Ask HN: Why is cryptocurrency so hated here? | Hacker News Reader

Ask HN: Why is cryptocurrency so hated here?

Could someone explain why CryptoCurrency is hated by most of the HN folks? I'm aware of the tech, and I must admit I'm not too excited regarding the financial implementations as they stand, but the distributed ledger system is pretty interesting, isn't it?

What's the hate all about?

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The "killer app" for cryptocurrency is ransomware and malware.

Ransomware creators used to ask for payments with gift card codes or sketchy Western Union-style transfers. Cryptocurrency makes it MUCH easier for ransomware gangs to get paid.

This has led to a boom in ransomware attacks and the commoditization of ransomware into an entire industry [1][2]. There are entities that specialize in getting a foothold via exploits, contacting the victims to force payment, taking payments and laundering them, and providing paying victims with decryption tools.

Cryptocurrency has made ransomware a big business for criminal gangs and financially-strapped nefarious state actors (North Korea for example) [3].

[1]: https://techmonitor.ai/technology/cybersecurity/ransomware-a...

[2]: https://www.titanhq.com/blog/the-correlation-between-cryptoc...

[3]: https://asia.nikkei.com/Politics/International-relations/Nor...

I think ransomware was around before crypto, but crypto really blew it up. However, I think if crypto vanished, ransomware would still be as big of a problem if not worse. Without crypto, the risk of collecting ransoms increases and I imagine they would go up quite a bit and be harder to navigate in some ways.

That's not to say I don't agree with your take.

I think the second killer app for cryptocurrency these days are DeFi and NFTs, which are perceived by most to be high risk and vaporware.

Personally I love NFTs, but that's an aside. I can acknowledge that it's a territory that's full of scams.

The hate is about the over exuberance for a technology that just isn't that interesting. While a distributed ledger with permissionless consensus has a few places it applies, the vast majority of proposed use cases are better solved without it. This irrationality for the technology and an ecosystem rife with malice and profit seeking without true curiosity for the problem or solution is quite the turn off.

I can't speak for others - but I don't hate the Block Chain. I think the technological underpinnings are pretty interesting. I'm also kinda fascinated to watch what will happen next - will crypto currencies get government regulated (or at least the exchange to and from real currencies)? Will they get banned?

When it comes to Crypto-Currency... I personally don't own any of that, because I'm old fashioned. (I don't play poker, I don't trade stocks, I don't "make" money at all, I rather earn it - that's just how I'm wired). But if you are into it - knock yourself out. I'm not going to proselytize.

The only thing I really dislike about Crypto, is those people in it, who believe that they can convert *me*, if they just push hard enough. And if I say "not interested" they think they just didn't proselytize/evangelize/preach enough... that sort of behavior can make quite angry. Does not mean I hate Crypto, though.

The blockchain tech and distributed ledger technology is interesting. The current uses of it appear like money grabs of some kind or another. A ledger itself has zero value, it's literally the same as a checkbook register, its a tool.

For example using the checkbook register as the ledger, let me describe my understanding as it relates to crypto:

* I offer up a limited set of pages of a checkbook register for trade and we track who trades what part of this register. We establish 1 transaction (tx) in the register is 1 unit

* We assign some value to each unit in the register. These values are associated with government backed currencies since we need some reference point as to their value in money.

* Accounts are created to track how many tx/partials you own. Trading platforms are built to buy/sell/trade units of this register. Apps are built with value displaying the govt currency

* If you run some complex mathematical proofs on your computer/GPU you can "find" a new unit and keep part of it.

* It is well known there are limited units of the register, this drives the "value" up on trading platforms.

* People (or companies, banks, etc.) are allowed to buy/sell their units and move the proceeds of that sale that into a supported government backed currency with some transfer fees.

Humans have associated monetary value with a ledger of transactions and those transactions are tracking trades of the ledger itself? It just doesn't make much sense when you think it through at that basic level like it was a checkbook register. In my example if the value of each unit on the register/ledger was associated to marbles instead of a government backed currency, this whole thing falls down.

What if blockchain/distributed ledger technology was used as a tool to track transactions but the ledger itself wasn't something that has monetary value?

To convince people to run the software, a reward is generated and given to the block author. That's necessary for people to be incentivized to run the slow and expensive mining software. The reward structure is a key part of the framework.

> [...] but the distributed ledger system is pretty interesting, isn't it?

Yes, the protocol itself is pretty interesting and I've seen no one bashing Satoshi. If anything, Satoshi is often venerated on this website for his impeccable technical and communication skills - and for good reason IMO as the body of work he left is astounding.

A big part of parties involved don't understand the first thing about currencies and yet they want to disrupt "currencies". Don't understand the trade-offs of democracies but they claim that BTC will "democratise money".

So put together all these absurdities that we often have to bring down on HN and I can why someone would consider that "hate". It's not hate it is healthy criticism. Before disrupting something, you need to make sure you understand the reasons behind specific choices the society made.

That said, crypto-currencies are here to stay, eUSD, eEUR, etc. are on the way :-)

ps. Isn't it ironic that Satoshi invented BTC as a non-centralised system and instead the tech will be used to enable the most tightly controlled monetary flow ever :-P

> ps. Isn't it ironic that Satoshi invented BTC as a non-centralised system and instead the tech will be used to enable the most tightly controlled monetary flow ever :-P

This is why many people put a high[ish] plausibility argument for "Satoshi" being a governmental (or quasi-governmental) agency vs some remarkably smart individual

Probably because a vast majority of cryptocurrency projects are just attempts to print money and fool people with tech word soup descriptions.

This could be said about most tech startups to. Just replace the word cryptocurrency with “tech startup”.

I could start a list but I’m sure you can all come up with a few on your own… wework, Theranos, etc.

Those things are hated here too.

I'm a non-techie so my opinion is automatically discounted...but I'll tell you what I truly think..I think it's so hated because it solves so many problems for the folks who really needed those problems solved and who were being ignored.

Techies hate poor people, people who don't look or think like they do and people who really need the tech to work and not just be some fancy, sounding gobbley-gook to impress specialty bankers (ie: VCs). Starving Afghanis who need money to buy food don't care what "tech stack" it's built on or what College you went to...they need to buy food. Africans don't care if "Timmy" reminds the lead VC of himself during his college years, they need a seamless, cheap way to transfer money across vast distances. Africa-Americans don't care whether or not you knew them at the Country Club, they need a way to store their savings without being accused of theft, be insulted at banks or murdered in the street.

Additionally, they hate it because the Japanese coder who gifted the World with Bitcoin proved he's a better coder than they are by orders of magnitude. Most want to say "it's not very interesting, it's boring etc." But the World and the real use cases, which are not NFT or gaming related, like Ripple, Corda R3, and VeChain say otherwise and drive them mad because the two week coding bootcamps which were enough to help them game the system and get vastly overpaid...isn't enough to buy vision or foresight and you need both in order to see just how far Crypto and the Blockchain will take us.

My first comment on HN here.

Initially I used to think of Crypto as a fad and a pyramid/Ponzi schemes (maybe some of them still are), but off late my understanding of the concept has evolved. If you compare say Bitcoin to Gold there are many parallels 1. Can be considered as stores of value, on their own are worthless (there are edge scenarios where gold is used in electronics etc.) 2. Can be lost or stolen, but cannot be not destroyed 3. Available in limited quantities 4. Work/Energy spend required to obtain them (mining), are not readily available 5. Liquid assets, can be bought and sold easily 6. One is physical, other is virtual

I’m beginning to think that CryptoCurrency has a future.

it's a scam that separates people from their money and wastes absolutely gobsmacking amounts of energy for literally no reason. what good could possibly come of it

Core features of crypto are a severe detriment to crypto holders: if you lose your passphrase/private key that money is gone forever* and if you get scammed you have little recourse outside the legal system. If you can solve those two things I'm more likely to get on board. As far as I know, they can't be solved, so to me it's a non-starter.

* unless you put it in a third party service, that likely isn't insured for the full value of all deposits

>that likely isn't insured for the full value of all deposits

And how could it even be insured for the "full value"? The "full value" when it was deposited at $9 a coin? Or the "full value" 3 years later when it's $900 a coin? Or the full value another 3 months after that when it crashes to $0.009 per coin?

Regularly asked question. The reasons are many and on the top of my head:

prove of work protocols are an energy sink, no matter what crypto proponents bs about it.

most use cases of a ledger could be done with a proper centralized service with a good database.

crypto money do not scale and lots of the regulations they don't apply have actual sense.

lots of crypto marketed stuff is actually pseudo distributed, pseudo crypto, and often just a scam.

Also, the supposedly free crypto markets often have a few whales who can manipulate the price and can rob smaller investors from their money.

I don't find the energy/environmental arguments compelling. US military accounts for almost half of US fuel consumption, 10-20% of the federal budget, and hundreds of toxic waste sites throughout the world. Propping-up the petrodollar has been their primary occupation for at least the last decade, if not longer.

Remember, HN is not with 100% US members. I'm not an US citizen and the US government does not give a flying fuck about my opinion toward their military spending. On the other hand, not all of the US citizens are eco friendly and are much pro US military than me, so it makes sense for them to vote for it.

Nationality is beside the point. A store of value has to be backed by something (know-how, labor, natural resources, etc.), and these somethings (and their markets) have to be defended (agreements, force, counterespionage...), and all of this consumes a great deal of energy, but good luck finding out what that number is in the media. That's much harder piece of homework than typing a number into a mining calculator, hitting enter, and posting another the-sky-is-falling opinion piece on Medium.

Your argument is, “This thing may be bad, but what about this other thing that I think is even worse?”

It doesn’t address why you don’t find the arguments compelling. Do you think energy impact is completely trivial?

In a crypto vs. fiat world, the energy consumption argument doesn't hold water when fiat probably uses just as much (or even more) energy.

On a per transaction basis? It's important to remember that crypto is a tiny fraction of transactions.

ENIAC consumed 174,000W. Raspberry Pi: 0.1W. Practice makes perfect.

You find find an argument from me that the energy consumption of the US military is somehow acceptable.

However, all of that energy consumption being used by crypto is at the mercy of a desperately small number of speculators, hobbyists, and marks. For what it accomplishes - the actual utility it provides, which is to say, very little - it is an astonishingly energy-hungry system. Even compared to traditional banking systems like Visa - which process millions of transactions every second to bitcoin's, what, three? - it is shamefully wasteful.

I think I fall into the category of folks that "hate crypto", though to be honest, the environmental factors aren't what really gets my goat. Not only does the entire sphere speak like either well-fed con-men or desperate marks (Framing critique as "hate", for instance, is a common tactic), but the basis of their technology is focused on taking the single worst aspect of physical existence - that there is only so much stuff - and porting it to the digital world. At that point, the fact that it literally burns away resources wily-nily is just, what? Helpful metaphor?

Even though many of these things are grifts wrapped in scams boxed in hustles, the idea of fiat currency upheld by energy and math seems like an improvement over a fiat currency upheld by energy and weapons, and a worthwhile endeavor.

BTC has beaten my money market account by a ridiculous amount. As a store of wealth, it has done its job well so far. People keep saying that it's a bubble, and perhaps it is. My gut tells me that the Weimerica scenario is just as likely as a BTC bubble-burst. I like having a variety of baskets to put my eggs in.

>As a store of wealth

My uncle picks pockets down by the pier and keeps all the wallets in a bag under his bed. This, too, has been a growing store of wealth, beating out my dinky little ETF accounts. Despite his claims, I do not want to "learn from the best". Despite my wishes, he encourages me to check out the pier anyway.

Who is BTC stealing from?

The Bigger Idiot.

The same can be said for stocks, bonds, real estate, commodities, and paper currency (7%+ USD inflation as of Jan!), and does not distinguish cryptocurrency from any other traditional asset. Quite a stretch to call that theft--unless it boils down to the old "property is theft" argument--but I'll let other people tilt at that windmill.

The claim that Bitcoin (or ETH, or lite, or tether, or Doge) will function in any way like a currency in the near or middle future is a meaningless pipe dream with no technical roadmap to meaningful adoption. You can talk about the hypothetical benefits of the chain and the ideological failing of a fiat currency, but none of that maps to the reality of the crypto space right now. You're either a willing con-man or an unwilling mark.

Some people will get fat from crypto. That doesn't change the fact that it is a cesspool.

It used to be a field dominated by tech (yay!). But increasingly a mix of idiots who just act like they have some inside knowledge and management types have taken over.

About 5 years ago I worked at London Stock Exchange. Our division did transaction reporting and I followed crypto out of interest. I was called to an urgent meeting and told our division was launching a crypto unit to make products on blockchain. What products? I asked. "We don't know, just find something, the division upstairs have one and we don't want to be seen as behind" was the answer after about 60minutes of careful questioning. Queue 101 meetings on crypto, often with expensive external "experts" who didn't understand mining or thought blockchain was bitcoin etc.

The fastest way to turn techies against a techis for it to become "fashionable" and therefore be shoehorned into things it isn't good for used as an excuse to waste money on non-sense by people who know no better but somehow control the decisions and the cash.

You can have a distributed ledger without the proof of work, e.g. hypercore (https://hypercore-protocol.org/), scuttlebutt (https://scuttlebutt.nz/docs/protocol/).

https://www.hyperledger.org/ and Trillian (https://transparency.dev/) as well

It's long but really good, I highly recommend Folding Ideas's video about NFT's (and bitcoin) https://www.youtube.com/watch?v=YQ_xWvX1n9g . He says it much better than I could the often vacuous greed and bad faith arguments of it

I have some bias as a crypto/NFT enthusiast, but I can acknowledge there are a lot of issues in this space. However, I was pretty disappointed with this video. I feel like it could have been a great piece of journalism, but the video was made to support a negative thesis on NFTs from the get go. It's full of bias and opinion. I think a similar story can present the facts without the commentary and leave some more openness to the positive aspects of crypto/NFTs.

The reason for anything complex in society always comes down to multiple reasons and many individual choices, but I'd say that the real core of it comes down to (far too many) people tend to mirror the opinions of their chosen media because they're scared of making a socially unacceptable choice. Media says crypto is bad, so people here say crypto is bad as that's the safest choice for them.

The really fascinating part of it to me isn't that crypto is currently abhorred here, it's the shift you're going to see at some point in the future when the rich+powerful folks have made their plans and fully packed their bags, and the media gets their marching orders and starts telling people that some future chosen crypto is good. You're going to have loads of people here turning their mindset on crypto on a dime and claiming that they really liked it all along with absolutely zero self-awareness.

A heuristic I like to use is that when someone presents many reasons for why they like or dislike something, they’re usually excluding the main reason.

The rationale for this is that causes are often power-law distributed in importance, so the top reason will be most of it and the other reasons are merely supplementary or for the purpose of argument.

Scott Adams calls this the "laundry list" argument: if you have to list more than a couple solid reasons for something, you probably don't really have any solid reasons for believing what you believe

Yes, it is very Scott Adams to say “if someone points out many solid reasons why I am wrong, it means I’m really right!”

Great job at totally missing the point

I disagree with this framing, if only for the reason that “solid” seems to imply “true” here whereas I believe the criterion is actually whether or not the argument is “convincing”.

Often the real reasons are not “convincing”, but this does not mean they are not valid, sensible, or correct.

Laundry lists tend to include lots of incredibly unsolid opinions, "reasons" - most of which can be easily refutable with facts

If you have facts that you start with, and explain your conclusions, you have valid reasons

Note - opinions are fine, too: but never confuse your opinion with a fact (which most people do) :)

I hate Chrysler products

Not because I'm a Ford Guy or a BMW Guy - but because they feel cruddy to me

And my opinion is all I need there

I can tease my Jeep and Doge and Chrysler owning friends who love their vehicles while they tease me about my cars - because it's all fun and games ..we all know those are opinions, not facts

Sure. The distributed ledger is kind of interesting. But Bitcoin isn't a good implementation of it, Ethereum is better but still not good, and the vast number of others are obvious scams picking up on the popularity of the first two.

The ledger is also old news. There's nothing to talk about. The only thing that makes news are the scams.

What I don't like about cryptocurrencies are the mining methods that are all "fastest gun in the west" and/or "I got lucky - gimme coins!"

"Public" tracking of transactions is interesting - but gets to be unwieldy very quickly

There probably ought to be a mix of "everybody has/can verify/sees every transaction" and "no one cares that THIS cryptocoin bought a donut 8 years ago - get over yourself already"

I would like to see a mechanism of aging-out transactions after X period of time, or X number of transactions, or some combination of the two

There also needs to be a way to penalize hoarders - if cryptocurrencies are supposed to be CURRENCY, they need to be in circulation. Artificially removing currency form circulation as some kind of "investment" technique hurts the currency as a whole (especially with capped currencies like Bitcoin).

Using "traditional" currency as an example, when you deposit your money in a bank, it doesn't stay there - it keeps moving around[0]. Money that gets stuffed into a mattress, on the other hand, intrinsically loses value (and not merely because of inflation) because it's not being used. Additionally, money that's hoarded becomes a risk to the hoarder - have a house fire? It's gone. Someone breaks into your root cellar where you cleverly disguised your stash in empty pickle jars? Gone. With no recourse.

The same happens with cryptocurrencies that stagnate. I know I have a couple bitcoin lying around on a harddrive somewhere. That I can never access. Because I lost the wallet access code. Yes, it's my fault for forgetting. But they might as well not exist, since they're inaccessible. My flub hurt the entire Bitcoin ecosystem (to some degree) because they can never again be circulated.

---------------

[0] https://www.investopedia.com/terms/v/velocity.asp

In the end it is not very practical or special. Most things can be achieved better by traditional methods(SQL database).

And in general it has yet produce anything else than financial speculation and some marginal use cases. Not that traditional finance shouldn't step up and be cheaper.

Plus all of the interesting stuff like smart contracts is clearly riddled with issues and bugs. And on other hand the pure blockchain coins either aren't performant, competititve or just tend towards centralization by exchanges and online wallets.

Not to forget that it just isn't user friendly and errors are irrevocable. Which makes it horrible thing for your average citizen.

It's a question I've often wondered about, especially given how much crypto/web3 is talked about in the more mainstream media and how many developers seem to be interested in working in the field.

One thing I'd like to know is what is YCombinator's stance on crypto. Have they invested in crypto companies ? Do they have a policy against it ? Have Paul Graham or the other principals ever written about their views on the topic ? Because after all this is YCombinator's site and the views of those folks on most subjects have traditionally carried quite a bit of weight here.

I dunno about YCombinator's stance ... but PG has mentioned them some: http://paulgraham.com/nft.html, https://twitter.com/paulg/status/1490406747051286539 (via https://treatyourcrypto.com/venture-capitalist-paul-graham-d...)

OpenSea was a W18 (https://www.ycombinator.com/blog/yc-companies-looking-for-su...) YC project (found via https://www.ycombinator.com/blog/?query=nft)

https://www.ycombinator.com/blog/?query=cryptocurrency may give other data points for your consideration

Interesting, for me that makes the consistent strong sentiment here against cryptocurrency and especially NFT's all the more surprising.

Just because NH is a subdomain of YCombinator doesn't mean it's "run by" or "is their" site

I'm pretty sure it is though. I mean I think dang is a YCombinator employee. I also don't know of many sites that let 3rd parties run their subdomains, unless they're explicitly and obviously set up for that purpose, like maybe wordpress.com.

But the content isn't inherently "YCombinator-approved" :)

I have a simple question.

Are cryptocurrencies supposed to be good currencies, or good investments?

Because you cannot be both. The purpose of a good currency is diametrically opposed to the purpose of a good investment.

Yes you can.

USDC is a stablecoin based on USD backed by USD-equivalents.

BTC is a cryptocurrency designed to be created from energy, and with a finite supply.

YFI is a cryptocurrency that get distributed rewards from the decentralized organizations profit-seeking strategies (like a hedgefund).

All "cryptocurrency" means is that it exists on a blockchain really.

The rampant scams turn people off. Also, I think HN skews a little privileged and there are many people here who can’t imagine living unbanked or under an embargo.

> the distributed ledger system is pretty interesting, isn't it?

It's mildly interesting, until you realize all the limitations with it, and then realize that the use cases are basically nil.

There's very very few use cases where you need a specific kind of trustless consensus. In fact, the end state of these systems shows that trust is still necessary in so many other ways. So no, I don't think it's actually that interesting.

The amount of overhead that comes with using a cryptocurrency is a bit nuts to me, huge 20GB+ Blockchain files that need to be on ssd storage, and the bloated and unstable software that goes with it.

The fees are also huge in some cases, it costs a lot to send or exchange it. And it can take a long time for transfers to complete.

There a few things that benefit from Blockchain, but the majority of projects would be better off without it imo.

Converting real property deeds into a public ledger could make a great deal of sense (except for the title search companies and local government records workers)

It's public information as to who owns what property - why is it all locked-up in file cabinets more-or-less randomly distributed through the country?

And in the end there is no practical reason to have it on blockchain. It is even undesired.

Failure of certain governments does not mean all of them have failed. Many have robust working registries of ownership. And sufficient procedures to sort out the issues.

But why rely on slow, inherently error-prone, human-run processes if you can automate it into something far less likely to misunderstood?

This is my personal take only.

It’s mostly speculative and the ones who benefit the most are essentially criminals: Those that either want to hide their monetary activities; or hide their money.

There’s also a snake-oil aspect to it, which makes it ripe for fraud.

More down-to-eath, it steals away from the GPU supply and I imagine HN has its fair share of gamers.

Finally, there’s an old investor saying: When widows and orphans get in on the action, it’s time to get out.

I think we've known crypto is the future since before bitgold. Technology is about breaking monopolies. The internet broke the communication monopoly. Email took the postal monopoly. Skype the telephone. PGP broke the secure communications. Uber broke the taxi monopoly. 3d printing will break the manufacturing monopolies. Blockchains break the bank/contract law monopoly. It's just the current implementations are not very good and most of it has become ponzi schemes. Cryptocurrency is now all about artificial scarcity. Once the artificial is removed and crypto reaches it's actual stable true scarcity cost with hundreds/thousands/millions of cryptocurrencies competing for cheapest/fastest/stable price/anonymous i believe you will see mass adoption.

Cryptocurrency is much hated here because many people got scammed and lost money in tech.

hype and no dominant use cases as of yet.

As currently set up, with proof of work, it is an environmental disaster.

There are many non proof of work cryptocurrencies. Besides that, energy used by Proof of Work << Energy used by US military.

My personal theory is much simple: the crowd is a bit aged here.

They may try to rationalize their hate, but I think it's not about reason but people seeing crypto as "against the natural order of things":

“I've come up with a set of rules that describe our reactions to technologies: 1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works. 2. Anything that's invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it. 3. Anything invented after you're thirty-five is against the natural order of things.”

― Douglas Adams, The Salmon of Doubt

My grandparents and parents love WhatsApp, Uber, Instacart, 4G, Smartphones, Ipads, and Netflix (to give a few examples). All things that were invented long after they were 35. I am between 15 and 35 and I have yet to see the problems Bitcoin solve for me (TBF, I don't live in Venezuela or Argentina, and I don't do any illegal activities). I am bit more bullish on Ethereum.

Congratulations to your parents and grandparents for being exception to this rule of thumb, and for your awareness that while you don't have any problems solved by one crypto, but that others might, and another crypto may have provide value for what you do.

Having been raised in this exceptional family might have helped :)

I'm under 35 and think it's stupid.

This is the agist response to those who don't try to understand why

About a dozen people have written their rationalisation in the thread. But you have decided they are just old and their beliefs must not be sincerely held - they're just "a bit aged". Surely if the other commenters were younger they'd discard all the thoughtful reasons they've supplied in this thread and concur with you.

'Why do you like crypto? Don't answer, I already know, it's just because you're young.'

This is just a ridiculous response.

Older people have seen this hype cycle before drummed up by VC's and media.

Remember when "data is the new oil" and billions were invested in the "big data" market because it was going to revolutionize how businesses do business.

Sure theres a great use case and theres definitely utility but its another example of a solution trying to find the problem. Crypto / blockchain is similar. Theres good tech there and I'm sure it will be useful in some aspects, but again.. a solution trying to find the problem.

There's a lot of no coiners that have had plenty of opportunity to understand the technology and have missed many opportunities to hold a small piece that would have gone big. There are also accounts here that are pro surveillance, pro china, pro lockdown, etc.

That's an interesting juxtaposition. Your first sentence emphasises the speculation interactions with cryptocurrency; the second emphasises the claimed benefits of cryptocurrencies.

But there's quite a big gap between those two.

It's simple idea: Ensure absolute truth every 10 minutes, limit supply to 21m. If that doesn't tickle your inner hamster (while running on the wheel).

An inane comment using bandwagon bias to sell the idea of losing out due to none participation.

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