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> * "This will decentralize ownership of a currency." Nope, it will move from having government control to having oligarchic control.

In most places where oligarchs exist, they largely control their government. That is, they are one in the same, whether this is a formal or informal arrangement. Though they may be different subsets of oligarchs.

‘Oligarch’ doesn’t mean ‘rich dude’ - an oligarch is by definition someone (a member of a small elite group) who exercises control over a state.

The point of op wasn’t that Bitcoin transfers power from states to existing oligarchs - indeed, that would be nonsensical, as by definition oligarchs already control states - but that it would transfer power from democratic state institutions to oligarchies. Ie it would create new oligarchies and supplant democracy.

Isn't having more power brokers healthier for a democracy than fewer? Today, the existing oligarchs control both the currency and all the laws. This at least fragments that further. The existing oligarchs still get the government; that doesn't change. The new ones get the currency.

There are a couple of things that should be pointed out:

> * "Irreversible transactions are a feature."

I can choose to use a reversible transaction or a third party escrow (non-custodial and can require multiple escrow parties) if I want that safety net. This can be done easily, even on a simple chain like Bitcoin.

> * "We don't need banks anymore."

Off-chain doesn’t imply custodial risk. Using a ZKRollup chain, the layer 2 network facilitates transactions but is unable to steal my money by altering my balance without a valid signed transaction or refusing to allow me to withdraw my funds.

Certainly using a custodial off-chain approach is the same as using a bank/exchange, but that isn’t a requirement.

> "Irreversible transactions are a feature." They're definitely a bug. If I buy a TV with a credit card, and receive a box of rocks, I can do a chargeback. If I make that same transaction with cryptocurrencies, I'm SOL unless a fraudster suddenly decides that they really want to make good on it.

Agree with all you said apart from this - I'm not sure how reversible transactions would help you get money back from a fraudster. With 'legacy' money its eBay/Amazon or your credit card company (or the laws that they operate under), the level above the currency/transaction that gets you your money back. I imagine if Amazon accepted bitcoin they would also provide refunds.

The legal protection provided by using a credit card (in the UK/EU anyway) is by far the biggest reason not to use anything else for transactions on the internet.

With reversible transactions, the credit card company can reverse the transaction without the consent and cooperation of a fraudster. With irreversible transactions, the fraudster must initiate a transfer signed by their private key in order to transfer funds back to my account. Even with a court order, if the fraudster is in another country, they can just ignore it and I'm SOL.

I agree that the legal protections are the bigger part of it, but the actions prescribed by those legal protections can only be implemented if transactions are reversible.

Edit: I forgot to add, I'd also put the existence of ransomware as an effect of irreversible transactions. Prior to the rise of bitcoin, the main economic incentive for viruses was to rent out time on a botnet. Afterwards, the irreversible transactions meant that ransoming data from the computer owner was economically viable.

* "This will decentralize ownership of a currency." Nope, it will move from having government control to having oligarchic control.

-> While not perfect, look at something like DAI. You can buy MKR and then be involved in the process of managing the DAI currency. https://en.wikipedia.org/wiki/Dai_(cryptocurrency)

* "A strict limit on the number of tokens means that the value isn't stolen away by inflation." If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.

-> Not all cryptocurrencies have a max total supply. There is all sorts of experiments going on.

* "These are anonymous transactions." On a public ledger, the most you can do is pseudonymous. Just like TOR, you only need to monitor the exit nodes to map pseudonyms to actual people.

> "Is using monero gui (not through a remote node) safe from tor exit nodes?

> The exit node will see that there is traffic on the XMR port and where the destination > of those packets is (an XMR node). But they won't know where it came from, and with regard to the transaction, they won't know the sender, the recipient, or the amount. Short answer: yes."

https://www.reddit.com/r/Monero/comments/5umdut/monero_safet...

-> Maybe it goes down a rabbit hole of semantics but I think for most people the above (sender, recipient and amount are unknown) constitutes anonymous.

* "Irreversible transactions are a feature." They're definitely a bug. If I buy a TV with a credit card, and receive a box of rocks, I can do a chargeback. If I make that same transaction with cryptocurrencies, I'm SOL unless a fraudster suddenly decides that they really want to make good on it.

-> I think this is pure opinion. I've never charged back something. If it's something you do often you as the user can decide whether it's a feature or bug.

* "We don't need banks anymore." is absolutely hilarious when coupled with "Off-chain transactions solve the throughput limits." If there's an organization that holds money in their on-chain accounts on behalf of others, manages a balance of those off-chain accounts backed by deposited assets, and facilitates transactions between those off-chain accounts, that sure sounds like a bank to me.

-> I assume you're referring to something like Tether or USDC. You are correct for now. Chains like Solana can do 50k TPS today. UST (TerraUSD) is currently securing 2 billion USD equivalent completely on chain. We have the tools to transition but you're correct that we have not transitioned yet.

* "Sure, there's a high electricity cost, but compare it to the entire banking system that it's replacing and it's minimal." This one manages to be both inaccurate and false. A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack. As such, the more it expands in usage, the more much be expended to secure it. We've seen how Bitcoin alone now dwarfs entire countries, let alone the banking sector. And even if the statement were true, it is misleading to compare a payment processor to the entire banking sector. Even if the entire banking sector ran on cryptocurrency, you'd still need somebody to underwrite loans and mortgages.

-> A chain like Solana is running on Proof of stake and uses a fraction of the energy that BTC uses. They currently have around 700 validators and rising fast. Undercollatoralized loans are another challenge which many teams are working on. Keep in mind, the challenge is to replace a system that has been solving issues it ran into for hundreds of years. Cryptocurrencies / DeFi are very new and there is much work ahead.

I understand you're skeptical and have a negative opinion. It's great to be skeptical. Why I firmly believe that there is a big future ahead for these technologies is because the trend I can observe around the globe is a trend towards more technology in everything. Why have a dumb phone when you can have a smart phone? Why have dumb money when you can have smart, programmable money where lending, sending, purchasing can be streamed, fractionalized, automated and whatever else we come up with. Technology has a habit of making tools more performant. I anticipate the same outcome in this area.

I think lot of your comments relate to Bitcoin, and that's a Gen1 cryptocoin. If you have a look at where Cardano (Gen3) is going, you might have a more favorable opinion.

Good point, I missed a few from my list.

* "Proof of stake will save us." Proof of stake embeds the rich getting richer into the very fabric of a currency. It provides a guaranteed net positive return for transaction validation, in the same way that proof of work provides a guaranteed net positive return for electricity usage. In both cases, if the return were not net positive, then transaction validation would not occur, and the "currency" couldn't be spent.

* "Proof of stake is at least better." I'll agree with that one, since it has fewer externalities. But that's like saying that a dumpster fire is better than a car fire. Neither are good, but one of them is less bad. There's also nothing stopping the proof-of-work transaction validators from switching to the next proof-of-work coin, so I don't think the existence of a marginally better alternative will remove the environmental impact of cryptocurrencies.

I thank you for making these problems explicit. I am very curious what the wealth distribution of Cardano looks like and will do some analysis.

Don’t people who play video games screw over anyone who wants a graphics card to render 3D graphics for movies by your logic?

Have you looked into how strike.me is using Bitcoin? It’s essentially a Venmo/cash app competitor that is transacting over the bitcoin lightning network. So you keep your balance in usd but because lightning provides instant transactions when you want to spend to another lightning user from strike they will buy bitcoin at the current price and send the transaction on your behalf or vice versa. What’s cool about this is that you don’t know anything about the other end of the transaction. I believe this is the direction Dorsey wants cash app to go in.

> Don’t people who play video games screw over anyone who wants a graphics card to render 3D graphics for movies by your logic?

To some extent, yes. In those cases, there is optimization between different types of value being found, and different tradeoffs being made. There is intrinsic value in entertainment, both from video games and movies. There is instrumental value in, for example, machine learning model training. The difference I see with cryptocurrencies is that they provide no significant value, either intrinsic or instrumental. It isn't a matter of tradeoffs, but a choice between producing some value at all, or producing practically none.

I will concede that there is some amount of entertainment value that people may get from watching cryptocurrencies rise and fall, but that same entertainment could be found in any other form of gambling.

> Have you looked into how strike.me is using Bitcoin?

Honestly, I try to avoid the new cryptocurrency product developments in the same way that I avoid reading about new homeopathic "remedies". In both cases, while there are variations, the foundation on which they are built is so fundamentally flawed that the end-product will be flawed as well.

This is the first I'm heard about strike.me. Looking into it, their website is incredibly sparse on details, and your comment gives more information than their FAQ. The main piece is that transactions are resolved using the Lightning network. That's the type I had been referring to as actually being a bank with the off-chain transactions, but skirting all banking regulations. With that, I wouldn't trust any money that's held in a strike.me account, because either strike.me or their Lightning provider is functionally a bank but without any regulations.

> Don’t people who play video games screw over anyone who wants a graphics card to render 3D graphics for movies by your logic?

There is a hard ceiling to the number of GPUs of a given generation that even the most enthusiastic computer game player might realistically want to have at the same time, and it can be counted with the fingers of one hand. This is not the case for cryptocurrency miners.

On the other side of things, people and businesses who render 3D graphics for films may not have a hard ceiling as such, but they certainly face diminishing returns for their investment above a certain number of GPUs, and at a certain point they would incur in downright losses. This is not the case for cryptocurrency miners either.

> move from having government control to having oligarchic control.

Government control is oligarchic control. With the bank bailouts in 2007, it became clear the government wants to keep the oligopoly of banks in charge, instead of freeing the resources to companies worthy of them.

Bitcoin makes no change from this perspective. Taleb says "that the distribution of holdings of bitcoin follows a power law with tail index ≈ 5/4, no different from the distribution of wealth in the U.S." [1]

> If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.

Indeed, the demand is affected by speculative bubbles. I hope that demand stabilizes, and that people realize the potential gain from trading against short-term sentiment.

But the supply might be a good predictor of price. [2]

> A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack.

I agree. PoW expends a ridiculous amount of energy per transaction, and gains security by essentially outspending any attacker. But to some extent, Bitcoin developers are at fault here for refusing to increase the block size (thereby limiting the blockchain space and increasing the reward for miners).

[1] - https://nassimtaleb.org/2021/06/bitcoin-currencies-bubbles/

[2] - https:///@100trillionUSD/modeling-bitcoins-value-with-scarci...

Government control is oligarchic control

We have the means (ostensibly) to voice concerns to representatives in an attempt to incite change. Private oligarchies with 0 oversight never act in the user's best interest, and you have no recourse to do anything about it.

> Bitcoin developers are at fault here for refusing to increase the block size

This, of course, is nonsense; they increased it significantly beyond what some reasonable research showed was safe. The current best-available research shows both that a fee market must exist for long-term Bitcoin security (it is unstable in a post-subsidy scenario without either an uncapped supply/subsidy or a strongly-limited block size.)

Neither is the PoW measurable on a per-transaction basis, since current PoW continues adding protection to all transactions that have ever gone before, Lightning exists, and offchain exchange volume (for Bitcoin) isn't totally faked.

Indeed, a fee market exists and should exist. But I would not increase the block space indefinitely, only as long as there are no double-spend attempts that succeed.

The current cost of a 51% attack is roughly $1M per hour [1], which I find an obscenely unnecessary and wasteful amount of security.

[1] - https://www.crypto51.app/