
> Nothing about blockchains, DLTs, crypto, at its core is a scam to me
Which I took as an implication that you didn’t see Tether as a deeply troubling or a scam
Tethers management is the problem - obfuscation and using other crypto as collateral instead of just USD.
Tether is one stablecoin, and arguably the worst example since it is literally the one coin every coiner will agree with you is a bad stablecoin. Do a deep dive on MakerDAO's DAI instead.
I mean bittorrent is neat tech as well but it's still primarily used for piracy. Doing a deep dive into how bittorrent works doesn't suddenly change the fact that 99.9% of torrents out there are violating somebody's intellectual property.
All I'm saying is, there's lots of super neat tech out there that's primarily used for not-so-super-neat stuff.
(sidenote, I actually think piracy is pretty neat, but it was too good an analogy to pass up)
Some of them opt out of more environmentally unfriendly stuff like Ethereum for sure
Personally I've developed systems for paying for everyday things like your bus fare or phone bill using crypto in a country where there's a hell of a lot less confidence in fiat (Brazil) -- hell check out the history of the Brazilian Real if you want an idea of what real candycorn money looks like
Personally I just feel a hell of a lot of privileged bullshit out of people arguing that crypto is some good for nothing shit. Yeah sure great try living in a country where your government is fucked. We truly don't live in some francis fukuyama neoliberal fantasy world where we can trust stuff like traditional financial markets which have gone and failed us in the non english speaking world time and time again. I welcome any and all alternatives
Wow, you can actually pay your bus fare and phone bills in Brazil with crypto? That sounds either very impressive or totally unbelievable.
I could not find anything on Google, so if someone could you link/cite to some actually used examples (I guess apps or utility website?) that would be very helpful. Sincere thanks.
My experience as a Brazilian is that I've never seen anyone using cryptocurrencies in real life. On the other hand, the government's new instant payments system (Pix), allows anyone with a mobile phone to easily make small payments. In less than one year since launch it's already ubiquitous.
https://www.google.com/search?hl=en&q=comprar%20passagem%20d...
plenty of options now wow so hard to find
Remittances seems like one of the true benefits of cryptocurrency... but that's why I'd like to know what amount of usage is actually that and what is, let's say non-beneficial.
And of course new sectors that are not established can seem like snake oil, simply because they are new industries.
The internet has steamrollered many industries and fundamentally changed the way they work.
Manufacturing, Music, Politics and now The final big boss, money.
It will take another ten years for this industry to mature. But in amongst the sham and drudgery we have the first non-violent system of currencies.
Isn't that a "they laughed at Galileo" argument?
They thought the Internet was snake oil. They thought Napster was snake oil. They thought BitTorrent was snake oil. ... but they also thought Pixelon was snake oil.
Yeah, I think it's safe to say that the primary use of cryptocurrency nowadays is as either casino chips or a money laundering mechanism. The economics no longer make any sense for anyone else.
It’s like arguing the most popular restaurant is so crowded, no one goes there anymore.
You're buying a number on a blockchain somewhere in the hope someone else will want it for more money, that's it.
But it doesn't negate the value of the technology. Yes, piracy is neat and useful, but illegal. But was the benefit of piracy that you got free stuff? Or was it that it was an easier system than any other at the time?
So, yeh, early adopters may often be driven by the seedy side of culture.
How would a merchant of physical goods even know about something like Celo, whatever that is?
I once bought donuts from a food truck with BTC and the donuts were good but the payment process was really slow.
The first economist says, "Look at that $20 bill."
The second says, "That can't really be a $20 bill lying there, because if it were, someone would have picked it up already."
They walk on.
Ha ha ha. That would only be possible with a government issued digital currency. Any private company running a "stablecoin" is guaranteed fraudulent. Can't be legit.
I think everyone is talking past each other, because no one's exactly defining what the "scam" is, so you're talking about different things.
I don't think anyone's suggesting that, say, deep in the BitCoin code there is some algorithm giving Satoshi Nakamoto a dollar for evert transaction.
On the other hand, I believe that the vast majority of buyers are buying simply because they hope that someone else will buy at a higher price tomorrow, or next year.
This causes everyone to cheer-lead about how everyone else needs to buy or HODL, because they simply want to drive the price up.
For me, personally, I'd say this is what I'd call a "scam," in the sense that a MLM company is a "scam": that the motivation of the majority of people extolling the virtues of buying crypto tends to be simply personal enrichment.
I fall into the latter camp. I don’t begrudge the former. I just don’t think it’ll last and have little taste for speculating.
It's just that widely available, totally unregulated financial instruments will always be primarily used to run ponzi schemes, pump and dumps and meaningless speculation (meaningless in that speculators are largely just speculating based on what other speculators might do).
What is interesting about distributed ledger consensus via proof of work only remains interesting when there's a disconnect between the economy and good government. If your government is corrupt, or your economy is corrupt, you want the two to be disconnected. The problem is that the latter - corrupt economies - dominate over the former.
If you have a functioning government, you can use the legal system to enforce contracts, and then ledgers don't need to use proof of work. If you don't have a functioning government, or you can't let the legal system look at your contracts, then blockchain starts to look interesting.
Tether smells extremely fishy and seems to be used for a huge amount of trade volume on BTC and other cryptocurrencies.
https://iota.stackexchange.com/questions/8/why-does-iota-use...
No, the scam part is the idea that crypto is going replace fiat and as such will be worth many times more in the future than it is now.
I'd also be very, very surprised if there wasn't price manipulation going on with crypto trading.
Hi there. I've published a few papers in top conferences on BTC and ETH. I don't own a cent of crypto and believe that a lot of it is a very bad idea.
I find it endlessly frustrating when people insist that the only way to disagree with enthusiasts is to be ignorant.
Let other people (non-tech or hybrid) comment on the idea. They have time to think about this.
Tech people can only help by explaining in understandable ways how blockchain/cryptocurrencies work. 3Blue1Brown has a good video on it.
Let’s keep the culture of not deriding ideas. We can’t predict human behavior or the future of it. Maybe something beautiful comes out of it, or maybe it accelerates global warming. I trust other disciplines to comment on that.
This is different from almost everything else, where advances in technology that increase efficiency are usually a direct benefit.
All this energy goes into what is essentially a lottery for miners. Except for 6 hashes per hour, all of the literally 100.000.000.000.000.000.000 hashes per second get thrown away entirely, not even advancing the same miner, the same ASIC, towards one of the qualifying 6 hashes per hour.
Additionally, there is no "silent majority" in tech that think it is a scam; the author has invented this.
It's not supposed to. No need for a permanent ledger to store cheap day-to-day transactions.
Crypto is so large, complex and fast-moving that it takes thousands of hours to grasp.
If I'd make a list of 100 questions regarding crypto, an exam so to speak, I am reasonably sure that this silent majority can't even answer 5% of the questions.
Because they don't know crypto. At all.
Tragedy of the commons is fully evident in the bitcoin block size debacle.
More like, everything old is new again. Nicholas Weaver called it "speedrunning 500 years of bad economic history".
There are non-technical heuristics that we can all employ, through our knowledge of history and sociology, that allow us to identify late stage bubbles (and the pyramids and ponzis that accompany them).
I don’t have a taxi driver but I do have taxi driver equivalents in my life that are currently giving me all the signals I need.
I'd reckon that the average HN cryptocurrency skeptic would do better than the average person who's actually invested in crypto.
This is always how cryptocoin nuts argue.
Do you really need to go through all the history of the system in order to be convinced of the latest state?
What are the different ways to decide who should be the next person that gets to choose the next block of transactions?
Can you hide the amount you’re sending? What about the recipient? Or your own identity?
Can you transfer bitcoin into ethereum or more generally one cryptocurrency into another?
Is it possible to send funds to a recognizable shortname instead of an hexadecimal string?
Are there ways to protect your funds with several keys instead of a single one?
- No
- Another google search for "bitcoin + <your question>"
- "Yes" for literally the rest of the questions.
This wasn't an exam, this was basically an advertisement for "look what cool things you can do with this"
If I got any wrong, whatever. I have literally never researched bitcoin or blockchain. If I got them right, well... nice try on the exam I guess.
Answer to question three is not restricted to Bitcoin. There are many other systems, e.g. Proof of stake (POS).
You're right that cryptocurrency enthusiasts are always generating new work and coming up with new ideas. Actually, they do this a lot more easily than other domains, because the fact that their entire field is a scam means there are a lot fewer of those pesky roadblocks like "the idea not actually accomplishing the thing you think it does" to contend with.
The fact is that nearly all cryptocurrency projects rest on one of a few obviously-false premises. Like "systems that require every participant to store the entire history of transactions forever scale well", or "people in the real world want every transaction they make to be completely irreversible", or "digital legers are guaranteed to accurately track the state of real-world objects". If you dismiss these, you can dismiss all the projects that depend on them without needing to know the difference between a MerkleCat and a SatoshKitty.
Have you heard of mina?
The thing is, regular money is, from a certain perspective, also a "scam". A lot of the financial system is effectively make-believe, with massive conflicts of interest at every corner and dynamics that keep working because everyone believes they should - until, for one reason or another, they stop believing, and then you have 2008.
Crypto is just another big mountain of make-believe systems (and getting bigger with every new contraption), but it is so young that the games of pretend are still very visible; and the key actors in crypto are different from the key actors in regular finance, which means it gets a bad rap from the latter. But if it can survive long enough (say, 30 or 40 years), people will just stop pointing out the "scam" and will go along with it, because "why not? If it works, it works".
I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity. And in fact all of the fiat currencies I know of originated as representative money.
Bitcoin is not widely accepted in exchange for things of values, and I see no reason to believe that will ever change. Being able to spend it is the "killer app" of cryptocurrencies, and none of them have actually implemented it, despite many, many attempts.
No, technically fiat money has value because it is accepted by a government to settle taxes. Which is why it loses value dramatically when a state collapses or otherwise becomes irrelevant to the local economy. Because traditionally the state itself was the issuer of such currency, already we have a massive conflict of interest at the very start: when the state pays out his own debts in its own currency, it's effectively asking his creditors to believe that currency has some value in the real world, while also telling them exactly how much that is supposed be. To "solve" this problem they invented central banks, which are supposed to keep governments away from the process of determining the actual value of a currency, if you believe that they are as independent as they proclaim. In the end, what matters is that enough people believe that certain arrangements are fair, and that the government will still be there tomorrow asking them for taxes. As long as that's true, one might well use the currency as a unit to settle private trades too, but that is a consequence of the original belief.
> I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity
The key in this sentence is "widespread", which is something you can redefine pretty arbitrarily and hence move goalposts as required. In practice, other tokens have been used here and there, but in the end, what wins tends to be government-backed tokens for the simple reason that authorities will always enjoy a right to put you in prison if you don't settle your taxes in the currency they desire.
If you look at it from a technical perspective, any collapsed state where the local currency has been wiped out and internal trades are settled in USD or EUR (a pretty common occurrence), in practice is already using an non-government-backed token, something on which nobody in the local economy has any control. To these areas, it doesn't really matter that the USD will be accepted by the US Federal Government to settle taxes; they just need a unit, and since this unit is accepted at the fringes of their system, well, might as well use it internally too.
> Being able to spend it is the "killer app" of cryptocurrencies
No, being able to convert into other tokens at the fringes is the killer app. Which quite a few cryptocurrencies do have, although in an extremely fragile state. The longer they keep them up, though, the easier it gets, as more and more people believe that the underpinning arrangements are fair and exchanges will still be here tomorrow to exfiltrate value to prison-avoiding currencies.
Not true. There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires for taxes, fees, etc.
In fact, the origin of using taxes + coinage goes back to a pragmatic way for ancient kings to not have to organize the logistics of feeding and housing a large army. Pay the soldiers in coin. Require citizens to pay a tax in the same coin. Boom, they self organize.
Money itself came about far earlier, and was independently invented in multiple places. The example most people look at is temple complexes in the Levant, where debt records came first, and currency second. It was an adaptation of earlier gift economy behavior to enable scaling to groups too large to have intrinsic social trust, and allowing for specialization of labor in building and maintaining the temples.
David Graeber's book will educate you about all this.
> There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires
If you'd read the rest of my comment, you would have seen that I explicitly address this case. Instead you went for a pointless appeal to authority about thousand-year-old situations that don't matter to the current environment.
Before the 1900s the vast majority of currencies were valued based on their precious metal content (gold or silver), not government fiat.
> you: Before the 1900s the vast majority of currencies were valued based on their precious metal content (gold or silver), not government fiat.
ORLY? I didn't know that. Oh wait I literally said it in the comment you replied to.
Bitcoin in its current form should not be seen as a payment currency, instead as digital gold. A new asset class similar to actual gold/silver, real estate, stocks, etc.
Something to put part of your wealth in, hoping it appreciates over time. And as Bitcoin appreciates over time so well so far (12 years of 200% appreciation per year on average), it doesn't really make sense to spend Bitcoin. It is deflationary by design.
Bitcoin already is a killer "app" as such. An accessible way for anybody to preserve/grow wealth, a hedge against inflation and the lack of return on a normal savings account.
Your take on crypto for payments is needlessly pessimistic. It's inevitable, the winner just isn't clear yet.
Legal tender also only applies to paying public debts (i.e. taxes)... not paying a business.
It really doesn't. But that is a convenient way to dismiss criticism from everyone who isn't a crypto insider (which is a self-fulfilling prophecy -- the people who spend that much time on it will necessarily be bought into it, the people who are critical will have given up caring about it at some point so will never have the necessary "credentials" to talk about it).
Not a very good way to convince me of cryptocurrencies' greatness by saying 'oh its too complicated to understand, but trust me its big'.
i'm not very into crypto - and everytime i look it feels like another speculative bubble but this time the speculators are even more hyped.
Both repeat the same memes to each other in a self-reenforcing echo chamber. The underlying link is to political consensus. Leftist-socialist Twitter is eager to say that socialism is good because Bitcoin is bad. Trumpist-conservativist Twitter loves to say that Bitcoin is good because Joe Biden is bad. Nihilistic crypto permabulls are so hyped up that they jump into every thread to defend their favorites and their negativity is usually limited to the dismissive "sorry you want to be poor".
It never really goes anywhere. Someone comes up with a new crypto narrative - adoption, value, environmental impacts, human interest - and it's all you hear about for the next month. If you try to find good information you are presented with an opaque wall of obvious scams, not as obvious scams, and people who believe or do not believe in them.
There is interesting stuff going on, but the people studying it carefully are so hard to find through all the noise now.
It's easier when there's a bear market.
I have several friends that worked in the industry professionally, for one of the few exchanges that takes KYC and such seriously.
None of them continue to work in that industry. One of them found it to be a net negative on their resume. None of them hold cryptocurrency.
There are many of us that are in fact informed, and have come to the same conclusion: this is internet tulips, and the music is going to stop some day.
Because they don't know Sciento-resonant-homepathics. At all.
So, what's left? I know you can still make money with it if you joined earlier and you're lucky. Same with a MLM, but at least those don't waste so much energy nor ruin the GPU markets.
- Instant loans without paperwork or credit agencies, algorithmically collateralized
- Micropayments to websites you visit rather than ads
- Electronic payments that can remain private if participants are smart. Much better privacy protections than electronic payment options like Visa/Paypal.
- Truly democratic governance protocols in which important decisions can be voted on in real-time by participants with skin in the game.
- The ability for a code itself, not associated with a human, to earn and hold money.
- Algorithmically enforced contracts that are more resilient to bribes and other forms of subversion compared to traditional court systems.
Beyond answering questions from friends and family & reading r/Buttcoin for entertainment, I just don't want to spend time debating the issue with the occasional enthusiast.
Doubt it. He's another Libertarian and certainly hates the existing system.
In the case of Bitcoin, originally, every Bitcoin holder would also be able to mine with their own computer and receive transaction fees. This has since changed, so now it's only the miners with specific equipment that benefit from the transaction fees.
This is embarrasing. I will give you more info in case you are geniunely wrong and not playing dumb.
This is the last mined BTC block: https://www.blockchain.com/btc/block/00000000000000000001d85...
The fees collected for transactions is 0.15 BTC and the mining reward is 6.25 BTC. Mining rewards will continue declining and some day the only value of mining will be those fees, but until now they have been largely irrelevant to the point that some miners just mined empty block because it was simpler from a technical standpoint, and it was becoming a problem because it just generated congestion in the network: https://bitcoinmagazine.com/business/why-do-some-bitcoin-min...
So you may think it's a scam for other reasons, but your point about mining fees being the driving of the pyramid, ponzi or whatever, is completely wrong.
Judging by how quickly Tesla stopped accepting Bitcoin, I would say he definitely knows.
Crypto is vast, complex, and inherently not suitable for binary thinking. I've studied the space for months and have come to the conclusion that crypto is two-sided in almost every aspect.
Many/most coins are speculative, which you can associate with words like "greed" and "casino". Yet also provide wealth savings/growth to people locked out of it in our traditional system.
NFTs are a cruel joke right now, yet ridiculous as they are, may be a precursor to various groundbreaking uses having real utility, in an exponential way.
Smart contracts are largely dysfunctional, yet there's early success in replacing financial products like staking, lending, leverage. When it works, it's permission-less, which has interesting social benefits (access not defined by your identity/social class).
And so on.
I'm not here to debate any of these points, my only point is to not dismiss crypto as a whole (binary thinking) and to not underestimate it. The topic is too complex for it.
To whom? “Crypto” is the colloquial shorthand for “cryptocurrency”. And I believe those thinking otherwise are reacting to the new usage encroaching on the old. Petty hill to die on…
To everyone outside the cryptocurrency social bubble.
> And I believe those thinking otherwise are reacting to the new usage encroaching on the old. Petty hill to die on…
I think it is pretty silly to deliberately use an ambiguous term when better ones exist.
The most sensationalist tweets get posted here all the time. It's not worth anybody's time taking them seriously.
Is this a bit?
I've talked religion with more free thinking open minded Jehovah's witnesses.
Newegg and Overstock don't even take payment in bitcoin. They allow you to use a third party processor to exchange bitcoin for USD then immediately transfer the funds to the retailer. There's no evidence that these payment mechanisms have ever been more than a rounding error in these retailer's sales.
For example of Square:
> Its mobile payment service Cash App has been its flagship product. However, in recent times, while Square reported that cash transactions at its U.S. merchants as a percentage of overall transactions fell from more than 50% in 2015 to around 30% today, the bulk of the company’s revenue this past year – around 56% – came from Bitcoin transactions. Over the past year, revenue from bitcoin was $1.8 billion – a whopping 10X increase over 2019’s revenues in this category. [0]
So this 10X increase isn't an indicator of adoption then, they just made up this figure?
[0] https://leverageshares.com/en/insights/square-paypal-catalys...
[0] https://www.nasdaq.com/articles/beneath-the-surface-of-squar...
DeFi isn't even 2 years old yet. This whole space really only started building applications in the last few years. Ethereum itself isn't even 6 years old yet.
All that is being replicated in DeFi but permissionless and open to the world.
It's a cliche at this point.
Cryptocurrency people refute entire books and deep analysis (from actual experts) with "everything you just said is wrong, but I have to go now so can't say why".
It's not this in isolation, but the fact that it's a cliche that's the thing.
Your strategy is to say "you're wrong, prove me right". No, I won't be writing book-length comments here to convince some internet stranger whom is categorically against it.
I have no burden of proof. I'm not even a proponent or opponent. All I said is that it's complicated and two-sided, to keep an open mind.
I'm not here to explain you crypto.
When you come out and say, things are too complex to make an argument, it can read like FUD and whataboutism. As if you are attacking an idea that an argument _can_ be made.
I'm sure you didn't set out to muddy the waters, but after having muddied them in the middle of a lively debate, I think this is the sort of response you should expect to receive.
Coherent arguments against cryptocurrencies are readily available. The case for cryptocurrencies is shifting, contradictory, and often nonsensical. This means something. It matters.
But I'm pointing out that this is ALWAYS the argument pro-cryptocurrency. It's not this instance, but a pattern.
Cryptocurrency people refute entire books and deep analysis (from actual experts) with "everything you just said is wrong, but I have to go now so can't say why".
It's not this in isolation, but the fact that it's a cliche that's the thing.
It's comical. I'm not sure, but it sounds like you're laying the ground work for waving your hand and saying "book? By the time it's published the technology has moved on, so it's not relevant, so let's just ignore the whole thing" when the main arguments against cryptocurrencies/smart contracts are not about the details of the tech.
The arguments are mainly about the premises and the goals. What technical means get invented then becomes irrelevant.
I'm not a crypto bro, so I don't need to defend the case for crypto. 6 months ago I was in exactly the same spot as most people here dismissing the industry as a whole.
Admittedly, largely based on hear-say and the mainstream narrative. Not by actually knowing anything about it. After taking a deep dive I've changed my mind on some aspects, but not all. I would not agree with my past self, I was ignorant.
Even if you do study it deeply and still conclude it's all garbage, it's an intellectually fascinating journey. You get to learn a lot about history, human psychology, our financial system, politics, trading...basically how the world works.
Interesting stuff to debate, but this is not the place. Fine.
Well, almost. Probably cryptocurrencies have more of a chance of actually succeeding in providing realistic microtransactions. Not BTC (PoW and way WAY too few tps, too slow, too high fees, etc...), but it's something traditional finance has failed to provide.
(cryptocurrencies have, for a decade now, also failed though. So I'm not getting my hopes up)
Of the remaining ones that should at least get the benefit of the doubt, here's my rough opinion...
Bitcoin is king and proven in its function as "digital gold". Based on its enormous market cap, network effect (100m users and growing exponentially) and one-of-a-kind performance of 200% per year on average, for 12 years straight.
Which is no guarantee for the future, but nothing is. Bitcoin is the invention of an entirely new asset class with unique properties, good ones and bad ones.
Ether and adjacent helpers (such as link) are also a winner, if you take the long term perspective. Almost anything application-wise is built on top of it (DeFi, NFT) touching potentially almost any industry one can think of.
It is true that most things built on Ether are crap and likely to fail, but that doesn't have to be true forever. The point is that even if 1% becomes successful, it's likely Ether-based. Even failed development on Ether grows usage of Ether, and the network effect quickly gets beyond the point of no return.
Compare it to the world settling on Git/Github for software development. This doesn't guarantee good or useful software, yet when such software is produced, it's from that infrastructure.
Besides Bitcoin and Ether, there's a few semi-serious outliers like Cardano and XRP. I expect them to fail fully.
So that sums up my opinion of the space:
- Bitcoin as asset class, long term. - Bitcoin's Lighting Network for payments, yet needs to become more user friendly and get wide support (give it 3 years). - Ether and helpers for a wide range of uses.
Bitcoin and Ether are not only here to stay, they will grow exponentially. Pretty much anything else is safe to ignore. For now.
It's consuming more electricity now than Sweden. It can't really grow exponentially. The world just does not have enough electricity for more growth at that rate. Unless you just mean "exponential in price", in which case that's just speculation, and completely disconnected from, as they say, the fundamentals.
For its current purpose (store of value, so not an every day payment currency), Bitcoin does scale. Should for some reason miners be unable to gain access to more energy in the physical world, the protocol automatically adjusts the difficulty.
Scaling transactions has no relation to energy usage, only mining does.
As for its energy usage, that is a wildly complex topic, and it's moving very fast.
Energy consumption in itself is not a problem, it is only considered a problem when:
1. The energy source is not renewable 2. The consumption directly competes with purposes deemed more useful by society (perceived or real).
As for renewables, I believe the score to be somewhere between 30-50%, which is greener than almost any other industry. Furthermore, this score is going to rapidly improve as coal-based mining in China is in major decline whilst North America gains in mining. The NA mining companies have formed a council to report on energy usage and stimulate not just the use of renewables, specifically to go for stranded energy sources. These are types of energy that are locally available, yet too remote or costly to transport to civilization.
To sum it up, it's not as bad as the headlines say, and rapidly improving for the better.
Energy usage, not even it being dirty or green, isn't the heart of the debate though. Keeping devices powered on/plugged in costs more energy and serves no purpose, yet zero headlines about that.
Rather, the debate is that a lot of energy is consumed for what skeptics consider to be no purpose.
And now we do get to a hard divide. Believers and non-believers.
A true believer thinks of Bitcoin as the hardest money ever created, absolute scarcity as a one time human invention. This classic article is one of many making the case for it:
https://vijayboyapati.medium.com/the-bullish-case-for-bitcoi...
Read it with an open, but skeptical mind. If you're disgusted by it, your personal outcome is clear. If it does tickle some interest, this Twitter thread links to a few of such articles:
https://twitter.com/anilsaidso/status/1290758632238276609?s=...
As for Bitcoin being speculative, yes and no. With a long term perspective, it is predictable to a degree. A dutch stock expert came up with a valuation model called "stock to flow":
https://stats.buybitcoinworldwide.com/stock-to-flow/
Actual price action versus predicted price is so accurate that it's creepy. And there's a reason for it. Bitcoin's supply is entirely predictable and mining rewards are cut in half every 4 years, triggering the next bull run, followed by a bear market. Like clockwork.
Even the financial establishment agrees that Bitcoin is the most asymmetrical bet there is. The risk/reward ratio is one of its kind.
To translate that to any ordinary citizen: you pick a portion of your wealth you can afford to lose entirely. 10-25% of savings are often heard numbers.
There's a really small chance that this money, which you could afford to lose anyway, will be lost. A so-called "Black Swan event". More likely, the money would be halved and never recover.
Against that limited risk (due to your limited exposure), is a much higher chance of it multiplying by 10, 20, more...depending on how long you hold the asset. As in, almost guaranteed. For Bitcoin, not for the shitcoins.
This sounds like a sales pitch for buying Bitcoin, which is not my goal. I don't care if you do or don't. My point is to highlight the uniqueness of this asymmetrical bet. It has no comparison. There's no asset in the world with a risk/reward ratio this favorable.
Or, you can call it funny internet money that heads to zero. Either conclusion is fine, if its an informed one.
My main point on that was that the exponential function grows quickly. If it's all of Sweden today, then it's just a couple of doublings before it's literally everything. If you graph the current use this is not the far away future.
I don't have absolute proof, but you cannot hide the kind of electricity use without driving up demand noticeably, so actually people are already today paying more for electricity in order for someone to profiteer from hashing. We're all paying for this.
> 1. The energy source is not renewable
Or it displaces otherwise-renewable use into non-renewable. Which (at this scale) of course it has.
> To sum it up, it's not as bad as the headlines say, and rapidly improving for the better.
I disagree on both points. The waste graph (and that's just electricity. Where do you think non-economical mining rigs go?) is growing exponentially.
Have you seen this guy talk about our inability to understand the exponential function? https://www.youtube.com/watch?v=kZA9Hnp3aV4
> Keeping devices powered on/plugged in costs more energy and serves no purpose,
It's a problem, yes. But it's not true that it serves no function. "It's easier to keep it plugged in than not" is convenience.
I'm not justifying it, but yes actually it does have a purpose. Just like idling a diesel car outside my window while I'm trying to sleep does have a purpose.
> Bitcoin's supply is entirely predictable
Not really since an unknown amount is lost forever every year due to crashed hard drives and lost passwords.
For your medium link, it can be summarized as "an intro to bitcoin". And I'm surprised it was written in 2018, as it seems to have the naivety of a small child, with regards to both bitcoin and economics.
E.g. it doesn't motivate why we need to (effectively) get back on the gold standard. The "work" that was "proof of work" for my FDIC-insured bank balance is a combination of the value I added to my employer, and the value the market gave me for helping correctly price goods. I don't need my bits to be scarce.
> "However, because bitcoins are traceable on the blockchain, a particular bitcoin may become tainted by its use in illicit trade and merchants or exchanges may be compelled not to accept such tainted bitcoins."
Like I said. Naive. And this was written 4 years after Mt Gox, where 4% of all bitcoins that will ever exist, were stolen.
In a legal money laundering sense I would guess that maybe the majority of bitcoin out there is tainted, since tumblers actually cause 100% of their output to legally be tainted. And with it being circulated, the only "clean" bitcoin is from HODLers who have never moved it after mining.
> "Without improvements to the privacy and anonymity of Bitcoin’s network protocol, bitcoins cannot be considered as fungible as gold."
And in this very next sentence he's essentially saying "yeah but let's help the criminals hide it, and not do that tainted thing I just said".
He calls it "improvements".
> "Nation-states have shown a persistent proclivity to inflate their money supply to solve short-term political problems. The inflationary tendencies of governments across the world leave the owner of a fiat currency with the likelihood that their savings will diminish in value over time."
This is more naivety. E.g. in order to have our best future, we as a society actually don't want resting savings. I've been lectured by a friend because I have a coin jar, and that is money that isn't in motion. I wouldn't go that far, but there's some truth to the fact that money (in any form) at rest does nothing. Whereas money in motion does.
GDP is not a perfect model, but like many models it can be useful. And GDP measures the velocity of money.
So why "punish" people for hoarding cash (in any form) and not moving it? Because it's in society's best interest, or so goes the argument. This naive writeup seems to merely say (like other pro-coin ones) that taxation is theft, inflation is theft, etc...
Anyway, I think I've read this before (or it's just the same coiner dogma repeated ad nauseum so that it's indistinguishable from something I've read before).
I'm not disgusted by it. I don't get disgusted by uninformed naivety.
> As for Bitcoin being speculative, yes and no. With a long term perspective, it is predictable to a degree.
What I mean is that approximately nobody is buying bitcoin in order to actually use it. Unless they are using it to send money to ISIS, or something. No, they buy it in the hopes that someone else will pay more for it, later. That is neither payment, nor store of value.
Maybe one day it'll be more stable, and thus a better store of value. But I hope it dies way before that.
I don't disagree that these coins can be a good investment for the individual. But that's where the disgust comes in. It's profit over morals, with a spread never before seen. It's doing something evil (environmental impact), in order to profiteer from organized crime (anonymous currency). Even if you yourself commit no crime, it's you profiting from destruction[1], to fund organized crime.
You're essentially making the argument for a lottery that has (unfortunately) reasonable odds. That doesn't make it right, or good, or nondestructive.
I'm not sure why you think those bitcoin 101 links would be new to me.
[1] And I don't mean "destroying the old to create the new", no I mean literally destroying productivity and base resources. As if you could mine bitcoin by proving that you've burned medication. That is resources society had, that could be used, that you burned at the expense of others for your profit.
It seems we disagree overall on crypto, and that is fine. I'm going to selectively respond given the large amount of points you address.
As for the energy part, the technicals (energy mix, stranded energy, emissions) are a discussion on their own and reality on the ground is fast moving. I do not consider the issue resolved, I consider it smaller than projected.
In particular, your claim that the convenience and laziness of leaving electronics plugged in justifies wasting energy whilst using this same energy for sound money to be problematic, shows privilege.
Bitcoin is incredibly popular in Venezuela, Turkey, authoritarian nations with a rapidly inflating currency. One of very few ways for underprivileged citizens in said countries to protect/grow some of their wealth. In Africa, nodes are growing the most currently, as several projects aim to implement the same basic life raft.
Back home (developed nations), the youngest generations struggle to build up wealth. Never before in history have the young owned such small piece of the pie and never before were their debts so high. Middle class seems entirely out of reach for them. That's why it's not surprising that specifically they jump on crypto.
And lastly, even for those already in middle class not necessarily requiring crypto as a life raft, there's nothing wrong with them trying to build wealth, unless you also oppose to people investing in stock, real estate, etc.
You probably have the opinion that Bitcoin is not a solution for these people, but I want you to acknowledge that the problem it tries to solve and the macro backdrop that has led to its creation, is very much real. Bitcoin aims to be hard money, and hard money has humanitarian value infinitely larger than leaving your phone plugged in.
As for privacy, you're again being quite selective in your outrage. We know that almost anything able to connect humans can be used for good and bad. WhatsApp is end to end encrypted and proven to be used in terrorist attacks in Europe. Yet nobody has called for the ban of WhatsApp. You intentionally take the bad faith angle for privacy as if this feature was specifically designed to do unlawful things.
No, it is designed as part of the separation of state and money. A good faith goal, a humanitarian goal. Just like WhatsApp basically is designed for good, to allow billions of people to connect with each other.
Bitcoin is a store of value, yet a volatile one. That's because it's still early. It's likely to reach a 10T market cap. A maximalist would project 100T, but I'm not sold on that idea.
The more realistic projection, 10T, would not make it an existential threat to the existing financial system. It would just be digital gold. Bonds and derivatives are a few hundred times larger.
I'll end with a philosophical note. One you would wildly disagree with, but that's the point of a debate.
Our current system depends on perpetual growth. Maximize work, productivity, consumption, even population growth. Only endless growth keeps the system alive, and even barely so. It rapes the planet and cruelly still leads to enormous inequality.
As such, I don't consider it very much of a threat when money has no inflation or is deflationary. We should work less, consume less, and return to a more sane standard. This is going to happen anyway due to further automation.
The current system treats people like economic cannon fodder. If the current system has no regard for people, don't be surprised that people turn their back on it and seek a life raft or early exit.
Anyway, thanks for the debate, this was my last reply.
Nothing is. That's kind of the point.
> As soon as it hits real world caps
Do you think that will be before or after every single use of electricity becomes metered? We already lost most free tier trials of any sort of compute (CI, VMs, etc). I'm expecting that hotels will start metering electricity for guests at some point, because some asshole is going to rent rooms for mining rigs.
Someone's going to put a mining rig in the public bathroom. In the curtesy outlets in airports.
There is no "cap", it's a constant escalation of theft. All there is is a place of diminishing returns for the thieves.
> your claim that the convenience and laziness of leaving electronics plugged in justifies wasting energy
What the actual fuck. This is literally the opposite of what I said. Literally the exact words "I'm not justifying it" is what I said.
> Back home (developed nations), the youngest generations struggle to build up wealth. Never before in history have the young owned such small piece of the pie and never before were their debts so high. Middle class seems entirely out of reach for them. That's why it's not surprising that specifically they jump on crypto.
So you agree that it is speculation, not currency?
> there's nothing wrong with them trying to build wealth,
On that level, no. If you rob a bank to do it, yes.
> One you would wildly disagree with, but that's the point of a debate.
Ironically, no it's not. You think the point of debate is to increase disagreement?
But no, I do not disagree with anything you said after that. That's almost the only thing you said that was reasonable.
You didn't justify leaving electronics plugged in, you said it provided value: convenience. If you'd calm down and read between the lines, see the overall point that "value" is subjective. Surely we can point out several energy consumers offering questionable or no value. The popular narrative is that Bitcoin offers no value at all, which I tried to counter. Clearly it has value. Maybe not to you, but it does to 100m+ users and exponentially growing. And the value it offers ranges from a humanitarian life raft to pure greed, yet value it is.
True, I do not consider Bitcoin a currency as in a payment currency. Its currently useless for that in a technical sense, but also in a financial sense. You do not want to spend a deflationary asset.
I consider it an asset, banks literally call it a new asset class. Is it speculative? Yes and no. Short term it is, day to day its clearly volatile and actively manipulated by traders (doing longs, shorts, leverage). So as a "store of value" on the short term, it's a failure. With a bank account, if I put in 10K today, I can take out 10K the day after. With Bitcoin, that 10K might be 9K or 12K, who knows?
Longer term, it's less speculative. It's deflationary, aiming to at least counter fiat inflation, yet in reality far surpass it in growth, doing 5-10x price actions every halving, and about 200% per year on average. That's the track record. I can't predict the future.
I think the point of a debate is to discuss opposing views. They don't have to grow further apart, but they might. I also don't mind a hot debate, nor am I frustrated or upset with you. My point isn't too "win".
Still, nice to agree on one point in the end. Have a great day.
It's not. What would you say to someone who went from store to store, and emptied the "take a penny leave a penny" tray into their pocket, so that nobody could have that anymore?
Even when it's not literally theft (e.g. credit card fraud or cloud services), it's abuse that destroys a resource, to the point where nobody can offer such a service.
> If you'd calm down and read between the lines,
I don't appreciate you lying about what I said.
> Surely we can point out several energy consumers offering questionable or no value.
So this is plain whataboutism?
1.3M people die every year in traffic, too. That doesn't justify setting a price floor on energy, or fast-turnaround ewaste.
> You do not want to spend a deflationary asset.
And if it doesn't die, it always will be deflationary. Supply is limited and people die, or lose passwords or hard drives.
Yes, Bitcoin will always be deflationary. I personally am not convinced it will eat up all wealth in the world in the way a maximalist believes it will. As said earlier, I'm thinking 10T max.
Should it grow to contain much more value, Bitcoin is more likely to be expressed as sats by default, and owning a full coin would be rare. Many want to do this right now due to unit bias. Newbies tend to prefer a 0.3$ shitcoin like Dogecoin over a coin as expensive as a luxury car.
Layer 2 solutions can work with a fraction of a sat, yet they can't settle this fraction on the core BTC network, nor would this make sense in terms of transaction costs. So I think they use some kind of buffering mechanism for that.
That's not how I use it, at least. I use it as "stop changing the subject", and "two wrongs doesn't make a right".
What am I supposed to say to this distraction, if you're triggered by the word whataboutism?
> It's hypocritical to aggressively combat one energy waster whilst allowing or even demanding 200 others.
If that were the only thing about blockchain, then maybe. But it's not.
But also no, I don't think it's hypocritical in that abstraction level. There are doctors out there who want to help people, yet are not working on malaria. That doesn't make them hypocrits on malaria.
Yes, there is arguably hypocracy. Just like how you would save a drowning child if you walk past them, but you won't give $2 to feed a starving child on another continent, or $10 for a malaria net.
Maybe you actually do. But even then I'm saying you'll ruin your nice shoes to save the drowning child, but then you'll buy new shoes instead of using that money to save another life.
And then we have descended into a completely different point from the value of bitcoin. It's a distraction. You've effectively changed the subject to not have to discuss that you're making the world worse by pumping bitcoin.
In a world where children starve and die from malaria we don't have to discuss any issue at all. How convenient.
> shitcoin like Dogecoin
What makes Dogecoin shit and bitcoin not?
The way I see it, nobody really cares about emissions, energy use, pollution, the environment...at all. Most people commenting on Bitcoin are likely to enjoy a US middle class existence, or even upper middle class.
They have ACs running all day, 50 electric appliances in their home, move themselves with 2 tons of steel, indulge in purchasing clothes made from slavery in Bangladesh, consumables stiff from palm oil (destroying rain forests), likely regularly eat meat, take airline flights, and produce tons of plastic trash.
The above lifestyle, if it were to be deployed globally, would require 6-8 planet earths, by estimation. Yet there's no concerted outrage, call for regulation, outright bans on any single aspect of it. Obviously because that would mean giving up comforts you enjoy yourself. As it comes to principles, people have none as soon they are tested.
Therefore, it's much easier to attack something you don't use or understand, as there's no personal cost to it. I reject your environmental abuse yet will defend mine.
Still, its a fair and valid point that in a world of environmental collapse, adding to the pile doesn't help. I'm with you on that. I'm optimistic that it will be resolved, and rather quickly. Mining will pretty rapidly become renewable, CO2 neutral, focus on stranded energy, etc. A headline may be forthcoming this week even.
Dogecoin is shit because the creator says it's shit. When interviewed about its purpose, inflation scheme, energy usage, he openly admitted he considered nothing at all. It was a joke. Dogecoin has no functionality nor scarcity. It doesn't even have a development team.
Still, the joke is widespread enough for it to sustain for quite a while. If only enough people hold it, a full crash to zero becomes less likely.
The main differences with Bitcoin would be scarcity, the network effect, institutional adaption, L2 solutions, exchange support, ETF funds, etc.
The difference between a "serious" coin and a shitcoin is easy to see in price movement. When BTC dumps, say 30%, a shitcoin dumps 80%. A shitcoin is speculation only, whilst a serious coin is speculation combined with long term value, or the belief in long term value.
I'd say the reason is that many people have already made their mind up and no amount of "actual arguments" will convince them otherwise, but sure, here are some examples of things enabled by smart contracts.
https://www.gemini.com/cryptopedia/amm-what-are-automated-ma...
https://www.investopedia.com/terms/a/atomic-swaps.asp
https://www.ibm.com/blogs/blockchain/2020/11/blockchain-for-...
Arguing with someone who is bearish on cryptocurrency is pissing in the wind, which is why people would rather leave for "unrelated reasons".
1. Inconsequential. Ok, you built a fancy crypto system.. so what?
2. Misattribution (the IBM article). Ok, you improved a traditional finance system, why is crypto necessary for that (other than marketing purposes?)
Regarding your second point, I understand what you're saying. I guess the benefit of doing that specifically in a blockchain/smart contract system instead if <insert your bespoke system + database of choice here> is you can take contracts that have been verified by others and deploy them on your blockchain and tweak the numbers and be confident on the output. Instead of blockchain, you could use any sort of "industry standard ledger/schema", but no industry standard ledger/schema exists and blockchains do exist.
ImmuDB was posted here the other day, it's pretty young but could be promising for businesses who want the benefits of blockchain without needing to use a blockchain.
Yet the cost is distributed externalities like burning nonrenewables or wasting greener energy sources on inefficient or pointless calculations.
Are there any smart contracts or DeFi without the externalities problem?
And even if there are then is it wise to put money into things one doesn't understand? The DAO exploit makes me wonder if the juice is really worth the squeeze.
But even if that happens (and it would be great), there's still everything else: https://news.ycombinator.com/item?id=27345786
Harmony One, Polygon, Fantom to name a few (Polkadot/Substrate is growing quickly, too). ETH2 is obviously going to be the big one, though.
https://www.amazon.com/Attack-50-Foot-Blockchain-Contracts-e...
I should have a cut-and-paste answer to this question. I actually do already, but under my real name and I don't want to dox myself.
Search for my username here for some: https://news.ycombinator.com/item?id=27210604 (some comments are "below the fold" (e.g. this comment: https://news.ycombinator.com/item?id=27219137).
And here: https://news.ycombinator.com/item?id=26944659
But I'll try to summarize:
The core things that blockchain stuff tries to solve are not actually the hard problems. The hard part of online commerce is not that customers can reverse credit card transactions. The hard part of contract law is not automatic payments. The hard part about property law is not atomic transactions of money and deed transfers.
So just off the bat, almost everything that is presented as a "solution" is not actually solving anything meaningful.
But it doesn't stop there. It's actually making the actual hard problems worse.
For cryptocurrencies, it makes courts all but impotent. A court can't compel you to pay child support, or return the money you stole. You can just say "no".
It's not trivial to track money, but the stated goals of cryptocurrencies is to make it hard or impossible to trace, and to compel.
It's not easy to find money laundering, or just criminal money being moved around. AML & KYC laws exist. They're not perfect. They can inconvenience legit people, and they can be gotten around. But they do help greatly.
The explicit goals of cryptocurrencies is to get around AML & KYC laws. This is what Pintrest was talking about.
So that's for "anonymous". We don't actually want someone to trivially move $1B anonymously.
We as a society, as a people, don't even want people to be able to send money any way they want. E.g. we don't want people to be able to send money to ISIS. There's a "baby and bathwater" argument that can be made here, but since cryptocurrency people don't even WANT to prevent this use case, it's not what they're making, or selling.
Like airline security, it's not effective because it's perfect, but because there's too much risk that one of the layers will catch you.
And the cryptocurrency dream is to remove all those layers.
Reversibility: People don't want this. One of the main reasons to use a credit card AT ALL is that people want reversibility. If that's all you wanted then you can probably just accept debit cards.
And as for smart contracts: All smart contract systems need a way for a court to interpret the contract. The contract may not be legal, it may have been signed under duress, etc.. So all smart contract systems need this escape hatch.
So how is it adding any value?
And the hard part of contracts was never what's being solved here. The hard part is codifying your intention into legalese, and conflict resolution. The codifying is still there, but now it's computer code instead of legalese. But conflict resolution is removed? Why?
The most ridiculous one is "land ownership registry". You know who ultimately decides who own a piece of land? The government of the country it's in.
Do you think France will bow down to "math" if a French court orders a house to be sold, but the would-be seller is some anonymous "wallet" that refuses?
France would just "fork the blockchain", and the authoritative fork is the one backed by police who will come remove anyone who claims ownership of something they don't own.
In an extreme example, if the ownership of Mona Lisa was "on the blockchain", and a rogue employee sold it, do you think France would hand it over? Of course not. So it means nothing.
I realize this comment is all over the place, and not diving deep into any one argument. It's more like a survey (though not complete) of various arguments, that can then be explored in more detail. This comment is long enough already.
And note that all this is in addition to technical problems like PoW/PoS, electricity use, scalability, transaction speed, 51% attacks, etc... Even assuming all those are solved, the problem is the the very GOAL is a dystopia.
ISIS has figured out how to get funded long before crypto was a thing. Banks already launder billions and that's harder to trace than Bitcoin transactions. And now, like it or not, crypto already exists and is here to stay, so perhaps it's better to start building legitimate use-cases around it than to just mumble about ISIS from afar.
All of your examples seem very contrived for how crypto won't work. I can make up examples of areas where crypto won't help, too. It's not supposed to be the end-all use case for everything.
The lack of conflict resolution in crypto is a side effect of decentralization. When you're talking global interoperability and value exchange, conflict resolution is off the table anyway. What court am I supposed to go to if I wire money to a guy in Nigeria and he doesn't fulfill his end of the bargain?
Ownership of the Mona Lisa might not be one, but there are many use-cases where removing a centralized mediator has a ton of potential benefits. One example might be Basic Attention Token, where advertisers and users can get a better experience because there's no need to satisfy the Google Ads middleman. What's the use for a conflict resolution mechanism in online advertising? Same with device connectivity with helium network, or decentralized lending that can provide better interest rates because there's not a huge meatspace banking infrastructure to support.
I'm not saying crypto won't work. I'm saying every single idea that's been proposed won't work.
And the base problem is that the whole point of these coins is disguising "I want to create a world problem" as "I want to solve a problem".
"It's hard to get around [AML, KYC, tax, etc.] laws" is not a "problem" that needs to be solved. Yet again and again, this is what coiners propose as a potential "killer app".
> When you're talking global interoperability and value exchange, conflict resolution is off the table anyway.
Huh?
> What court am I supposed to go to if I wire money to a guy in Nigeria and he doesn't fulfill his end of the bargain?
Your bank makes it hard to do this, to make sure you're not being scammed.
And what problem exactly are you trying to solve? If you send BTC to Nigeria and the guy doesn't fulfill his end of the bargain then BTC by design doesn't allow any recourse.
Our current system may or may not be able to help you, but BTC goes out of its way to say "fuck you, you should just never have made a mistake".
But also, if someone moves $10B to Nigeria, you can bet your ass they'll find a way.
C.f. when one of the Pirate Bay founders, while living in Cambodia which doesn't have an extradition treaty, hacked some banks. VERY quickly that whole "doesn't have an extradition treaty" did not matter at all, and he got arrested and put in prison.
He should have bought bitcoin/monero. Noob. :-)
It's actually telling that he had full access to the bank's mainframe, yet still only managed to steal like a couple of thousand USD. The rest of the transfers were blocked or reversed.
So the system worked as intended. And as we've seen time and time again (cough, Mt Gox), bitcoin just doesn't work even as intended.
> One example might be
For many years now we've heard hypotheticals, but no actual solutions. The time for brainstorming should have been over, considering the HUGE environmental and crime impact.
At this point it all sounds like "it's not worked so far, but can we just continue setting fire to children? I think it'll do something good one of these days".
> decentralized lending that can provide better interest rates because there's not a huge meatspace banking infrastructure to support.
But can we have an actual solution, not just handwaving, here?
How are you going to solve the intersection between lending contract and laws? What about bankrupsy? What about court ordered child support? What about inheritance, death, etc?
These blockchain things are trying to solve what is actually the EASY problems, not the hard problems.
Like, what do you think will happen if you say "can I get a better interest rate, if I agree to be excluded from chapter 11 and chapter 7 laws?". Likely no, no you cannot. Your "math" doesn't magically make the government, judicial system, and police just "go away". And for good reason.
Most exchanges also blacklist addresses to help keep you from getting scammed. People still get scammed, though.
> Mt Gox
A sketchy exchange hacked 7 years ago and many of the BTC was recovered. Good luck hacking Coinbase.
> hypotheticals, but no actual solutions
Basic Attention Token is literally a functional system working today, right now. So is Helium Network, The Graph, Unlock Protocol, Storj, Golem, Livepeer, and dozens of other projects that are actually making awesome innovations today.
> The time for brainstorming should have been over, considering the HUGE environmental and crime impact
So if we stop all crypto brainstorming and innovation, then mining and crime will suddenly disappear? What if I told you crypto innovation is making these things better, not worse - Proof-of-Stake is about to reduce Ethereum's energy use by 99.9%, only made possible by continued innovation in crypto.
> But can we have an actual solution, not just handwaving, here?
Yes, Compound and Aave are decentralized lending platforms that give you better interest rates than banks. Your points about bankruptcy don't apply here, because DeFi lending is designed so that you can't go into debt. Bankruptcy only happens when you're loaned some money that you can't pay back.
In meatspace, avoiding debt collectors and child support is still illegal, whether you're hoarding BTC or just putting cash under your mattress.
Even so, can we agree that if I'm paying for a newsletter subscription online, that the multi-trillion dollar meatspace infrastructure of banks, credit cards, bankruptcy laws, FDIC, and court settlements is basically wasted? Shouldn't I just be able to sign up to a website, instantly pay a fraction of an ETH, and be on my way, no banks involved? That's the core of what crypto promises: web-native money.
Which is why nonreversibility is a bug.
> A sketchy exchange hacked 7 years ago and many of the BTC was recovered.
4 years before that article.
> Good luck hacking Coinbase.
That's a matter of when, not if. Like I just said even actual real banks get hacked.
But it doesn't even have to be that clean. It's enough that one Coinbase employee has the opportunity for even one minute. I don't know how much they manage, but someone left alone (or conspiring, for a two-key system), and you can have all the money disappear.
And the thing is, they'll likely get caught in that case. But so what?
The average sentence for robbery is apparently 111 months. Now, I didn't do more research on that than a simple googling, but 10 years prison, and when you get out you're a billionaire?
And keeping in mind that during that whole prison time, your family is stinking rich.
> Proof-of-Stake is about to reduce Ethereum's energy use by 99.9%
Again, I'm not holding my breath. Especially since bitcoin HODLers will never give up, and bitcoin factories have financial incentive to continue the scam.
> So if we stop all crypto brainstorming and innovation
No. You should show some results after a decade of crime and waste.
> What if I told you crypto innovation is making these things better, not worse
I read this as "reducing the problems they created", not "making the preexisting problems less of a problem".
Great. Let me know when coiners consume less power than Denmark for 7tx/sec.
> DeFi lending is designed so that you can't go into debt.
How does that work? Let's say I have a DeFi loan, and then I get drunk and smash a priceless vase, now owing $100M to some art gallery?
So my assets and liabilites are now that loan, and my debt to the art gallery. I go bankrupt, and my assets and liabilities are renegotiated / forgiven.
And the solution can't be "the law of the land, and courts, do not have jurisdiction over DeFi debt". Because obviously they do.
> In meatspace, avoiding debt collectors and child support is still illegal, whether you're hoarding BTC or just putting cash under your mattress.
Yes, but like I said: judgement proof.
Today it sucks to be judgement proof (i.e. you pretty much have to be a bum). In a coin future it doesn't really affect you at all.
> Even so, can we agree that if I'm paying for a newsletter subscription online, that the multi-trillion dollar meatspace infrastructure of banks, credit cards, bankruptcy laws, FDIC, and court settlements is basically wasted?
Not sure what you mean, here. The multi-trillion dollar industry does more than allow you to pay for things online. It's the engine of the whole economy. A better comparison is to compare it to only paypal.
And paypal does have overhead, to be sure. And yes for any happy transaction between you and the newsletter that overhead is waste. But you're paying for when it's not a happy transaction. E.g. when the company goes bust, just plain doesn't give you the product or service, or when your card gets stolen (c.f. someone hacked your computer), and other mishaps.
And also for when actually the newslesser is a front, and "you" are actually just laundering money for them. Compare this to how in the 90s some people set up companios selling ringtones, and then went and bought SIM cards with cash, and used it all on their own ringtones.
You don't have to make it impossible, just too risky or expensive to be worth it. At least with real money. With coins making it risky doesn't help, because the money can't be clawed back, so you can just wait out your prison sentence.
You saying the whole industry is wasted is like me saying police, fire departments, and ambulance are a complete waste, because I have never neither either of them. Hell, I've never even needed my home or car insurance, or my life insurance.
Do you have the source study? I don't want to give my personal data to a blockchain company, and they rejected both mailinator and gmail for registration.
> The core things that blockchain stuff tries to solve are not actually the hard problems.
What are the hard problems though? Depending on where you stand you might see different things, but to me the hard problems are that banks throughout the world have a hard time trusting and interoperating, things are slow (payments have to go through banks correspondences and central banks and the BIS and that route takes a long time even if some of the stages are RTGSs), errors are way too common (basically audits happen all the time, are manual, and consequences of errors are real issues that people have to deal with).
> The hard part of online commerce is not that customers can reverse credit card transactions. The hard part of contract law is not automatic payments. The hard part about property law is not atomic transactions of money and deed transfers.
What are the hard parts from your point of view? Is your point of view that the system is perfect and doesn't need the technical improvements proposed by blockchain? I'm not sure I follow.
> It's not trivial to track money, but the stated goals of cryptocurrencies is to make it hard or impossible to trace, and to compel.
I feel like that's too much of a strong statement considering that some cryptocurrencies, which I've worked on, were built specifically to follow regulations and make fraud hard.
> The explicit goals of cryptocurrencies is to get around AML & KYC laws. This is what Pintrest was talking about.
Again, there are many cryptocurrencies with very different goals and this statement can't apply to all. The statement is at least very wrong for some well-known cryptocurrencies.
> We as a society, as a people, don't even want people to be able to send money any way they want. E.g. we don't want people to be able to send money to ISIS. There's a "baby and bathwater" argument that can be made here, but since cryptocurrency people don't even WANT to prevent this use case, it's not what they're making, or selling.
So, ignoring what I said previously that different cryptocurrencies have different goal, and so that statement doesn't apply to the field in general, there's still something to be said about that. How much privacy do we deserve? Where is the line where privacy is too strong that it is damaging to society? There's a very similar argument with end-to-end encryption in messaging applications and governments trying to fight it. For example: https://www.gov.uk/government/publications/international-sta...
> Like airline security, it's not effective because it's perfect, but because there's too much risk that one of the layers will catch you.
BTW I don't think airline security is a good example. Adam ruins everything has a good episode on that: https://www.youtube.com/watch?v=-LDzOi1dyAA (tl;dw: it's security theater)
> Reversibility: People don't want this. One of the main reasons to use a credit card AT ALL is that people want reversibility. If that's all you wanted then you can probably just accept debit cards.
Credit cards are mostly a US thing btw, I never knew about them before moving here, and even in the US reversibility is not always a thing. For example, you can't reverse transactions done on venmo or zelle. But even then, cryptocurrencies don't preclude reversing transactions, there's nothing in the technology that would prevent that, especially if it used as a settlement layer for virtual assert service providers (exchanges, banks, etc.)
> And as for smart contracts: All smart contract systems need a way for a court to interpret the contract. The contract may not be legal, it may have been signed under duress, etc.. So all smart contract systems need this escape hatch.
I'm not sure I understand your point. A smart contract has its code published in clear so by using it you already choose to trust and obey the code.
> The most ridiculous one is "land ownership registry". You know who ultimately decides who own a piece of land? The government of the country it's in.
Agree, linking real objects to the blockchain is hard, and projects that tout that usecase are often scams.
> And note that all this is in addition to technical problems like PoW/PoS, electricity use, scalability, transaction speed, 51% attacks, etc... Even assuming all those are solved, the problem is the the very GOAL is a dystopia.
PoW/electricity use are things of the past for the technology. No new cryptocurrency rely on these. Scalability and transaction speed are things that are being solved (I believe Algorand is aiming for 20k transaction/s for the end of the year). There are other consensusless protocols that pretty much scale linearly based on the number of machines you throw on the problem (see fastpay or At2).
BTW if you have any question, happy to continue this conversation or clarify anything.
I mentioned this. E.g. "The hard part is codifying your intention into legalese, and conflict resolution".
But again, I would invite you to talk to some contract lawyers and see what the hard problems are in their space. And carefully listen to how they solve them, and if your cryptosolution maybe not only doesn't solve the problem, but actually makes it worse.
Especially internationally, where you maybe hire a service, but then one of the countries involved has export restrictions, or immigration requirements, or whatever else.
These blockchain things are explicitly made to "go around" all government regulations (that's why they can say it'll be cheaper and more efficient). But the companies still have to obey the law, or they'll go to jail. So no that's not the problem.
> Is your point of view that the system is perfect and doesn't need the technical improvements proposed by blockchain?
I have not seen a solution based on blockchain that solves a hard problem. Nor have I seen one that doesn't make a hard problem even harder.
E.g. when I bought a house I had to prove to the bank and various involved parties where the money came from. And then when transferring I had two people from the bank walk me through it, to make sure this 6 digit cash transfer was legit.
It was annoying, yes. But I understand why it's there. To say "oh if this had been bitcoin you could just have transferred and it would be there in an hour". Or "had this been a smart contract it would have triggered deed transfer". Ok, sure. But what if there were some legal dispute and the seller was about to lose the house? That I would essentially be buying stolen goods?
What if the house had known deficiencies that the seller provably knew about but lied about during selling? If this had been Bitcoin they could simply decline to pay me. They'd launder it in Monero, and sucks to be me.
It's easy to set yourself up to be judgement proof if your assets cannot be seized.
> Credit cards are mostly a US thing btw, I never knew about them before moving here, and even in the US reversibility is not always a thing
I've lived in two countries, neither of which are the US, and credit card extra protection is certainly not US-only.
But that was still not my point. I'm saying reversibility is a feature. That mainstream finance can deliver. And it's good, so cryptocurrencies should too. They mostly do the opposite on purpose, which shows that they are not actually making what people actually want in a currency.
> Again, there are many cryptocurrencies with very different goals and this statement can't apply to all. The statement is at least very wrong for some well-known cryptocurrencies.
zcash, I believe, makes lip service to AML/KYC, but to me as a non-ML-investigator it smells a bit loophole-y, and one that may close.
> BTW I don't think airline security is a good example.
Adam ruins everything (and I've seen it) is entertaining and informative and all, but while yes there are aspects that are security theatre, turns out many of them do add up. The hijackings of the 70s largely went away. But also, Adam's not even saying airline security is security theatre! He even enumerates four added security features that DO stop terrorists. He's talking about the TSA. And then Bruce Schneier says more relevant things.
So the sum of airline security is: good old fashioned police work, infiltration of organizations, wiretaps, anomaly detection, behavior checking (Israel does a lot of this, and the have a good track record despite the obvious targeting), TSA, passengers, air marshals, reinforced cockpit doors, etc..
So if you want to be successful, then you have to get past ALL that.
And while the TSA doesn't do much, any suicidal idiot could just get on a plane with a fullauto in his carryon. At least now he has to weigh the risk of being embarrassedly found in the security check.
So maybe he probably switches to a handgun instead of the AK47. So he's less dangerous.
> cryptocurrencies don't preclude reversing transactions, there's nothing in the technology that would prevent that
Sure. But every time someone tries to sell the benefits of cryptocurrencies they will list this as a feature. And again this is my core point: All of the features they list, are actually bugs. And if you invent a cryptocurrency without the bugs, then it doesn't actually solve anything for anyone.
> I'm not sure I understand your point. A smart contract has its code published in clear so by using it you already choose to trust and obey the code.
It's not your choice to obey an illegal contract. And it shouldn't be. That's the point of contract legality.
And the hard part of writing a contract is not the enforcement, but codifying your inner intent into a bugfree contract, signed in a legal manner.
If you hold a gun to my head and force me to sign a smart contract, and I can prove it, how can a court invalidate the contract if you refuse to sign the invalidation block?
> PoW/electricity use are things of the past for the technology
And the present. I won't celebrate prematurely.
Someone saying that crypto will replace the USD = someone saying that crypto has no usecase and is only used for fraud.
Unfortunately it really takes a lot to have an opinion on the field imo. Money is very abstract and so you need an understanding of crypto, of economics, and of how payments work in the world today.
Edit: No refutation? Just downvotes? Ok then.
Consensus algorithms are inevitable. Either we use our current corrupt, politically-driven consensus system, which exploits workers, minorities, and generally anyone not rich and powerful, or we bother to engineer some consensus algorithms that has some bounds on the corruption possible within it.
Then there is the watching all my adult life as assets grow more expensive and further out of reach, a debt treadmill emerges to ensure the continued struggle of the middle class lest they try to escape their position.
This is in the west. I can't imagine the shenanigans banks play on folks in less regulated jurisdictions. Maciej, I'm sorry that you refuse to get it. We need hard money to prevent the value loss of the time-store fruits of our labor. We need an explicit spend model to prevent unauthorized charges. We need a way to prevent the custodian of funds from helping themselves to your pocket. Better yet, we need a digital store of value that does not require a trusted third party. And we need to make sure special interests can't dictate who is able to spend their money.
For this, it is the most valuable thing on the planet.
(And cryptocurrency charges even more.)
Better go transfer my life savings into Bitcoin, I suppose.
Just saying.
Money supply is up and demand to put it in safe places (like Swiss bank accounts) is very high. German bonds went negative for this reason as well.
When I withdraw money with my Belgian debit card in the Eurozone at any ATM (including Berlin), I do not pay any fee. And this is true for all major Belgian banks.
Of course, if your account is not in the Eurozone (US?) or denominated in EUR, or through a basic credit card (visa) then usually a fee would apply.
But that doesn't necessarily mean that the present alternatives (bitcoin, altcoin of your choice) are THE answer either. It's not a binary thing. Something may emerge that is valuable and useful and decentralised but I haven't seen anything that fits the bill yet.
For the vast majority of people Bitcoin is an investment because the price is going up. The price is going up because lots of people think it's a good investment. It's a self-fulfilling prophecy until it's not. Then it's every person for themselves and someone will be left holding the bag.
Yes, some people can use Bitcoin to buy goods and services. But if all the speculators were to decide they wanted to exit the market at approximately the same time do you really think the price is going to hold anywhere near where it presently sits? And are those people using Bitcoin for purchases going to hold, or are they going to exit their positions too?
Phrased more simplistically - can we all agree that the vast majority of xCoin holdings are speculative?
These things happen every day. I will happily pay a sub .1% fee for a centeralized bank account that's protected by regulations and federally insured.
They are mostly political/governmental problems that are solved by a working democracy. In countries where there is no working democracy, the dictator won't give two shits if this NFT proves that you own this piece of land before taking it from you. Blockchain in itself is not something that brings political stability to a country.
Blockchains and NFTs make sense only when the blockchain becomes the source of truth, and it does solve real problems - it just doesn’t work for cryptocurrency when someone’s $1 could be worth 30 cent or 6 dollars in just a year. Nobody wants that amount of uncertainty.
"only"?
I'd say the "utility of the land" IS the only value of "having" land.
It is well known historic fact that Romans fought for new land knowing that the time will come when you could wrap it into NFT to make finally useful!
Same story with Columbus and his ICO (Initial Columbus Odyssey).
Property rights are always going to rest on the rule of law, and in places where the rule of law is strong, property title law is well established and doesn’t need a distributed ledger to disrupt it. Disrupting it would generally be bad.
Paper USD is a lot easier to hide than a Bitcoin transaction on a public ledger
Or over 1000% in Venezuela.
For example, Erdogan flat out banned businesses from accepting cryptocurrency when he saw that people were putting their money in cryptos because of the inflation of the Turkish Lira.
It's not like cryptos are a stable currency, either. Question: Wouldn't it make more sense for people in develping countries to buy more stable assets or currencies, or is it not possible to that because of a lack of access?
I think access is a major problem here, although I haven't dug into the issue enough to know for sure.
These same people then mine coins in those countries, utilising cheap or subsidised electricity, resulting in power shortages.
As we have seen in Turkey, these exchanges can be easily shut down, or the founder can simply disappear with all the cash.
These are not really long term solutions, and the existence of cyrptocoins is probably making the individual lives of people in the 3rd world worse.
I think its more likely that if these grey-market coins didn't exist, the local tech bros in the 2nd/3rd world would actually be pushing Governments to improve general financial regulation and stability, and building a proper series of banking companies themselves.
Which country specifically would be a good example of this? If there are in fact any examples of this.
these tech people are in such a myopic bubble
[1]: this is not to claim, as some do, that it is unregulatable, although it may be.
How to pay a drug/malware/CP dealer?
How to receive a bribe without physical exchange/trail?
Cash doesn’t work well for any of these use ases, while crypto (esp. Monero) is just perfect!
Perhaps you don't consider those risks to you to be very big, so you don't place much value on mitigating them. Other people do, however.
That's exactly what I'm saying in my original comment, though. Do you think a government that wants to disown your assets cares if you have an entry in a database that proves that it's yours by law? THEY are the law, fuck your blockchain.
> The threat of arbitrary unbounded inflation.
Again. People who are affected by this usually don't have the means to just log into Coinbase and buy some crypto. Even if, it's not like it's a very stable place to put your money in to.
If they cannot deprive you of the key, they cannot deprive you of use of the assets.
(HN is a very pro-privacy community, judging from Apple vs. Google discussions, so I take it for granted that a desire for privacy doesn't need further justification or elaboration.)
I don't know what to make of your strawman about Google. This thread was asking about problems Bitcoin solves. Bitcoin allows payments without an intermediary automatically divulging your identity to the other party to the transaction. It doesn't also need to end the arms race of consumer privacy in tech in order to be a useful advance for privacy.
Choose a better one.
That's a sizable assumption to begin with. Democracies are less and less, well, working because the Internet itself has eroded trust significantly and is moving the parameters of epistemology around. That is a problem caused by tech, so how is it not a tech problem ? The work done in the blockchain space on trust is IMO very important.
All the main preconditions for crypto to take off are finally in place. If you are a professional money manager or CFO there is no way in hell you are going to risk managing your own keys, let alone keys on behalf of a customer or supplier. The largest impediment to all the good blockchain projects has been the lack of a cheap, affordable, insured custodian for key management.
It's taken years to get to this point because these issues aren't technical in nature; they're governmental. The SEC weighed in on what it takes to be a qualified custodian near the end of last year, so now finally some of the larger names in this space have said they'll offer services.
All the best, obvious use cases for crypto have been blocked by this issue: automatic payments, self-settling contracts and futures, escrow with almost 0 overhead, trade finance, etc.
You could have all of this with open banking standards.
Blockchains solve this problem, as in mathematically proves that certain classes of exploits requiring information asymmetry are impossible.
We could have all of this with open banking standards? You're looking at them!
The banking industry is corrupt. Blockchain solves this. End of argument.
I have yet to see a specific, easy to explain answer on how blockchain solves any kind of fraud. Who is forcing any of these fraudsters to put any information on the blockchain? As soon as you need external safe guards you are back to square one.
I don’t have the solution to any of the problems of the banking industry but in my experience technical solutions don’t solve any of these societal problems.
My counter point to the lack of specific, easy answers on how blockchain solves any kind of fraud would be that there aren't any, in that there is a certain amount of financial and technical know how that is prerequisite to explaining _why_ these problems are provably non existent. We will need to wait for higher level abstractions to be invented before mainstream adoption is possible, and until that happens I will admit cryptocurrencies are almost hopelessly confusing in their mechanisms of action.
[a] China's new central bank currency may be able to solve this problem to some extent but I consider the forced adoption of such a currency in the Western world to be too draconian to be practical.
A lot of time has passed. Why has no one come up with these higher level abstractions?
Even assuming your timeline is correct. And even ignoring that the top comment on this HN addresses this exact point pretty well: Are you telling me the goal post is now 32 years?
And while we’re picking arbitrary points in computer history. The iPhone was released in late 2007 and is around 2 years older than the Bitcoin blockchain. I hope I don’t have to make the argument that smartphones have had a bigger impact on society than any kind of crypto/blockchain solution.
https://en.wikipedia.org/wiki/Wells_Fargo_account_fraud_scan...
Say something like a traditional bank emerged on the blockchain in the form of a smart contract and you stored money with them to have them invest it or something. There would be a public record of all charges the smart contract billed you for and tracking the history of it would be way easier than piecing together your Wells Fargo statements to figure out they've been charging you a couple dollars more every month. This also would be much easier for auditors and financial crime investigators to notice.
Great you solved a very specific problem and replaced it with a myriad of other problems. Who is gonna take care of your private key? Are you really that confident in your tech skills that you can keep the private key to your money safe? I am not. If someone else issues and protects your private key, what’s stopping them from charging you fees for nothing (or spending all your money).
> There would be a public record of all charges the smart contract billed you for
I as a bank customer have exactly zero interest in my transactions being “public” (I know they would be pseudonym, still pretty risky). The risks I imagine coming with this outweigh the supposed advantages by a lot.
> tracking the history of it would be way easier than piecing together your Wells Fargo statements
I don’t know in which century you live but I have a history of all my transactions of all my bank accounts in the interface of my budgeting tool. I can immediately see if there is a suspicious charge. But maybe you have a recommendation for a blockchain based budgeting tool that lets me see details of every transaction, rather than public keys.
> This also would be much easier for auditors and financial crime investigators to notice.
If it was so easy to investigate shady things on the blockchain why aren’t all these pump and dump scammers and ransomware groups in prison?
There's a lot of details that go into running something like that and none of those questions are trivial.
And yes they have been given assurances to entrepreneurs. I have been on this planet for 30+ years and my bank accounts have never gone to 0 because of a “database problem”
I really don’t understand what your point is.
> How much are they going to charge? Are they going to let anyone write apps on top of it?
Banks don't currently do this and never will as the overhead is way too much work and far too expensive. The closest example we have is AWS which is extremely complex and can't actually be used for anything dealing with money.
It's easy to naively think about a big organization building a platform like Ethereum but once you start designing it out you realize the problem is far larger than it first appears and it would take years and an army of lawyers to make any headway.
Last time I checked there are already tons of apps for banking use cases. I use a third party budgeting app across multiple accounts. For my European bank account I use a third party tool to wire money. During my time as a freelancer I used tools that fetched my transactions, automatically categorized it and gave my accountant access to it to prepare my taxes.
What use case do you want to build that can’t be build on top of an API?
Critics think we're in the Dotcom bubble of crypto right now, but we're still in the Usenet stages. You need technical expertise in finance and computer science to grok crypto. I would ask any naysayers to this point in particular to share their understanding of some protocol like Aave, Sushi or Yearn and how these fail to surpass similar products in the space of traditional finance.
There’s no free lunch.
You're asking good questions, but be careful not to jump to easy answers -- you might lose your money!
I would not recommend my grandmother uses Yearn, but I also wouldn't recommend that my little cousin who knows how to program saves her money in a Wells Fargo account either.
Regardless I appreciate your considerate comment. I always know something interesting is afoot when HN relentlessly downvotes both pro and con comments.
Can you provide one or two technical reasons why this is the case?
The author lost me here. Completely subjective take on what Uber has done. They've completely improved ride-sharing and cab hailing within the whole industry, including non uber users. Depending on what country I travel to, Ill be using a different app like Grab or Didi or a local taxi app that were all made possible by Uber's initial disruption.
Some of those financial regulations are unjust. People can send remittances in crypto to relatives in repressive countries, and you hear their stories from boosters. But people also want to move billions in untraceable crime money around. Guess which traffic predominates
IMO the former outweighs the latter. Perhaps remittance doesnt sound like a big deal to the author because they may not know immigrants who use these crappy services. The thought of punishing some darknet users buying pills online is more alluring than focusing more on fixing the flaws with remittances. I'm talking new residents who pay income taxes on their biweekly paycheck(fair) and then pay western union(bad deal, less fair) to send 50-200 bucks to family in far off places with spotty infrastructure and electricity, in remote places where there are no ATMs and the relative has to travel 2 hours into town to pick up their western union transfer. Millions of people go through that every day and I'm much more interested in crypto solutions and dont mind if it takes some uber style disruption to fix that later on.
What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency. My hunch is that a lot of the value of cryptocurrency in those countries comes from the fact that it's been astronomically increasing in value, not that it's a great way to move money around remittance barriers.
The current concept of ownership appears to be that if I own something, broadly speaking, that means people generally agree (and the state, and ultimately their monopoly on force, will back up) that I get to say what gets done with it and who gets to make use of it, and that it's not OK for someone else to take it away from me without my consent.
If NFTs are going to change that, I'm not sure I like it.
My supermarket gives me an NFT in paper form every-time I buy something.
Otherwise I don’t know what else to say
This is a general problem I have with crypto stories: every crypto coin has a built in incentive for people who hold it to hype it so it's really hard to tell if actual regular users are finding it useful yet.
The final goal is not to be able to convert crypto to fiat, the goal is to keep everything in crypto. Do you think all this infrastructure is being build just to convert it back to fiat, what cypherpunks want is to destroy fiat.
Inevitably the answer is "some trusted third party" that turns it into a vanilla remittance.
- If you have a bank account you can go through crypto exchanges. Centralized of course. - There are p2p platforms that connect buyers with sellers. So in the platform, similar to Binance p2p, you can see how many transactions other people have and buy/sell crypto from them. - There's a black market which has home-delivery. So you contact them through the internet (you can find links in reddit and other sites, most go through Discord) and they send you a person with your crypto/fiat and make the transaction in your home. You can also go to their location if you prefer.
Not sure if that really answers the question, but if I was receiving remittances from abroad doing options 2 or 3 would be simpler and cheaper than using any traditional finance tools, which all require you to have a bank account in the first place (a LOT of people don't have one here because of the requirements to open one) and have higher fees and bureaucracy.
For all the harsh words you posted without evidence, thankfully you've at least admitted you don't understand much.
Your premise is that cryptocurrency is not "spendable currency" which is simply false. I pay people in hyperinflationary environments in cryptocurrency variants with low transaction costs and fast speed, and they in turn directly spend it on physical goods like food.
Is this such an incredulous thing to believe in a country where the official fiat currency is worthless?
Whether this is a good thing or not probably depends on what you think of illegal markets in desperate situations.
> "the government, which controlled all official foreign trade, continued to maintain a highly artificial exchange rate with Western currencies. The exchange rate worsened distortions in the economy at all levels, resulting in a growing black market and the development of a shortage economy.[25] The only way for an individual to buy most Western goods was to use Western currencies, notably the U.S. dollar, which in effect became a parallel currency. However, it could not simply be exchanged at the official banks for Polish złotys, since the government exchange rate undervalued the dollar and placed heavy restrictions on the amount that could be exchanged, and so the only practical way to obtain it was from remittances or work outside the country. An entire illegal industry of street-corner money changers emerged as a result. The so-called Cinkciarze gave clients far better than official exchange rate and became wealthy from their opportunism albeit at the risk of punishment, usually diminished by the wide scale bribery of the Militia.[23]"
> "As Western currency came into the country from emigrant families and foreign workers, the government in turn attempted to gather it up by various means, most visibly by establishing a chain of state-run Pewex and Baltona stores in all Polish cities, where goods could only be bought with hard currency."
https://www.nytimes.com/1981/10/09/business/the-lure-of-a-do...
https://en.wikipedia.org/wiki/Polish_People%27s_Republic#Eco...
It's a side point to the thread though.
They only did that in some places where there were poor Taxi markets (medallions etc). In places where you could hail a cab follow it and pay for it with your smartphone years before Uber, they did nothing. They didn't exactly invent that. They just said that because magic fairydust they could do that also in cities where the law said they couldn't. Which is kind of strange when you thinnk about it.
Local Taxi hailing apps were first. Uber adopted this and their disruption of many local markets happened only after offering cheaper alternatives by burning money.
> What is surprising is how large the number of techies who don’t get this.
What do you mean by "this"? Do you mean all of the points made by the author in the tweets?
Or do you mean "the following" instead of "this", referring to what you think is most innovative about Bitcoin?
I find this writing to be unclear and/or circular.
Are you saying the following? _If_ the primary goal of a system is Byzantine fault tolerance, using a cryptocurrency is a requirement?
- a way to ensure that users of the system can't cheat by creating a vast number of nodes and inflate their "voting power" (think of a poll where you can get behind a proxy to vote multiple times because the only security is weather or not the IP voted): this is the hash-cash, proof of work computation that ensures you have real hardware behind your "vote"
- an incentive to mine and secure the network: the cryptocurrency. The amount of cryptocurrency you mined is just a translation of the energy and work you did to secure the network the same way as a banknote is a conversion of X number of hours you worked for someone.
The question, like I stated in another comment, is whether or not this distributed ledger is useful. Let's say we haven't discovered the killer use case for this yet (putting my skeptic hat). Is it fair to dismiss it just because of all the scams related to its current use ? Do we do the same for email just because there's so many phishing attacks that happen on the protocol ?
> Considering that _it_ hasn't produced any value of note in 13 years...
What do you mean by "it"? Do you mean (a) Bitcoin in particular; (b) some/many/most/all cryptocurrencies; (c) a distributed self replicating Byzantine tolerant state machine? Or something else?
The comment by tzumby meant (c). Generally, the HN thread was about (b), best I can tell.
> I don't think it's worth 2% of the entire world's wealth
Taken literally, if 2% of the world's wealth is in Bitcoin, so isn't that its value, by definition?
I'm not trying to nitpick. I'm trying to push back on what seems to be a glossing over of the fundamentals.
I wonder if what you mean is that you don't think it is _wise_ for people to put so much of their assets in the form of Bitcoin.
Now, if we want to have the discussion of "how has Bitcoin affected the economy?" it is not enough to only look at a snapshot of how wealth is allocated at one instant of time. We should be looking at a differential view; i.e. before and after.
In particular, an economist would ask questions such as...
1. How has Bitcoin changed transaction costs? Who bears these costs? Over what time frame?
2. To what degree does the structure of Bitcoin provide advantages relative to other assets?
3. How does the development of Bitcoin factor into a longer-term view of experimentation and innovation?
4. To what degree has wealth been reallocated due to Bitcoin? To what degree did it disrupt existing wealth patterns?
And so on...
Enron wasn't actually producing any value. Neither are self-replicating Byzantine fault tolerant systems.
Anything they can do can be done hundreds of orders of magnitude more efficiently. And nothing they are doing /requires/ the inefficiencies.
I mean, obviously people at Enron were doing /something/ in the same way Bitcoin is. And obviously investors were paying a lot of money for that at one point and then stopped paying for it when it became clear that /something/ was mostly fraud.
I can see that it is not market capitalization.
Am I detecting some conceptual discomfort with how market valuations work? You wouldn't be the first.
If you want to make the comparison, perhaps you could lay out your logic?
So far, I haven't found a clear, direct, fundamental argument in your comments. I see some loosely related examples and some rhetorical questions. I am interested in your justification and terminology.
Various pyramid-like enterprises sprung up in the new, underregulated markets. At their peak, the schemes were worth upwards of half Albania's GDP, were participated in by 1/3 to 1/2 of the population, and enjoyed support from the government.
For a time, all investors enjoyed good interest payments. But all the popular adoption and shared belief in value couldn't fix their underlying insolvency and the ensuing collapse once new deposits dried up.
Whatever quantifiable value, if any, Bitcoin produces for being a BFT ledger is not nearly enough to offset the constant, massive value drag require to pay for mining costs. That x% of the world's wealth is currently tied up in it is not proof against its fundamental insolvency.
Can you estimate (1) Bitcoin's value, as you see it and (2) the mining costs?
Various actors (of varying legality) benefit from Bitcoin to varying degrees.
* distributed systems * self-replicating systems * Byzantine fault tolerant systems * state machines
The tweets by Pinboard are largely talking about social and societal issues. Both technical and societal issues are important. They are intertwined.
> ignores the tech ...
Not true. He doesn't ignore the technology of Bitcoin.
> because he doesn’t understand it
Please show evidence of this. You are not "in his/her/their head", nor is it likely that you've had a conversation where you can assess. It is more likely that Pinboard disagrees with you largely because of value differences.
It's just the Byzantine mechanism that happened to win. If anything, its innovation is that its n is based on hash power, not on number of users or nodes.
And the cost? Having to drag an immutable database around that can't be simplified; and, obviously, the opportunity cost of all the energy that's being used to support the consensus.
The game theory part is likely to be inexorably intertwined with the cryptocurrency part. The incentive to defect is blunted by people's investments, either in terms of hash power machines (for PoW) or in coin holdings (PoS). It would be very difficult to construct something that would be self-replicating/hype-incentivizing but not reward early comers the same way.
Can you clarify what you mean by "the same way"? I wonder if you meant "reward the early-comers in _some_ way."
Yes, early miners of a cryptocurrency have an advantage, in the sense that there is less competition in computing resources. However, when you factor in risk (i.e. likely return on investment and opportunity cost), this "advantage" may not seem worth it. It depends on one's risk profile, awareness, opportunity, and skills.
Thinking along game theory lines, when designing a system that requires up-front work, it seems clear that early participants will look for risk-adjusted rewards downstream.
I don't know if I agree with the "very difficult" aspect of your comment. Many real-world systems exist that are not clearly explained by game theory; humans are more complex than their theories.
Just to give one example, family genealogists typically are more than happy to share their historical research and family trees with others without expectation of personal gain. They do it largely because they want their ancestors to be remembered in the context of history. Of course, there is also some incentive for the _ genealogist_ themself to be remembered and perhaps to be perceived as important. But my point stands -- family genealogists don't expect to be compensated at all, much less in a pyramid-scheme kind of way. They are happy to create something of value and share it. Of course, a big difference between these family trees and cryptocurrencies is that the former are non-rivalrous.
To put my argument in context: consider IRC. An economically motivated BFT system would give the IRCops and channel ops some kind of quantified share of power that they stand to lose if they defect. But doing that, I think, would not just be a difficult programming exercise; it would also undermine the ops' intrinsic motivation and lead to a worse environment.
So the likes of Bitcoin work well if the protocol is designed for (game-theoretically) selfish participants whose interests lie mainly in the number going up. But that's a very narrow niche. Your genealogy site would probably suffer if it had a "number of family names added" counter and the users' status was measured entirely by such a number.
> Weighted users.To prevent Sybil attacks, Algorand assigns a weight to each user. BA⋆is designed to guarantee consensus as long as a weighted fraction (a constant greater than 2/3) of the users are honest. In Algorand, we weigh users based on the money in their account.
That 2/3 is your n=3f+1 right there. It's just that, as I said of PoS in general, the n is based on coin holdings.
This is not controversial, as the authors of Algorand are completely aware of the limitation:
> Most Byzantine consensus protocols require more than 2/3 of servers to be honest, and Algorand’s BA⋆ inherits this limitation (in the form of 2/3 of the money being held by honest users). BFT2F [35] shows that it is possible to achieve “fork∗-consensus” with just over half of the servers being honest, but fork∗-consensus would allow an adversary to double-spend on the two forked blockchains, which Algorand avoids.
However, the theory and practice turned out to be very different. Neat algorithm can't be used as an excuse for the whole ecosystem that emerged around it: insatiable electricity usage of PoW, pump and dump, ransomware, money laundering, etc.
Rather, the whole thing is an extended, worldwide pump-and-dump; speculation is driving all movement.
To me, it's really sad, because Bitcoin (and some of its descendants) are intellectually fascinating. With simple building blocks that had been around for decades (hashing + public keys) someone made something profoundly new. It's in some ways inspiring, since it makes me feel there must be so much more out there to discover and build. It's also sad, because it shows how things you build can 'grow up' and become a little unrecognizable.
No. Money launderers and extorters drive demand for cryptocurrencies. This affects its price.
See: https://www.independent.co.uk/life-style/gadgets-and-tech/ne...
The mistake of cryptocurrency is discounting the potential for price manipulation. Earl adopters understood cornered these markets immediately. Now we are in never ending cycles of hype, markup, dump, accumulate, hype, markup, distribute, and accumulate over years. These cycles are continuously producing winners and losers and the losers are generally those who have more to lose and are thus enable to withstand the intense pressure of bear markets.
I love Bitcoin and Ethereum and all the potential freedom that they represent. At the same time - enough. These markets need regulation. We need to know who owns these coins. We need to see their selling patterns so we can see their manipulation.
Unfortunately, the cynic in me knows that too many people are making too much money and are probably going to block regulation for a very long time.
This is the opposite of what I think is true so I'd love to see a citation for this claim.
Maybe I’ve just seen this cycle a few times and this is my cynical take. But I think it just makes sense.
I saw so much potential, and it's just a shame to see what happened to the community and direction of the technology. The Ponzi Casino is a sad outcome for crypto.
> What we especially need to stress to regulators is that there's no relationship between the technical claims of cryptocurrency and our now over 13 years of experience. It's not decentralized, it's not a currency, it's not a store of value, and it's not a promising technology
> Cryptocurrency solves no problems that it didn't first create, and most of those it doesn't solve. Smart contracts are neither of those things—at worst they're an API for fraud, or as @qrs put it, self-funding bug bounties at best
Those are a lot of hasty statements made without indisputable evidence.
Edit: I'll take any evidence if indisputable evidence is too high a bar.
That reminds me of that guy who didn't receive his package and filed a complaint to the store he bought it from. They asked for a proof that the package didn't arrive, and he replied with the photo of his empty hands.
I'm unsure what claims you're alluding to. But I'd love to help out as much as I can.
What we especially need to stress to regulators is that there's no relationship between the claims of _gold_ and our now thousands of years of experience. It's not decentralized, it's not a currency, it's not a store of value, and it's not a promising element.
_Gold_ solves no problems that it didn't first create, and most of those it doesn't solve. Banks are neither of those things—at worst they're an API for fraud, or as I put it, self-funding institutional greed.
I think most of us in the industry gave gold a long leash because it's full of cleverness and seemed innovative just on those terms. But it's time we recognize that cleverness is being used as bait to defraud more people and perpetuate a con. Enough is enough.
The two things people need to know about gold are completely non-technical:
1. If it isn't backed by self-perpetuating value, it isn't worth anything outside of industry process (electronics, etc.)
2. If it works, it creates an end run around all financial regulation, and will be dominated by uses those regulations try to stop
And the list goes on. I am not equating cryptocurrency to gold, I am just trying to point out the absurdity of the authors statements.
Why wouldn't that happen with bitcoin
Thus, it is here to stay.
Some gold obsessed people probably have hyperbolic claims about what gold can do, but my impression of it is that it is generally understood as a hedge against inflation or a store of value. Relatively few people think they are going to hodl gold until they 1,000x their way into being gold-millionaires and most of those that do probably aren't expecting real gains from gold.
Gold doesn't promise to be decentralized currency. Cryptocurrency does try to make that promise. Gold does solve problems it didn't create - e.g. use in electronics or in jewelry.
I think most of this parody just substitutes the word "Gold" for "Bitcoin" but misses that gold actually isn't making the same claims.
As you know, gold is also shiny and has been used for jewelry for thousands of years in many cultures. Some anthropologists have reversed the causality of value and jewelry, arguing that gold is precious _because_ it is used as jewelry. Indeed, in many cultures different types of jewelry [1] were used as a basis for currency (as in unit of accounting).
Therefore, one of the most basic human features, dressing up within a social hierarchy might be at the basis of gold and currency.
I don't see any such use case for cryptocurrencies (yet).
[1] besides pearls, beads, necklaces, it could also be rare make-up material or even feathers. I recommend the work of anthropologist David Graeber in his book Debt: the First 5000 years.
What we especially need to stress to regulators is that there's no relationship between the claims of _USD_ and our now hundreds of years of experience. It's not decentralized, it's not a good store of value, and it's not a promising piece of presidential portraiture.
_USD_ solves no problems that it didn't first create, and most of those it doesn't solve. Banks are neither of those things—at worst they're an API for fraud, or as I put it, self-funding institutional greed.
I think most of us in the industry gave USD a long leash because it's full of cleverness and seemed innovative just on those terms. But it's time we recognize that cleverness is being used as bait to defraud more people and perpetuate a con. Enough is enough.
The two things people need to know about gold are completely non-technical:
1. If it isn't backed by self-perpetuating value, it isn't worth anything outside of what people believe it is worth
2. If it works, it is only due to financial regulation
I'm not anti USD nor am I equating USD to gold or crypto. Just showing that these are mostly lazy arguments that can be applied to pretty much anything tradable on any market.
Deflationary tokens, if they get too enmeshed with the financial system, tend to be hoarded to a point where they displace productive investment on an economy wide scale, putting a huge gridlock in the economy.
Even Douglas Adams tried to warn us: https://benoitessiambre.com/specter.html
> because it's full of cleverness
with
> because it's shiny
Over time I witnessed many "new" things, and the ones which stick typically have a specific aura to them, like a 10x simplification, or speedup or reduction in "noise". These things are really rare; most things are incremental and that's good, too.
Blockchain did not seemed to have any of that.
PS. Merkle trees are super interesting and I use them daily (in git) - so all the tech ideas are certainly worth considering, it's just that they are not fit for the advertised purpose plus it has gotten an enormous drag on resources, for nothing.
PPS. I typically have an "tech instinct" to see new things, but I currently cannot really see anything that looks like a major tech shifts from the past. ML is incremental and despite its grande successes is mostly applied by the surveillance industry, which makes it much less attractive. Cloud seems much more profound and the whole apification of the world transformation - although I do not like the centralization, even if it is more economical. In general, the real revolutionary tool or technology does not need to sell itself, it is picked up by the weird and intelligent first, then trickles down to the masses (also: tech can be great w/o mainstream adoption, too - it just not a revolution then).
PPPS: Wild speculation: With 5G, everyone with a phone could host their business directly on their device, instead on other peoples servers. When phones hit a TB in storage, you can run your socnet with your friends - and you probably will, because mainstream money will have moved to something much more immersive, addictive, profitable like glasses, vr, ar.
In Venezuela there is absolutely absurd inflation number there: like over 1,000%.
Argentina it’s over 30% each year for several years.
Bitcoin is a tool against oppressive governments
I've been thinking about this a lot lately. The decrease in the cost in high performance phones, more storage, and high speed connectivity will make for some interesting social network opportunities where your device is the server and there's no/minimal intermediaries. You could bring back the Google Circle concept and cache things from your inner circle while accept that things in outer circles are ephemeral if the friends' device is off.
It's also a bogus attempt to imply a broad consensus where there is none. As someone in tech myself, my personal opinion is that most of the twitter thread is nonsense.
This behavior isn't just annoying to others; it's harmful to his own goals. If Maciej had hedged his bets and accepted Bitcoin payments for Pinboard in 2013[1], it would most have been the most cost-effective action of his entire life. He would be worth millions more today. He could have used that money to further causes he cares about, such as climate change and social issues.
Instead, he's trying to ban cryptocurrency. We had this same debate with cryptography in the 1990s and DRM removal software in the 2000s. Back then, technically-inclined people agreed that you can't ban math. But now many are trying to do just that. What exactly would a cryptocurrency ban look like? Would calculating lots of SHA-256 hashes cause men with guns to come to your home and put you in a cage? It sounds more absurd than what happened to DVD Jon.[2]
I can't remember ever calling for a ban on cryptocurrency. If you're remembering something I'm not, then please correct me.
If regulators agreed with these statements, what do you think they would do? And if you don't want cryptocurrencies banned, how do you want them treated differently from today?
You're either being dishonest here or you consider yourself extremely naive.
It did not occur to me at the time that I should hoard these payments until they were worth millions in 2021; back then we were still thinking of cryptocurrency in terms of something you'd get paid in and convert to a bank balance.
So, which is it? Would you have lost all of it in a hack or would you be withdrawing straight to a bank balance because you abhor "hoarding"? It can't be both.
It can't be that the only reason for Pinboard to accept Bitcoin in 2013 was to get rich quick, and it's not a get rich quick scam, it can't be both at the same time?
It's like the problem where every time travel dicussion has turned from Morks and Eloi, becoming your own grandpa, treading on a butterfly in the Jurassic period and altering all history to "I'd buy Apple shares" "I'd buy Bitcoin" "I'd tell my parents to buy Apple shares" "I'd buy crypto" "I'd buy crypto" "I'd buy crypto".
This argument makes me hate cryptobros even more - people who have an interest in cryptocurrencies have direct financial benefit from talking about how good they are.
> He could have used that money to further causes he cares about, such as climate change and social issues.
Financial benefit from something doesn't make it right or morally acceptable, it only makes you rich.
Coinbase is centralization, bank adoption is centralization, etc...
Also if “fear of regulation” causes massive sell-offs, doesn’t it totally fail at being the “anti-government” centralized currency?
I’m also just not convinced total decentralization is good? I mean sure markets are a decentralized way of pricing things and allow distributed decision making blah blah blah, but they have limits. I feel like far too many people are drawn in by the answer to the wrong question “what does crypto solve?” Instead of the more interesting one “what problems does it create”
I mean sure, in an authoritarian state that’s what happens. I’m just not convinced crypto is the solution? In order to evade being at gunpoint you’d essentially need all your crypto transactions to be undiscoverable to an all powerful entity, which is probably mostly possible and that’s great. The downside is you now open yourself to people being able to take all your money from you with close to no discoverability. In order to keep that privacy you’d have to avoid all centralized exchanges and manage most of this yourself and i’m just not convinced 99% of people need or want that?
I’m not saying the tech isn’t impressive or the idea in its purest form compelling and interesting, but there’s a lot of fantasy I think.
Everyone is using some sort of hosted wallet that defeats the entire propose of it!
Cryptocurrency is a subject that has to have a deep and public debate. What the OP is saying (which I take to be "the tech world has a duty to point out the flaws in cryptocurrency to avoid giving an impression of a clean bill of health to every ICO out there") - that is a valid socially useful debate.
There are valid real world uses of bitcoin (see Turkey shutting down payment apps recently). but yeah it is also a volatile wild west that is miles away from anyone's expectation of normal regulated currency behaviour.
Yes there is a crying need for an "internet native" currency. What will that be - I don't know. But it is not here yet, and it is reasonable to make that clear and loud.
---
I think the submitted title probably had something to do with it; As a title, "the emperor has no clothes" is generic and baity. It's also false in the sense that there's no consensus view, so to the extent that the analogy is meaningful, it doesn't apply. I've attempted to replace that with a more neutral and representative title now, drawn from the author's own words. Suggestions for a better title are welcome.
Beyond that, HN has had so many threads arguing the same points about cryptocurrency over and over, that it's not clear there can ever again be a new discussion about it. Repetition is a curiosity killer, and usually indignation takes its place as people resort to hammering each other over the head with the same dumbed-down clubs, back and forth.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
However, I think we can try turning the flags off on this one because Macjiej is at least trying to take a different and more specific angle on cryptocurrency critique.
Fair point. Sad, but fair :-)
I do find it interesting that there's this putatively 100% tech topic that has the same dynamic as political threads.
Edit: well, one thought...IMO the dynamic that the explicitly-political threads and this sort of thread have in common is that people's identities are strongly vested in their position. The more we do that the more it feels like our existence is being threatened, rather than just our view. Then it's a fight to the rhetorical death.
That happens with emotional tech themes too, for example when people (god help us) identify strongly for or against some $BigCo or $celebrity.
Large sums of money being involved are a big multiplier of all this.
Here for example is The Economist on his bookmarking site:
>>> Mr Cegłowski runs Pinboard, a paid social-bookmarking service which allows subscribers to store web links with annotations and share them with others. In broad terms, it is similar to Delicious, which Yahoo! acquired in 2005.
https://www.economist.com/babbage/2011/04/04/stick-a-pin-in-...
But yes, this is a controversial subject. It shouldn't be. It should be an easy yes / no. But something is wrong. We should not be afraid of the discussion about what is wrong.
I think bitcoin was a research project - it wasn’t designed to succeed as a real currency. Consider:
1) It has a fixed money supply. There will only ever be a fixed amount of bitcoin once it is all mined (or technically, the amount will grow more and more slowly forever— effectively, it’s a fixed amount). We’ve known for a long time what effect this has on a currency. A fixed supply will be deflationary, i.e. the value of 1 btc will only grow. To be stable, the total amount of currency in circulation must equal the economic value that it represents. This is why the Federal Reserve must continually expand the money supply - it’s because the US economy grows. (They actually expand it slightly faster than the economy grows, causing a small amount of inflation, on purpose. This is preferable to undershooting and creating a deflationary currency). Deflation makes for a terrible currency, because it inhibits spending. If you think your dollar will be worth more tomorrow, you’ll wait to spend it. That waiting cascades into the broader economy, causing a recession. Bitcoin can therefore never, ever be a true currency. Its deflationary design prevents it.
2) Transactions are public. Far from being a cash replacement, which is both anonymous and private, Bitcoin transactions are publicly recorded on the blockchain. There are elaborate work-arounds to improve privacy, but fundamentally the ledger is public. This is not a good feature for a cash replacement.
3) There is no one in charge. Would you trust the US dollar if a loose collection of volunteers struggled for control over key monetary decisions? Despite best efforts, governance of bitcoin is a disaster — because it wasn’t designed for governance.
4) It’s extremely expensive. Search recent news for the estimated electricity usage of bitcoin mining. It’s so large that a hedge fund recently restarted a decommissioned fossil fuel power plant just to mine bitcoin. Do you think this is a good design?
5) It’s inconvenient. Have you tried to make a bitcoin transaction? Were you surprised that you could pay extra in order for the transaction to settle faster? Did you think that was ridiculous? You’d be right!
I’m glad more people are speaking up about bitcoin. The emperor indeed has no clothes. Bitcoin is getting out of hand.
To compare, you need to measure the attributes of the this and the compared entity.
The alternative entity compared in this case is the Existing Financial System that is handled by the Fed, Wall Street and the Bankers.
Now, there are innumerable number of comparisons and metrics that have already done this job for their preferred metrics and statistics. They all unequivocally side on the side of Bitcoin. (one example: https://wtfhappenedin1971.com/)
You are free to ignore these comparisons; but you have to compare and contrast that how cryptocurrencies, if ponzi compare to the modern financial system of all it's warts and what is the net effect of Cryptocurrencies and the Financial system as it exists today; rather than simply stating Cryptocurrencies are in and of themselves Ponzi.
If you think cryptocurrency is a scam then you havnt looked into the technology behind it and the economies that have been built using these technologies.
> The two things people need to know about cryptocurrency are completely non-technical:
> 1. If it doesn't work, it's just an easy to lose casino chip
>2. If it works, it creates an end run around all financial regulation, and will be dominated by uses those regulations try to stop
(edited for formatting)
(edited to add) There is an important difference between having downsides and being a scam. Downsides of the U.S. dollar or "petrodollar" system include global warming, international wars, and regulatory capture. The U.S. financial system has all the kinds of fraud, blackmail, and crime mentioned here and more. Doesn't mean the dollar is a scam.
Are there others out there who are also not sure? It seems like every time I see this debate, I just see hardcore people on one side yelling at the hardcore people on the other side telling them how stupid they are (in very eloquent ways, of course).
Is it really that obvious that this is a good/bad idea?
I think there may be something there, but that the current state of “crypto” isn’t it.
I’m encouraged to see discussions happening around banking and other open financial processes there. People who just can’t gain access to market where money they make can actually accumulate and help them are usually invisible. I want to see something come of that.
These are expensive lessons, though—financially, ecologically, and socially.
I'm still semi young and not a senior developer yet, so can someone explain to me how the following blockchain projects "have no clothes" as in "would be much easier without blockchain"
- Helium Is building wifi coverage, incentivized by rewards based on coverage provided (that the users don't have to pay)
- Several projects providing decentralized cloud storage.
- SingularityNET is an AI marketplace that allows easy access to different ML apps with the goal of making those work with each other.
I also find the ethereum infrastructure really cool (except the huge fee problem right now which is getting fixed with proof of staking/2.0 soon).
You have a whole "new" internet that you can access via ether nodes and you can just consume other smart contracts on the network with no hassle. No need to create an account for a service or purchase some monthly traffic etc. You just interact with other apps because payment is decentralized and everything is public.
I've made a small demo project for myself in .NET to see how it works and it really isn't too difficult.
It seems to me that people who say that all "cryptocurrency" is a scam barely investigated more than bitcoin.
I wish we had more subtlety in our discourse. It feels like it's all either blind admiration or blind condemnation.
Bitcoin is trying to be a new currency. Currencies more or less operate on "collective delusion". I think many people scratching their heads at why Bitcoin is worth anything _are_ missing something, which is why any currency has any value at all, which is itself kind of surprising and unintuitive.
At the same time, I think it's fair to be a little more skeptical about what the value of a currency like Bitcoin is, precisely, and how much effort ought to be put into building it.
Personally, even though I'm a proponent of cryptocurrency in general, I wish it'd disappear in spite of any short and middle-term calamitous consequences on perceived value if that means one less "dumbed-down club" (Using dang's words) when it comes to discussing crypto.
[0] https://ag.ny.gov/press-release/2021/attorney-general-james-...
[1] https://www.singlelunch.com/2021/05/19/the-tether-ponzi-sche...
Elaborate? Not sure why this would be true.
I'm pretty sure there are plenty of "commodity currencies" (shells, salt, even gold) that achieved value without some central agency controlling the currency that could also levy taxes.
You make a valid point, I do trust that our government will come to collect what's due from the citizens, but what about the corporations?
Worth noting there are quite a number of what are known as Community currencies still active in the US & Canada:
USA: https://en.m.wikipedia.org/wiki/List_of_community_currencies...
Canada: https://en.m.wikipedia.org/wiki/List_of_community_currencies...
Cryptocurrency has no such backing.
That's true for any type of property, including cryptocurrency. US police have returned stolen cryptocurrency to its rightful owner.[1]
The wrinkle is that police can only recover property if they know where it went. Cryptocurrency makes that harder in some ways (pseudonymity/anonymity, mixers) and easier in others (transaction history on the blockchain, lots of electronic records in exchanges).
Over my life, I've had a half-dozen things stolen from me that were worth more than $1,000. Only in one case did the police recover my property (a motorcycle) and only because the thief committed other crimes while riding it. I had to pay $200 to get it out of San Francisco's impound lot. (It would have been $400, but the city gave me a 50% discount because I was a resident.) It was only after paying the money that I could see the bike. It was totaled.
1. https://www.nj.com/news/2019/09/nj-man-tried-to-send-apology...
Cryptocurrency is by definition non-fungible, and as you rightly pointed out, harder to recover.
But more importantly, if you are a US citizen you can use the services of the US government to recover your stolen cryptocurrency, but if you aren't a US citizen, you can't.
But no matter what country you are a citizen of, you can use the US government to recover your USD.
Cryptocurrency is very fungible. When I withdraw BTC from Coinbase, it's the same as any other BTC. There are blacklists of BTC addresses (for scams, ransomware, blackmail, etc) but there are also blacklists of USD serial numbers (from robberies, ransom payments, etc). Also there's the issue of counterfeit bills.
> But no matter what country you are a citizen of, you can use the US government to recover your USD.
Where did you hear that from? There are plenty of nations that the US has shunned from banking infrastructure: Iran, North Korea, Cuba, etc. People in those countries will have no help from the US in recovering their stolen money. Also the US government isn't required to help anyone recover USD. They usually don't do squat when there's theft overseas. And by using the banking system, you open yourself to the whims of US authorities.
If anything it's closer to the opposite of your claim: For citizens of most countries, the US government can freeze your accounts and take your money.
>Cryptocurrency has no such backing.
Unless someone steals your private key, I don't think it's very feasible for someone to steal _your cryptocurrency_ without going against the whole network
There was this guy called Madoff. He was able to get better interest than the markets for quite a while too. Those stablecoins are not contributing to the productive economy. They're not being invested in machines that make new cars, clear carbon from the air, produce cheaper food. Nothing about cryptocurrency will solve housing or free time, because those are political problems which require humans to come together with a common aim - not, in the complete opposite example, people just wanting more for themselves by "depositing stablecoins on some defi platform".
Can you simply explain to me where that money comes from? That just seems like an absurd amount of interest. Considering the crypto/inflation hawk intersection, i’d presume people would be skeptical of all this “free” money?
Since you're French as well, I can tell you that here it gives about 4-5% in yearly returns.
So it's not unheard of returns with traditional asset classes. As far as I'm aware, the money in that specific case comes from interests paid by those taking loans (from the funds that's you're putting out) or from staking rewards (in the case of staking cryptocurrencies using proof of stake).
The total supply of Bitcoin is 21,000,000 coins. However, every single coin is 100,000,000 individual assets.
21,000,000 sounds pretty finite. But 21,000,000,000,000,000 sounds a tad less finite. The price of Bitcoin relies on the fundamental false premise that it’s scarce.
1/100,000,000 = x/100,000,000
"stacking sats" is a common phrase so it's not really a secret that a bitcoin can be subdivided. In fact, a lot of bitcoin supports would support people learning this fact.
What degree of that difference, if any, is a consequence of payment frictions rather than other factors (say: most activity and interactions are local).
What preferences are exhibited by major international buyers and sellers for payment or credit systems?
And making blind assertions and veiled insults is not?
The claim was made. Its relevance should be determinable.
That aside:
- Gravity model of trade.
- "Research: How Far Will Consumers Travel to Make Routine Purchases?" https://blog.accessdevelopment.com/research-how-far-will-con...
Yes. Bad actors ask these sorts of questions in order to stofle conversation. You basically asked this person to do a research papers worth of research in order to prove his argument while you put basically zero effort into your comment. If you think the stats dobt align with what he said look it ul yourself and tell us. Asking questions like the parent did is lazy and often badly intentioned
If it does have relevance, then the questions do in fact matter.
- Phone number not required
- Crypto-coins work in more countries countries then mpesa
However, I think people don’t understand that Bitcoin is first and foremost a brand. A brand doesn’t have to be “useful” to have value, it just has to be recognizable to enough people. A lot of altcoins have appeared, but not a single one of them has the brand strength of Bitcoin - not even the “tech fave” ethereum.
On the flip side, one doesn’t have to participate in any kind of crypto, including Bitcoin, to leverage the brand - since the brand doesn’t rest on the value of the currency itself.
It also reminded me of Folding at Home. Here people completed by virtue of their personal compute resources.
Of course crypto serves as neither a form of entertainment or scientific discovery and is just a massive waste of resources to create artificial wealth. If only all that computation did something useful.
Compared with a PoS cryptocurrency yielding no useful compute as a side effect, it costs $Y cheaper for someone to 51% attack.
if they just shut down coinbase and robinhood and square then 99% of people will lose access.
chinas great wall blocks a lot of the internet itself. it’s delusional to think governments can’t stop crypto easily. they can even just block internet completely
If you like analogies, totalitarian governments ban all sorts of things that check their power like guns and books, but overcoming them still has happened historically in part by people finding ways to disobey those things without getting caught (and often with fatal consequences when they are caught)
It has virtues.
As someone who works in applied Cryptography and has also worked for the European Central Bank, we need “crypto”.
1) seigniorage is an abused privilege. Source: US debt ceiling at 27TRN.
2) permissionless money has value, I cannot send more than 5k a day using my bank. I can send any amount using crypto. I also don’t need two utility bills and an address to open an “account”
3) it’s censorship resistant. Govt’s can’t just stop payments or shutdown the network.
Use Monero.
EDIT: downvoted again. I’m not contributing here anymore.
If they have a firewall, they could block the majority of exchanges, wallet apps, and even ips of some of the largest mining groups.
Unless they have something as complex and comprehensive as China's firewall, they couldn't, because the protocol could just route around it.
The evil of democratic government (as opposed to a strong republic) is that that 51% can vote to rob the 49% of everything they own. Crypto prevents this.
First, your use of "holistically" doesn't make sense to me.
> ho·lis·ti·cal·ly | ˌhōˈlistik(ə)lē/ | > adverb
> mainly Philosophy in a way that is characterized by comprehension of the parts of something as intimately interconnected and explicable only by reference to the whole: the damage caused by unethical behavior needs to be examined holistically.
> • Medicine in a way that treats the whole person, taking into account mental and social factors, rather than just the symptoms of a disease: he has been treated holistically for a heart murmur.
Second, are you characterizing the people on HN as being mostly or completely against cryptocurrency? This sounds like anecdotage. Remember, not everyone with an opinion broadcasts it.
Cryptocurrency is maybe the most important innovation is human history.
Or perhaps neither.
Some other simple explanations include:
1. People see it differently than you do.
2. People are not engaging in conversation as a way to learn from each other; rather they are talking past each other.
I'm inclined to think it is a mix of both.
Like I mentioned in a comment nearby, people on HN seem to vote based on different criteria. The lack of clarity can make it hard to extract clear meaning from votes.
Electricity? The wheel? Money? Sulfa drugs? Spoken language? Counting? Agriculture? Written language? There's a long, long list and to put cryptocurrency on it seems awfully hubristic.
In fact, you're so breathlessly ecstatic about the cult of bitcoin that I have to wonder if I'm being spoofed...
It's not a simple concept to explain so here's a couple of videos which might help you to understand it better.
Bitcoin Is Protecting Human Rights Around the World: https://www.youtube.com/watch?v=xLYYh4aPXAM
Philosophy of Bitcoin from First Principles: https://www.youtube.com/watch?v=HrehEWYj16s
Have you reviewed the HN Guidelines at https://news.ycombinator.com/newsguidelines.html ?
> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
I'll offer my two cents in case it gives another perspective you haven't considered. The meaning of voting on HN is far from obvious. Various people downvote for different reasons.
Maybe they are unimpressed by your comment, maybe they disagree with it, maybe they think it is inappropriate somehow, maybe they don't like that you plugged a particular cryptocurrency, or something else.
In any case, I recommend not worry about the votes, up or down. At times, it can be helpful to see if what you are writing is perceived as useful, if you can take the feedback in that manner without taking it personally.
> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
Am I accurately stating your concern?
How do I tell someone that I value his input even though I respectfully disagree? It's pretty much impossible on HN without writing a post.
Most of HN just follows MSM talking points, and the MSM hates crypto now because it's a threat to the powers that be.
Cryptocurrency was built BY tech people. I'm a 41 year old developer who started programming at 14, and love what is happening in the crypto space.
So go F yourself for putting you as the spokesperson of the tech world. Such arrogance!
Economic bubbles are self-feeding. They have the social mechanisms of a cult where the members shut off communication with the external culture and only seek reinforcement for their belief system.
If the tech world speaks out it will be like doctors recommending masks and quarantine in the early days of Covid or climate experts explaining global warming: the "true believers" will just reinforce their belief.
Let them drink the Kool-Aid, there's nothing we can do anymore.
First of all, I am not a Bitcoin maximalist, nor I am "brainwashed by a multi-level marketing sale pitch".
Bitcoin is just a prototype for a P2P consensus algorithm that has stood the test of time. It has MANY flaws, and it failed its original goal of becoming electronic cash, and instead it became kind of a digital store of value. Is it worth more than it should? Sure, but you could argue the same of a lot of tech companies.
The problem is most people think they understand blockchain, but they don't. They just think its for creating a meme currency that is a speculative bubble.
What blockchain enables us to do, is to create a trustless P2P state machine, on top of which you can build any Turing complete project you can dream of.
Instead of focusing on Bitcoin and Dogecoin go and check out Ethereum and projects like Aave and Compound. Blockchain will completely change the way we do finance, from how stock are traded, to how we transfer money. I am sure that it will happen in our lifetimes.
Ethereum is very cool. Aave and Compound are very cool. But today, the whole ecosystem is super insular. Crypto loans and derivatives have to be overcollateralized with cryptoassets, and so the only use case for them is levering up cryptoasset exposure. Flash loans are a unique aspect of DeFi, but they're only really useful for arbitrage of cryptoassets.
There remains a huge disconnect between cryptoassets and the real world. Things like NFT attempt to bridge, but it's basically just pretend. Owning an NFT generally provides no actual control or rights over the asset it refers to.
Until institutions start creating assets natively on the blockchain, none of this stuff has any impact on the outside world. And it's not at all clear to me that this is going to happen, because there are potentially insurmountable hurdles in figuring out how to harmonize law and the blockchain. This entire ecosystem may turn out to be a dead end, outside of the clearly demonstrated use cases of speculation and crime.
What we are lacking is a bridge between traditional finance and crypto that goes beyond what crypto exchanges offer.
I think it will take time before we get there because we need for institutions and businesses to start adopting it, but this has not been happening for a decade.
Ethereum is just 7 years old, and its in its infancy. I think we will need a couple of more speculative cycles before we end up with something useful.
I wouldn't be surprised if Bitcoin brings us back to a currency backed by gold or something similarly strong, or better.
Presumably each bond would fetch a value (in $) corresponding approximately to the current exchange rate. While the bond holder could cash them in at any point, why would they? Wouldn't many investors consider a bond backed by a major government at least as secure as a crypto coin?
In this way, the government could effectively increase the supply of bitcoins (and presumably thereby reduce their cost/value).
Of course, the Government runs the risk of bitcoin appreciating and then having all the bond holders cashing in, but with exceptionally deep pockets the only real reason to cash in would be if they feared a Government default.
By selling enough bonds, presumably the price could be driven arbitrarily low, extinguishing the risk entirely.
As someone who is a loser in both the fiat ecosystem and crypto ecosystem and having experienced some horrors both ecosystems, I prefer crypto ecosystem hands down because it's the most honest and transparent system.
Once you understand how both systems work, it's impossible to pick the fiat system. The fiat system is a pyramid scheme of epic proportions. It's not possible for an ethical person to want to participate in the fiat system once they understand how it works. It is really that bad.
I realize that people will downvote this now, but when crypto prices start doubling every week, they will finally understand what's going on.
When you understand how the monetary system works, this claim is not far fetched at all. It's a certainty.
see: https://twitter.com/Pinboard/status/1399094306221166592
This thread was previously [flagged] [dead], but is now back to normal. I assume via moderator action?
I don't know why people would bother flagging something like this though, threads as content-less generally die on their own without much fanfare. OP and his friends get an ego boost from making front page and then it fades. NBD, no need to be contentious about it.
In terms of cryptocurrency, from my perspective the problem for mass adoption comes down to stability of value and oversight. Why would anyone want their paycheque to come to them in crypto when a few tweets by Elon Musk, lord of crypto market manipulation can turn your 2k paycheque into a 1.1k paycheque?
On top of that, for good or for ill the big banks and credit card companies have decades of built up trust in that there is a centralised authority who can ensure that your money is safe. Irregardless of what the reality of crypto and the safety of your money in crypto, the wider public will not trust that their money is safe when there is no one to be held accountable if something happens.
Finally, the fact that crypto has, to the wider public at least, been shown to have significant benefits for criminal activity and speculators actively trying to manipulate the markets has painted the entire crypto space as something that the average person should generally avoid at all costs.
In theory, I liked the original idea of crypto. But the truth is that crypto was good-intentioned idealism corrupted by selfishness and greed.
https://nederob.medium.com/bmw-uses-vechain-to-combat-mileag...
https://medium.com/vechain-foundation/walmart-china-takes-on...
The "why": https://www.reddit.com/r/Vechain/comments/7ra0tt/honest_ques...
Social benefit comes from payment systems that provide safety and stability, not risk and volatility.
Cryptocurrency by design doesn't have this and will always be open to speculators or other rational bad actors manipulating their asset markets.
Who is "we"? And why they think they are a majority? Was there a poll or so? Did I miss out something?
Such kind of framing makes me angry — no matter I agree or not on the actual point! Who the fuck thinks they can speak on my behalf without even trying to ask me about my opinions?
If you look past that, what you have is a highly resilient, replicated, totally-ordered log of data you can use to build other p2p services. For example, you could use Bitcoin transactions to implement an open registry of all Mastodon servers by binding their IPs and public keys to server names in a first-come first-serve basis. This would provide a one-stop-shop for discovering all Mastodon nodes and their public keys.
As another example, you could build a p2p Docker image deployment system by binding a public key to a sequence of transactions that contain the hashes of fixed-sized chunks of the image, as well as a seed IP address. From there, peers with the public key could scan the hash sequence and seed IP address, discover one another, and self-organize into a random flood network to replicate the chunks and reassemble the image. The image author would publish a new series of hashes (or perhaps the Merkle root of a series of hashes if space is a concern) when a new image is published.
Point is, you can do so much more with the tech than what is being hyped.
I'd say we all subsidize bitcoin and the likes indirectly and unwillingly through the price hikes in HW directly or indirectly attributed to something of dubious (to put it mildly) tangible value.
Not true, you can exchange Bitcoin locally with other individuals. Mailing paper money or checks over postal service is not comparable to making payments using Bitcoin online. Especially when considering international payments.
Yeah that’s what I’m saying. People meet up in real life and exchange Bitcoin for cash locally. Various forums, web systems, and message boards exist to facilitate this.
Correction: ignoring speculation, the base asset-value of bog-standard crypto securities (i.e. the ones that don't "do" anything other than get traded around) is sustained by a mix of:
• capital flight (in countries where the routes for regular ForEx conversions have been restricted)
• financial "regulatory sandbox" instruments development, i.e. the ecosystem built on "security tokens." (This, as it turns out, is mostly being built out by the existing financial sector.)
• grey- or black-market purchases — i.e. purchases illegal for either the buyer or seller according to their local jurisdiction. (Which doesn't usually mean criminal activity as you'd think of it, but rather is most often a routing-around of brain-damaged legal codes, e.g. FDA bans of non-dangerous drugs. I have a friend who's trans, who found it impossible to get prescribed hormones where they live — but got them easily on the dark web! Another friend, who had gone through every step in the workflow to solving their chronic illness and come up short, used crypto to buy a Russian medication that doesn't exist domestically, and it solved everything for them. Etc.)
• facilitation of trade in environments with untrustworthy civic financial infrastructure, e.g. Venezuela
• facilitation of trade between private citizens of countries that actively attempt to prevent trade with one-another, e.g. countries who have trade embargoes, or even countries who are at war
Note the common theme: cryptocurrencies enable people to enter into trade with one-another when one or more governments don't want to enable that trade, or even want to actively prevent that trade. That's the "base value" that speculation on cryptocurrency is a multiplier on top of. Cryptocurrencies route around embargoes/tarrifs/etc. in the same way that the Internet routes around downed links.
> I agree but I raise you one better.
> We in tech need to talk about how graft and lies are not qualities of entrepreneurship, and that they are disqualifying.
> We need to dispel the myth of moving from con to legitimacy, and that fraud may be justified if founders do it.
I do see value in being able to instantly exchange tokens which are generally liquid and convertible to local currency, with low fees, internationally, and in denominations that make sense to, e.g., tip a blogger for a post you like. The US could regulate the heck out of it, and the Venezuelan or Tanzanian farmer could use it more laissez faire.
But none of that comes from the crypto aspect and PoW and untrusted decentralization. It could just be a non-profit with a DB and a public API.
Are there any coins out there trying this?
Does it actually do that?
What else does it do, intentionally or unintentionally?
Who benefits from it, and who pays the costs?
Is this exchange worth it for those paying?
These are basic questions we should ask, not just about cryptocurrencies, but about the finance sector in general. When investment firms cause recessions or famines as a side-effect of enriching themselves, we have to ask if they're worth tolerating or if governments should drastically tighten regulations.
Cryptocurrencies are just the low-hanging fruit. The whole tree is worth shaking.
It does (and can) not define how it is used and also abused.
It is, eg. obvious that Bitcoin was made with the idea of representing a coin, a mean of payment. However, it is clear by now, that Bitcoin will never be a mean of payment. In contrast, it is mostly used as investment.
Also, you can not simply ban any cryptocurrency. The technology can not be 'stopped'. The lawmaker could only disallow it for this and that use.
Hmm.
It’s a fraudulent “con” and also very dangerous because it subverts regulations.
Hmm.
Seems pretty contradictory, no?
You can either criticize bitcoin for not working or for working too well but Maciej seems to be trying to do both at once.
I’m not a Bitcoin user or particularly a fan but these self contradicting attack lines don’t seem likely to be politically effective. Just choose one. I’d go with “mostly used for crime.” And then add “environmentally ruinous” for good measure.
If you don't want to do that, and you want to wax poetic about shitcoins being evil, ffs, please keep in in the drafts, salty nocoiner. Especially during a bull cycle where people who already don't trust "tech nerds" are going to read this and want to buy the shittiest of shitcoins.
One mistake us "smart" folks make is thinking that investing is about understanding a system that's complete and smart. Most investments are not like black jack but more like poker where it all comes down to behavioral economics and psychology. Doesn't matter how stupid the actually game is, it's about the meta game with the crowd.
Plenty of tech folks making money in crypto know this, wallstreet going into crypto knows this. Most of us in tech are too autistic to play on that level. So focused on the correctness of the tech.
For the players it's a big casino and they know it. The lucky winners will be rewarded for having heart and playing
No we don't need to break it here (even though it's a pastime of the author, who has already done it to two tech ideas in that Twitter thread).
Build something that improves upon the ideas and solves the problems in a better way instead.
https://www.reddit.com/r/badeconomics/comments/nfv8vg/the_te...
It's a not ponzi scheme, Elon Musk isn't 'in on it', and Bitcoin is too free to fail.
If you don't like it, GTFO?
Sure Bitcoin is boring but so is gold. If you weren't interested in gold in the first place you likely aren't interested in Bitcoin either.
The proof-of-stake, smart contract platforms are truly exciting. Stable coins and Uniswap are real innovations w/ more to come.
Bitcoin, due to its mining costs, is a massively negative sum game. So much worse.
And only crickets from regulators. Thats where the real story/dog is burried.
Also DLT tech doesn't require a token with "value". There is no need to create an "alternative money" It can be just a DL (Distributed ledger). reducing everything to bitcoin and its forks is like reducing the whole internet tech stack to http and ignore everything else we can do with it.
DLT tech isnt going away an no one who seriously understand it would say so. THis is just another useless twitter BTC hate thread. People who actually understand the tech dont care about bitcoin. Its the dinosaur tech and its deprecated since like 2013 or so when the first alternatives appeared (XRPL) which dont need the whole energy wasting block lottery.
Just because few people are using a tool correctly yet does not mean the tool is without value.
What is he advocating then? To stop working, thinking, and writing about cryptocurrencies? When do we start burning books too
everyone knows it’s an open ponzi scheme. but you’d also be rich if you invested in it early. and you can’t convince someone whose bought into the ponzi that it’s a scam. you just have to wait for them to get burnt
and it mostly takes advantage of poor people trying to get rich to the advantage of early adopters.
This sounds extremely ignorant, Bitcoin essentially has accomplished a _trustless_ transfer of value, globally and at very low costs (even considering the extraordinary fees right now). This is just the cost of that...
To say that one scheme is a scam but the other is not is extremely subjective.
A corporation like Facebook probably does more harm to society than Bitcoin. Why ban Bitcoin but not ban Facebook? Why not ban Snapchat or Twitter? Ban Uber, they burn a lot of fossil fuels! This kind of thinking necessarily leads to communism. You can't ban crypto and keep capitalism... What's left of it.
The thing is none of that matters. Cryptocurrency is a currency and anyone treating it otherwise and getting burned can't blame the currency for it.
The thing is the *sole criterion* for the viability of a currency is acceptance.
Some examples:
* 90% of USD doesn't physically exist and has no intrinsic value whatsoever. The fact that everyone the world over will accept it in trade defines its viability.
* Stones of Jordan (SOJs) in Diablo II. Terrible, currency because most of the games in the item were worth less. But that didn't matter. They were all anyone would accept. The fact that it was within a game didn't matter. Within the scope of the game they were about all that was accepted.
* chipped gems in Diablo II. They had value in modifying other items and were more granular than SOJs. Some people would even accept a large number for an SOJ.
* (D2jsp) Forum gold (Diablo II). You can buy it with USD (or other currencies I suppose, probably BTC too), and use it to buy items in the game.
* Credit cards - almost every place in the world accepts them, and in theory it's because they're moving a government backed currency... but wait.
* Icelandic Kroner - perfectly viable...but only in Iceland. At least for the most part. Like nobody in the US is going to let you buy gas with 1 ISK.
* Yuan - perfectly viable...but only in Japan. Same as ISK, but japan.
Some negative examples:
* Again, Credit cards - If you were to try to start your own payment processing company that works exactly the same as say, Visa, but nobody has heard of your company it doesn't matter, no one will take it.
* Zimbabwe dollars - hyperinflated to the point of 100 trillion dollar bills. Which people would accept a wheelbarrow of for a roll of toilet paper. Not accepted, so no value.
> It has no social benefit except helping end first dates fast.
* This just isn't true. I've used it to buy weed in a state where it was legal and it worked great. Meaning that you can buy things the government thinks shouldn't be allowed to.
* It allows money laundering. Whether or not you agree with it, it's something it provides.
* Banks and the government can't control you via seizing or freezing it. This one is incredible. The internet has a history of payment processors unilaterally destroying businesses - for example Wikileaks, and many types of porn or sex related services, many of which aren't illegal.
Crypto provides freedom from authoritarianism and that's wonderful.
The overarching axiom is, acceptance is the only thing that matters. Stupid, crazy, nonsensical, non-divisible, non-government backed, all don't matter if people just accept it in trade. And even the best well designed, feature rich, secure, safe, environmentally friendly currency isn't worth a damn thing if no one accepts it. The dumbest, most authoritarian controlled, slow processing, high fee currency with a massive carbon footprint to create more of can still be viable if it has widespread acceptance.
The key is nothing matters except acceptance. And people accept crypto, especially BTC and the other early coins. So they have value.
So no, it's not for us in tech to speak out, because it's not our decision. If people accept crypto, it's a real currency. If people don't, it isn't.
Another way to look at it...what if I told you there was a new scam coin that had 27 trillion in circulation, an unlimited supply, and 1% of people own 30% of it. Oh wait, that's USD.
Cryptocurrency makes it easy to enhance ones own confirmation bias because the industry has had such a bumpy ride towards progress. If you want to take an overly harsh perspective about the technology then by all means just Google 'a list of hacks and scams.' You'll be entertained for days with what you find, and at the end of your research you will have more than enough material to make yourself look smart on twitter.
That's also another point. If you can talk about basic flaws in a technology by playing 'Dr Doom' then you can score free points from the audience without having to know much about the subject. It's an easy way to look credible because most people are followers on social media and won't have the time or interest to look more deeply.
So lets look at the claim that cryptocurrency 'has no use and only causes problems.' To disprove this we only need to find a few examples of use-cases that are very hard if not impossible to do under traditional finance.
1. Trusts -- escrow -- jointly controlled accounts with arbitrary leverage over assets. You can't do this under the traditional financial system because the legal system can be used to dispute ownership which commonly happens when a will is attested.
2. Confidential transactions. Anonymous money and accounts. Traditional finance views this as a disadvantage, whereas FinTech views privacy as a right.
3. Flash loans. Flash loans are a way to finance a smart contract that borrows money and repays it atomically in a single transaction. Flash loans have radically changed capital markets but their power is still being understood. Potentially this is a new form of funding for automated companies.
4. Price stability. It's possible to design cryptocurrencies in such a way that their price trends towards some function. This property is highly desirable when people are going to be storing their wealth long-term. If we can build more stable currencies we can protect against flash crashes and even economic depression.
5. Smart contracts. Programmable agreements for wealth exchange make it possible to provide unique financial instruments that are engineered to be less risky than anything traditional markets can accomplish. This is due to increased transparency, collateral requirements, and protocols that help enforce fairness.
There are too many examples to list in how cryptocurrencies are shaking up not just finance but many other industries. To claim that it all amounts to fraud, gambling, and ponzi schemes just tells me the author has no understanding of the transformations taking place right in front of them. They'll probably be left crying 'its a scam' long after society has silently replaced most aging FinTech with platforms that provide enforceable safe-guards... because in the end it is more transparent, flexible, and when done right -- safer than alternatives.
It presents itself as a techno-utopian vision of freedom, takes advantage of greed to replicate itself throughout the financial system, and mutates to use as much energy and as many resources as possible.
If it were designed for that purpose, it would be the most cynical indictment of capitalism conceived.
I've recently closed my bank account, and started using something a bit more up-to-date (Revolut). I believe Bitcoin is the single biggest innovation driver in the tech sector right now.. but sure.. it's a scam.
Not gonna lie, I laughed at this.
> I believe Bitcoin is the single biggest innovation driver in the *fin*tech sector right now.
Obviously not the biggest driver in tech; i don't blame you fr laughing at this statement.
I think I’d be inclined to point towards “neo-banks” as being more innovative in that specific sector, but that’s within “reasonable to disagree” range.
But if you don't like Bitcoin you can use USD based cryptos like DAI or USDC to transact and conduct peer-to-peer lending, purchase art work, save with higher yield, provide liquidity in a peer to peer marketplace, etc. By no means do you have to choose Bitcoin.
Does it? Your Bitcoin "savings account" would have lost over 45% of its value over the past month and a half.
Also, note it is entirely possible to invest on what's called a risk curve. You can allocate some portion of your savings, maybe 5-10% as a hedge. No need to go all in. Maybe 0.5%. at any rate, your savings account has cost you 50% or more in purchasing power for meaningful assets in the past 5 years. While you've gained a great deal of purchasing power if you held crypto.
Yes i've lost a lot of my net worth compared to last month.
Compared to last year, i'm up 3.5x.
That's one of the things i like about using Bitcoin as a savings account, it makes me think more longterm about my finances.
If one looks at gold and asks themselves “why is gold worth 11 trillion dollars today?” How did it, over centuries and centuries obtain such a status?
Bitcoin has better properties than gold does. It’s more scarce, scarcity means predictability, and predictability gives rise to trust.
You don’t have to be a hardcore libertarian- I’m sure not- to appreciate a better version of gold, and what benefits that can have.
Also - the USD is used more for malicious purposes, paper money is actually harder to track than Bitcoin transactions.
have you reviewed what you are writing or is it just a Markov chain generating text?
Also, https://news.ycombinator.com/newsguidelines.html#comments
That’s predictability. Name one other asset on earth that is easily transferable and more predictable in that sense?
In Venezuela is disgusting, over 1,000% inflation each year.
From my experience living in a 2nd world country, the people involved with buying Cryptocurrencies are typically young males working in IT, who proceed to waste their time, money and energy.
And Carl Icahn: https://www.google.com/amp/s/www.cryptoglobe.com/latest/2021...
- “bank accounts”
- a universal notary and authenticity service
These are building blocks for a number of applications.
Most order applications don’t make sense, but hey, everybody needs “bigdata” too
Cryptocurrencies do not add anything to either beyond what was already done by cryptography.
> “bank accounts”
We already have bank accounts. In banks, hence the name. What’s the average transaction fee for the most popular cryptocurrency? By one of many metrics by which cryptocurrency fails even against the status quo.
So no, we don't have bank accounts.
Underbanked people more so than the general population.
And this group is also the most harmed by current cryptocurrency transaction fees — I’ve met someone (friend of a friend in Nairobi) for whom, assuming rent is paid monthly, current fees would raise their rental cost by 10%, and they’re already struggling.
Putting aside softer claims, writing "at all" is an exaggeration. Would you care to moderate your opinion or at least elaborate? Please point out area(s) where you think the author is mistaken?
Bitcoin has more social benefit than any other technology. Money is technology that runs our society by allowing us to trade our time between each other. Sound money that can't be diluted or stolen away by a few benefits everyone. It's not only more fair money, but it also allows perfectly efficient markets and saves the environment by not incentivizing overconsuming.
Bitcoin is not used for money laundering, gambling, vaporware etc. and is not particularly well suited for those. His claims are not based on actual data.
Bitcoin is decentralized. Bitcoin nodes which protect the monetary policy are run by users. It's not possible for anyone to weaken the currency by forcing users to run a weaker version of the software.
Bitcoin actually solves the problem of central bank monopolies. It is money, it is a currency, it is a store of value. His claims are simply false.
He just doesn't understand that it takes time for Bitcoin to stabilize at a certain value. It takes time for people to switch to a better money.
This is highly subjective. What about plumbing, electricity, or antibiotics?
Rank ordering technologies by their social benefits has major methodological problems. First, you can't consider any one technology in isolation; they exist in a network. Second, the value of a technology is relative to alternatives.
First, Bitcoin's tremendous energy usage is a major negative for the environment.
Second, please explain the connection you see between Bitcoin and "not incentivizing overconsuming".
Perfectly efficient? Of course not.
If we weaken your claim to "Bitcoin _helps_ markets be _more_ efficient", I would still ask for your reasoning.
There are some good arguments against it but this is still elementary-level crypto-bashing. I’ll just leave this here
https://twitter.com/PeterDiamandis/status/139837433261162906...
The digital money angle? Eh it’s okay. Everyone loves a gullible population that prefers to be paid in not-money.
Eventually crypto will have to invent all the overhead and governance it was trying to escape. You know, so things like Musk’s little pump-and-dump the other week stop being possible.
For the downvoters: The original bitcoin paper explicitly says it’s using a merkle tree data structure under the hood. Same as that used by git.
Same as bitcoin. You can always split off a new chain. You might not convince everyone that your new chain is the chain, but you’re welcome to try.
b) What is the longest chain? How do I determine if the longest chain is in Gitlab, on my computer or my coworker's computer? Where does the pull request go?
c) How do I indicate that I have approved a pull request in git?
How do you know that the exchange you’re using buys bitcoin on the same blockchain as the exchange I use? Because they said so?
When’s the last time you downloaded the whole blockchain for any coin and verified the whole sequence of blocks from the very first one? I certainly never have. But I regularly have the whole chain for git projects on my machine.
Point is it’s the same data structure. Bitcoin’s innovation is in how blocks get added, but it’s not as revolutionary as it looks from the hype. Read the original paper if you don’t believe me, it’s very well written and incredibly approachable
Seems like one of those tweetstorms where people perceive it to be saying something worthwhile because it's long and is said with adamancy.
We give too much voice to all these people suffering from hysteria. I suspect the only reason these people are given a voice is because they usually call for more laws to "fix" more things which benefits those in power.
edit: Also speaking of things we should ban, I think if we are talking about things that are actually harmful to society (not that I actually give a damn), we should start with banning twitter so that we can stop hearing these "moral" rants
The fact that you can formally buy, exchange, and cash out of crypto with full banking support gives cryptocoins a veneer of Government support and legitimacy.
The USA bans online gambling and ponzi schemes. Cyrptocoins are worse, because they include a side order of immense waste of electricity and advanced manufactured computer chips, and enable ransomware.
I think this article is completely correct. We, as members of the tech community, have a duty to communicate with the public and democratic representatives that cryptocurrencies are a harmful technology, and the formal exchange of them for fiat should be banned.
Electricity shortages: https://www.cnbc.com/2021/05/26/iran-bans-bitcoin-mining-as-...
Chip shortages: https://www.fxempire.com/forecasts/article/bitcoin-mining-ad...
Ransomware: https://www.marketwatch.com/story/bitcoin-extortion-how-cryp...
In terms of overall negative impacts, crypto is worse than ponzi schemes and online gambling.
A rational solution would be a carbon tax, so pollution is no longer an externality. Focusing only on Bitcoin only makes sense if one's agenda is just to hurt Bitcoin.
Does that make it right? Ignoring that, many private institutions go out of their way to ban transactions in things that the government doesn't even ban. Marijuana in states where it is legalized for example. All forms of sex work on the misguided belief that it somehow benefits the sex worker. Etc.
Also I don't have a duty to follow your misguided morals.
Now is the time we must shut it down. Bitcoin, Ethereum, all of it.
Even ponzi schemes have it's limits and this one has been reached and been illegally allowed to run rampant.
It was nice when it started, not while it lasted. It didn't work and now it's time for it to go.
Blockchain is just another buzzword that isn’t actually useful.
How are Bitcoin and Ethereum ponzi schemes?
The whole thing is so volatile a single billionaire can say anything causing the entire crypto market to crash, leaving those who got in extremely late holding a huge bag.
Bitcoin is useless and has no usecase at all and Ethereum spurred on the useless energy inefficient and vapid NFT craze which is yet another money laundering scheme. Don’t get me started on ransomware as that is for another story.
This experiment should not have been allowed to run it’s course at all and all of it needs to be shutdown.
Lol. Talking like that obviously shows that cryptocurrencies are not for you. This tech has cypherpunk and crypto-anarchy roots, regulators/governments are not the intended users for this tech, even if you like it or not. If you do not view cryptocurrencies from an cypherpunk perspective you will not see their social benefits, it is an entire way of life an alternative view from the centralized shit show we have now. Yes the tech has flaws, just like how digicash, hashcash, b-money etc had flaws, this is an evolutionary process and nothing you or your government says can stop it.
Oh yeah? Let's find out.
Strikes against it:
- It's burning a massive amount of resources and that is just increasing
- I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
- A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
- Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
Do you own a car? Have you ever used plastic? How much resources are burned by banks?
> I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
Yea lets also ban computers because they allow cryptocurrencies.
> A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
Ever heard about Zcash or Monero
> Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
Yes the tech is not perfect but tons of research (Proof of Stake etc) is happening to make it perfect.
But decentralization? How will the ease of entry not allow allow rich people to dump money into it and be the main players/money makers in that system. Perhaps they wont all be in one country but they'll certainly (by stake owned) be one predominantly one demographic.
Serious question: What does "not silence" looks like?
Anyone who asks me gets my viewpoint on cryptocurrency and blockchains generally (which is more or less the same as Maciej's). My relatives all know it, but they also know another relative (who also thinks it is a scam!) made a couple K back in the first bubble because he was just playing around with the software. My coworkers all know it. Repeating it only causes strife, not education. People don't want to hear they've made bad financial decisions no matter the time, place, or tone. They instantly get defensive. I mentioned it in passing to a new hire in their trial period recently and got a really nervous look like "is this guy going to not give me a permanent contract because I liked bitcoin?"
There's no forum in our society for us to say "this is a scam" that isn't run by people with millions or billions of dollars invested in that scam - unless you're famous enough to get on cable news as a minor tech entrepreneur - and no social maneuvering that makes it effective on a personal level.
That's a chart showing the M1 money supply increase by the Fed. It has more than quintupled in the past two years. That chart looks like a true scam to me. And it shows in the US household net worth data: https://mobile.twitter.com/RaoulGMI/status/13987339019132641...
The only thing that speaking up ever does is generate more noise, which frustratingly then generates more interest. This probably even applies to Pinboard's appearances - anything, pro or con, to keep cryptocurrency on the air.
Two big issues immediately stands out that made me believe that bitcoin has no future:
1. Long latency of transactions. I remember it took about 10 minutes for the purchase on coinbase to finish, and another 10 minutes to transfer half of the bitcoin to my personal wallet. This makes it impossible to use bitcoin as a currency. Imagine I go to a store and at check out, I need to wait for 10 minutes for the payment to go through.
2. High transaction cost. The transaction fee to transfer the bitcoin to my personal wallet cost around $15 (if I remember correctly), an astonishingly high fee.
I kept the bitcoin as a souvenir, and when this year price go crazy, I sold half of my bitcoins on coinbase when price was at $50K, to recoup what I spent on it in 2017; and still kept the half in my wallet, as a souvenir of what I believe to be the biggest ponzy scheme in human history.
Beyond just currency uses, smart contracts open the door to phasing out escrow middlemen for purely digital transactions (like buying/selling domain names, etc.) Decentralized lending and borrowing is another major use of smart contract coins.
India’s smartphone penetration is at 41%.
All exchanges in India require a Savings Bank account for Fiat transfers. How are these unbanked people meant to use crypto really?
you're talking as if bitcoin and ethereum is all of cryptocurrency.