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Comment by gerikson | Hacker News Reader

> The developers seem to have been earnest in their attempt to create a new kind of stablecoin , one that was only partially collateralized by a “real” stablecoin.

This space is a giant house of cards.

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Seriously. I posit that many of the programmers in the field have no financial background whatsoever, on top of whatever shaky software background they may also have (especially if they went to a bootcamp). Just hilarious to watch.

Developers used to “we can fix it in production, ship it” develop system where fixes can’t be shipped with expected results.

Even worse: unless you use a proxy contract, production code can't be updated period. Smart contracts are immutable, besides being able to self-destruct themselves.

And the unexpected results may be billions of dollars worth of assets lost. Like most of SV, most of the cryptocurrency space is "move fast and break things", but breaking things entails a little more than an app being down for a few hours.

I've worked in the space for a few years and can say it's been the opposite experience for me. Had the chance of working on a Haskell project with the original creators of Haskell, being taught QuickCheck by the creator of QuickCheck, testing economic ideas created by professors of Economics at top universities, and sponsored entire compilers and languages to help ensure the software was as solid as possible. One of my favourite tutorials was when we had Leslie Lamport come in to give us a talk on TLA+. There is so much money in the space you can have absolutely insane teams.

The existence of some “absolutely insane” highly-skilled, well-trained, well-funded teams in the field doesn’t mean that there aren’t also lots of poorly-qualified teams without the up-front funding for development trying to cash in on all the money sloshing around the field.

True, I'm just saying as someone who's been in the space for several years I've not come across too many of these. I think it's a stereotype that doesn't match with reality - at least from my experience.

Wow, sounds great. Where have you been working / which cryptocurrencies/services have you been working on?

This was with IOHK (iohk.io) on Cardano however due to relocating and work visas etc I'm currently working on my own projects in the Eth/Cardano ecosystems

Thanks.

It's like Ponzi schemes but everyone is Ponzi. Scammers trying to scam scammers. Like Vegas without the tourists, only hustlers.

The financial crisis of 2008 showed us that you can say the same about the traditional finance system.

Crypto is reinventing the same system as traditional finance and hitting all the same problems that we encountered in the last 100 years.

At least here everybody who opens their eyes can see that it's a house of cards.

"They are doing it too" is a favorite argument of crypto-enthousiasts. I'd argue the answer here is not more madness (crypto), but a serious attempt to fix the traditional financial system.

Why bother -- it's so broken. We can just again, it makes way more sense.

But cryptocurrency's answer is usually not "how can we do better" but "how can we repeat the same mistakes in a shorter time span?"

Cryptocurrency is incrediably diverse at this point, so you would have to be more specific.

Is TFA specific enough for you? It appears to be about the inevitable outcome of imitating banks in an unregulated context. A top level comment here is about the outcry for regulation that this then produces.

A computer lets you make more mistakes faster than any other invention with the possible exceptions of handguns and Tequila. - Mitch Ratcliffe, 1992

1992.

The internet was the domain of colleges and government institutions. The Eternal September would begin one year later.

1992.

The Super Nintendo Entertainment System just came out to most of the world, with North America getting it the year before and Japan two years prior.

1992.

One whole year before Doom would come out.

1992.

Windows 3.1 when it was still a DOS shell was released.

We were beating our heads against 386 processors praying for 486s, hopefully with the math coprocessor so we could actually get something done.

Even then, we knew. And now it's nearly 30 years later and it's just as true then as it is today.

We basically have low inflation and a savings craze as a driver of a housing bubble in 2008 as people were looking for perfect, risk free bonds (no such thing can exist outside government bonds and even those are just best effort).

The people behind Bitcoin were basically thinking: Ok, our banking system failed because of low inflation and a savings craze. Let's make both of those worse so that it will never become possible to run an economy on top of Bitcoin.

Fiat banking failed because an aging population has a strong saving preference to the point that it chokes out businesses. The idea behind saving is that you release production capacity in the economy so it can be used on something else. The population isn't going to stop aging. The problem is going to get worse over time. There won't be a something else unless the government artificially uses the savings on that something else.

I think the point is that starting over will just create a new equally broken system. So then we'll have two broken systems. Humanity could've instead used all that time/effort/capital to continue improving on traditional finance as we have been doing over the past century.

The current financial system becomes more robust every time a black swan event like 2008 occurs.

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