Crypto: The Good, the Bad and the Ugly
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I would go out on a limb and say that if this is web3, I don’t want to have anything to do with it. This is an outrageous waste of resources and energy with awful environmental impact, driven primarily by pure greed and wishful thinking.
Looking at mindset of the VC’s, which are giving this “things” validation, scares the living sh*t out of me.
More and more, implementation of modern ‘tech’ is pushing me towards abandoning the ship and moving into the woods somewhere.
Don’t let me start with NFT’s. It is horrible. The impact of this thing over a lot of my friends is getting ridiculous. I somehow understand “the money” aspect (ponzi scheme, money laundering), but recently I got “the cult” vibes from some of them and closed the door permanently.
So hard “no” from me. I already have a “Metaverse” in which I feel comfortable, it is called reality.
And Web 2.0 is enough for my needs.:)
So rather than saying the same thing over and over on every HN thread about it being a 'scam', let's do something about it then? How do we ban it all to save the planet and stop the scams everywhere then?
Or are we going to complain on the next HN thread about cryptocurrencies and web3 once again?
It's as trusted as the system backing it. Can it be trusted enough that you at least can see when it's being manipulated? Can your current system? Some countries benefit greatly, some maybe little to none.
When every transaction flows publicly that's already a different starting point than what we have today.
The battle is between the libertarians and the authoritarians. The authoritarians want to ban things they don’t understand. They want to bully others with their choice of how they use energy. They want the state boot stomping on the face of humanity forever.
Banning is always an act of violence. Don’t give in to violence.
Such a simple and straightforward argument and instead of having it they'd rather hide it. I wonder why.
Not saying banning crypto is the answer, just saying this is reductive and flawed as an argument
Your argument is flawed. Making a bomb has a narrow purpose to do damage. Banking institutions do dramatically more damage. This is a potential alternative removing middlemen from the equation and operating at a fixed rate.
Proof of Work didn't predict the use of ASICs and was intended for common hardware that would make dominating the pool cost prohibitive. Proof if Stake is one alternative although has its own issues.
Yes, greed is what you are angry at. That is absolutely the problem. If you are truly upset about the environmental impact then moving upstream to energy producers should be your target.
Nuclear is astronomically more energy dense and has made significant strides in zero waste plants and safety features. Then again you aren't complaining about the banking institutions impact on climate which outscales crypto and continues to climb.
You just don't understand what you are talking about. Everything can be abused, but just because it is abused that does not mean it should be banned.
To add to this who is out there quantifying how much energy is used by the data centers, jets, etc, of banking institutions and other institutions driving money to contrast this to? It's almost like some people might want the system that is currently in place to stay that way.
What's wrong about greed? Why not channel it to create a better world?
For every trade, both "greedy" sides see themselves better off, otherwise there would be no trade. This increases the quality of life for everyone.
Care to take a guess where that damage stands?
How much impact does the banking institution makes vs how much crypto makes. Comparison is not a novel concept and is quite literally part of the scientific method.
It's almost like you are intentionally sowing seeds of misinformation and distrust to redirect...or you just like throwing stones from glass houses.
This is crypto's utility and the only thing I've seen crypto being used for seriously that isn't speculation. Cryptocurrency is disrupting the black markets the same way amazon/ebay/online shopping disrupted the retail markets.
Crypto isn't a solution looking for a problem, the problem was found back in 2011 - it's just that nobody wants to admit it. It reminds how everyone used to say that BitTorrent was used for downloading Linix ISOs, but with less self-awareness.
An interesting tangent of your BitTorrent analogy is that, for BitTorrent the protocol, an actually legal use case was found later: it is now used to create powerful ad-hoc CDNs for limited use cases with the novel property of gaining bandwidth automatically as more clients show up. The "Linux ISOs" that actually existed were the earliest incarnation of this, driven by non-profit orgs low on cash, but the concept is now in active use also for purely commercial purposes such as downloading large game updates (World of Warcraft, StarCraft 2 etc. have been using this scheme for a long time now) or generally distributing large software packages to a bunch of clients (I've read about at least one company-proprietary project that uses BitTorrent embedded in some kind of software package distribution system to quickly roll out microservice updates in a mesh made up of thousands of servers). This may mean that it's not impossible for some of the crypto protocols to eventually end up being used for actual benefit in some legal way that is not just again financial speculation. However, it will probably be much less world-changing than the crypto enthusiasts expect.
Nice point about BitTorrent. I'm sure crypto will have some niche adoptions in the future too. Apparently P2P game updates ended up being disabled though. Probably a good thing too - imagine the absolute carnage on ISPs if places like netflix decided to outsource their CDN to everyone's home internet.
https://web.archive.org/web/20160715104054/https://us.battle...
Given how asymmetric many home connections are, and were more so further back, and that using the whole upstream will effectively throttle downstream & there is no reliable way to detect at what throughput you will become a problem, I never saw P2P game updates as a good idea in general. Excellent for those behind the same bottleneck though - two PCs in the same student digs updating the same huge game for instance, saving a second slow download using the orders-of-magnitude faster local LAN - but I don't think that is a common enough use case to be worth the implementation effort.
When paying for domain names or VPS (or anything online, but those are the cases where it's easy), I prefer paying with crypto because I don't want to give my credit card information to some stranger so they can misuse or lose it. This is not illegal and a legitimate use case.
I don't see the value crypto is adding here. If you did have misplaced worries about being a victim to CC fraud, seems like it would be easier to use a prepaid credit card, debit card that you only transfer funds to when making purchases or a service like paypal.
With crypto, the only thing you give out is your public key. No one can perform any fraudulent activity with just your public key. It is of course possible to be defrauded with crypto, but then it will be partially your fault because you did something you should not have. With credit cards, you can become the victim of fraud through no fault of your own.
I do think that is a difference worth pointing out.
Third party payment processor breaches where CC data is lost are quite rare I don't think I've read about one in a very long time.
Sure, I guess you can't get phished out of secrets with crypto like you could with a credit card, but that's never happened to me, and probably won't happen to you unless you aren't very good at detecting dodgy websites. Also, if you fall for those kinds of scams, I have some monkey jpgs I want to sell you.
The real benefit to crypto here is that you can send money, to anyone, anywhere in the world.
Consider a similar hack on a site that accepted Bitcoin instead of credit cards. The fraudulent JS replaces the payment address with the hacker's address and you send your coin to it. There's no getting your money back now.
I know which outcome I would prefer. However based on your username there is probably some bias in your argument.
This makes no sense. The CC holder isn't screwed, they are mildly inconvenienced while they wait for a replacement card. It doesn't matter how many months after a breach it happens - the person who ends up without money is whe merchant who the fraudster used the stolen card with, because they will get a chargeback fee and lose stock (if they sent it out before chargebacks happen).
The vendor isn't screwed in in the cryptocurrency situation. The vendor isn't out of pocket (except for losing a sale). The person who sent the money to the hacked address (i.e you) are. Maybe the vendor will decide to send you the product anyway because their site got hacked, but that would be entirely up to them and not a function of the payment method used.
I can see how it might aid early detection. But I don't see how in that scenario you're safer using Bitcoin. The malware could be on the customers computer rather than the website. It could only be altering one in every 100 transactions. It could not be malware, it could just be a vendor selectively scamming. There are many nice features in cryptocurrency, but consumer protection is not one of them and it's a weird thing to espouse.
Well, if you lose your crypto wallet - you lose your funds. Generating a new wallet is not going to solve that. Whereas losing fiat cards doesn’t result in my bankruptcy.
That’s not really true. The service/product provider can and will ask for more details, like name, address, etc - it has nothing to do with the mode of payment.
The second thing is that crypto or "defi" enthusiasts go on raving about the decentralized structure. Anyone older than 25 should know that decentralization/centralization is a continuous cycle in which neither one is inherently better than the other. However, decentralization by itself is always used as an argument for crypto without further explanation. Red flag to me.
Why a red flag? First, crypto is not decentralized, contrary to popular belief. In the case of smart contracts as the author of the article points out, everything runs on the network (Ethereum for example). That is _extreme_ centralization. Everything has to happen within the boundaries of the network. Sure the execution is decentralized, but there is one and only one protocol that everyone should use. Imagine a world where every messaging app has to use the SMS protocol.
Second, centralization has enormous advantages, which is why we have so much centralization. Do you trust yourself to safely store the key to your life savings or artistic portfolio? I absolutely don't. I don't even trust myself to backup my holiday photos.
You could then argue that there are identity/access services for that, like Coinbase (or whatever equivalent in the future). But as soon as you use a service like that, you are basically creating the crypto equivalent of Facebook/Google/Twitter for single sign-on. To me we are then exactly right back where we started in 2005: building centralized services on top of a decentralized infrastructure. What have we gained? Nothing. Except that some VCs got to execute web 2.0 all over again and get rich from the gains, which they apparently missed out on in the previous cycle.
I have thought so much about this subject, and maybe I'm just too dumb or know to little about it, but honestly everything about crypto is repulsive to me.
Different really.
Money transfer across country boundaries is a big use case. Chinese were using btc to get money out of the country which was one of the original big bumps.
the immoral people are the countries that restrict people's ability to move by restricting their ability to move their assets.
The US exerts its will around the world through the banking system. Sometimes for good and sometimes for immoral purposes. Crypto allows good and bad actors to avoid that pressure.
I'm talking specifically about the Friedman Doctrine and making companies beholden to shareholders in the United States. It's been proven that it doesn't work yet we still have that structure.
Predicting future direction can get people deeply invested in an investigative way but when they hold the reigns they can coerce entities to follow their direction
If the asset has only low liquidity, then it is difficult to sell it at the sticker price and your sale may actually lower the price, but this will not happen for most people with high liquidity assets, such as BTC or ETH and so on.
The slowest part of this are the banks and the clearing houses. They essentially "trust" other institutions to a certain extent and vouch for the money until it officially arrives on the books. You should read up on FedNet
if you are worried about volatility there are less volatile options inside of crypto
I don't "boost" crypto. I disagree that crypto is how we should buy our lattes.
If you live in a country where financial independence and control is not a reality this could be something greater than the corrupt system you are trying to extricate yourself from.
There is rampant corruption in crypto and although I feel easier to see, still a dangerous investment vehicle.
Is this the thing that changes the world? I think it did in some ways already. Is it the final iteration? I doubt it.
As a first cut, I am wholly impressed and I believe it can create something different.
It doesn't matter. Trust makes the world go round.
Even if consensus took seconds to attain instead of minutes, it would still be too slow to maintain the liquidity of even current financial markets. We're talking 2-6 billion trades per day on NYSE alone, often concurrently - as low as 4.6 microseconds per execution. There is no way we'd be able to achieve that with the consensus state of the art.
Only through offline trust and batch reconciliation can we achieve this kind of liquidity.
Crypto is not for buying your latte. It's for the people that cannot trust the system that issues the money to begin with. In your country perhaps it's not an issue. I am sure there are plenty of countries you can see that it is.
This economy-scale decoupling is the dual of each and every one of our very own psychological uncoupling from our own physical worlds, which has occurred because of the computerization of work, socialization, and life itself (the shimmering neuralink dream).
Cryptocurrencies are what happens if you completely decouple the asset price from the physical world. To create the "value" of cryptocurrencies, we purposefully do nothing at all. The asset is valuable only because of the flow of entropy. Not the flow of energy (which generally has some physically useful function). But entropy itself -- a thing that exists only in the "map" of information, not the "territory" of the real world.
Typically, moving entropy around is useful to us, because it actually corresponds to changes in an underlying physical process. Like, your job doing excel spreadsheets for warehouse inventory management is just changing the flow of entropy -- to you, it is decoupled from the physical world. But there is a link to the physical world: when you change a cell in a spreadsheet, so too a physical good moves somewhere else in the warehouse.
With cryptocurrencies, not so. All this entropy is moving for the sake of itself. It's all virtual -- none of it can be coupled with the physical world (by design! if it could be, some physical force could go in and take your crypto-coins).
Now, here's the delusion: unfortunately for us, moving entropy around is actually still coupled with moving energy around. It actually has a tremendous physical effect on the world around us.
Something I've noticed about cryptocurrency people is that they are very, very plugged in. The evangelists never have a physical job; always a computer job, and they are always online, and believe in being online to the greatest extent possible. And I think, actually, there is a very obvious reason for that.
Asset prices have seen massive inflation in the last decade due to ZIRP, asset purchases by central banks on an unprecedented scale. The risk free rate has been zero for far too long, and this has directly led to people moving into more risk in order to try to get a return, any return at all. So asset prices, particularly risky speculative asset prices, are no longer judged on their fundamentals like cash flow, but are tightly tied to monetary policy instead. This is starting to feed through to prices of food and other commodities as price inflation as well. So now central banks (and the Fed in particular) have an invidious choice - crash the stock market and save the real economy, or crash the real economy via inflation and save the stock market.
The Fed just suggested they would take away the punch bowl from assets a little earlier than planned, so the party is over and people are scrambling for the exits - that will continue this year. This impacts tech stocks which are not making money and not likely to make money, and speculative assets like bitcoin which money has piled into due to Fed policies.
We've seen this story before, we know how it ends.
1. How does this story end? 2. Which Fed announcement are you referring to? That rates will be raised? What do you mean the party's over, that speculation will decrease and prices will drop? 3. "This impacts tech stocks which are not making money and not likely to make money" You mean that this will impact stock of tech companies which are not profitable, since their stock values are speculative, and not that tech stocks won't make money, right? 4. So that means the Fed has chosen to crash the stock market and save the real economy, right? And by that statement, you mean that the Fed will curb speculation in order to stop price increases in food and other commodities? 5. How and why does rises in prices of risky speculative assets trickle down to rises in food and commodities prices? Is this because some part of the market gets out of the high risk assets and start bidding up lower risk assets? Is this true in general, that price increases due to too much speculation in one part of the market will eventually spread to everything else?
2. For the last few months and more strongly recently the Fed has been signalling that they are going to taper stimulus, hence the rocky ride in the US stock market (driven to spectacular highs over the last decade by Fed purchases of treasuries and even corp bonds).[1]
3. US stocks in particular have not been valued on fundamentals in a long time - the indexes are propped up by a small group of tech stocks which are very overvalued, even world indexes are imbalanced in this way (50% US, 2% Apple for VWRL for example).
4. Well so far, they will doubtless have some wobbles on the way and may even reverse position completely as they have in the past (see 2013 and 2018 withdrawal of QE below [2]). This prevarication IMO just makes the eventual shock when they have to withdraw it even greater, and/or devaluation of the currency worse. They may choose to devalue the currency further so that nominally stock prices stay level, but that leads to inflation...
5. I don't think the two are linked, save that commodities are also linked to monetary and fiscal policy which has bid them up to unsustainable highs and led to unrest around the world (after 2008 and now again as price inflation rises). Sorry if that was unclear, I meant the Fed policies were starting to feed through to inflation.
To be fair to cryptocurrencies like Bitcoin, this is precisely the sort of market distortion and financial repression it was created in reaction to and attempts to solve, it's just unfortunate it was unsuited to use as a currency and has been taken over instead by speculative carpet baggers intent on fleecing others.
[1] https://www.reuters.com/markets/europe/wall-street-closes-sh...
People getting into crypto in fratboy style have gone on the rollercoaster and often are pushing it to their desires.
In the history of money (I'm talking U.S. at this point but other countries have their story) this carpet bagging happened earlier on... we've just been using it long enough that the story was forgotten and long before our time.
I'm referring to the Gold Reserve act Executive Order 1602 of 1933 where gold was required by law to be turned in at an exchange of $20/oz and a year later jacked up to $35/oz an ounce.
This decoupled the Federal Reserve from backing credit with gold, etc. The story continues but you get my point.
https://en.m.wikipedia.org/wiki/Executive_Order_6102#:~:text....
And the secondary thing you need to keep in mind, when the money supply is growing at a rate faster than the real economy, and the value of that money is pushed into either consumption(CPI) or investments. But because the Fed explicitly outlaws more than 2% inflation, it must therefore be in investments. Those investments can be anything, from houses to stocks to tulips to receipts of monkey jpegs.
The third thing you need to realize is that once an asset is above their 'true' value, there is no rule that better assets will grow more. What actually happens is those which have the least supply and largest marketing raise the most. So you see houses go up, you see buyback stocks go up, you see collectables go up.
So next you need to look at, how is the money supply going up? The money supply goes up when interest rates fall. Wealthy people who have good credit take out more and more money to buy more and more assets. As the wealthy don't use this new wealth to consume, as they already consume as much as they want, inflation doesn't occur. This is the savings glut of the rich[0]. When this happens, because we don't get inflation, this pushes the Fed to allow even more money printing to occur to allow inflation to hit their 2% target. It becomes a vicious cycle of more wealth inequality begets more interest rate reductions.
But with interest rates at 0%, the Fed is no longer able to move the money supply anymore. Now they need to do it directly. When they were doing it indirectly, they had that indirect buffer, "that's just how the way the world works", but when they do it directly, suddenly they have accountability. So instead of 90% of new money going to the wealthy, maybe only 50% goes to the wealthy and 50% is spread around to the non-wealthy.
So once the Fed starts Monetary Policy 2, now we see inflation. And once inflation kicks in, the Congress and others will see the hurt that is occurring to normal people, and they will push for even more policies that trigger inflation even more. This is what happened in the 70's.
So the Fed needs to put a stop to the bubble, just as they did in the 70s, so they will raise rates. Those raised rates will push the balance to currency, and money managers will work out that fact, and more a bigger and bigger percentage of their investments into this area. This will crush all of that extra value, and boom will go the inevitable cyclical money velocity bubble. Houses will drop down to their fundamentals, stocks will correct, monkey jpegs will crash to 0.
The big thing we need to watch as this occurs is what happens to things that we thought were not correlated, but ended up correlated based on everyone buying into the bubble. What happens when people pull their broad index funds? When the index funds are net negative, how low can the market go? Can the Fed have the precision to crash the Bitcoin market, to slow down the housing market, and not allow the stock market to fall 90%? I guess we'll see.
[0]: https://scholar.harvard.edu/files/straub/files/mss_richsavin...
Of course, this virtual space is coupled with physical space, by hugely centralized entities called exchanges. To get your money across the border, you need to deal with them. In that case the physical value you can buy with your cryptocurrency comes about from the exchange, not the currency.
Value is a physical thing, not a virtual thing. That’s because we live in the physical, not the virtual world. But we’ll readily delude ourselves into believing that’s not the case.
An exchange is merely a full node with a user interface.
To operate as an exchange there are certain KYC/AML rules they must follow.
Setting up a node takes about 20 minutes and then letting it sync for a couple hours to a day depending on your internet.
You can send crypto with as high or low as a fee as you want...it's just a manipulation of the queueing metric and which transactions miners add to the chain. With exchanges they set that for you.
"Coins? Why would I want those instead of food? I can't eat coins."
To which the killer adoption feature was governments saying "Well, you have to pay taxes in coins, so you need some" to bootstrap & put a floor in under the system's value.
Crypto doesn't appear to have had a "tax" moment yet.
Is there anything I can only do with Bitcoin, Ethereum, etc? Which is to say, if the value of both absolutely collapse (to some fraction of a cent), who would still be buying, and to do what?
Note that in the latter case, the physical money doesn't even change hands - it's all in a ledger, but the ledger is in people's heads. In fact, you could say it's a proof-of-work system, since making the stones is expensive in terms of amount of effort spent, even though they don't have any utility as such.
E.g. If someone said "The value of the cowrie has crashed!", then how long did it take for everyone to find out & the cowrie economy to reprice itself?
I'd hazard we deal with much more sophisticated, capable, fast, and aggressively predatory market participants now.
Cryptocurrency can never be an abstraction of some physical process.† Therefore, I would argue, it can never be useful to us.
† Well, technically, it actually is an abstraction of a physical process: a heat engine with 0% efficiency.
But that wasn't sufficient alone to give it utility. And without utility, there is no buyer of last resort, and no floor under value. Hence taxes.
Fiat currency removed the proof of work, and replaced it with proof of stake (-ish?), but retained taxes.
You could probably make the argument that "buy NFTs" or "run dApps" are the beginning of crypto's tax moment, but both seem a pretty small scale to base value on.
IMHO, that's the entire point behind dApps: a crypto-native version of taxes that puts a value floor under the cryptocurrency. If you have a solution that can only be solved by dApps, and you need cryptocurrency to run dApps, then there you go...
The value of money is derived from moving against thermodynamic equilibrium. Cryptocurrency’s value comes from moving towards thermodynamic equilibrium. The conversion of work into heat — not heat into work!
I’m not talking about taxation or apps. Those are things built with the axioms of crypto-evangelism. I’m talking about the physical fundamentals underlying those axioms.
The thermodynamic direction is less important than the fact that people didn't want to do it.
But proof of work was always a transitory, bootstrapping phase. Even among the crypto evangelists, I can't believe anyone saw a long-term future in that.
This is a very important point, that I’ve also been saying for a while. Crypto is purely digital, almost every application that goes popular is fully digital, and almost no ideas have any connection to the real world. That’s gonna cause problems one day…
Do you have a source for this? I find it hard to believe that high stakes gambling is hindered by banking systems.
The blog post itself also touches on this, slightly, by asking what the connection between compute and money is. Is compute just a proxy for money? Or, will in the future money become increasingly a proxy for how much compute you have at your disposal. The latter surely seems unlikely, but with what you said here, it is not out of the question, especially if people increasingly associate pleasures with things that require compute.
Nobody requires anyone to use any website that they don't want to (except perhaps irs.gov). You are always free to ignore it, like you are free to ignore Twitter.
Giving people more options rarely makes the world worse.
I have paid for Lady Gaga albums.
Quality of content is not quite "subjective" in general. Perhaps in entertainment.
Quality is of course subjective, but there are certainly examples of things which are popular and trashy, or cost lots of money and are not high quality, and even some examples of things which are popular and trashy and cost lots of money but are not high quality (Melania Trump's interior design comes to mind).
Web3 is Centralized: https://blog.wesleyac.com/posts/web3-centralized - discussed here a few days ago: https://news.ycombinator.com/item?id=29766497
Even if it were decentralized, the moment a technology appears to be decentralized, we do everything in our power to add a centralized (management) layer on top (e.g. github). That layer is what the masses will flock to and eat the lunch of the original technology.
If you have a technology that is already centralized which you try to decentralize it will be nothing more than a niche existence (that might not be a bad thing. See centralized Twitter vs decentralized Mastodon as an example of this)
"Distribute", is more practical than "Decentralize" because it lets you articulate the players and don't have to worry about sybils.
The funniest thing right now is the noisy people into NFT "art" who get their work stolen and are appealing to authority in meatspace.
Also, there are benefits to even partial adoption of Web3 by applications. For example, providing a decentralized ownership graph gives the community more power to fork if the centralized server-provider abuses their power, for instance.
See what happened when Steem was seized by a billionaire to be made into a corporate appendage:
https://decrypt.co/38050/steem-steemit-tron-justin-sun-crypt...
Token ownership, that could not be censored by the new owner of the application, is what enabled this coordinated defection.
I could maybe buy the idea that we'll move to an internet where every site nickel and dimes us. But is it more likely for the world to adopt crypto or is it more likely for our Google and Facebook OAuth accounts to support a non-chain wallet api? The crypto cut seems like it will always be more expensive as well.
I personally don't believe it is, but some people seem convinced. Also, there's a lot of money to be made for the early entrants who are promoting this idea.
But on a serious note, isn't this how everything works these days with inflated IPOs to reward venture capitalists?
The arguments against are these beaten dead horses that many within crypto know already and frankly not well versed.
NFTs were an unenforceable joke, integrating the physical world and the digital world doesn't exist (yet?), there are alternatives to the PoW model in use, legal aspects and oracles in the Ethereum network need to be addressed still...what about the DAO reversing the hack which was essentially a loophole in the contract. When loopholes happen in current legal systems it's frowned upon and demands precedent. How about the ridiculous pump and dumps, the toxicity that is speculation amidst many other things.
Governments didn't pop up in one day whole cloth and this will take iterations as well. There is some evolutionary approach to things where what "theoretically works" is tested in reality and deduction is provn out against induction.
There is more transparency in some ways, a lot of confusion in regulation, and misinformation galore. Look no further than the current dealings in Wallstreet to see that existing systems are not currently solved with digital money having been tested for decades now.
I think there are many deserved "good, bad, and ugly" articles to be written but this one was lacking in depth, context, and what I feel is missing most frequently...contrast
"NFT Art" is a stupid implementation of NFTs that probably mostly exists for money laundering.
I always thought of NFTs as a good backend for things like concert tickets or other kinds of "club memberships". This would not really have the enforceability problem, at least not more than traditional tickets, while some new features are added.
If someone is enforcing the NFTs then that someone could just as well store the data in some SQL table, since there is exactly 0 decentralisation in that case
But there is no way to prove that the issuer is actually the person who "owns" the event. This all goes back to the oracle problem: Unless the proof exists on-chain (like the currency value of a public key), it is useless; there is still an "oracle" outside the chain that must provide the proof.
This is why NFTs are not useful.
NFTs in their current hype cycle with art is a shallowly thought out implementation.
It requires a governing body to source the originals but then you essentially have a coin at this point.
The primary use case for crypto is simple: (1) People buy crypto because it keeps going up in value (2) It keeps going up in value because people keep buying it. (3) For why people keep buying Crypto, see (1).
That's the logic of a Ponzi scheme. All previous Ponzi schemes failed because either (a) sooner or later the scheme runs out of new suckers, and/or (b) the authorities intervene and shut it down, and/or (c) The founders cash out and 90% of the money just disappears into thin air.
The truly fascinating thing about crypto is that neither (a) or (b) appears likely in the near future. It's a Ponzi scheme with fungible shares.
For (c), as with other Ponzi schemes, the founders make a lot of money, the later entrants lose a lot of money. Sooner or later, the founders of BTC (for example) will start to cash out. At the moment, they seem to be cashing out gradually, so as not to cause a crash in their remaining holdings. That is one reason BTC prices are so volatile.
At the same time as the BTC founders are trying to find the optimum point in their cash out equation, there is another use case for crypto which continues to drive demand: crime and money laundering. Crypto is a great way to move money between jurisdictions. For some criminals, it is well worth the risk of volatility.
Ponzi logic and money laundering logic will continue to drive the price of established cryptos upwards. I suspect it might be quite a while before the game stops. That makes cryptos like BTC an interesting short term speculation. But to paraphrase Gurf Morlix: stay in too long, you're gonna get cut, and you're gonna bleed.
Who are these "BTC founders" that are cashing out gradually? The only actual founder of Bitcoin, the anonymous Satoshi, has not moved any BTC since they disappeared from the internet: https://whale-alert.medium.com/the-satoshi-fortune-e49cf73f9...
I may not have all the data, but is there any evidence that at least one observable price drop was caused by someone's cash-out e.g. in BTC?
Tell me you don't understand Bitcoin without telling me you don't understand Bitcoin.
No, that's not the logic of a Ponzi scheme. Crypto is not a Ponzi scheme.
Ponzi promised a 100% return on investment in 90 days. He got money from 15,000 investors. He needed 30,000 investors in 90 days to pay off the original 15,000. By the end of the year he would have needed 240,000 to keep the scheme going. By the end of 5 years he would have needed 16 billion investors. Crypto has been around what, 14 years now? In 14 years he would have needed 1080863910568919040000 investors.
Ponzi schemes don't collapse sooner or later, they collapse sooner. Ponzi started his scheme in January of 1920 and it collapsed in April of 1920.
Crypto is just a normal speculative investment. People buy it because they think someone else will pay more for it later. Same as speculating in gold, Amazon stock, or MTG cards over the last 14 years.
So? It doesn't pay a dividend. The only way people have made money off of that over the last 14 years is to sell the stock to someone willing to pay more for it than they did. Well I guess you could loan it to a short seller, but for the most part, it has just been a purely speculative asset, same as crypto.
>> gold has both utility and intric beauty
Crypto has utility as well, as the parent post pointed out. Many people suspect that for both gold and crypto, their utility value is tiny compared to their speculative value.
That's the problem. "An ecosystem of tokens that appreciate in value all the time". The perpetual motion machine of finance.
Bitcoin has actually been able to pull this off, more or less. Etherium, maybe. The rest, not so much.
The NFT thing is winding down. NFTs are basically Axie Infinity, OpenSea, and the little guys. Axie Infinity is crashing. SLP is down to $0.02, from $0.35 at peak a few months ago.
OpenSea is hard to measure. There's wash trading to pump up prices.[1] NFTs have no overall market price. NFT markets stall, rather than crashing - high asking prices, no sales. There's a lot of that on OpenSea. "So far, most new NFT collectors on the secondary market have yet to recoup the costs of their purchases"[2] In other words, the issuer makes money, but the suckers who buy NFTs lose. Many of them don't realize they've lost. Someday they will find out, when they try to liquidate their Bored Ape Yacht Club collection.
I kind of liked the idea of NFTs as part of an asset portability system for virtual worlds. Goldman Sachs even endorsed that. I was thinking of this for items in the US$1 - US$100 range, like game items. The transaction costs would be too high if it took a blockchain transaction to walk through a portal, even for the cheap blockchains.
Some big part of all this is probably going to come apart in 2021. Definitely Axie Infinity. Maybe Tether.
[1] https://www.theverge.com/2021/9/15/22676075/opensea-insider-...
[2] https://www.ft.com/content/e95f5ac2-0476-41f4-abd4-8a99faa77...
This is theoretically possible on Zero Knowledge rollup L2s (two strongest contenders are zkSync and StarkNet) if they achieve sufficient scale but definitely wouldn't work on monolithic chains (not even relatively cheap ones).
zkSync says they don't have their test net for smart contracts up yet. StarkNet is in alpha.
For this problem, it's OK if change commit verification takes a while, as long as it's cheap. If you move your no-copy NFT from grid A to grid B, grid B can verify that you own it, even though the current state is on grid A, and let you show it on grid B. A slow check later by each grid can prevent persistent dual copies. It's like catching double spends later. It's consistent eventually.
This is one of the things NFT proponents talk about - being able to move your truly-owned asset from one grid to another. However, so far there seem to be zero implementations. NFT land is tied up with make-money-fast right now. Potentially useful low-cost applications aren't getting done.
And only 0.665 % earns money on OpenSea. Concentration of it is way less, you can just crawl the collections. 5 collections dominate all the rest and only the first 266 collections earned > 0 eth. The other 40 k. earned 0 eth. It's obviously not a way for an artist to earn any money.
Script to reproduce ( linqpad): http://share.linqpad.net/wkbrut.linq
Beyond the hype are the numbers :)!
Edit: Didn't contain the script.
I tried searching for familiar collections and couldn't find any of them:
- Corruption(*s) - Bored Ape Yacht Club - Lonely Aliens Space Club - NFT Worlds
You also have neither entries for the major Art Blocks series (Curated/Playground/Factory) nor any of the hundreds of individual artist collections contained in them.
So, I think your crawl might be off.
Additionally, individual artists tend to not use OpenSea but instead use Rarible, Foundation, and SuperRare (or skip ethereum altogether and use something on Tezos like fxhash).
OpenSea is still the biggest NFT market and had an api, that's why I checked their api.
Edit: sorry, the linqpad link was to pastebin instead of the source. Adjusted it
the association of wealth with "playing" is very much a metastasis of the old system masqeurading as some sort of innovation. this is not wealth creation, this is zero sum games robbing orphans and widows. be my guest "playing" and feeling smug about it, but lets not rewritte the meaning of words
actually that strongest hint that crypto as it stands is an ugly distraction is that there is no real wealth creation associated with it. as in: a real economic activity (that is kosher) that has been enabled by it while it was prevented by fiat currency systems
yes, that is what I mean by "metastasis of the old system" but there is much more nuance: the overfinancialization of the economy is a recent phenomenon and while it is not black-and-white to separate from actual underlying intermediation needs I seem to recall somebody claiming that 5% of the current financial sector is actually useful. The rest is parasitic wealth transfer, essentially exploiting governance failures. With crypto there is no real economy so it is 100% parasitic.
I don't have a problem with an entertainement oriented gambling industry provided it is informed, discretionary and it does not become an abused addiction. But ideally in a society that has real problems to solve (health, education, environmental degradation) you want to harness the speculative instincts of both finacial system end-users and intermediaries to really perform "God's work"
The poor still take the highest risk. As the poor buy more into it , the rich get richer as well. Maybe the poor get richer but how much money can they lock away? What stopped them from investing that money in the stock market before crypto was around?
I fail to see how this creates a new economy. It's the same economy just wearing a new skin. The players are the same players. The winners are the same winners with the same luck of making it big or not to inspire others to get into the hype.
And you’re right it is the same economy, just open to all, and with way more fun ideas like flash loans (impossible in traditional finance), no-loss lotteries, decentralized automated market maker exchanges, tokens you can stake for other tokens that represent the interest and the principle which can then be traded again, etc.
Should it be allowed? Up for debate. I’m strongly against any rule that says “you’re too stupid, this is for your own good”.
I'm skeptical it's an overall social good to remove guard rails that prevent sophisticated sellers from fleecing unsophisticated buyers (say what you want about the SEC, but they do enforce some rules), but I agree the current scheme prevents all people from equally freely investing in all opportunities.
[0] https://www.investopedia.com/terms/a/accreditedinvestor.asp
So far this stuff has circumvented the accredited investor regulations.
1- Anything can be abused, just because something is abused that doesn't mean it should be banned. Want to stop child abuse? Don't ask people to stop having children, go after abusers!
2- The fact that governments can print money whenever they want is a scam and some clever people want to be free of it. Demanding this is not a crime!
3- If you don't like it, then don't use it! It is simple as that.
4- If you don' know what decentralized means, you may start from what democracy means. And after finishing that, you should understand that when 51% of the population wants to ban the remanining 49% of people to live, it's no longor called as democracy, but fascism.
5- In order to understand crypto, you have to understand how paper money works and essentially how the world works in the first place.
Kinda disingenuous to frame crypto as a life essential to 49% (??) of the population.
Also when most crypto users are aiming to avoid taxes while participating in the same society as the non-crypto majority. You need public infrastructure for things like the “internet” to function.
I believe this scenario fits the definition of "democracy".
> Democracy (Greek: δημοκρατία, dēmokratiā, from dēmos 'people' and kratos 'rule'[1]) is a form of government in which the people have the authority to deliberate and decide legislation ("direct democracy"), or to choose governing officials to do so ("representative democracy").
1. If you study the history of technology, it becomes pretty clear that it often take decades or even centuries to see the full impact of an invention. Declaring the ultimate value of a technology barely a decade after it was invented is just ignorant. It's only been about 30 years since society became "networked" and it seems clear that some form of "Internet currency" is inevitable. If you had judged the impact of gunpowder, the printing press, or photography 10 years after their invention, you'd obviously be quite mistaken. We might not see the "killer app" (whew that's an old expression) for blockchain for years.
2. A lot of crypto-critics seem to focus on the people in the crypto world (scammers, NFT sellers, etc.) and the things that they supposedly do wrong, but then apply these criticisms to the technology itself. This is a flawed approach for obvious reasons, but I also understand it, as the crypto world is full of hero worship and hype machines. If you're interested in this tech, you have to learn how to ignore these things.
3. It's somewhat unfortunate that blockchain and crypto have become dominated by finance, as it drowns out discussion of other use cases. Hopefully, this will fade into the background more as the technology matures and is adopted by a larger percentage of the population.
It takes decades to see the impact. It almost never takes a decade to see the use, and that's what people are deriding. Crypto doesn't really solve a problem that needed solving and it is often the wrong solution for many things it's used for. All at a very high cost.
Cryptocurrency hasn't really brought much in the way of new technology to the table.
You're saying it's useful because it's in use because it's useful.
If you study the history of technology, its ultimate impact is never manifest within a decade. It took decades for the Gutenberg Printing Press to spread around Europe and centuries for the consequences to see be seen (Protestant Reformation, newspapers, birth of the modern media, on and on.) This is the case for pretty much every other invention.
> Crypto doesn't really solve a problem that needed solving
Again, this may be because the problem hasn't arisen yet or isn't obvious yet. We have only just begun the era of networked communications.
The second bit worth noting if you think crypto is more to follow the Gutenberg path, is that investing in him turned out to be a terrible decision: he made things which were tangibly useful from the start but lost money doing it...
It did not take years for it to be seen as incredibly useful and it was clear fairly early what the use for it was.
Saying the problem isn't obvious yet is bizarre. The printing press's use case was apparent immediately, even if the extent of its impact wasn't.
You're conflating impact and problem space conveniently.
There are clear use cases for blockchain which have been laid out ad infinitum by other people. There are also downsides. This makes it pretty much the same as any other technology, e.g. the combustion engine.
There are only two periods of time that can be commented on.
From inception to the present. From the present to future predictions.
The former hasn't shown a use that can't be solved better by other methods.
The latter hasn't shown any either.
The printing press on day 1 had a mission statement that had no equal. So did the combustion engine. It did the current thing faster and better.
I don't know why this is so controversial, but I suspect it's because of #2 in my original comment.
Again, I didn't say that crypto will become extremely useful and important in the future, but simply that declaring it useless or unimportant now is foolish and unlike virtually every other technology.
"The future is already here – it's just not evenly distributed." - William Gibson
It is, but that was because far fewer people were well educated so they didn't really see the need, and innovations tended to be physical objects that can only travel as far and as fast as the transport of the time will take them. Today most people in the developed world are very well educated (relative to the 1600s) and things based on computers travel at pretty much the speed of light. Things, particularly in tech, obviously move faster now.
Crypto solves the same problem.
Crypto doesn't solve this (except in very limited circumstances where recipients can buy everything they need with crypto). It's just a layer in the middle, and as it's a layer which requires additional exchanges, it's not more efficient except where it provides a loophole in foreign exchange regulations or where parties with a vested interest in crypto have chosen to subsidise the exchange costs.
The tech is interesting, but the full impact of the invention isn't yet discovered. Focussing on the scamminess of the loudest players in the current tech environment is unfair to the tech. But you can't critizise the current state and environment of said tech, because it's full potential hasn't been discovered yet.
The "we haven't found a use case yet but it'll happen so keep doing it till a use case is found" arguments are so common and nonsensical
I'm not saying crypto is some fad or whatever, I'm just not convinced there's anyone into it that doesn't just want to get rich.
That said, I think there's probably a good idea in there though. AWS, GCP or a niche player could essentially add a donation API to their serverless platform. This would create a similar promise of a service that can be directly financially maintained by users with some added benefits like support for closed source, and a protected execution environment.
requirements:
- low transaction costs
- low volatility
- many places where you can pay with it
- secure
- privacy
- no tax problems
- fast transactions
- handle fraud
- scalable
But that is a big if. Bitcoin fails at almost all of the above points. The only coin that comes close is Nano (I've got no investment in it). They solve fast, secure, scalable and cheap transactions, which I think are the main problems right now. Read their whitepaper, it is interesting. Whether they can solve the other problems remains to be seen.
The only advantage to cryptocurrency is the concept of decentralized trust. A blockchain only has value in situations where no central authority can be trusted. If Nano solved every problem on your list the result would be what we already have, but with a distributed network of coin owners in control of it instead of credit card companies. That just doesn't seem like a very compelling benefit [0]
As the article says, I'm sure there are enthusiasts who are very interested in the technical problem of creating a global payment network. Unless they can do it for roughly half the cost of what we have now, it doesn't have a lot of practical value.
[0] I am aware that there are people who are locked out of financial systems because of corrupt governments, etc. But if 80%+ of the population can use the existing systems, they aren't going to go through the trouble of switching to a new currency for the sake of the 20% that can't. And even if they did, it wouldn't be long before the same corrupt governments found a way to lock certain people out of the new system
I agree with this. And that is probably what will happen, but that wouldn't be a bad outcome. See it as one way to break a chain of middle man's.
Another (more likely) way to push down prices is with regulation. But to do this on a global scale is also very difficult.
And to be fair, EU regulations have very successfully brought these fees to about half of the typical market-driven price we see in other parts of the world. I'm not saying they cannot be decreased even further, and the EPI was created specifically for that, but you cannot deny the situation in Europe isn't too bad.
Providing one-way, immutable money transfers is inherently cheap. Even SEPA transfers, which are reversible in some cases, are incredibly cheap. As you listed yourself, if you need to handle fraud with low transaction costs, that instantly discards permissionless blockchains; you're essentially going back to a centralized, federated network of trusted peers.
But none of the cryptocurrencies are there yet, and maybe it will never happen.
I don't think big businesses can just disregard the cost of fraud and other payment incidents. On the other hand, subsidizing small businesses makes sense: for good or bad, there's an increasingly anti-cash movement in some European countries.
- V. costs nothing to exchange a bill
- V. link to a real economy so little volatility (except when the real economy implodes)
- V. accepted everywhere within a currency zone
- V. mostly secure (ofcourse theft is as old as humanity)
- V. private (only your counterparty knows about it)
- V. fully integrated into financial accounts / tax systems
- X. fast (local) transactions but remote remittances outside a currency zone a serious problem (expensive, slow)
- V. counterfeit tech very sophisticated
- V. you can print as much as you want
The major flaw of cash is actually linked more to the international system of currencies (which underlies many more socioeconomic problems)
https://bam.kalzumeus.com/archive/bank-transfers-as-a-paymen...
It can also come in the form of something like paypal. Paypal could reduce their rates to almost zero. If everybody then uses paypal we achieved our goal. But for that to happen paypal needs to become a monopoly, and once it is it has no incentive for low prices.
Note: I meant privacy as in private for consumers. With bitcoin everybody can see all transactions. I (and most people) don't really care that the government can see your transactions for tax and anti-fraud purposes.
The idea that crypto is inherently wasteful is inaccurate. PoW is extremely energy intensive, especially without L2s, but it need not be the only consensus mechanism for the future of these protocols.
* Popular payment processors like visa and mastercard have become moral arbiters. Shutting down one's ability to donate to Wikileaks was a huge wake up call to the world. They've only ramped up efforts since then, blocking the purchase of marijuana, pornography, and donations to many organisations. It is clear that the centralisation of power in this space is not in the best interests of us.
* Banking infrastructure is stuck in the 90s. It should never take a business day to settle payments. It should never take several business days to settle cross-boarder money transfers. It should never cost [$x|3%|whatever exorbitant exchange rate the bank is offering]. Payments should never be tracked by government agencies as a matter of course. Payments and transfers should be instant, virtually free, and private.
* Confidence is low in government management of currency. Modern Monetary Theory appears to be winding its way into policy decisions which is basically the financial equivalent of formulating a nation-wide strategy based on moon crystals and horoscopes. Predictably, inflation is creeping up, and the desire for a stable store of wealth is increasing; or at least a hedge against inflation which isn't already inflated stocks.
NONE of these drivers above can be completely satisfied with crypto yet, but I am amazed with the progress it has made to date, and I have no doubt these will all be solved in time - far ahead of the conventional banking industry.
I agree with the author that some interesting tech issues were solved but apparently this still doesn't lead to anything legitimate and more useful than the non-crypto version of whatever problem you're trying to solve.
During my time in tech I've only knew two people who held crypto. However, I've know a lot of people(myself included) who got into crypto, got dissilusioned by the promises, and after seeing that nothing they promissed actually arrived left.
5 Years ago I've heard how crypto is going to be a killer usecase for e-commerse, banking, and even cloud computing but no actual work was ever done to acomplish these goals
And from a developer perspective, if game engines were written in a way which made the holders of a certain token impossible to exclude from the game or possess items whose properties couldn't be adjusted for gameplay balance or aesthetics, that would be a bug, not a feature.
Think about it, you could implement items in a game using NFT tech OR a database: would the players notice anything functionally different in the game? If not: why the big deal about NFTs in gaming?
"Trust us, your items are safe with us!"
> the only difference (which doesn't really add any utility to games) is the idea of this database being public.
On the contrary, this does add utility. By the database being public I: A) Have reasonable guarantees of ownership of my items B) Can use my high value items across multiple experiences
FWIW I can definitely see an asset store like model if that’s what you mean. Where games that share an engine can share developed assets. But you need to look at how that works out in practice in terms of how much integration cost there is, gamers tolerance for asset reuse and actually how broadly applicable it is between different games. And even then extant asset stores already work perfectly well so it’s not clear what putting it on the blockchain and presumably some decentralised storage actually provides.
Possibly the big fan-base ready to play a game where there can log in easily and use some of their hard earned collector items.
True, with social networks it played out differently, but social networks is a rare category where the almost only thing you care is having/finding all people you know, all other features are kind of irrelevant. Joining another social networks adds close to nothing (as long as you can chat with those people) and only add friction. A bit like money… the more uses it, the better, it doesn’t need to do many things, the very only thing you care, is all people you know using the same.
Many other things work similarly, but no way in that extent. Mostly you care a lot more about additional features. For example Airbnb works better the more people use it, but you also care about important features, and you would switch to another similar service if it was a lot better and has a reasonable amount of choice/venues, as you don’t need everyone around you using it (which is the case for money and for the main social network you use… at least for the masses who want the fastest solution on most days)
If you're writing a game and trusting data from another game...you have a trusted authority and you can just use traditional apis, no?
What’s the incentive for the developer to do this? And more importantly how does my M4 rifle work in an epic fantasy role playing game?
The problem with your first suggestion is that you do an awful lot of work to map another games NFTs to your own items but presumably get none of the money from them. You also have an immediate balancing problem. And the better way is to just make a game that those players want to play, which is how game populations move around now anyway. The only way I can see supporting external NFTs as worthwhile for a game developer is if they’re already table stakes for taking part.
Or say you support BAYC, all that work to address 10k potential users?
None of the things you mention are happening or likely to happen.
Technically, most games aren't interchangeable with assets. There's a wide array of asset formats and bespoke optimizations. It's very hard to take something from one game to another unless they share an engine.
The alternative is the second developer would need to make a corresponding asset for every other one. Though they won't get financially rewarded for it and there's no guarantee that the users will buy the future assets from them instead of elsewhere.
I see this suggestion come up a lot in crypto circles and it's almost certainly always from people who have no experience with game or other real time development, trivializing the cost of asset creation.
The metaverse version of this is NFTs that drag around their own code, art and so on. That can run in a sandboxed way and there are protocols for game entity communication and so on. But this level of interoperability is a pipe dream outside of games like Second Life.
Right, but what if you consider it a bad thing to introduce an economic incentive for other people to burn the planet down?
This is beyond a matter of personal choice, until and unless we all get our own personal planets.
I don't really use Ethereum, but I commend the devs for recognizing the problem years ago (before I was even aware of it) and taking steps to remedy the situation.
In the short-term, yes, it is incredibly wasteful (though recent changes have disincentivized mining somewhat, even with a bit of protest) and there are many other cryptocurrencies which are already proof of stake available. This year, hopefully, Ethereum will finally move to PoS.
Hybrid systems like Ethereum, bootstrapping with PoW and then switching to a PoS system afterwards seemingly solve this problem, but such a switch implies that the social structure around the blockchain is centralized: Ethereum is technologically decentralized, but politically very centralized (you can also see in their way of handling the DAO “hack”, violating the Ethereum protocol and rolling back the blockchain) and that's why the developers can just go “screw the miners and their hardware, we're moving to PoS now”.
You couldn't do this kind of switch for bitcoin, because it's really decentralized, with stakeholders having deeply unaligned interests.
Ethereum has many problems, which prevent it ever competing with bitcoin as money. It can do NFTs and games, sure. However, there are many competitors who do these better, like BSC and Solana, and other more centralized blockchains. So, in the end there is really no place for Ethereum to be competitive in.
These assertions that it is clean are not based on anything more than wishful thinking.
I like(d) everything else about bitcoin even though it's dated technology now, but proof of work is unjustifiable, the incentives create an extremely negative externality that aren't offset by its potential as borderless, uncensorable money. Especially when other blockchains avoid this issue entirely.
I just don’t agree that it can be dismissed as easily as the article does there, by saying that you can choose not to use it.
We only have one planet we share and other people’s choices are also important.
In a system centred around the premise that money is the only thing that motivates, for thing A to beat thing B, there has to be more money to be made from doing thing A. I don't think the case has been made here (though perhaps it has elsewhere) that PoS can beat PoW on these grounds -- are there sufficient incentives to make that shift?
I have the feeling that if you inject money in any cryptocurrency, you inject money in the "cypto market" which eventually mean that the price of PoW money also increase. And the energy usage follow the price of the PoW money.
The best way to push the energy usage of PoW money down is to get back fiat money under control and stop incentivizing reckless gambling, like the FED finally seems to be doing.
Eventually I think Bitcoin will lose out to PoS cryptocurrencies (probably Ethereum), and many people such as myself are specifically rallying behind this narrative, which is why we see bitcoin dominance at near historic lows, and I suspect it's unlikely to recover to >70% and perhaps not even >60%.
Wow, glad to know you have the global carbon emissions problem in hand!
Back in the real world, until we have actually got that problem in hand, PoW cryptocurrencies are a huge extra amount of consumption, where we already have more consumption than green energy producers can keep up with. And now crypto miners are bringing decommissioned fossil fuel plants back on line in some places, purely to service PoW.
The planet burners are the buyers. Sorry.
Green and crypto are quite different things, supply and demand — green is about production, the only important part. How we generate energy in a clean and sustainable way.
Crypto is about consumption, and you have no business telling others how they should spend energy. You can however incentivize the consumers to do it cleanly. You can be green and also pro-energy usage.
Being green doesn’t mean being a bully and telling people what they can and can’t do.
2. Banks provide orders or magnitude more services than cryptocurrency ever will
Why is it considered OK to generate massive amounts of pollution and expend tremendous energy flying beef from Japan to New York for people's consumption, when there are perfectly edible cuts of beef which require at most a short train ride?
What if the crypto is mined in part or full by renewable energy, which many crypto miners do (it's economically to their advantage in certain areas/climates)?
If the goal is saving the planet, there are plenty of activities like flying internationally for pleasure, or eating meat that do far more environmental damage than cryptocurrency mining.
Secondly, many of us don’t think that beef example is really “OK” either.
Third, the idea that Bitcoin or crypto in general runs predominantly on green power is bullshit.
Fourth, BTC now consumes more power and has more associated carbon output than many mid sized countries, it is not some piddling little thing that we can safely ignore.
Fifth, and last - My point that you replied to was about the article writing the problem off as personal choice. While we only have one planet it is not just personal choice.
Because gamers, graphics designers, porn watchers and TVs don't use piles of thousands GPUs kept at 100% load 24/7. The spike in power demand and consumption after cryptocurrencies became popular speaks for itself.
> Why is it considered OK to generate massive amounts of pollution and expend tremendous energy flying beef from Japan to New York for people's consumption, when there are perfectly edible cuts of beef which require at most a short train ride?
Totally unrelated issue that the absence of cryptocurrencies didn't create and that cryptocurrencies can't solve.
> What if the crypto is mined in part or full by renewable energy, which many crypto miners do (it's economically to their advantage in certain areas/climates)?
Because they still pump heat in the atmosphere. Also, most places where renewables such as solar can be convenient, aren't the best places to generate more heat, and they would need even more energy to cool down the electronics.
> If the goal is saving the planet, there are plenty of activities like flying internationally for pleasure, or eating meat that do far more environmental damage than cryptocurrency mining.
Completely unrelated as well. See point #2.
Many blockchains already use or are transitioning to proof of stake cryptocurrencies. Not to mention gamers, porn watchers, and graphic designers in aggregate utilize far more energy than cryptocurrency and also do not use green sources. It seems you just have a personal dislike of crypto and are letting it preclude you from objectivity.
Regardless there are 1.5+ billion gamers which does make it comparable. Video streaming in aggregate consumes an incredible amount of energy, as does non-essential plane travel. But people seem to not mind that. It's fine if people want to enjoy their movies or fly around the world for pleasure but it's a bit of cognitive dissonance.
These demands will only multiply as the populations age, until eventually consuming the host. You can already see this in countries like Italy, which are now in demographic death spirals.
If we can craft a new financial system without spending 15%+ of our GDP and rising on Pensions[1], even with some inefficiency its still worth it.
https://data.oecd.org/socialexp/pension-spending.htm
Avoiding sales taxes, platform commissions, and income taxes is a major advantage.
The issue with Crypto right now is waste from Proof of Stake, and fraud/security risks. We need to resolve this before expanding.
So you think the problem solved by crypto is no longer paying taxes or contributing any part of our incomes to the collective good? I guess you think that child mortality isn't something we should worry about? Or looking after the weak and sick, in general. Why pay for schools, or sanitation, or public transport, at all? And the rules that govern human behavior - we can just rid ourselves of the police in this libertarian-anarcho system where the rich do as they please, and the rest predate upon each other.
Sounds like a great use-case for crypto.
It doesn't solve the political issue(s), for this reason most everything going on is harmful nonsense...
It could have been a part of a larger puzzle, but it's not and the people (seriously) involved with it are mostly scumbags and scammers, by the sound of it.
The legit businesses were a start but it never became a true payment contender, meanwhile those in power ran interference with competing payment systems (think apple or google pay, absolute nonsense I absolutely do not want) or propoganda "yeah this is illegal and fake and all worth nothing", which just hurt adoption.
Sounds like there is hope with Ethereum for it to actually be useful but Bitcoin is just a speculation heatsink at present. "In the future" it might work but there is a likely chance it will be gone in the future...
I'd rather euthanize myself at age 80 and pay much lower taxes throughout my adult life than die at age 85 in a gold-plated Government hospital.
Sanitation and public transport can be directly charged to end-users based on usage. Education can be funded with land value taxes.
Federal Government bureaucracy just exists to support itself. Healthcare agencies have been turned against the population to promote lockdowns and big pharma, and intelligence agencies spy against their own citizens.
It is accepted in many parts of the world, unfortunately, but in what part of the world is it "efficient"? Can you give an example? Is "basic medicine costing $500 (see insulin) to the few that can afford it and the rest dying because they can't access it" what you define as efficient?
> I'd rather euthanize myself at age 80 and pay much lower taxes throughout my adult life than die at age 85 in a gold-plated Government hospital.
I'd rather not. I doubt many people would be okay with that. I like living and being healthy. You can still feel free to do that in either situation.
> Sanitation and public transport can be directly charged to end-users based on usage.
So the rich should get clean streets and running water while the poor walk on their own shit? Should we charge per poop? As for public transportation, you think it would work if I didn't pay taxes for it and it cost $80 for someone to take it because they can't afford the $20 Uber ride?
> Federal Government bureaucracy just exists to support itself.
This is objectively not true. Many techies (not just crypto people) tend to forget why societal structures were invented in the first place. No one's saying inefficiencies don't exist but disregarding all of society seems to be specifically tailored to get a rise out of people.
I don't know how I can explain to you that we all need to care about each other, otherwise we'll all go extinct.
Part of GP’s point is that you’re not healthy & free for those extra five years when the costs truly spike.
That's a pretty accurate depiction of the US. Seattle at least
but then I remembered some stories I've heard about Seattle and San Francisco.
Only it wouldn't probbably work that way, more probably it would be something more like:
Dear Citizen, this is the Government.
Our actuaries determined that you can only live up to 70 years with the tax you paid, so you are kindly requested to present yourself on the morning of the day before your 70th birthday at 9:00 o'clock at [redacted] so that we can proceed to your termination.
We assure you that the procedure will be quick and painless.
Thnks in advance for your cooperation.
You can see other spikes related to other wars. Wars sure are great if you want to expand Government power and taxation over your own citizenry!
Also some stuff of much more dubious value, like TSA and heavily militarized police
Spending time writing a hit piece on these technologies is silly and I wonder what the actual motive is.
Blockchain and associated tech solve no real business problems that aren't better solved by other means. Einstein was offered the role of president of Israel but declined because he knew he was not qualified to lead a country. The devs working on crypto may be technical geniuses, Satoshi included, but that has no bearing on whether they have any understanding of economics.
Out of interest do you have an example of the chain following a particular head due to collaborative mining over 51% of the network for this to work?
I feel ownership and control of my house and my stuff. To some extend at least. Can the government theoretically seize my assets? Yes. Can the goverment seize my Bitcoins? Well, depends on whether or not I want to leave my social circle.
The sense of ownership of Bitcoin is based on your willingness to leave everything behind. And your ability to cross borders into countries that won't send you back.
I think, ultimately, crypto only works if your outlook on the world is very pessimistic and you have zero trust in existing structures of society.