On anti-crypto toxicity
blog.mollywhite.net
blog.mollywhite.net
Meanwhile, this long protracted failure has been accompanied by a massive increase in stupid, toxic, illegal, scammy behaviour in the crypto community. Even if you're curious about hearing how the latest project is justifying itself, you can't have a conversation about it because the entire conversation is dominated by memes and spam about other scam projects. At some point the reasonable thing to do is to say "No, actually this whole thing is just bad, and shouldn't be treated seriously". There's only so many times that you can humor the same lie. Web3, NFTs, DAOs, Altcoins, Smart Contracts, Stable coins. It's just the same grift repeated every 6 months. For every claim of how this tech could help someone there are thousands of people who have been harmed by scams using this tech.
Agreed. For me it was the NFT'ing of a fart that was the jumping the shark moment that drove me from being merely a crypto skeptic to being vociferously anti-crypto and advocating against it at every turn.
I'm basically an anti-crypto bitcoiner.
Anyway, you have your choice of what money to use. I prefer USD and Euro myself. And I really still don't understand any use case for someone in a first world country to use crypto.
I grant that 3rd world countries without banking systems may, may need it, but I don't know why we just wouldn't start banks there.
Hi. Here is a use case you can carry on to future discussions. There is a flourishing scene of dark net markets where people can purchase drugs using cryptocurrency. Merchants have reviews, products have reviews, and the whole process is much safer, secure, and convenient than meeting a drug dealer in real life with cash.
Bitcoin is not yet perfect. Hopefully someday. Monero however is pretty great privacy wise.
Two things:
1. Bitcoin Lightning is not Bitcoin and is in fact a centralized by design layer 2 system which the transactions are off-chain [0][1], a direct contradiction to what Bitcoin was designed for. A peer-to-peer on-chain electronic cash system.
2. Monero and the other privacy coins are getting delisted and banned from exchanges due to increasing regulations. [2][3][4]
You can still use Monero, but the on-ramps, exchanges will have banned the privacy coins under these regulations, cutting a way to easily exchange it for fiat.
[0] https://iopscience.iop.org/article/10.1088/1367-2630/aba062
[1] https://arxiv.org/pdf/2201.07746.pdf
[2] https://markets.businessinsider.com/news/currencies/monero-k...
[3] https://www.consilium.europa.eu/en/press/press-releases/2021...
[4] https://www.coindesk.com/policy/2022/03/31/eu-parliament-vot...
Yes, but I personally have node equipment sitting in my closet waiting to be setup. (time constraints) It's not so centralized that it's obviously destined to be controlled by Governments and Corporations. I would put proof of stake down as being much more controllable by monied interest.
> 2. Monero and the other privacy coins are getting delisted and banned from exchanges due to increasing regulations.
That's sad, but it leads me to two thoughts. One, I'm glad I don't live in the UK or EU, and I think it's gross that something like that happens without the input of the people. Not that I'd put it entirely past the US to do this either (sigh). Two, hopefully Uniswap and other decentralized exchanges will allow for people to swap into privacy coins without a regulated exchange, but I agree there are probably numerous ways to penalize or track the entrance and exit thereof.
I think really this comes down to getting off exchanges asap and trying to actually use the currency. My local community has a group that actively uses the currencies for exchange, but who knows how strongly that would survive if the currencies couldn't off ramp to fiat.
Clearly crypto is valuable to break the law. After all, look at the number of crypto scams. Or ransomware attacks.
Except they absolutely have. The contemporary art market is exactly what you describe. There's sharks sitting in tanks of embalming fluid being sold for tens of millions of dollars just to be put in storage, and people laundering their money in art investment schemes. The contemporary art market is absolutely an unhealthy social scene of greed and deception.
With crypto, the pollution is built into the system. It's not only being used by the corruption, it is itself rotten. And neither does some of it look nice on walls.
So is the contemporary art world. The contemporary art world is vastly polluting as well. How much GHG do you think is generated to run a museum, or warehouse, transport aircraft, ect, filled with bad contemporary art?
No-one is proposing that contemporary art is some sort of technological breakthrough that will completely revamp society, make everyone rich and change finance for the rest of time.
(Also, I'm sorry, but I do NOT believe that contemporary art consume even a tiny fraction of the power that cryptocurrencies do when nearly all of it sits in a handful of warehouses and never moves, just changes ownership abstractly. You would really need to prove this claim.)
Yes, there are strong parallels between the art market and the NFT market. The main one being that money laundering seems to be the primary purpose of both. But at least art does provide people with some level of subjective enjoyment beyond that.
On the other hand, NFTs are pretty new. Maybe someone will make a museum of NFTs that don't suck in a couple years and I'll be proven foolish.
I'm not sure how one would curate an NFT museum, I imagine you'd want to display the jpeg and then select for pieces that play with the uniqueness guarantee somehow.
I haven't the foggiest clue how that would work, it if it is even possible, or what it would look like. But people have only been doing them for a couple years. If we made a museum that sampled the NFT population as selectively as an art museum samples the overall art population, that NFT museum would have approximately zero entries, right?
Perhaps the “web 3” evangelists can switch to show more of these apps, and the real world value they provide.
if someone has to defend their tech by using analogy to the early web, it's probably bullshit
It's about how much of a strawman this is. People are literally using the worst possible example of a new class of applications to dismiss all of it. It's usually indicative they don't understand it or were fortunate enough to never having the need for anything like it.
To make an analogy with evolutionary theory: every single technological breakthrough results in mutation pressure and consequently a massive explosion of new species (products). Some of these products are good, fit well with the environment and thrive. Some of them are ill-conceived or mal-adaptive and do not last long.
Yeah, "NFT-as-art" is bullshit, and I would bet that it will go away sooner or later. But that does not discredit NFTs as whole, much less blockchain/crypto/web3/whatever-you-want-to-call-it.
Most of them are literally forks of it.
there are forks of bitcoin, to be sure... but the majority of "cryptos" out there are GPU mineable coins, because there's hardware that can be exploited to mine "profitably". not to mention the need to pre-mine shitcoins so they can be given to grifters and shills who pump & dump.
This is the essence of the Nakamoto Consensus Algorithm, which underpins the entirety of blockchain economics.
Well, I can send arbitrarily large amounts of money across the planet, to any country with internet access, for tiny sums, safely, irreversibly, to anyone.
Many people have sent many millions to Ukraine, for example. Transnational, permissionless internet money is quite handy.
That wasn't possible before, and that's pretty useful, so I think the basic claim (that cryptocurrency is useful) is holding up fine.
> arbitrarily large amounts of money
and in the other corner we have the types who know about and enforce AML and KYC legislation.
How is this possibly going to end well for the first group?
A lot of people don't seem to integrate this fact. The practical power of a lawmaking body is not unlimited. There are certain things they simply cannot stop, no matter how many laws are passed.
It won't "end" for either group, really. The latter will pass some laws, and the former will mostly ignore them, same as happened with hookers and blow.
The people who inhabit both groups (the subset of lawmakers that like being able to pay for their hookers and blow with unreported bitcoin) will laugh at the absurdity of the whole thing.
There are some people who see attitudes like that in the government and think how can [things backed by math] survive a coordinated government onslaught that'll happen any year now? And then those that just look at such statements as the unlettered nonsense they are. Bitcoin lets you "be your own bank", independent of any KYC laws that may or may not apply to other banks in your jurisdiction.
If selling things to US citizens for cryptocurrency is criminal, and enforced?
What if selling things to US citizens via any means is criminal, and enforced?
If the EU and the US alone said, "In a month, we'll consider every crypto transaction to be criminal in nature, and we're going to enforce it," the market would collapse as everyone stampeded for the door at the same time.
True. And yet, cryptocurrencies would still remain useful! A market collapse is not the same as it not having utility. Bitcoin was useful even when it was only pennies, and it will remain so.
This thread is about whether or not cryptocurrencies are useful. They are. Could governments crash their markets? Yes. Could they stop people from using them? No.
> True. And yet, cryptocurrencies would still remain useful! A market collapse is not the same as it not having utility.
(Genuine) Q: How many market participants are interested in "the utility" vs the (potential for) "getting rich"?
Plus, unlike drugs and prostitution, the ledger is public and permanent… simplifying enforcement against the remaining fringes dramatically.
So long as any of those residents can travel to another place where they can exchange it for hard money, that's not true. Countries do not exist in isolation.
This is compounded by how some countries are big enough that traveling across a border is a fairly significant undertaking (Brazil, for example). Not something most folks can or will do on a whim. Plus, you'd have to transfer a fairly significant amount of money to be worth it, making it more likely you'd run afoul of the border patrol.
Also, anonymity is not yet something that people care enough. But it already exists - monero, zcash, or the Aztec Network on top of Ethereum. I can bet that any serious attempt from the government at chasing regular people based on their Blockchain activity would lead to a lot to adopt the "truly private" networks.
There would still be shady cryptocurrency things (just like we still have illegal drugs and gambling and prostitution), but at least we won't have smart people proudly announcing that they made new crypto system (just like we don't have people proudly announcing they made a new kind of illegal drug today).
Because for each person who genuinely believes into monetary anarchy and/or does not trust the government, there are lots more (thousands? tens of thousands?) people who read about it in New York Times and want to earn their money. It is the second group which is fueling the first, and so getting rid of it will make crypto harmless again.
Once your wallet is in some way connected to you, all your transactions since the beginning of time are now known. This is a wet dream for government enforcement.
AML is Anti Money Laundering
KYC is Know Your Customer
Far more has been sent over traditional rails [1]. Once you consider state aid, e.g. the billions the Congress has authorized, crypto's contribution is irrelevant.
Given Ukraine had to convert 80% of its crypto into hard currency before it could use it, crypto was also the most expensive donation vector. If we consider crypto’s likely role in softening Russian sanctions (also almost negligible, but we’re comparing two small things), the net contribution could be a wash.
[1] https://abcnews.go.com/Politics/wireStory/crypto-aid-ukraine...
When you put it that way, your or my life is just a point of irrelevance in the sea of humanity. While that has a ring of truth to it, it's an odd way to dismiss each piece from making its contribution. A house is built of many bricks.
*not going to address the green energy mining debate here but yes I know it is a thing.
Given funds sent by congress that went through how many approval gates, delays, and intermediaries, vs. millions sent almost over night to the UKR address...
What are the pros/cons of the the two approaches? - billions were sent via congress, and the last time this occurred at a similar scale and sense of urgency was covid relief. The [0] fraud [1] involved [2] and what scale was somewhat substantial and is now a focused DoJ investigation. Scale of $2bil seizures, for instance. Sending direct to a crypto address also has issues and fraud certainly exists, but wouldn't say irrelevant in the alternative controls it offers. $100 mil almost overnight with no strings attached vs. billions from Congress that has strings and will take some time presumably.
- Zelensky has consistently been upfront about the need is both resources, and speed of receiving resources [3]. What's more in line with that need - overnight donations, or Congressional authorizations that eventually lead into donations.
- Conversion: per Zelensky, biggest need is armaments, and he's been able to buy armaments directly in crypto, so that neutralizes your last criticism a bit, or at least more accurately fills out the picture [4]
Do you have any information the aid issued by Congress - has it actually reached UKR, how much of it, strings attached, etc?
[0] https://www.justice.gov/opa/pr/justice-department-announces-... [1] https://www.cnn.com/2021/05/12/politics/secret-service-covid... [2] https://www.theatlantic.com/ideas/archive/2020/04/course-rel... [3] https://www.theatlantic.com/international/archive/2022/04/ze... [4] https://www.theatlantic.com/international/archive/2022/04/ze...
What has cyrpto provided that you can't provide via Paypal or bank transfer? Hell - here's a paypal address for a bunch of guys who want to buy Ukraine a fighter jet - info@buymeafighterjet.com . Here's the donation page for the Kyiv school of economics https://kse.ua/support/donation - you may notice a small bit of text right above the crypto addresses for you donation - that small bit of text is a form for card transactions, 8 different ways of doing a bank transfer and a paypal address.
So what has Cryptocurrency acheived here? You donate crypto to these charities, and then what happens? They convert it back into fiat currency to actually spend it. You've literally just added more steps to something that was already solved.
Which part of the claim are you refuting here? It is a fact that one can send very large sums of value between two addresses for a trivial transaction fee. This value can be swapped across other tokens with low slippage in the millions (denominated in USD).
> What has cyrpto provided that you can't provide via Paypal or bank transfer? Hell - here's a paypal address for a bunch of guys who want to buy Ukraine a fighter jet - info@buymeafighterjet.com . Here's the donation page for the Kyiv school of economics https://kse.ua/support/donation - you may notice a small bit of text right above the crypto addresses for you donation - that small bit of text is a form for card transactions, 8 different ways of doing a bank transfer and a paypal address.
I spoke with someone yesterday who lives in Nigeria, they were moving to Rwanda and needed to pay a deposit in advance. They were unable to pay via MoneyGram, Western Union etc. - one provider offered to handle the payment and requested many documents for a few days and in the end rejected the transfer. This person then had to send money to a friend who lived in the US who then forwarded it to Rwanda. This experience made the person feel isolated and outside of the system. This is an anecdote however my guess is if you think PayPal is "good enough" you don't live in a country that is marginalized by the status quo payment system.
> So what has Cryptocurrency acheived here? You donate crypto to these charities, and then what happens? They convert it back into fiat currency to actually spend it. You've literally just added more steps to something that was already solved.
So that's your take, global finance is a solved problem? No todos? No improvements needed we can pack it up? This is a stunning poverty of imagination in my estimation and a denial of the very real struggle many people face day to day in transacting.
And regarding the case with the guy in Nigeria: How much access do people in the developing world have to crypto? And don't start with the crap scam Sam Altman came up with.
what are you talking about crypto-related fraud without even a nod to these enormous organizations that have been convicted (multiple times) of fraud?
This is not the same thing as sending money to Ukraine. If I send money between two addresses, I've just sent money between 2 addresses.
> This value can be swapped across other tokens with low slippage in the millions (denominated in USD).
But not to actually buy anything in Ukraine. To do that you have to find someone with Fiat. As you see with all the other examples I gave you, what you've done is used the modern banking system to buy crypto currency - some bank transfer to a crypto exchange, send it from one address to another, and then left yourself with the problem of getting the money back out of crypto in Ukraine. Which as you'll see with almost all of the charitable giving in crypto to Ukraine, happens via the modern banking system, often with the direct involvement of the Ukrainian government.
So it seems to me, that this entire thing about using Crypto for Ukraine is rubbish. And it seems like that to you too - because when I start interrogating the idea, the Crypto to Ukraine story morphs into a Rwandan sending money to Nigeria.
My take is that Crypto in your example, was a worthless layer of complexity that doesn't solve the difficult problems of international banking, it solves the trivial bit in the middle.
No, weapons are getting purchased in crypto in Ukraine.
My cards don't work on PayPal and I don't keep money in banks (because they've robbed me without cause before). I can, however, donate with cryptocurrency without friction.
Question of course is has such exiting happened. Have payment processors threatened or actually left a space over somewhat subjective judgements? Answer in this case in recent years is yes: Assange, OnlyFans, Canadian Truckers, etc.
Stating the above doesn't imply I support the above 3/etc., but it does show to me that based on which way the wind is blowing, payment censorship can and does happen. Assuming a payment processor/corporation will always be on your side ideologically isn't a great call. Popular German firms today were popular German firms under National Socialism. Or, are you going to tell me there isn't a single successful and well-regarded corporation today that wasn't enforcing segregation happily 60 years ago?
I'm also not implying necessarily an equivalence in present day payment censorship to segregation. But I certainly standby that hedging your bets on your ideological views always aligning to corporate/govt entities and as such you don't have to consider payment censorship is a bad call. Crypto isn't perfect, and 999/1000 times I'll use a credit card, but its an important alternative.
What happens when Climate Action groups get fed up, really start turning the screws on Exxon, and also rely on corporate infra (GSuite, Slack, Paypal) for running everything internally? Who does a payment processor side with - climate action groups perhaps doing not nice activism, or their ~largest client (ignore details here for a second) Exxon who is fed up with the activism and starts turning screws back? This has already happened with communications platforms via warehouse unionization, and QED Signal is pretty widely used. Are you saying it won't happen with payments, or there is at least a risk worth acknowledging?
[0] https://time.com/6155209/ukraine-crypto/#:~:text=Ukraine%20h....
As I understand it, somewhere around 20MM was sent to Ukraine via crypto. The National bank of Japan sent 100MM the first day with lower transaction costs (fees, electricity, complexity). And the Ukrainians still have to convert the crypto to money to use it.
Meanwhile, everyone could just send money to Ukraine via the standard banking system if they wanted to.
To be fair, they've gotten rich from selling their early-adopter cryptos to the next fool. But many people have won the lottery.
And that's where it all falls apart. Crypto-fanatics assume that "good for me" translates to "good for us." As we know, the crypto-rich only exist because others (usually many others) became crypto-broke and/or fiat-broke.
At least, in general, people have no realistic expectation of winning the lottery. You also don't usually have people betting their entire life savings on the lottery. The analogy is only very loosely true.
Separate Money from the State
Lots and lots of people want to succeed like the early adopters of crypto by (nearly) any means.
Their biggest "means" is denial of the capital "R" Reality: Its already too late to repeat the rise, like wanting netflix stock price to grow after it already rose high, because you just bought some and deserve another 500% gain.
And so, since you need that rise badly, you dismiss each argument and everyone against your wish for repetition. Instead you hope for more "suckers" to buy after you so you can have the monyey and with it the break you think you deserve.
And the thing is: I would want that too, damn - I would not mind 100.000 suckers to go broke for me to be rich. I'm just sane enough to see that this gamble is not worth to enrich the ones who are already "in". sigh
* Starknet is running a Turing complete VM using nothing but zero knowledge proofs. It's now possible and practical to trustlessly prove general purpose computation with O(logN) proof sizes.
* Uniswap processes nearly $2 billion of trading volume a day. For reference that's about as much as the Australian stock exchange. In an entirely decentralized, non-custodial, trustless manner.
* The Solana network processes 65,000 transaction, about equivalent to the entire Visa network.
An overwhelming majority of these are bot trades.
> * The Solana network processes 65,000 transaction, about equivalent to the entire Visa network.
Visa does 597 million consumer transactions per day. Not only is that magnitudes more, I would wage to guess that >75% of Solana's transactions aren't consumer purchases.[0][1]
[0]: https://www.blockdata.tech/blog/general/bitcoin-volume-maste... [1]: https://s1.q4cdn.com/050606653/files/doc_financials/2021/q4/...
Actual approximate volume of transactions per month was around 500 million as of Nov 2021[2], so around 16.5 million transactions per day, or only about 5,800 transactions per second on average, so it can handle a lot more.
It's handled just under 70 billion transactions to date[3] since it debuted in early 2020, so roughly 35 billion transactions each year for the two years it's been out.
[1]: https://usa.visa.com/run-your-business/small-business-tools/...
[2]: https://www.statista.com/statistics/1280088/average-number-o...
[3]: https://explorer.solana.com/
EDIT: had to recheck and revise my math a bit, when working with that many zeros it gets easy to mistype something.
Likely the same is true on the Australian stock exchange. Not that this is a bad thing. There is a person behind every bot - and in the case of Uniswap, the arbitrage is what makes it work in the first place.
This is my anecdotal experience (and no, I don't invest in crypto), but that's enough for me to not consider cryptocurrencies "just scum".
P.S. Also I pay for VPN with it, because this is also the only way at the moment, and without it I cannot even read news I prefer.
P.S. There are no sanctions prohibiting companies to sell hosting to me (by me I mean ordinary citizen with "toxic" passport), it is just VISA/Mastercard decision not to serve us so I dont have other means to pay.
> [] are there for a reason
Slaves are there for a reason. Firing squads are there for a reason. MS-13 is collecting a 'tax' on the local business persons for a reason.
There for a reason.
Also, poor argument.
Have you seen the companies funding the pro-crypto crowd? The 3 people and a discord server projects get the most attention and generally act toxic, agreed.
For the rest of the space, plenty of Fortune 500's investing in it for the long haul/"humoring the same lie."
are you talking about the internet or crypto? or maybe you were referring to finance. wall st? i get hundreds of scam emails a day, shall we get rid of email too? seriously, just because there are scams, doesn't mean that the internet, or wall st, or crypto are all worthless. that's just lazy and ignoring that scams are from people, and not from the tech. some people will use whatever means they have available to scam other people out of money. that doesn't remotely mean that all of crypto is a scam.
"How can we create a more equitable financial system, where everyone has access to banking services? How can we reduce the power that a small few currently hold over the web? How can we improve data privacy and ensure that people have control over their personal information? How can we create reasonable privacy in the financial system? How can we make information more available to everyone? How can we fix a society where so many people are in untenable financial situations? How can we reduce the enormous wealth disparity in today’s society—both in the existing distribution of wealth but also in access to new opportunities to earn it? How can we enable creatives to make a fair living from their art? How can we address inequities on a global scale? How can we create self-governing communities around shared interests or goals?"
Cryptocurrencies as a tech are not the answer for any of those questions, they could be a tool to support some of those things but as of now are not the most efficient way to improve those. Maybe the "movement" / hype behind cryptos could help but you have to an absolute uncynical person to think that given the types that are most loudely hyping it up, society won't be worse off in the end.
The crypto holders would love if the world switched to using the cryptocurrency they’re invested in because it would make them extraordinarily wealthy relative to the average person buying in late.
I don’t understand how anyone can honestly suggest that a gradual changeover to a specific cryptocurrency would be anything other than disastrous for financial inequality.
I feel people think “if everyone had bought Bitcoin when it was cheap, everyone would be rich now” and then think that Safemoon rugpull #42053 will somehow do it.
As I understand it, “equality” in a society refers to people’s equal access and treatment in some aspect of society (health, education, financial, legal, …)
Whereas “inequity” in a society refers to different outcomes for people (billionaires vs the indebted unemployed, for instance).
Outside of scams and fraudulent or deceptive launches, crypto seems to be very equality supportive to me.
That it has magnified inequity isn’t a reliable indicator of a lack of equality.
Equality enables everyone equally, it doesn’t provide equally for everyone.
Even if everyone had equal access to capital, we would still be talking about the equality of restructuring economies to wildly benefit a minority who gambled and got lucky. Should a single currency gamble "win", it will be in no small part due to heavily invested and politically powerful people making that happen.
People pursue very different paths in life. People dedicate themselves to the paths they do take with varying degrees of effort, thought, etc.
Inequity is going to always be the result. Enforced equity has (so far) simply enabled enforcers to create inequity in there favor.
I think it is a mistake to treat all inequity as “the” problem. Because it isn’t, and because that distracts from solving problems that can be solved. (To a higher degree.)
The crypto holders not only would love if the whole world switched but they actually depend on it to realize their profits, and for the latest adopters to not be left holding the bag, which at least the last 50% of adopters will be holding some portion of the bag/losses before and once it collapses; the wealth transfer will already have happened to the early adopters, and so whether the "community" or army of HODLers pity themselves and keep dabbling in it to keep their dream alive or not, will be interesting to watch at least, perhaps if it's not too embarrassing for the majority; the ones who exited with millions to $100s of millions, at least some of them of course will proudly showoff their gains by being in the MLM-Ponzi scheme(s) early - not being shameful of the unknown harm and losses their gains caused others and society as a whole. A lesson, to say the least.
But the above is why those of us who see what Bitcoin et al are for what they are need to take a stand because regulatory/systems and policy capture will happen and is attempting to happen, perhaps the most extreme example of this so far being El Salvador - where their current "elected" leader at one point brought in military with guns into their parliament to threaten their parliament if they didn't adopt whatever he is/was gunning for; then you have a government/organization that's shown an example of what they're willing to do wanting to then influence the rest of the world (by whatever nefarious/violent means they may be so inclined to do) in order for a global-decentralized financial database to be required to be used, to then realize their gains, which richness wise, if they succeeded at getting the world to adopt - would make them as relative early adopters, very rich indeed - at least those in government who actually control the keys to their kingdom's crypto vault.
Once I saw a significant portion of the mainstream VC-finance industrial complex buy into it, arguably heavily lead by USV with their Coinbase and other ecosystem investments - gaps they knew someone would have to fill, including funding a crypto lobbyist organization, then I knew things would get too serious to ignore. The solution however simply seems to be thoroughly educate the population so they understand the mechanisms - as most of what they will have seen or heard about is easily considered propaganda to hype up to sell more of whatever flavour of MLM-Ponzi scheme they can convince/trick you into buying.
Edit to add: Forgot to link to article re: "Heavily-armed police and soldiers enter El Salvador parliament" - https://www.bbc.com/news/world-latin-america-51439020
I don't know what an equitable monetary policy would be, but I know that intentionally deflationary currencies look nothing like it.
[1] https://www.investopedia.com/terms/d/deflationary-spiral.asp
Every employee in Germany is required to pay a share of about 20% of their income (1) into the retirement „fund“ — which isn’t one really as the money is not invested to gain interest but instead is immediately payed out to the current generation of retirees. On the other hand, employees are promised to receive a future pension based on the payments by the next generation of employees (i.e. their kids). In Germany, this is called „Generationenvertrag“ („contract between generations“).
This is almost like a Ponzi/pyramid scheme where obscene „profits“ are payed out purely based on the exponentially growing number of payees until the day the growth stops and the system collapses like a house of cards.
This breakdown has been happening for decades already albeit at a glacial rate in the German public pension system as the population has been shrinking and therefore the number of payees. It is artificially kept alive as the German federal government pumps 100 billions of tax money every year into it which is 30% of the whole federal budget …
Of course, a redistributive pension system can sustain itself as long as the population age distribution looks like a literal pyramid. But that’s not the case for most Western countries.
(1) Formally, the employee pays only 10% and the other 10% are taken from the employer. But, of course, the employer could as well pay his 10% share as salary instead. So, either way, it’s the employee paying everything.
Now if we think about it for a moment: social security need money for 3 major things: unemployment, retirement, and health care. At any given point in time, you can divide the population in 2 categories: those who are currently working, and those who are not. And those who are currently working pay those who are not (gross oversimplification). The question is whether the workers pay enough money to sustain the idle.
Now health care and unemployment ought to be fairly constant (barring some major crisis), and you can have rules so people don’t abuse the system too much. So no pyramid there: we adjust how much workers pay for health and unemployment and that’s the end of it.
Retirement however is subject to longer term variation because of that age pyramid. And at a time where we have boomers retiring, we have less working people to sustain them all. And it’s made quite worse when the salaries of the working people don’t even keep up with inflation. We could have solved this by having an exponentially growing population, but that is bound to crash at one point.
So okay, I understand the pyramid analogy there. There’s a problem though: the boomers will die. Population will eventually get over that hump, and we’ll have a more reasonable proportion of working & retired people again. So the temporary deficit is just that: temporary.
And if that’s not enough, there’s something simple we can do to solve the problem. It’s so obvious that (at least in France) people don’t even dare utter it on national television: just raise contributions a little bit.
But no, doing this is so unthinkable that our rulers would rather have people retire later. Which won’t work, because of structural unemployment. So what we’ll have instead is lower pensions, and an increased reliance on pension funds.
There’s a snag however: pension funds are actually a form of redistributive system. Because redistributive systems are the only system there can ever be. See, even though you’re ostensibly investing money so you can retire later, what happens in practice is that your money is being injected in parts of the economy to fuel your investment. And ultimately, part of that money will be used to pay currently retired people. And when you retire, and the time comes to get your money back, you won’t get your money from a frozen value store. You’ll get it from the current economy, be it interest rates from your investments or currently paying people. However you cut it, your pension has to be taken from the current economy, and the only way you get paid is if your pension fund (and by extension the whole economy), can support it.
I’d rather have an explicitly redistributive system, it’s more honest that way.
On one end of the spectrum, you have personal and "defined contribution" saving and investment schemes: the individual carries a personal pool into their later years where they draw it down. How are differences between the contribution+performance and lifetime needs reconciled? Estates pass inheritances or individuals are bankrupt and we recursively ask ourselves what sort of system will cover their needs.
In the middle, you have what I think you want. An insurance pool redistributes the contributions, performance, and needs among a cohort. How are the aggregate assets and lifetime needs of the cohort reconciled? Contributions could be curtailed in response to excess accumulation or increased to cope with unexpected needs. Like any insurance scheme, the risk management has complexity around managing liquidity in the face of time-varying needs, contributions, and investment/economic performance.
But what skeptics see is an ugly reality unfolding further down that spectrum. Population growth and the long delay between contribution and withdrawal is (either naively or willfully) misinterpreted as excess accumulation. This is used to justify either insufficient contribution or "theft" of assets to fund other initiatives than the insurance pool. This leaves a hollowed out pension systems with defined benefits that cannot be satisfied with their meager holdings. As with a Ponzi scheme, they appear to work while the incoming contributions from an ever growing cohort are used to pay outgoing benefits to an earlier, smaller subset of participants. They collapse when the participation rate fails to grow fast enough to meet the ever growing needs of the aging cohort.
Even if you save your retirement in a real estate, it's value is tightly correlated to amount of people in productive age when you try to sell it.
The only thing that can save one, is to start saving money early and give it to componding effect. Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it”.
Anything else wont work because demographic at least for europe is bad.
The good information is that to make componding effect to work, crypto is much more compund effect friendly asset in the world. Of course, in the mean time you need to use your brain to not lose your priv key or being phished etc.
Good luck
If the future population does not drive a large enough economy, there are dwindling products and resources available to swap for all existing financial instruments. These real resources are things like clean water, food, medicine, shelter, energy, technology, and services which cannot be stored over a person's lifetime and then consumed decades later.
It seems to me that the instruments with meaningful value in this picture are those rooted in a right to capture future production. That is things like ownership shares in continuing business enterprises, industrial infrastructure, natural resources, buildings, and developed land for housing and commerce. Of course, infrastructure and buildings decay over time, but they do represent a kind of real stored value for a planned service lifetime.
An actual plan to take care of a shrinking population would need to think about how automation can increase the efficiency of production such that a smaller future generation can generate sufficient output to satisfy the needs of the whole population including the elder non-workers. To avoid the Ponzi threat or more generally the "musical chairs" game mode, this plan needs to accomodate continous, incremental decline. The important technological and cultural skills to operate this system need to be passed down to ensure continued production for all who remain alive.
In USA, social security and health care are different issues. SS can be patched up. Health care is on course to consume the entire federal budget.
Well, after the boomers have died, Generation X and the Millenials will demand their retirement package. The population age distribution will not become a pyramid with the next generations.
> just raise contributions a little bit
A little bit. Lol. In Germany the contributions are quite unpopular, too (and rightly so with 20% removed from your gross income), but the government just increased the tax subsidies over the years. Nowadays, they amount to about 30% of Germany‘s federal budget — on top of all the contributions. How much money do you think does a society need to pay for their retirees to make a redistributive pension system sustainable?
> See, even though you’re ostensibly investing money so you can retire later, what happens in practice is that your money is being injected in parts of the economy to fuel your investment. And ultimately, part of that money will be used to pay currently retired people.
No. You have a weird notion of how capital markets work. In a capital based system an individual saves for his retirement. Money is put aside every month and invested over a long time. The individual‘s money and its returns of investment are used to pay the pension.
You can make this a public system where everybody is forced to pay and even set up a national fund. It can be subsidied a little to support the poor when retiring.
This is how to render this system fair and sustainable.
My point is, you can't eat money. You can only exchange money for food. You can't heat your home with money. You can only pay for energy. You can't drive with money… well you get the idea.
So you're saving now so you can retire later. From an accounting perspective, sure, you increase a number there now, so you can decrease it later. What you cannot do is store actual food for several decades, accumulate enough energy for several decades, or store all the material you'll need several decades from now.
What you'll eat 20-30 years from now will not be taken from the current economy, it will be taken from the economy we'll have 20-30 years in the future. If there's no food there you will not eat, and that's the end of it. Maybe you'll have your money all right, but food will just have become too expensive for you to buy enough of it. (Now I talk at the individual level, but this is obviously a scale thing: some people will eat all right, just not everyone.)
Hence my argument that even capital markets ultimately are a form of redistribution. Because at some point, either the young work so the old can enjoy retirement, or we leave the old to fend for themselves. Or something between the two ends of that spectrum.
When you go from 10 active people to 1 retiree to 2 active people to 1 retiree, you can't solve a problem by increasing contributions by a little.
And no, investing money for retirement is absolutely different from spending it on the retirement.
I've addressed this remark here: https://news.ycombinator.com/item?id=31107334
I am not sure how it works in USA, but in Poland it's similar scheme as in Germany.
Pure Ponzi-like scheme, but if you decline to participate in it, then you go to fail for avoiding it.
Anyway, there are many more people who can join the crypto trend than polish Social Security system. Growth trajectory is downward, and only printing more many can save it from collapsing.
Had 4 points upvoted and now down to 0 points, arguably Bitcoin et al enthusiasts/gamblers who instead of actually responding to my points can suppress my comment from the top of a thread by a quick click of a downvote - giving them a reward, dopamine hit at the same time; ideologues who are financially incentivized to suppress counter narrative and promote their propaganda, whereas I'm not financially motivated or incentivized to spend all the time I have to write out what I do.
Honestly, the arguments are basically the same as the gold bugs and the motivation is the same. People are invested in gold so they want it to succeed even at the expense of other people. Same with cryptocurrency.
That is most definitely a political question.
I think the article has a strange reasoning about crypto trying to "save the world".
For me it's pretty clear: individuals can now store and transfer value on the internet using a consensus algorithm. Plenty of you claim that it's enough to have a democracy that controls a central bank. That way you also have some kind of consensus on your value storing and trading. Problem is that this democracy/central bank is not stable in every country. So crypto provides real "internet money", with all benefits and drawbacks.
Whether that improves or worsens society, is purely a political question. But it's clear that cryptocurrencies try to live outside of governmental control, which is of course where most of the benefit comes from.
I believe it’s naïve to expect that it will remain outside of government control. That it won’t get slammed with the same laws and regulations applied to fiat currencies.
Governments live on money. As alternatives gain traction, the governments take notice and start regulating. There’s a fair bit of historical precedence around this.
Not sure what about crypto is outside government influence.
Crypto is regularly taxed, seized and landing people in jail. Countries that can't manage that wouldn't find an offshore bank account, as evidenced by their entire population of elites having one. "Government can't touch my crypto" is a founding myth.
But fundamentally, I believe we agree.
Make crypto-crypto transfers: no problem.
Of course when government cracks it down, it will be hard to turn into fiat or buy/sell legal stuff.
It's counterintuitive to think that a financial instrument that increases transparency would make people more difficult to govern, and it would - unless the government is very corrupt.
As a species, we have developed government control because in general, large-scale anarchy doesn't work well.
Not really. Society has long since been a push and pull between governmental control and anarchy of disobedience rendering some control irrelevant or impractical. And we are much better off for that - governments worst authoritarian instincts are frequently tempered by the general public simply ignoring their pronouncements.
Except that, from a practical perspective, if you live in a country without a stable "democracy/central bank," using fiat from a stable country (e.g. dollars or euros) is a better solution than cryptocurrency in pretty much all cases. AFAIK, cryptocurrency isn't in proper circulation anywhere, so you're likely going to have to do the same kind of forex transactions to get it, plus you're going to need a computer and internet to use it. Also stable-country fiat also doesn't come with weird ideological monetary policy ideas baked in (e.g. "money should be deflationary!").
The idea that money should be stable with mild inflation seems to be the consensus view of the people (in multiple countries!) who actually have responsibility for the economy as a whole, and the economies that have stumbled into deflation don't seem very healthy.
Deflationary money seems to mainly appeal to people who are most concerned about jealously guarding the value of their little private hoard. Bitcoin was likely designed by someone like that who happened to be a talented programmer.
Inflation ruins the store of value function of money, but a little inflation isn't a bad tradeoff if the medium of exchange function of money keeps working.
The reason for this bias is that our society defines itself through a high degree of the division of labor. If money stops flowing, the division of labor stops and without the division of labor we are going straight back to the stone age (hyperbole). This is why economic recessions and depressions are feared more than economic booms.
So how do you get your money out of the country when you are not allowed to get your money out of the country? Strap dollar bills on your chest, or just use crypto?
For that scenario, the better question is: how are you supposed to get cryptocurrency if you're not allowed to get your money out of the country?
But that's not the scenario I was addressing, what I was addressing the circumstances that lead to the very real practice called "dollarization":
https://en.wikipedia.org/wiki/International_use_of_the_U.S._...
> The U.S. dollar is also the official currency in several countries and the de facto currency in many others, with Federal Reserve Notes (and, in a few cases, U.S. coins) used in circulation.
A list is here: https://en.wikipedia.org/wiki/Currency_substitution#US_dolla...
Those are all political problems. Technology does not solve political problems. Politics solves political problems.
All cryptocurrency does is obfuscate the politics behind its monetary system. As flawed as our monetary system is, the politics behind it are visible and under control of a government. In my country, my government is elected, and I'm an active and informed voter.
Thus, I think the best way to solve those problems is to be an informed voter, vote, and encourage other countries to adopt democracies.
Bitcoin has solved an international transaction of money which were political problem.
That is a problem that was already solved. I've personally bought things from foreign countries (in person, and via mail order) with a credit card.
> Try to buy something from not-so-friendly urisdiction. And you will see the difference between storytelling and business.
Give an actual example, rather than a vague hand-waving hypothetical.
Some random points:
1. For mail order: paying is only part of it. Shipping is just as important. Are you hypothesizing a "not-so-friendly [j]urisdiction" where international payment difficult but international mail is easy?
2. For in person: would the person prefer my crisp American dollars or dicking around with Bitcoin addresses and waiting hours for transactions to confirm?
3... I could go on.
My general problem with cryptocurrency "use cases" are they tend to assume the utility of cryptocurrency, ignore alternative solutions, and latch on to some narrow aspect of a situation when zooming out even a little would reveal contradictions and problems.
To me you're saying nothing's money unless the government says it is.
In my community there's a whole ecosystem of people trading goods and services in Bitcoin, silver, and Monero.
Governments have always had the ability to dictate who is a citizen and who isn't. Someone born in Angola is not protected by or subject to the US Constitution.
> To me your saying nothing's money unless the government says it is.
Now you're learning! Granted in a democracy the people have a say in what governments do, so if you convince enough people that using bitcoin as a medium of exchange is a good idea then it may eventually be so. Good luck!
Here's what happens right now if you try to pay your taxes in Bitcoin and refuse to convert to dollars:
1. The IRS warns you and charges you back-taxes for the delay
2. If you still refuse to pay after a certain period of time, they audit you and garnish any accounts they have access to until your taxes/back taxes are paid
3. If you have no IRS-accessible accounts, men with guns show up and seize your property, including but not limited to your Bitcoin, to make up the difference.
And for extra points you may get charged with Tax Evasion, which can send you to jail. This entire process may take decades, but it happens.
Sounds like pretty crappy money to me if that's the result of trying to use it at any significant scale.
> In my community there's a whole ecosystem of people trading goods and services in Bitcoin, silver, and Monero.
Great. You and I could also arrange to barter bars of extruded aluminum for goods and services. That doesn't make extruded aluminum money, or at least not "sound money". Note however that in the US those transactions are taxed just like any other, with the amount of tax determined by their value IN DOLLARS. If you're not reporting those transactions you're theoretically subject to the previously mentioned series of events.
Now the IRS can't see literally everything, so you can get away with it to a point. But if Bitcoin/crypto eventually reached the scale where a significant number of economic transactions are transacted in it, one of two things will happen:
1. Enough voters/lobbyists will be convinced of its viability that political changes are made to accept it as currency (unlikely, given the traits of bitcoin)
2. An epic tax-evasion crackdown that will make the conviction of Al Capone look like a Cub Scout picnic.
One can dream
> 2. An epic tax-evasion crackdown that will make the conviction of Al Capone look like a Cub Scout picnic.
Monero FTW.
Your response to governments dictating who's a person:
> Governments have always had the ability to dictate who is a citizen and who isn't.
You're saying a non-citizen isn't a person? I find all your viewpoints defeatist. Maybe that or you still side with governments worldwide? If so, fine, but I don't.
> Granted in a democracy the people have a say in what governments do
Do they though? In America, from a purely signals and systems perspective, my choice comes down to red or blue (1 or 0) on a number of representatives and measures I do get to vote on--that's ignoring possibly corrupt voting.
In the myriad of complicated laws that are passed, and even wars that are fought, I don't get more say than a binary choice on abstractions (representatives)? In what way is that government ruled by the people!?
Monero makes things more difficult, not impossible. If the government decides to outlaw Monero then by definition it will only be used by outlaws, and so long as the majority of the population doesn't see trading in Monero as worth the risk, it will remain limited in scope.
> You're saying a non-citizen isn't a person? I find all your viewpoints defeatist. Maybe that or you still side with governments worldwide? If so, fine, but I don't.
All right, you define what a "person" is and how it's relevant to this discussion. For all practical matters a random person in Angola might as well not exist to the US government, unless the US government decides they're important enough to warrant attention.
I fail to see how the government not being able to deny my being a biological human is relevant here. And actually theoretically they could deny it and refuse to treat me as a person, it just wouldn't change the laws of physics. The Khmer Rouge in Cambodia were notorious for telling people they couldn't be starving because "we're all equal, so if we're not all starving how can you be starving?"
I also wouldn't call my views "defeatist", I'm just presenting uncomfortable truths that I've yet to hear a coherent strategy for tackling. Which can be summed up as: "How do you plan to handle the men with guns, and the authority to use them, who don't agree with you?"
> Do they though? In America, from a purely signals and systems perspective, my choice comes down to red or blue (1 or 0) on a number of representatives and measures I do get to vote on--that's ignoring possibly corrupt voting.
> In the myriad of complicated laws that are passed, and even wars that are fought, I don't get more say than a binary choice on abstractions (representatives)? In what way is that government ruled by the people!?
I'm not saying the system is not corrupt or that it's perfectly representative. No system is either. But changes do generally follow the will of the populace in the long term on issues that affect a given population as a whole. Just look at Marijuana legalization, or the fact that we did withdraw (albeit with criminal incompetence) from Afghanistan. Now whether those changes are objectively positive or negative is another story, the whole process is full of half-measures, short-term thinking, corruption and unsatisfying messes. And citizens don't have perfect power as they would in a direct democracy (for good reason, lots of issues there). But we've yet to figure out anything better than some variety of democracy, and I don't see how crypto solves any of these problems unless you think the government has already collapsed beyond the ability to enforce laws on crypto users (it hasn't, at least in the US).
You can either try to reform the system or replace it. Either way you need a solid plan for what comes after that accounts for the known variables, and I've yet to hear a "crypto will replace the dollar" argument that does so, from even a cursory reading of history.
I appreciate your well thought out response. Thanks for the discourse.
> All right, you define what a "person"
I was only originally using this to say that the government can't tell me what money is in the same way it can't say I'm not a person.
That said, you're correct the government will likely try to destroy private currency that is out of their control.
> Either way you need a solid plan for what comes after that accounts for the known variables
I agree. This is where I spend my time in the crypto-sphere.
Here's a fun resource on agorism:
https://www.libertarianism.org/columns/black-market-activism...
Maybe it's a bit over optimistic. Either way, crypto and agorism is my current plan, and you're probably right in that I should shore up this plan.
Bitcoin was actually the answer to the government having shut down all attempts at alternative digital money prior, but for sure it's not perfect.
Cheers,
reedjosh
Wrong, as soon as governments needed to drop the gold standard they did it. Why wouldn't they do the same with the bitcoin standard?
This is such a weird belief. Is the claim that prior to the 20th century there were no wars of conquest or colonies? No kings and countries running up ruinous debt?
What surprises me is that people think that the problem is evil/incompetent governments mismanaging the currency. Wouldn't it be more productive to think of reasons why such mismanagement is inevitable instead of just sweeping it under the rug? Greece did austerity and it didn't work. If Greece hadn't done austerity, it could have gotten a few more years of 5% growth. Austerity ended up increasing indebtedness instead of reducing it by massively reducing the GDP of Greece.
It's only rational to "mismanage" your economy away from such a financial crisis. The real question should be, why is growth required every single year? Why can't we just stand still for a year and then pick up growth again?
In my opinion it is quite simple. Savings and debts must equal in the global economy. So if the government introduces a debt brake, the private sector must reduce the amount of savings it holds. If those savings are held as cash, the government can't do anything about it. It can't just recall the bank notes. So debt can't go down. If it does anyway, then the money that is currency circulating, moving around from person to person is saved as cash until the amount of money that is actively circulating shrinks so much that daily transactions can't be made. That is what recessions are. A sudden malfunction in the medium of exchange function of money.
Sure, bitcoin maximalists love to point out that if you bought it a year ago, it's up XXX%. But what if I bought near its high value? Not so good a proposition then.
Do you not notice what’s been happening to it at an accelerated pace over the last 30 years?
I’m not arguing for bitcoin either way. But I implore you to take a hard look at your definition of real value in a system with inherent inflation that forces you to speculate in order to preserve any “real value.”
This ^^^
Right now, if you're willing to buy in decent quantity you can still get 90% constitutional silver at only $28.64/$1 face value.
Wow, also this!
Say inflation is 8.5%, and you're holding an ounce of gold, then that gold raises by 8.5% in kind, you are still losing value as now you have to pay taxes on the 8.5% gained even though you didn't really gain anything.
Gold is volatile in real terms [1]. If inflation is 8.5%, your gold might be worth 10% more, 100% more or 90% less.
[1] https://goldprice.org/inflation-adjusted-gold-price.html
If you had some perfect asset (not gold since the volatility distracts you) that increased in dollars exactly as much as inflation, then you would still lose value to taxation even though you only gained as much as inflation.
In the real world, yes, no perfect asset like that exists, so it's worse than that. You have to risk your earned value to keep your earned value over time.
TIPs [1] come damn close. The interest is subject to federal tax, but you're still coming out ahead.
[1] https://www.treasurydirect.gov/instit/annceresult/annceresul...
TBH I don't know too much about them, but from what I'm seeing they're something like 1-2% interest. Inflation is > 8% right now per the government's own numbers
https://www.bankrate.com/rates/interest-rates/treasury/
Am I mistaken? If so, I'd love to find a way to get guaranteed inflation beating returns.
That's a real yield. TIPs "adjust in price (principal amount) in order to maintain their real value" when inflation rises [1].
So if you buy a TIP for 100 that pays 2%, and inflation is 8%, the face value is adjusted to 108 and you get a 2.16 coupon. (Super simplified, to the point of being technically incorrect, but framework-wise fine.)
Why doesn't this happen? Two reasons, people have loss aversion so they prefer being lied to through the money illusion. They get to blame you when the truth is that they are at fault. If they preferred taking the loss they wouldn't have to find a scapegoat. The other reason is that inflation has an uneven impact on the economy. Some gain and some lose and many people want to be winners or at least for there to be the possibility of winning, even if it is a detriment to society overall.
Cash encompasses physical notes, bank deposits and Treasuries. On one end, we have a form optimized for transacting. On the other, for transporting value over time [1].
Bitcoin is less efficient than Visa or Mastercard. It's more volatile than a Treasury.
It always feels strange talking to people for whom the hoard of cash is the important bit. For many people it would be far more useful to stabilize house prices - which are affected by a completely different set of factors.
Today you get a loan (if you can) to start a business.
It used to be you saved to start a business. But today savings is literally penalized.
This debt based system makes you depend upon it. I wouldn't need a home loan (or at least not such a large one) if the government didn't subsidize loans and cause inflation.
You are mixing up money and land. Those are completely different topics. You need a land value tax for land. Your monthly payments are going to be limited by your salary. A higher interest rate means the bank takes a bigger cut. You're spending the same amount of money either way. A higher income would help you more.
>It used to be you saved to start a business. But today savings is literally penalized.
You are saying this, while savings are at an all time high. The money supply is growing significantly faster than inflation. If anything, we are pandering to savers way too much. What people don't seem to understand is that the rich save way way more than anyone else so increasing overall savings doesn't matter for the vast majority of people.
Also, let me tell you something. Let's say you visit your family and your parents make you food. Would it be reasonable to tell them that you want to make your own food? It makes no sense, your parents already made food. Just take it. Don't pile up more food that nobody wants.
It's the same with money. The rich have saved such an incredible amount of money, that there is literally no point in saving your own money.
When?
While we've just hit an 8% inflation spike that may not persist, the past 20 or so years have been uniquely low inflation.
Please describe how loans are "subsidized", other than various countries' first-time-buyer schemes? Is your explanation US-specific?
Even pensioners are still dependent on a young population that is earning/producing.
I actually don't know what that is supposed to mean. You know, I am tired of these word games. Democratic People's Republic of Korea sounds cool until you realize that this is the official name of North Korea which has absolutely no relationship with democracy.
In theory sound money would imply a money system that acknowledges the existence of the real world and human needs instead of deferring to theoretical models that are known to diverge from reality. Since money is capturing reality perfectly, it introduces no representational errors i.e. money that is in your bank account actually represents the capability to purchase a good or service immediately.
Gold does not do this, unless you want to exchange your gold certificates (gold standard) for gold. When people save gold by putting it under their mattress, they effectively shifted their production schedule ahead, i.e. they produced today and they shifted their consumption schedule back, i.e. they consume later. The problem with this approach is that they are not asking anyone, whether they are willing to switch roles. By that I mean, is there anyone who agrees to consume now and produce later?
If nobody made such an agreement then you will be surprised to hear that there is less produced than you planned to consume in the future, after all, you didn't tell anybody, nor did anyone approach you and explicitly gave you permission to consume in the future. There is increased demand and you get inflation. At some point people start working again and end up overproducing, there will be deflation. This mismatch in the consumption and production schedule is the cause of inflation or deflation over the short term with a gold standard. Sound money does not solve the problem. In fact, it is the root of speculation.
If Bitcoin is sound money then the world doesn't need sound money. It needs money that isn't divorced from reality. It needs money that rewards planning ahead. It needs money that signals both abundance and scarcity of capital. It also needs to account for capital depreciation of idle capital and the loss of time of the unemployed.
I don't think this is true, bluntly.
Technology does not automatically solve political problems. But technology does sometimes render bad political actions unviable.
I would argue that a large part of the widespead acceptance of homosexuality in Western society was due to the deconstruction of singular media gatekeepers by the move of discourse from newspapers to the internet.
That is absolutely technology solving a political problem.
Put another way, technology allows groups to organize who otherwise wouldn't have been able to. In Bitcoin's case, it's largely libertarians.
And yet folk from my (mostly homophobic) part of the third world argue the opposite: that homosexuality is widely accepted in the west because it was promoted by media and entertainment gatekeepers. I disagree with them (and with you) - I think sexual liberation was an idea whose time had come; and the progress can be plotted to the 60s and beyond (maybe even as far back as WWII, when women were economically empowered); preceding even ARPANET.
I dabble in cryptocurrencies, but I can still see the inevitable inequality inherent in the rise to dominance of any one or small group of them.
I do have to say, however, that Vitalik Buterin says all the right things to appear as someone that does want to help the world be better. Separately to his creation which, if it dominated, would also not be a harbinger of equality for all.
Blockchains do create fundamental value, not just speculative value. Tech people often dismiss this claim and do not want to analyse further. To demostrate this, I wrote a post where I am comparing stock and cryptocurrency trading venues and showing that a decentralised system is the most cost efficient choice at least with some data points and why it is so:
https://tradingstrategy.ai/blog/most-efficient-market-is-on-...
I agree, Uniswap has its issues with scams. Even with added compliance and listing policy, it is highly likely to be most cost efficient. For example what we can do is that we focus only known good trading pairs like Bitcoin and Ethereum that are not scams. These are not scams and they still trade more efficiently on Uniswap.
There are efficiencies you do not see in traditional financial systems like - Open source - Open data - Open ledger
I think the most relevant talking point is about the open source. We know Linux beat UNIXes on the server market. We know Android beat Microsoft Windows Phone.
More about this in-depth in the blog post, of course.
In my humble opinion you were not, so I hope you don't mind me sharing some background context.
> Maybe the shadiest form of these deals comes from the public equity markets from a no-fees online broker Robin Hood and its Payment For Order Flow (PFOF) because of the conflict of interest of a broker making more profit when it is "saving in customer transaction fees." > > In decentralised markets, such shenanigans do not exist.
MEV is an extremely well-known, well-studied empirical phenomenon that happens today and does not have a known solution, and it's exactly analogous to front-running. It's especially funny that you put out this blog post almost exactly on the 3rd anniversary of the publication of the Flash Boys 2.0 paper.
What I want to know is, are you just ignorant of MEV-related problems, are you trying to mislead your readers, or do you have some sincerely-held belief that MEV front-running is somehow morally okay in a way that PFOF isn't?
I am well aware of MEV issues, as I have been developing for Ethereum for the last 6 years or so. They hurt me as a user as well. However, due to the already long post, I decided not to include them in this post and hope to write a comparison in the future. As you said, the comparison could be really interesting.
I believe MEV hurts the ecosystem overall. It is wrong, but I know it can be technically solved, as opposite to solved with regulation, on multiple levels. Some of the current solutions include e.g.
- Avalanche commit and reveal subnet
- Short-term auctions like Cowswap
Basically, everything where you can wait for a better trade execution effectively counters some of HFT issues, both in traditional and crypto world. You can always decide which price you are willing accept and then just wait for it.
Unfortunately Ethereum 1.0 generation AMMs and swaps are not built this in mind, because they come from the era when MEV was not an issue yet. But as I said, this is being addressed in the next generation of the technology. Also unlike on stock markets, as a user you have more transparency on the execution so you can verify that you did not get screwed over (unlike with Robin Hood).
the range of possible exploits on centralized equities and futures exchanges is very limited. HFT works, and works well, to drive down costs for retail and institutional traders.
there is no happy path in defi which results in narrower spreads, and less risk of block re-orgs, or other exploits which either drive up costs or massively undermine the entire ecosystem.
once again, trust is a lower energy state which pays for itself. this trustless, decentralized mania only serves a tiny subset of early entrants, arbitrageurs, and VCs. it does not result in a better market system by any way of measuring that I can see.
> the fact that most of the alpha in defi is in arbitrage tells the whole story.
What measurements do you use to define cost-effective? I am happy to do an apple-to-apples comparison if you tell what would you like to see in comparison. Also if there is a post/study that shows that there is only arbitrate in DeFi I am happy to read it and try to understand if I am wrong. While this might have been a situation in the past, I am seeing it changing over the last year and half.
In my post, towards the end, I pointed out some facts that even with HFT and industry consolidation, traditional finance has not always worked in the favour of a consumer.
We've become rather fixated on the notion of systems that can somehow produce good outcomes no matter how vicious its members are. The problem here is that any political and social order is only as good as its members and governing bodies. There isn't some disembodied "system, out there" that can strap us all into externally imposed restraints and put us all in cages to constrain our bad actions. The quality of a society is absolutely dependent on its members respecting the common good which includes respecting good laws. (That's another point. Leaders are not free to impose any old law and claim it is legitimate. Laws can only determine the general good as proscribed by natural law, i.e., human nature.) Indeed, I wouldn't want to live in a society of savages in which a tyrant exercises such control. This is precisely the lesson to be learned from Hobbes' Leviathan: the more immoral a society becomes, the most governments clamp down to try to maintain order and the viability of that society.
That doesn't mean we can't discuss better or worse political orders. Indeed, political orders are determined by law and law by objective moral principle.
And a word on equality. So far, crypto seems to be a place for wild speculation and the amassing of (real or imagined) wealth by a relatively small number. That's probably a large part of the appeal, like the lottery. But more to the point: equality is not a virtue. Justice is. But who said we are all due the same? We're not. No two people are economically equally valuable (nor is economic value all there is). The problem is poverty, or the excess influence of money in politics and culture, or usury and left, or unjust pay, but not inequality. How is crypto a solution to these social problems, and in ways that surpass traditional currencies?
There are some nice ideas there, but in practice everyone seems out to "get theirs".
More to the point, how can we create a more equitable financial system, where everyone has access to a banking license?
> How can we create a more equitable financial system, where everyone has access to banking services?
Is a government mandate away. If you want it, got to the streets or call your representatives. In most countries, a simply executive decree is enough to get it.
There's nothing there about equity. It's a completely different problem.
I'm not suggesting crypto is some panacea, but it does eliminate this very important problem for people on the bottom of the economic ladder.
I don't know if adoption will increase, nor do I have a strong opinion on whether it should. But it does solve the specific, narrow problem of lack of basic banking for the poor.
Some people can pay for groceries with crypto, for example in Slovenia there is a supermarket chain that accepts Bitcoin Cash (BCH) [0]. map.bitcoin.com [1] displays local businesses that accept crypto.
Then there is acceptbitcoin.cash [2] which lists online stores and services that accept Bitcoin Cash, Bitcoin and/or other cryptocurrencies.
That is one of the main things I like about Bitcoin Cash: it focuses on user adoption as money and not as a store or value or speculation investment. Avoiding the exchange to fiat money is essential for P2P electronic cash like Bitcoin was meant to be.
This fantasy of banking the unbanked has remained a fantasy. In fact it is so impractical that barely anyone is working on it.
Meanwhile technologies like UPI have actually transformed people's lives and actually made banking accessible to millions.
Why focus on a dead end technology like crypto when we already have better options?
Why focus on dead end legacy currency controlled by corrupt governments when you can adopt more modern modes of transacting?
Ms. White's point, here, is that there shouldn't be so much toxicity directed at individuals taken in by the crypto hype in the desperate hope of getting ahead. That level of discourse should be directed at the influence peddlers and grifters who are drawing folks in in the first place.
The paragraph you quoted is intended to help set the stage for why folks who don't know any better might look at crypto as the answer to their financial fears and anxieties. Later she points out that "I don’t think they are a feasible solution, and in fact I think they will worsen many of the problems they ostensibly aim to solve, but they are certainly being sold as the solution, and a solution that people desperately need."
In the EU - easy - get rid of PSD2 which requires banks to add OTP before actions, account number and password are not good enough anymore. Information and transaction providers now exist because of that but they require an application and a certificate that costs money.
If in the EU we get rid of those and go back to old "home banking computer interface" everyone can access their own account in an automated way.
Instead we now have to pay an external service which pays the state for certs each year to be able to automate our bank accounts.
This is essentially legal theft or a protection racket.
Image you have to pay a 3rd party for every sale you made. That is PSD2 in a nutshell.
Also easy - provide free bank accounts. Banks make enough money as is and are bailed out with citizens cash if they crash.
All crypto(currency) does is contribute to the pollution of the planet and provide no real value (progress). I'm not talking about all the scams that are going on in terms of value and I'm aware people got filthy rich by gaming the market, which isn't a market to be honest. It's a manipulative scheme, unregulated and I repeat myself, bad for the environment.
People should abandon the shared hallucination of believing money can have a physical manifestation. Money represents relationships between people. You can't own relationships without them becoming abusive.
People who maintain abusive relationships against the will of other people should be stopped and punished.
The way most cryptocurrencies are designed as if the people involved truly believe they can own someone else's time indefinitely.
These days, we painfully observe the culture of crypto in every single online medium that isn’t very carefully moderated, for example Twitter.
And about incentives, I think it’s very hard not to become some kind of “evangelist” or “shill” when a significant fraction of your net worth is invested in a digital item whose sole value depends on enough other people also believing in the project. You need to spread the hype.
In my opinion, all of this would be fun and games if it weren’t for the massive negative externalities all of this cause in terms of environmental damage and accelerating the climate catastrophe. This is completely evident, which doesn’t stop some crypto holders from denying it with all kinds of illogical arguments. That’s understandable — see previous paragraph.
This doesn't describe crypto over the past decade. It's become more pervasive, more corrupt, more destructive (from environmental impact to its role in facilitating hacking) and, with NFTs, more slot machinesque.
"The line separating good and evil passes not through states, nor between classes, nor between political parties either — but right through every human heart."
and
"If only it were all so simple! If only there were evil people somewhere insidiously committing evil deeds, and it were necessary only to separate them from the rest of us and destroy them. But the line dividing good and evil cuts through the heart of every human being."
-Aleksandr Solzhenitsyn
The climate externalities are significant, but they're not the only problem. If the whole cryptocurrencies space shifted to Proof of Stake tomorrow, cryptocurrencies would still have a tremendously bad effect by increasing wealth inequality (because just as with Proof of Work, it's baked in to the code).
Right, there's only bad people.
The bifurcation is between money laundering people and Ponzi scheme people.
The same as national health insurance. You make a law that everyone must be served by the banks. Easy.
Its bizarre that this is such an unpopular idea, when if posted in a thread about anything other than crypto, it'd likely not be scoffed at this hard.
Yup, that's how it works in democracies...
I think this approach is just as wrong as saying "crypto is the answer".
I think you're misconstruing the original suggestion, which was that a legal solution to the problem of the unbanked would be viable. You could pass legislation mandating that banks turn no one away, you could establish a publicly run bank of last resort, etc.
I believe those measures would be "easier" solutions to the problem than replacing the entire financial system, but that's just an opinion about a hypothetical.
This is the one I'm specifically discussing, its from a different user. This is the line that started the thread. Plenty of users are discussing this specific line I believe.
> The same as national health insurance. You make a law that everyone must be served by the banks. Easy.
and national health insurance is famously a fiendishly hard public policy issue (albeit one for which several competing models exist and have been put into practice). Working from an existing public policy model (like using France's example of offering bank-of-last-resort services through the postal service) still seems way easier than just deciding to solve it with crypto.
Yeah, I don't disagree that crypto won't fix this. I just disagreed that it was "easy". I took them as being literal.
Nobody here is advocating against democracy. People are just pointing out that blind trust in state institutions is equally as illogical as blind trust in the EVM. States have a track record of serving the powerful first, and sometimes exclusively. Trusting apparatus with a track record like this masks a sort of flawed optimism, just like putting your hopes of change in the blockchain.
Why would one look at history? Democracy is a modern phenomenon, and many modern states are republics, designed not to be full-blown democracies.
The UK is the perfect example. Hundreds of years of out-dated laws layered on top of each other to the point where nobody can tell what is law and what is a joke.
Literal nonsense.
English law is the preferred basis for cross-border contracts and English courts are the preferred venue for litigation between entities from different jurisdictions. This is very well attested - e.g. first result from Google:
https://www.qlts.com/blog/why-english-law-governs-most-inter...
They didn't propose replacing democracy.
Right, and saying "just pass a law" is asking the hall monitors to wave a wand.
1. Bad laws got us into this place
2. There's a lot of inertia in government
3. There's a lot of stake holders in government who don't have citizen's interests at heart
4. It's illogical to think you can, in light of this, just pass a law and fix it.
Yeah, we designed the law, and we know how it works. Sadly, we know also that the way it works is generally not how it should, and it has been co-opted often for the powerful.
It always baffles me why someone can't say "I'm opposed to X" without another person coming along and saying "that means you're in favor of Y". Don't respond to what you think I said, respond to what I actually said.
I didn't assume you supported crypto. I was pointing out that crypto has all the problems you specified as bad or worse.
> And crypto isn't dominated by the wealthy and being used to serve their ends? Open your eyes my friend
serve? Why would you mention something completely unrelated to their point, then tell them to open their eyes? To me it sounds like you're retroactively recasting your argument.
If I search for that phrase you are quoting/referencing in this thread, you are the only one using it.
I explained what point I was making. Do you have anything to contribute beyond attacking your strawman over and over?
Here is the "just pass a law" line. I've summarized a line that makes this exact point. I see no straw-men here. Can you point out where I make a straw-man? Genuinely interested in why you see this as creating a straw-man in my summary. I fail to see how else you can interpret other than 'just pass a law'.
Quotations marks imply a quote or a refernce to a term / phrase. When you deliberate misquote someone and then repeat that all over the thread as the basis for your argument, that is a strawman at best and pure bad faith at worst.
I see nothing in the line you are referencing that indicates any sort of blind trust is suggested. Even simple, easy legistlation works best when the trust it is based on is not blind.
Yeah, I'm done with this. I told you my objective was to summarize, you have decided I'm maliciously twisting someone's words. I'm not. I've told you as much. My misuse of quotation marks isn't proof in the pudding. I've explained multiple times, to you no less, my point but you've ignored it and have actually strawmanned it yourself. This is what you're doing right now actually by accusing me of random things.
I suggest you look into the "principal of charity". Its fine to disagree, but being hostile and accusatory isn't.
Read these while you're at it: https://news.ycombinator.com/newsguidelines.html
You've never explained how you got to the assumption that anyone here is suggesting "blind faith" in the government. Please go ahead and do that or don't claim you've "explained multiple times."
Honestly, this whole thing just makes me tremendously sad now.
It's slower and less sexy than new-tech and has a better track record.
it would be helpful to me if you could cite an example. i don't actually think this is true.
Sure there is. It's called "entrepreneurship". In fact, far more of the improvement in the human condition has come from it than the state.
It's astounding to me that we're on an Internet forum about startups, and people are saying that the only way to improve the world is through political activism.
Second, some of us have the experience of having been through, or been adjacent to, the social and political movements of the 1960s, which largely shunned actual political action in favor of personal change and the creation of new, non-state organizations. Despite the widespread availability of wholewheat bread in 2022, an honest retrospective analysis of this approach would have to conclude that it was largely a failure, at least in terms of the various goals involving widespread political and social change.
Thirdly, some of us have been a part of certain, ahem, startups that have gone on to be as much as part of "the problem" as anything that came before them, meaning that our expectation that entrepeneurial capitalism as the savior doesn't seem particularly promising either.
Sometimes the best fix is a disassembly.
As for "VPN being a scammer", this is all about trade-offs. If we had companies destroyed and robbed by VPN-powered ransomware, and we had plain people losing their life savings to VPNs, I'd argue for making VPN illegal. But it's not VPNs who are stealing people's money, it is cryptocurrencies.
That's a pretty American, libertarian take. As somebody who grew up in Western Europe, I'm not disillusioned by "the state" per se, and I think that the facts rather support that privatisation doesn't always make things better (e.g. railways). None of us may be "right" (it always depends on your experiences), but it's worth considering that "using the state to fix society" isn't a completely ridiculous take for everyone.
I'm not American. This take tends to come out of countries where the government has strayed away from its objective of serving the people. There are plenty of governments I'd trust, and not hold a libertarian view towards. Funny enough, most of these are European governments, so your point is well taken. That said, using the state to solve this problem isn't universally going to work. I bet Nordic nations could pull it off, if they've not already.
In short: if the government doesn't work for the people, and is structurally broken, I hold a libertarian perspective. If I see a government that works for the people, I lean neoliberal.
The lack of banking services for the poor is a market failure not a state failure.
State competition in markets that have failed to deliver necessary services has long been effective whether its through provision of housing or bare bones post office bank accounts.
It not only provides underserved communities it whips competitors into line because - surprise surprise - competition works.
It's the one weird trick parasitic oligarchs hate.
See: https://europa.eu/youreurope/citizens/consumers/financial-pr...
LMAO. we wish bud.
What percentage of emails sent in the world are legitimate vs spam? I don't think in principle we care about the volume of BS, we only care about how easily we can filter it out from the genuine stuff. I think over time our ability to do that will get better.
Once crypto as a platform has more useful products, it'll be more obvious that it's worth it to put in the work to filter out the BS. For now, I can see why it's not so obvious. But don't be disappointed that you didn't get in early.
We are told that crypto is supposedly a way to "stick it to the man", to fight those "evil banks/governments".
The trouble is that unlike fiat currency, there is no fundamental means of valuation. Crypto is worth what its worth on the day based largely or exclusively on entirely non-economic valuation, which is why its so incredibly volatile.
The trouble is that you cannot escape the truth that the world is based on trade. People make goods, people supply services and other people buy goods and buy services. People also buy and sell essential commodities. This happens both domestically and cross-border.
The value of fiat currency is ultimately tied to the economics of global, and therefore provides an objective means to value said currencies, both themselves and relative to other currencies.
You don't get that with crypto.
Well, you could argue that you do to a limited extent, but that limited extent would only make crypto comparible to emerging world fiat currency of some tiny country.... high-frequency boom and bust cycles, high volatility, potential for episodes of illiquidity etc.
The supposed “decentralized” revolution sounds about as likely as some kid who just read Marx leading a revolution. I think there’s a fine line between decentralized and deorganized.
i guess that line is the communication protocol?
This is my basic viewpoint regarding bitcoin et al. The significance difference is that bitcoin and similar are not territorial countries but free associations of people under particular conditions. This is where it gets interesting.
Can you expound on the fundamental means of valuation for Fiat currency? It's my understanding that there is no fiat currency with any fundamental backing. I was pretty sure Khadaffi was killed for promoting an African currency backed by gold, in lieu of the USD hegemony.
> The value of fiat currency is ultimately tied to the economics of global, and therefore provides an objective means to value said currencies, both themselves and relative to other currencies.
This ^^ is not fundamental... this is relative.
"The fundamental value of fiat currency is its capacity to pay taxes to a regional entity?"
just one take, but there are many ways to approach a fundamental valuation of a currency.
In my experience if you attempt to push back and ask how exactly they propose to fix these problems they'll just resort to enumerating the failings of our current system (the 2008 crisis, wealth inequality, tax evasion by the wealthiest etc...) which is all fair, but how does cryptocurrency fix this? I'd argue that so far it's mostly demonstrated that it shares all these issues, only even more pronounced.
The pyramid scheme at the core of cryptocurrency poisons the well, that's the original issue with this entire thing. You can't have a good faith discussion when one side expects that they're going to be billionaires if things go their way. I acknowledge that there's definitely toxicity coming from us cryptoskeptics, but you have to acknowledge that these days easily 90% of any discussion involving cryptocurrencies is going to use shallow catchphrases pushed by people who don't understand the technology, don't understand basic economic principles and are just hoping that their $1000 in ShitCumShibaCoin is going to make them millionaires.
On top of that the cryptocurrency side has over a decade of unfulfilled promises to account for. As far as I'm concerned we've exhausted the discussion years ago. Any debate surrounding cryptocurrencies on HN from 2017 is equally as relevant today, there's no need to keep repeating the same arguments over and over again from both sides. So today I mostly dismiss anything cryptocurrency-related as a scam and move on. It works well, too.
90% of projects out there are scams and have a crypto-token attached to it with a pyramid scheme on it and there also exists a 10% of projects somewhere that it is not purely a 'get-rich-quick-scheme', or a 'web3' crypto project that doesn't require a crypto-token attached to the product that has utility?
Thus, it also must mean that it is not going away 100% guaranteed, despite the rampant scams?
> So today I mostly dismiss anything cryptocurrency-related as a scam and move on. It works well, too.
So since 2017, there has been no regulations, crackdowns and legislation that has been proposed to regulate anything related to crypto and nothing has changed?
I really hope you try your best to avoid it and 'move on'. I should not expect you to continue to react to yet another HN post about crypto projects since you think all of them are a scam.
And even the not-entirely-a-scam projects, be it NFTs, the entire ETH or BTC sphere, are so full of money laundering, trade front running, people using it as investment vehicle, etc. that you can’t trust these projects either.
The old use case of “keep money in your BTC wallet on your own PC, send it as needed” doesn’t really work anymore (not even counting the issue of being unable to run a full node anymore)
What?? The parent was talking about the lightning network... which is built on top of the bitcoin node network.
> being unable to run a full node anymore
Full node syncs & runs fine even on a raspi 3... it's slow... and you're not participating in mining... but it's running, and does what you would expect a node to do (validate, receive & broadcast transactions).
Yes, but bitcoin is so volatile that you can’t keep money for daily usage in it. You can only use it as long-term investment or ultra-short-term wallet.
The regular usage – storing money for somewhere between one and 30 days – is really painful with bitcoin.
Are you saying that keeping some amount of bitcoin tied up in a LN channel is painful?
Or are you saying that holding bitcoin for 1-30 days is "regular usage" ?
Also, you completely ignored the point about running a node.
Holding money for 1-30 days is regular usage. You get paid, you spend it over a month on wages and expenses.
Bitcoin originally promised to be usable for that. Some companies actually paid you in BTC, some stores actually allowed you to pay with BTC. The original goal was to use BTC like a checking account.
Lightning is great at replacing the BTC network itself for transactions, but it doesn’t help much at allowing BTC to accomplish this original task of matching or exceeding fiat money in actual day to day usability.
This is (roughly speaking) the description of a currency, isn't it? I would point out that as a store of value, bitcoin's up
> [BTC's] original task of matching or exceeding fiat money in actual day to day usability.
I don't think BTC was intended to serve in the way you're describing. I believe it was designed to neuter/obviate at-large Central Banks (e.g. money printers, debasers of currency, economic overlords). In this way, it's gone a long way towards the intended purpose. Furthermore, as a base-layer, it's been extended considerably to support day-to-day usability. Further, as a Store of Value, it's done a lot better than USD in almost every time-scale you can compare, and all the ones that matter.
Here's the quote from the release (via: http://satoshinakamoto.me/2008/11/01/bitcoin-p2p-e-cash-pape...)
>>> The main properties: Double-spending is prevented with a peer-to-peer network. No mint or other trusted parties. Participants can be anonymous. New coins are made from Hashcash style proof-of-work. The proof-of-work for new coin generation also powers the network to prevent double-spending. >>>
I would also like to add that the original point of money is not to support a month's worth of planning... the point of money is to support planning across planting seasons and lifetimes. Wages and wage-work came along long after money was invented.
And Bitcoin was treated and hyped as a true replacement for Euro or US Dollar. And we hyped it as well. Online stores started accepting BTC, some companies started paying wages in BTC, the first BTC ATMs showed up.
Dogecoin started their tip bot with a tipping culture.
Neither Doge nor BTC absolutely were seen as investment vehicle or store of value, but instead as payment system and true currency.
I remember discussion about the volatility, and claims that with more and more people using it, its value would change less and less and it'd stabilize at about a BTC per Euro cent.
Even if you set aside the transaction costs and the staggering environmental toll of Bitcoin, it just doesn't function well as a currency because it has been used, and is being used, as a speculative investment vehicle by so many.
You absolutely do not want your currency to be rising and falling by double-digit percentages in value even over the course of a few years, let alone a few days the way Bitcoin frequently does. Furthermore, people accepting currency don't want that. This is one of the major reasons so few people do, in fact, accept Bitcoin as a means of payment. (Yes, I know some do. It's still very few, and always will be.)
Bitcoin has failed in being an efficient on-chain payments system and is somehow now an investment asset since that is its new narrative which is also a 'store of value' or 'digital gold'.
It seems that many supporters have admitted that it is not useful for its original purpose and that it is not instant, significantly slower than VISA and a extremely volatile to use as a currency.
[0] https://iopscience.iop.org/article/10.1088/1367-2630/aba062
> Is it going away 100% guaranteed due to the rampant scams everywhere?
> So since 2017, there has been no regulations, crackdowns and legislation that has been proposed to regulate anything related to crypto and nothing has changed?
From the other reply:
> Buy Bitcoin. Everything else is a scam.
Buy Bitcoin and use it for what? Currency? Payments?
Bitcoin has failed at being useful at all and it's intended purpose which is a peer-to-peer electronic cash system. Not an 'investment', 'store of value' and 'digital gold'.
We often praise projects that morph from their intended purpose in to something else (e.g. a good % of tech out there).
As a sibling comment said, they move to a separate able currency like dollars or Euro.
No one in their right mind will move to a fantasy token whose value oscillates up and down every second, sometimes to within several orders of magnitude.
Bitcoin's price fluctuation in the past year is 200%
Etherum's is ~300%
Monero, 330%
It's not as bad as Venezuela's or Zombabwe's hyperinflation, but no ine in their right mind would use a currency this volatile.
https://www.statista.com/statistics/326707/bitcoin-price-ind...
What part of "300% value swing over the year" do you not understand?
The “blockchain” thing killed it for me personally. Only so long I could just sit and see people naively wave around blockchain as a solution to every goddamn technical and social problem they can think of.
People buy all kinds of financial products which may not work out for them. There's an entire industry of OTC pink sheet stocks. Again, where's the outrage?
There's plenty of bad actors anywhere, but it becomes toxic when you have an app with an optional crypto integration and people come out of left field preaching their climate doom, crypto will boil the oceans, capitalist greed will be the end of us all, and all crypto is a scam. Meanwhile I'm offering a free to play game?
There's a toxic confluence of engineer's anti-biz perspective combined with a larger ID politics theme. Some benefiting from crypto are outside of the traditional channels. Wherever there's a disruption people take offense. In a word it is a hysteria over changing norms.
Criticizing over-engineered cloud solutions is done all the time. At the same time there are a ton of useful and pragmatic cloud solutions.
> People buy all kinds of financial products which may not work out for them. There's an entire industry of OTC pink sheet stocks. Again, where's the outrage?
This is being criticized all the time. At the same time there are useful financial products that are quite important for many.
> Wherever there's a disruption people take offense. In a word it is a hysteria over changing norms.
There is no disruption taking place. That's the issue. It's all just pure hype that quite obviously creates more problems that it claims to solve. People are tired of hearing the same arguments and excuses since years.
This is not like the Internet (or anything similar that has been used as an analogy) that was not taken seriously at the beginning, typically by established players who then got surprised shortly after.
Quite the contrary. It has been taken seriously but it didn't turn out to be what was promised. Just yet another hype, and "this time it's not like the last time". The negativity surrounding these topics came from insiders and initial adopters who started to speak out.
There are maybe some useful things in here that get overshadowed, but to be taken seriously those parts need to very clearly distance themselves from the rest.
He said 90% of discussions about crypto descend into shouting shallow catchphrases. And it's been that way since at least 2017.
He seems to believe that 100% of the projects are scams.
https://dune.com/rchen8/opensea
looks like up and to the right
On reddit, the crypto-themed subreddits (that I know of) are almost entirely comprised of doom-and-gloom-sentiment and astroturfing, while subreddits outside of this bubble are reminiscent of HN, where specific crypto projects almost never reach the frontpage and if they do, the discussion is seldomly about specifics.
For me its purpose is simple.
If my money is a representation of my time and effort, why should I accept the central banks' inflation "target" of even 2%, due to money printing? I don't see why anyone should be okay with that, particularly given that central banks rarely meet that target for long and more often than not overshoot by a significant amount.
It's insane to me that anyone should expect the purchasing power of their money to reduce, debasing their own time and effort. Why is that acceptable to people?
I kind of suspect you're missing some idea about how your particular idea of money leaks but I can't tell from your comment what in particular you're missing. Maybe try thinking through the relationship between not consuming something now, and wanting to consume something in the future without using the idea of money?
Have you ever considered why banks look like temples?
Do you know the weight of a shekle?
Consider discovering more about these topics before you opine on "money".
> Maybe try thinking through the relationship between not consuming something now, and wanting to consume something in the future without using the idea of money?
Do you know about "time preference"? Do you appreciate how an inflationary currency promotes a shorter time preference? Can you see how that impacts the world by promoting rapid consumption?
Consider investigating how hard money impacts time preference.
Because I can’t make 99% of my transactions with Bitcoin. Sure there’s a handful of vendors online that take BTC and a BTC ATM in the gas station in the shady part of town, but for majority of pitches, money is probably going to have to be converted to USD and go through a bank.
This is not possible with fiat. You can't have any confidence how much fiat will be produced by central banks at the press of a button. Millions? Billions? Trillions? Who knows...
Whenever I need liquid cash to buy things I can quickly and easily convert to fiat at anytime, and gain the benefit of price appreciation over the long term (+4 years).
The only problem with that at the moment is capital gains tax, but I believe that will be addressed eventually.
If crypto were the currency of a small emerging economy, it would find company in the volatility of its peers. (It would still stand out in a class of its own.)
Most people in those currencies prefer steady +2%/year (worst case: eight for a few quarters) to -70% one year, +90% the next [1].
> Why is that acceptable to people?
Nobody financially literate experiences it. Real wages vary within a narrow band, and have increased over the decades [2]. If you're storing value over longer periods of time, you store it in appreciating forms of cash (e.g. Treasuries [3], interest-earning deposits) or securities (e.g. bonds, equities, et cetera).
The people who do get screwed by inflation, the poor, do because of commodity volatility. Turning around and making everything volatile by handing them a volatile currency is the opposite of helpful.
[1] https://www.upmyinterest.com/fund?tick=Bitcoin
Deflationary currencies encourage people to _hoard_ money as a viable strategy, and the more people hoard, the more valuable it becomes.
In a society where the most profitable and safe strategy is simply to hold your money and do nothing with it, no business ventures will start.
----
So many questions people ask about crypto could be answered in a first year economics course - or simply by sitting down for a while and working out strategies with poker chips.
If people weren't so pugnacious about their complete lack of knowledge of economics, it would be rewarding to explain to people why things are how they are.
I hasten to add that as a socialist, I have a lot of issues with modern economics, but pretending that it's nonsense or that its mathematical models aren't useful is just silly.
People hoard things regardless. Inflationary currencies cause people to hoard property and we're watching the destruction from that unfold in real time in the US.
>Deflationary currencies encourage people to _hoard_ money as a viable strategy, and the more people hoard, the more valuable it becomes.
What's the primary source for this theory?
I hear it espoused a lot but it seems counter-intuitive. People still have to buy food, shelter and clothing in a deflationary environment.
Maybe if I read the larger arguments in works that established the idea I can get a better grasp on it.
Phrased like that, sure, how can anyone disagree?
But what about urging folks to not loose their shirts in a scam? Situations like going to a wedding, meeting up with relatives/family-friends, and finding out they're about to get involved in Amway, bizarre religions, Tony Robbins or other self-help guru's, or nutritional supplement scams? Does it ever work to intervene? Probably not often, but there's value in speaking to them about it. Same thing with crypto.
One useful thing you can do is to direct folks to the "Line Goes Up" video from Dan Olson (https://youtu.be/YQ_xWvX1n9g). It's an epic, 2 hour long take-down that's perhaps the most comprehensive and air-tight argument against crypto thus far. Does it convince people? I hope so. It should?
It pains me to see even smart progressive orgs like Popula (https://popula.com/) get themselves involved in crypto. And I don't want the most vulnerable people to be left "holding the bag" when this stuff inevitably pops.
The people who need it the most will ask questions like: "How can I send money from the EU to the Dominican Republic without paying 25% 'banking commissions'?" or "How can I help my mother in Jakarta to get money quickly?" and totally organically, we come to the conclusion that Bitcoin is the answer...
We in the West tend to be blind from the problems and solutions that the rest of humanity has found by using bitcoin...
See also: https://bitcoinmagazine.com/culture/check-your-financial-pri...
Meanwhile, overall computer literacy and even access to a computer was a massive challenge for many people in that country.
With sending bitcoin you have many more problems: converting your local currency to bitcoin, and if you're like 99% of regular people using a hot-wallet like Coinbase and they take a cut to buy bitcoin, waiting for that to clear, sending it to another bitcoin address, waiting for that to clear, then the person on the other end has to cash out. Is there a coinbase-like in DR? If we're talking about underbanked, then how do they get their money? Is there a window for this coinbase-like thing that will pay out in fiat of the local currency? I've seen plenty of bitcoin ATMs around my area, but none are for withdrawal.
It starts your argument with: "Those who disagree with me are poison".
I'd like to say more, but HN has a clear "Anti-Didn't-RTFA Toxicity" policy.
There are ways of expressing disagreement which are toxic, and there are ways of expressing disagreement which are not toxic. She has observed is that many anti-crypto people have been expressing their disagreement in toxic ways, and feeling justified in doing so. She is discouraging the first while encouraging the second.
If you'd spent any effort trying to understand what she or I were saying, you'd know that. It seems rather that you'd rather fight against imaginary arguments from your own head, which is far more troubling.
When I hang out with people 10 years younger than me, "toxic" means things as mild as "buzzkill" or "wet blanket" and "gaslighting" is whenever someone says something you doubt.
Those word carried very weighty and serious connotations when they started becoming commonplace vocabulary years and years ago. These days they're meaningless, and we just have to adapt that new reality.
- I want to have a beer!
- ok, scan this QR, and accept the transaction
- there you go!
- thank you, here are your 5 beers
- oh, did I just pay for 5? I wanted 1! can you refund me and take these back?
- no can do! pretty sure you said 5!
You can convince the 51% to cancel the transaction or you can call the police. What would you do?
Bitcoin may fix some friction issues if it's integrated into the current financial system, but it'd then just be a very small cog in a giant machine.
You may not agree, it may also be that you do not want to agree, and it's ok.
Now if you start calling people toxic because they state what's obvious for them, you can never get a proper discussion. It's also a little red flag that should make you question if you are in a cult.
Try that with a credit card transaction and you'll get kicked out for ordering 5 beers and only trying to pay 1. :D
It's just that in the case of btc, there's no central authority to cancel the transaction. You need a court order to force the bar to manually send the money back to you. The bank cannot freeze the funds. Enforcement is crippled. If this is not a reputable business (unlikely for a bar and very unlikely for a small sum like that but bear with me), it's way more likely to lose your money.
This is one of the reasons why money transactions are hard and costly. You cannot pretend that a blockchain fixes all that.
If I lose 50 € to some unscrupulous merchant, that's worth it to not have to ask the bank for permission for and tell them about every transaction.
in other words, you aren't poor enough for the loss of 50 € to mean that you are going to have less food this month and won't be late on your rent because of it.
But poor people do use banking services and in both countries I've lived in (US and Norway), there are built in consumer protections. They aren't perfect, but they are stronger than you get with crypto. You can often resolve a payment issue, for example. FDIC protection in the US covers most folks (most folks don't save more than whatever the limit is now).
And this protection, even if imperfect, helps folks have a little more stability in their lives.
To the extent that the risk profile is or will become (with expanding regulations) the same as with cash, cryptocurrencies provide no meaningful improvement over cash, but have significant drawbacks.
So why should we take all this effort to get to "just like cash, but with extra steps"?
In this world however, disputed transactions may even be more than half, depending on the industry. You can't approach something that ignores this as a serious financial tool.
Compare a frozen bank account to a fraudulent transaction you can't revert. Sure, the latter is more frequent, but the former is devastating.
That's a feature, not a bug.
BUt I get your point, I used some automated "pay by crypto" checkout system a few months ago, their automated system never picked up the transaction even though the coins where in their wallet, they first blamed me and said they would refund if I paid the fee's which were not in a coin I had on hand so had to do some giggling about to get this small amount (was like < $1 of coins so it was easier to just pay this fee than it was to complain), then after they recieved this fee they said they would return the funds minus 8% as that 8% was their "handling fee".
NOW they did return all the funds I transfered so maybe that 2nd email was just a canned message but it was still a jab to the gut them saying "yeah, our system messed up and we want you to pay to fix it".
Things like that happen when you have an intermediate handling the transaction, and personally for my day to day transactions I'm happy with using the existing banking system
BUT the existing system does have flaws in my opinion. For one example, sex workers, banks do not like touching that subject. Crypto removes the gatekeepers to electronic payment transfers, well it does until you want to convert it back to fiat and your crypto gets blacklisted by the exchanges. But me personally, I don't think crypto is the answer, but kicking banks into understanding that adults are adults and don't need banks holding the reins.
(Granted payments in the adult industry are some of the most charged back which becomes a pain for payment providers).
And back to the topic: yes banks deserve some stronger kicks and that can be achieved only through politics (aka, getting involved). Cryptids only shuffle the burden around a bit.
- I want to have a beer!
- ok, scan this QR, and accept the transaction
- there you go!
- thank you, here are your 5 beers
- oh, did I just pay for 5? I wanted 1! can you refund me and take these back?
- sure! can I see your QR code?
- there you go!
- thank you, here is your 1 beer and refund
Note that I'm totally burnt on bitcoin for practical reasons, but your example is just silly.
It's just a conflict to make the point stand, we are not discussing my creative writing here, so don't hurt my feelings for no reason please! :)
If you believe that Bitcoin is better money, then you also realize that we need just one Bitcoin. In this world view, every copy-cat project doesn't serve any purpose, other than making their founders and early investors rich.
Bitcoin toxicity stems from this mindset. Bitcoiners are anti-crypto. There has been so many broken promises, and so much lost money from newbies, that it's better to just defend toxically against every crypto project, rather trying to go through their arguments and trying to rationally invalidate them. You can safely assume that everything in crypto is a scam.
I don't think Crypto is a "more equitable financial system" but it is a more equal one.
https://developers.slashdot.org/story/22/04/18/016252/is-git...
As for the oligarchs, they're still rich, but much less so, and they've lost many precious toys ( yachts, villas, football clubs).
Yes, the average Russian citizen is excluded from the rest of the world, and will bear the brunt of the impact. As they should, because they're the ones who mostly sat idly and allowed all of this to happen. I have zero sympathy for the average Russian whose inaction made them unable to purchase a new phone or car. They won't starve to death, and they won't be bombes to pieces, which are the prospects facing Ukrainian citizens suffering from the invasion which brought all of this on.
Speaking for a point of privilege right here aren't we?
What do you expect the average Russia to have done exactly? I’m curious what you would have done in their position.
When was the last time you've left the safety of your home to put your life on risk to protest against your government?
> When was the last time you've left the safety of your home to put your life on risk to protest against your government?
Many times. Admittedly the risk of arbitrary incarceration or death has always been low in my case, but it's because the places I've lived in didn't allow things to get as bad as Lukashenko and Putin's regimes are.
> because the places I've lived in didn't allow things to get as bad as Lukashenko and Putin's regimes are
Was it you or people who fought and died decades or centuries ago to achieve the presumably stable democracy you enjoy today? Please do not misunderstand I'm not saying your activism or causes are not important but trying to tell you that things are really tough outside the comfort zone of the first world.
I'm sorry but is just seems cruel, unfair and childish to expect that by starving people living in dictatorships they will just topple their corrupt government.
Also have you thought about the novel idea of old school policing to catch criminals instead of collaterally damaging the lives every single human in the world other than the 13% privileged who happen to be citizens of stable democracies?
But even then, hardly anybody seemed to care about making crypto work as a currency. It was all about the speculation/gambling, get-rich-quick schemes, and memecoin pump+dumps. Nobody bought their groceries or paid their rent with crypto, it was just the currency of darknet drugs and cybercrime. And multi-million-dollar exchange hacks seemed to be almost weekly headlines.
Crypto wasn't going well, even before NFTs came along, and before the environmental opposition to mining ramped up.
Of course, there are ways to obfuscate the money trail, but if they start handing out hard prison time and fines, that alone will probably deter most.
So while you still have a "bank", so to speak, you're still limited to whom you can do business with.
If you want a bank with a publically accessible ledger, fine, build it, or have your government publish all banking transactions. But don't pretend bitcoin can be an alternative to the current banking system.
They have all this tradfi regulation, and it's shit.
I think, some people are just a bit blinded by living in the handful of countries that have systems which actually work.
If you want to stop angry responses to claims for the value to economic process you need to be honest about the extent to which crypto is a game for massive speculative gain, pump and dump, washing and money laundering.
Use of public signed ledger to audit value flow and provide certainty to low doc activity like cash in Africa, payments to farmers worldwide, ending the game of 90 day credit and discounting for prompt payment, reducing rent seeking. All laudible.
But please instead of just listing them, give us some numbers.
- How can we transport value through space at the speed of light?
- How can we transport value through time?
- How can we protect our life savings from inflation?
- How can we develop a free market of currencies which solves the issues of centrally controlled currencies?
- How can we align incentives such that we stop consuming low quality products that produce lots of waste and start valuing high quality products that last for decades?
- In general: How can we, as a society, enjoy the benefits of a low time preference?
Such questions are the reason why I believe Bitcoin is one of the most disruptive technologies of our century.
But I also think that these proposed solutions are enormously attractive to people who see them as a tangible option in a world where these problems are not being solved—where we are being failed by our political establishments in so, so many ways.
I may disagree with the author about where to place blame, but I think saying "political establishments" is more authentic than "the government". At least in the US, it's We the People. We're the government. So when I hear anti-government sentiments, I generally start to discount whatever it is that the person is saying. Especially in this era, when the main problem is concentrated wealth in private institutions and corporations, who unlike the government, operate outside of election oversight. Meaning we can't throw them out of office when they do wrong.
And that's been my main concern with stuff like crypto. I feel the sentiment that the political establishment often lets us all down. But rather than creating an anarchist playground in crypto to get mathematically free of regulation, maybe it might have been good to put some energy into getting involved politically and solving the actual problems. Vote, raise money for non-establishment candidates, run for office, all that stuff.
The long game for crypto looks like any other unregulated game: winner takes all. Perfect wealth inequality. Whatever edge I think I may have to skim a little capital out of that pool, would only end up being used to exacerbate inequality as I take from someone else. Which is why I feel that the original goal of crypto to empower people (by bypassing the rules of the system) is only going to backfire and make things worse. Just like with trickle-down economics, the Gramm–Leach–Bliley Act or any other policy that claimed it would enrich all but only enriched some.
We don't fix the evils of the system by feeding from it. We fix them by paying into the good, getting involved and doing the work.
Isn't that like, failing to admit that nothing's changed, just the names of the wealth holders (and sometimes not even that)?
It looks like we as a species very much tend to form Pareto (or more accurately, power-law) distributions of wealth just by being ourselves.
Can anyone explain to me how crypto is uniquely suited to solve this problem? I'm not in principal against crypto currencies existing, but more and more I just see people trying to apply it to problems that they think exist because "the financial system is over regulated" - without providing any argument for why regulation is causing the unfairness in the first place?
I have yet to see anyone define a single problem in the financial system that crypto is uniquely placed to solve (besides funding criminal activity and bypassing sanctions), that wouldn't be better solved from better competition between banks.
Not every country in the world has a banking sector that serves it's customers as badly as in the US.
- No human being that's able to reverse fraudulent or mistaken transactions
- Currency that's hardly more stable (probably less so) than the world's the least stable currencies
- A digital environment that's rife with fraud and a completely fresh and unknown attack surface due to the nature of smart contracts
- Sky high transaction costs. Meaning the poor (the unbanked) will may more for banking than the rich do. (like they do for furniture https://www.washingtonpost.com/news/storyline/wp/2014/10/16/...)
1) Custody: with fiat, the concept of self-custody is "store your cash under your bed," and as we continue to move away from cash into digital money, this option is being eroded. In crypto, the concept of self-custody may be an EOA (account based on a private key) smart contract (such as a multi-signatory account), or some combination. This is not to say that all users should be choosing non-custodial wallets, but the ability to choose and diversify your assets across a range of these technologies is, in my opinion, better than having no choice at all.
2) Mitigating the need for intermediaries in certain situations. Currently to handle escrow of digital assets in fiat systems, you typically need to hire or use a third-party agency. In some cases escrow could instead be managed by a (cryptographically-verified) program execution, e.g. "transfer X domain name record for Y amount of stablecoin assets".
3) Privacy-preserving attestations via zero-knowledge proofs, which could use a public (decentralized) ledger so that all parties can verify the validity of the proof.
4) The immutable and public nature of smart contracts gives them certain properties we do not have with our traditional financial systems. For example Libor manipulation went unnoticed for several years; partly because the systems were closed and difficult to analyze. The public ledger is comparatively easy to analyze and difficult to manipulate. (The most common manipulations rely on social engineering; e.g. convincing somebody to sign a transaction, or buy ShitCoin2000.)
5) General security and operational improvements. Much of our traditional system is upheld by FORTRAN and questionable security methods (PINs, passwords, cell phone 2FA). Crypto currencies are extremely adversarial environments that are forcing new security models and cryptographic primitives: zk-proofs and zk-VMs, multi-party computation, new methods of private key storage and management, post-quantum cryptography. Hopefully some of these advancements (being funded by crypto currencies) will eventually spill over to other sectors.
- Crypto inherently holds no security benifits over traditional banking. Fortran has been used for decades because it has worked, and there has been little need for change.Fortran isn't a security hole in itself. In fact it has all of the same problems with private PIN access and MFA, PLUS all the downsides that come with malicious smart contracts. As far as personal security goes, crypto is much much worse.
- The immutable and public nature of smart contracts. Why should anything be immutable? What if something is done by mistake, or by fraud? The benefits of traditional banking is that at the end of the day, there is a human on the other side that can reverse things if stuff goes wrong.
- I see no benefit of the entire chain being public, just because I give someone my public key, because I spend money with them, or my employer needs to pay me, why should they be able to see EVERY transaction I have ever made?
- The ledger is generally considered immutable; but the platforms and protocols built on top of it need not be. Social consensus can pivot to a new contract address. An analogy would be a git commit; you can update the head of your codebase, but your past changes are still present and analyzable.
- Better support for zero-knowledge proofs would be the eventual end goal for many of these systems, allowing users to shield data and maintain their privacy. I agree that not every transaction should be public, and it's a limitation of current crypto currencies that will likely take several years to solve.
[1] https://federalnewsnetwork.com/tom-temin-commentary/2020/01/...
[2] https://increment.com/programming-languages/cobol-all-the-wa...
[2] https://www.wealthsimple.com/en-ca/magazine/cobol-controls-y...
In the EU the fees are limited to 0.3%, and in other areas (e.g. the UK) it's 1%. As a card holder I'm pretty happy to pay a ~0.3% service fee to know that I have recourse with a merchant, for example.
> I just want an efficient low-cost barrierless payment network.
Whats low cost to you then?
PSPs in the EU/EEA charge around 1% overall, a bit more to small businesses (for instance SumUp), and a bit less to the really big retailers that have more bargaining power.
I am guessing the good old unregulated free market of the US of A: https://www.valuepenguin.com/what-credit-card-processing-fee...
There, banks and credit card companies offer huge perks and cash-back to card holders. That money must come from somewhere, and that's from the transaction fees paid by merchants (and transitively customers, as merchants still need to make a profit). AMEX has even higher transaction fees, which is why some businesses don't accept it.
The situation is now at an idiotic local maximum: if I don't use one of these cashbacks cards, I am losing money paying for my neighbor's air miles, as I don't get a discount anyway. You don't need a "technofix" for that, you need regulations that cap interchange fees like the EU.
> AMEX has even higher transaction fees, which is why some businesses don't accept it.
Given the opacity of the fees (or "discounts") as amex calls them, I don't know how to believe this. Lots of retailers in the EU don't accept them, yet amex are bound by the same interchange limits as Visa and Mastercard. How much of this is actually true and how much is "well it was true 30 years ago and I've not questioned it"
> You don't need a "technofix" for that, you need regulations that cap interchange fees like the EU.
Agreed. And using crypto to limit network fees is a terrible idea. I just had a quick look and the current gas fee for ethereum is $20!
[0] https://www.mastercard.us/content/dam/public/mastercardcom/n...
They don't. Scheme fees in a 4-party payment network are the smallest part of the net fee, around 0.1-0.2%.
> I want a technofix for that.
And you'll never get one. Moving money between bank accounts in an immutable way is extremely cheap already. But that isn't what people want.
If you want to lower card payment fees you need to introduce regulations that cap the interchange and prevent fraud, it's purely a political fix.
Only true in certain countries, between certain banks/processors, and within certain thresholds.
My last last transaction fee on Tezos was a fixed cost of 0.000544 xtz ($0.00177 USD), had no threshold limitations, required zero privacy invasion, settled in ~30 seconds, and was not limited to a particular bank or regional currency. This is essentially the 'technofix' that crypto users want to see adopted by the rest of the financial sector.
How does a global network of peers can have transactions verified by majorities while being cheap?
Basically you could say crypto fees are the price you pay for not trusting anyone.
Using crypto is only a good alternative if you live in a society so fucked up citizens can't trust any bit of the contingent financial system.
In this case it's set up as "they're asking the right questions". But everyone's "asking the right questions" as long as you don't look too deeply into whether they're actually asking those questions or not, or whether their proposals could even hypothetically answer those questions, or what other actions they take aside from answering those questions.
That won't stop me chuckling at those that have been duped by a blatant pump and dump.
This is completely tone deaf. Crypto exists because markets are too regulated. Look at PayPal's fees and understand that they exist due to regulatory compliance.
Want to pay users fractions of a cent for killing monsters in a game? Not possible with PayPal. The regulatory overhead is too high for microtransactions.
If you want to participate in heavily regulated markets because you feel that is the safe or morally correct way to transact, then stick with the existing infrastructure. Why prohibit others and force your views upon them?
I expect the paternalist response to go along the lines of, "Well, the plebs are being taken advantage of. They aren't as smart as us. We need to step in and protect them from spending their money incorrectly"
Meanwhile, those magical regulators the author loves so well have centrally planned interest rates. Savings accounts have negative real interest rates. "Stimulus" is repeatedly injected into the economy by the wise, all knowing regulators. Don't blame the regulators though, demand more regulation instead?
Look I’d be thrilled to be rid of paypal but until eBay let’s you accept payouts to a Bitcoin wallet, I’m stuck with the banks and companies built on their platforms.
Oh whoops eBay doesn’t even let you receive payouts through PayPal anymore it has to be done through an ACH transaction.
I've been a victim of this. People in crypto hate you for trying to do things the right way (connecting crypto to real economic value instead of engaging in tribal maximalism and hypemongering popular projects) and people outside of crypto hate you for being involved in crypto which they think is all scams.
The irony is that only the scammers on both sides win.
So all of this allows me to not feel bad about reveling in the latest crash, or scam, or exchange hack, or when the price falls or what not because I have no skin in this game and can't care any less than I do. I think the whole thing is a speculative farce that has hit a critical mass of adoption and intertia (at least for bitcoin) that will continue to be a puzzle (at best and a scam at worse) for years to come.
Complaining that crypto uses a lot of power is like complaining India is trying to burn fossil fuels which will harm the planet. India wants to boost its economy the same way the west has done. Crypto activists want a democratised / uncontrollable financial system and so far mining and burning energy is the only way we know how to achieve it.
Instead, crypto advocates brandish an apparent technological solution that is at amost a very leaky abstraction. I can’t even stop screaming at how offensive is “wireless energy transport technology”. In doing so, you ignore that the scales in play are absurd: securing dozens of transactions should not have a larger environmental footprint than taking a billion people out of poverty. That you think this is even an argument is horrifying.
So what is your solution to this? There are ways to generate energy purely from ocean waves, this is being used near shore for the reasons stated above (you must transport the produced energy to shore) but we could install these way further and just rely on a sattelite connection for internet.
How else would you utilize these yet untapped potential energy producing areas? Handwaving and using strong negative words aren't an argument.
----------
> There are many ways to implement fair financial systems
Depends on what you mean by fair but please do list those other more efficient ways
Even if we assume (which is definitely not a safe assumption) that burning all that oil in the first place to mine the coins produces less carbon than the overall reduction caused by the increase in demand for solar panels and subsequent increase in their production and deployment (because just buying solar panels that were already being produced and going to be deployed by someone does not reduce the overall carbon load of the planet)...
That requires the miners to sink all their profits into buying solar panels, rather than, y'know, making money for themselves, which is the reason they're mining cryptocurrency in the first place.
I did not check this but Michael Saylor claims that over 40% of mining is done using renewable energy. Considering solar power by itself is a good investment last time I checked ( around 13% ROI depending on your local energy price) then that number will probably increase as it just makes business sense to do it.
I could use money I earned from selling power generated by a coal plant to buy solar panels. That doesn't make the coal plant produce twice the energy.
That is still a million times less efficient than existing solution and still horrifyingly wasteful. Blockchain principle is that if you have as many people as possible waste an astounding amount of computation and energy, you make over-ruling most of them too wasteful to be possible. You are not solving anything that way, just showing off that you have never heard of Kwakiutl.
There are blockchains now that are designed to be optimal for what they provide.
The bigger issue is that there are applications running on chains that clearly don’t need the features of the chain.
You are advocating for the end of the world as we know it within ten years.
Google might build some of their data centers up in Iceland, but that’s not the full picture.
Then you would not know what you are talking about.
> Google might build some of their data centers up in Iceland, but that’s not the full picture.
No, they have dozens of data centers, on every continent, and all of them are in areas with cheap, carbon-neutral supply. You think that you are being smart by being dismissive about their effort, and the effort of dozens of companies who host their own infrastructure, but that condescension and lack of expertise is just one more example of why Crypto advocates are so unconvincing.
Unsure about the former point.
More centralization (AFAIR you need 32 ETH to get started, so ~$100000, not to mention possible issues where you loose full 32 ETH) vs a single GPU with only lose is your electricity cost.
Pop quiz: What will happen first, Ethereum PoS or the year of linux on the desktop?
I’m willing to bet any amount you want up to $30,000 that Ethereum main net is running PoS by Dec 31 of this year.
Like, if we are using the second metric we could even create 1000s of irrelevant PoS coins to pump that baby up.
When the web was growing the electrical demands were similarly criticised:
“The current fuel-economy rating: about 1 pound of coal to create, package, store and move 2 megabytes of data. The digital age, it turns out, is very energy-intensive. The Internet may someday save us bricks, mortar and catalog paper, but it is burning up an awful lot of fossil fuel in the process.”
https://www.forbes.com/forbes/1999/0531/6311070a.html?sh=5db...
You need to compare solutions at scale, not just say that a process that serves billions of people is wasteful because it uses as much energy that a process that is serving dozens of people.
Finally, most of the internet is powered from warehouses that are purposely built in areas with carbon-neutral electricity. The operators are actively optimising their consumption and investing in carbon-neutral energy generation that match their needs.
Crypto avocates likes to say they _could_ do it with imaginary wealth, but that are very far from being able to afford it; if they could, it would break their business model. In the mean time, they are settled in the countries with the worst carbon footprint possible. They tried to hide it but you can’t really hide that amount of waste. They have distrupted the energy market of China, Kazakstan so much that thousands of people died in energy shortages. For now, all we have from those people is mountains of unrecycled electronic waste.
So, no, those two are not the same thing.
This is exactly the same case as with bitcoin miners.
Estimates I’ve seen put renewables as 40-66% of bitcoins energy mix, with this figure rising over time.
The incentive is towards cheaper renewable sources that would otherwise not be viable.
Every 10 minutes, a new coin is minted. That coin is given to the person who solved the correct hash. The chances of being the correct hash is 1/n where n is the number of miners active.
So if I fire up a miner and I'm the only one, I get a coin every 10 minutes. Life is good. Now, if you want bitcoins as well, you can fire up your own miner. Now we'll both get a coin every 20 minutes. But I was making 6 coins an hour, now I'm making 3. My production is halved. That sucks. But. I can spin up another miner. Now I have 2 to your 1. I get a coin roughly every 15 minutes, you get a coin roughly every 30.
You see where this is going, right? More miners, more coins. And the only way to get value out of these coins is to sell each coin for more than electricity used for all of your miners.
So you're incentivized to not only use every available unit of electricity to mine, you are also incentivized to sell at exorbitant prices. Bitcoin will not switch us over to renewables. It will also use renewables if and when they become available. Bitcoin has also caused long dormant fossil fuel generators to come online again.
No: both types of organisation are looking at areas with cheap electricity and free cooling, but large internet companies are looking at area with stable polical regime and low carbon footprint. Bitcoin miners _could_ value that; they certainly loudly claim that they do. In reality, they don’t. They set-up shops in countries with cheap coal like China and Kazakstan. It sounds like areas known for their corrupt officials and no rules around dumping electronic waste have some appeal.
They don’t go where electricity is carbon neutral. You know how I know that? Because I live near a lot of hydro power, Arctic cold, where all the big players have their European data centers——and there’s no crypto operation here.
Bitcoin advocates are delusional and loves confusing their claims (like they could operate a trust-less financial network) with reality. But reality is still easy to see: crypto a collection of wasteful, polluting, short-term scams.
Furthermore, Bitcoin can lower the hidden costs of the petrodollar. https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...
And Bitcoin incentivises having a low time preference. This leads to a much more sustainable consumer behaviour. Bitcoin helps us move away from the mentality of a throw-away society.
Ah so this is about twitter culture. I agree, it is strange that people showing some outward interest in crypto are ignored.
These conversations basically go like this
<user with nft monkey avatar>: thats not accurate, the flash loan was used to borrow and acquire a bunch of the governance token and then launch and pass an emergency governance proposal and the primary issue is that the protocol allowed for this to occur in a single block, not the flash loan
<user with predisposition that requires crypto to be bad>: you have an NFT profile picture your opinion is invalid! I just screenshot it!
so the technical person that could improve understanding is surrounded by perpetual ignorance
And even in your Scientology analogy, I think there are limited similarities because you are talking about scientology often to scientologists? Do you get into those kind of conversations? If you're not getting into those kind of conversations than thats just an ad hominem attack which is a very poor form of argument and also meets one of the Oxford definitions of ignorant ( informal - discourteous or rude; west indies - angry or quick-tempered.) These are traits to avoid, pejoratives.
One issue with ETH/smart-contracts that is not addressed in the series is how to ship patches to a smart contract. Let’s say there’s a vulnerability in my contract that accidentally leaks ETH.
How do I ship a patch to fix the contract? Could my buggy contract be taken advantage of indefinitely? Maybe I could move all my ETH to a new wallet and leave the bad contract? How is this problem handled today?
[0] https://youtube.com/playlist?list=PLK9Lwn4_TfLS3I9huJjd-k_Fe...
https://docs.openzeppelin.com/upgrades-plugins/1.x/writing-u...
There is also the concept of a standard upgradeable proxy contract.
https://eips.ethereum.org/EIPS/eip-1822#motivation
This is an area in which someone could build useful tools and libraries to facilitate this need even more.
For example, the author could use the word "evangelism" rather than "toxicity" and drill down much deeper to the core mechanism of what's going on. Are individuals being toxic within a community? Absolutely. But are they being accepted because "the ends justify the means" for the evangelists? Almost certainly.
That, I think, could be a real story being buried beneath the baited lede of "not only crypto supporters but DETRACTORS are being 'toxic'" so it's unfortunate that's never explored in more detail.
"Legitimate" projects are in between a rock and a hard place - either pay outrageous sums to the shillers or have no avenue to promote your project, as Google/Twitter/Facebook won't touch your crypto ads. Instead of the decentralised utopia we were promised, we've shifted power from traditional marketing channels with a vested interest in providing some ROI to scammers with no accountability, only in it to make a dollar at whatever cost. Scammers and hustlers are the gatekeepers of new tokens - unless you're paying thousands of dollars [2], it's almost impossible to get recognised.
Most projects are scams/get-rich-quick schemes preying on people's ignorance. There are well intentioned tokens out there, but even these have very dubious links between the price of the token and the utility of the project. The buybacks, reflections, stable-coin rewards, promises of guaranteed returns b/c we reinvest into other projects quickly part the ignorant from their hard-earned. Any attempt to dig deeper and understand project economics are met with the same platitudes and flawed arguments.
Of course there's the other side of the ecosystem where smart and talented people are raising VC money and working on interesting problems. I do believe there's something there around business model innovations (e.g. near fee-less micro-transactions tied to a crypto identity as a low impedance alternative to SSO) or technological innovations (blockchain-based serverless compute powering dApps - I do see a whole host of problems to which smart contract based dApps are a viable solution). The end result of this isn't a financial revolution but rather a host of entrepreneurs utilising web3 technologies to build the next generation of software startups.
[1] - https://agentsinu.com
[2] - 5k-10k USD for a single Telegram post is not uncommon
the really exciting, yet unexplored, leverage point that a new ecology of mutual credit currencies will likely have is in their use in what pioneers have dubbed Network Resource Planning (NRP) software. the DWeb project http://mikorizal.org is working on this. essentially it entails the open mapping of supply chains using DWeb p2p app frameworks (self-describing protocols, instead of centralized third party Silicon Valley-made platforms), using new (e.g. collaborative, automated) forms of resource accounting already employed by ERP systems behind closed doors (undemocratic stewardship of resources as done today is the real reason we are overusing resources). if anyone can see what i mean i'd love to hear you explain in your own words what you see and what you think of the impact it could have.
http://mikorizal.org/Fromprivateownershipaccountingtocommons...
Sadly, the "crypto space" was quickly invaded by hordes of people who never really cared about the technology itself, how it works and what it's actually useful for. (and what it's not useful for)
These people, who know nothing about it, and for years had dismissed it as a joke, suddenly began to talk about it very seriously as a very serious "investment" in self-proclaimed "expert" capacity.
You know the type of person I'm talking about! We've all seen them, and most of us can probably count one or two amongst our friends.
The potential for cool applications of blockchains is still there, but so far it seems to me cryptocurrency has mostly just been abused as a vehicle for crazy, baseless manias, and little to no meaningful application.
I'm currently at devconnect in Amsterdam and it's full of people who care about tech.
Really nice a crowd and even a bit more diverse than the rest of IT.
I haven't gone to any Bitcoin conference, but I can't see it being the same. Bitcoin's aversion to change means mostly demagogues are left, and all the talk is money talk.
That's true, but you say it as if that's a bad thing. Bitcoin is valuable because it does not change, its proven to work, and people know that. If the downside is that there isn't as much to talk about at a conference, then I don't give a shit.
Here’s links to 3 full days of talks from the Open Source Stage at the Bitcoin 2022 conference:
https://twitter.com/ODELL/status/1513487641538269188
Each YouTube video is about 5 hours long and broken into chapters per talk.
If BTC fell, ETH fell too.
There's a lot of innovation happening in and on Bitcoin. RSK for smart contracts, BetterHash for mining pool decentralization, the Lightning Network or Liquid Network as examples of layered scaling.
Bitcoin's dev meetups are great examples of the helpful, thoughtful, enterprising and conscientious community that exists, without the overly loud, overly shallow speculators.
I was also “into” crypto roughly early, never found a community (nor should I have to), that’s all I see, and that’s all I therefore assume exists.
I found my crowd, but many people don't.
I saw this happen with the early internet, and then later with crypto... It took a long time for the Internet to go from 1) only know to geeks to 2) grifters promising the world to 3) wider acceptance. Maybe this will happen too with crypto, but until it sorts out its grifter problem, it will be always be stuck at stage 2.
There aren't fewer grifters on the internet. There are just more regular people. And also more grifters, but they can hide in the rest of the noise.
It's going to be the same with cryptocurrency if it sticks around. There will always be people trying to trick less-wise people into giving up their money for nothing.
Bitcoin is over 10 years old.
The Internet existed before then in various forms, but never as an industry of rich people trying to convince poorer people to invest all their savings in email.
We have seen BTC and ETH lose their function as internet money as transactions and prices have gone up.
So is that why other 'crypto' like XRP, Stellar, USDC and Algorand are also compliant for the ISO 20022 standard since they are useful at being 'distributed internet money'? [0]
> We have seen BTC and ETH lose their function as internet money as transactions and prices have gone up.
Both of them have completely failed in their original purposes.
[0] https://www.prlog.org/12911340-cryptocurrencies-that-are-iso...
Right now, Joe Average, can transact for fractions of pennies. [2]
[1] http://melaurent.github.io/spamattack/
[2] https://bitcoinist.com/lightning-cnbc-sent-btc-to-a-ukranian...
[0] https://iopscience.iop.org/article/10.1088/1367-2630/aba062
I think I have a different definition ...
There is so much meta talk about crypto on the internet, but no one has the chops to actually talk about the ups and downs, challenges and successes of something like the lightning network, which is perhaps one of the most important developments in the space despite not being a speculative vehicle.
Lightning has promise but the regular chain is still just fine for many use cases especially for normal people, barring those rare periods of exceptionally high transaction fees. A transaction will typically show up in the mempool "instantly" and for many vendors that's good enough; much like the classic written checks system they can trust the purchaser isn't going to try any funny business before the transaction is fully confirmed/settled and you can let them go on their way with their groceries or coffee or whatever. If they do try something (successfully), well, you're out a small amount (maybe, an intermediary like bitpay may tank those for you), and you ban them from your business. For many other types of transactions, even waiting for at least one transaction but not expecting that for 24 hours from now is fine and impacts nothing. My hope is the effective minimum of 1 sat/byte will be decreased because right now it's 9 cents to send the median sized 224 byte transaction and if btc doubles again to $80k USD then the minimum fee doubles to 18 cents without anything changing, that's like an extra pack of ramen. Well it's still not that bad, especially since it's not amount-dependent; my whole state recently mandated grocery stores start charging 8 cents per plastic bag when they used to be free, many people are just personally tanking it and still throwing them out, but everyone would rather pay no fees if they could.
Check out DeFI on Ethereum and your hope will resurrect. aave.com, pooltogether.com, goodghosting.com, polymarket.com, ens.domains, gitcoin. https://ethereum.org/en/dapps/
https://gitcoin.co/grants/1112/goodghosting-a-defi-savings-g... : so this is a weird sort of mutual society / tontine kind of thing? Which has been gamified to encourage you to make regular deposits? However, it's missing three things:
- what are the actual interest rates?
- some sort of explanation of to what extent the principal is at risk to e.g. defi hacks or rugpulls or the collapse of the counterparty
- registration with the UK FCA if you're marketing to UK customers https://register.fca.org.uk/s/
There's no need to have cool applications of blockchains, there's only need for decentralisation.
If having a solid understanding of the tech underlying crypto is a prereq of any sort, it will never reach mass adoption. Personally idgaf what fiat we choose or tech underlying my debit transactions, so long as the value is reasonably stable, my account reasonably secure, and my form of payment is accepted by almost all merchants.
Sure, the dollar is reasonably stable. The problem is that the global financial system is deeply flawed in its fundamental properties. Bitcoin is a hedge against inflation, financial meltdowns, geo-spatial catastrophy, and more.
The whole movement came out of monetary crank-ism, those people were always there.
Let me know when there’s a mainstream non-scam MiltonCoin or KeynesCoin that isn’t deflationary and automatically models semi-optimal central bank policy.
So you believe inflation is a good thing?
While using the per-design resource destroying, planet burning Proof-Of-Waste? Are you Kidding?
And no, deflation does not encourage more long term investments, it does simply encourage hoarding, not exactly a desirable thing, form any perspective. And of course it is the fatal (and likely never fixed) flaw in bitcoin-as-a-currency.
You can use the Lightning Network to use Bitcoin as a currency. It's almost instant and free.
No, it does not. How could it? It does nothing but encourage hoarding. Not only that, but also a economy where everything is more scare tomorrow than today, is a economy in perpetual decline.
>You can use the Lightning Network to use Bitcoin as a currency. It's almost instant and free.
That does not side step the proof-of-waste on the main chain. This is a completely unrelated debate.
Bitcoin mining accelerates the transition to renewables. https://www.whatbitcoindid.com/podcast/can-bitcoin-mining-sa...
And bitcoin does not use electricity, it just flat out wastes it. And that's not because bitcoin in itself is useless (it is), but due to the design of the Proof-of-Waste. Electricity use implies that electricity is converted into something. Every iPhone uses X Wh. If you dail up the usage, the output increases. It's not perfectly linear, but that's a reasonable approximation. Bitcoin is different: More electricity will never produce a better service, more bitcoins or whatever. Bitcoin will not ever get better by using more. And yet it is designed to waste a amount of electricity proportional to it's price. Oh, and it is only profitable to mine if you use a below-average electricity price. E.g. use the laxes regulations, the most polluting or the most illegal sources of electricity.
https://www.coindesk.com/business/2020/05/19/the-last-word-o...
Furthermore, it can reduce the hidden costs of the petrodollar. https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...
Inflationary policies also have a very tight link with speculation in the economy. You only need to look at the past 2 years.
I see this claim time and time again, but it's hardly convincing. Deflationary assets don't exist in a vacuum, they compete with inflationary assets that create value over time (such as stocks), and it's not a binary decision as to which one is going to be the best investment/use of your money. Additionally, the value of pretty much anything (whether deflationary or inflationary) is hardly a factor of their availability in the future but rather their actual or perceived utility at a precise moment in time.
It's the fiscal policy of many countries that's massively driven up asset prices including cryptocurrencies. Those who didn't invest saw their savings printed away.
Inflation (of IOUs) is good for those holding the actual wealth (resources, land, farms, factories, real estate, etc - often through public shares). It's good for those who have debt denominated in inflationary currency. It's definitely good for some people and their business. What many people simply don't understand is they're not part of that group.
You can call it crank-ism if you want, but the movement behind Bitcoin's properties were born out of very real concerns about current economic models and what their effects are.
Freicoin is the closest I can think of
I actually built an app before that which would easily transfer money between countries, by finding matching local trades. Unfortunately to turn it into a service, it requires the currency to both be popular and stable.
Is this the same idea as Wise (aka TransferWise)/hawala?
It is important to note that crypto currencies are distributed blockchains, a subset of blockchain methods. Blockchains for tamper detection purposes have been around for longer than bitcoin and its ilk, IIRC they date back to the mid 80s or before.
But the crypto people don't talk about Git. They are focused on being early adopters and investors in something that will generate 1000x returns, even if those returns come from a pyramid scheme mechanism.
People don't speculate with "web", they don't "pay" with web.
Right, risky startup ideas/investments are not a thing, understood
> they don't "pay" with web
Online payments doesn't exists, TIL
- a shortage of all components used in building PCs, starting with CPUs, then GPUs, then RAM, then HDDs, and back to GPUs. Simply because scalpers and shitcoin miners could outbid everyone else.
- People getting hacked left and right (particularly blue-checkmark accounts) on Twitter, Youtube or Facebook to rename them to Elon Musk and promise crypto airdrops
- the amount of corruption that has been necessary to enable said hacks. "SIM swapping" attacks used to be something nation states did against top-of-wanted-list criminals, not something that could be bought on the darknet for a couple hundred dollars
- the loot of said hacks ending up to fund Iranian or North Korean nuclear terrorism programs
- the amount of large scale hacks made only possible by Bitcoin and friends providing a relatively easy way to launder money, in particular ransomware
- an awful lot of "stars" peddled NFTs, ICOs and the likes and let their fans hang out to dry when the hype collapsed
- an awful corresponding lot of friends and sometimes family that got lured in by shitcoins, actually made money and now peddles shitcoins instead of crap MLM products to everyone whose ears haven't fallen off since long
- all the "rug pulls", "hacks" and other instances where serious amounts of money got stolen or vanished into thin air
- artists getting their works minted as NFTs without authorization
- people buying up coal power plants of all things to mine shitcoins
- instead of delivering the promised "there are no banks and taxes!" world, all shitcoins (obviously... as everyone predicted) ended up depending on centralized institutions like exchanges, large mining pools, auditors and the likes, especially once governments around the world caught up with developments. And to make it worse, many of these institutions end up with lesser consumer protection than banks! Hooray!
The only positive contribution that cryptocurrencies brought to the world was that people had a safe way to pay for and order illicit drugs, as taking out shady dealers and cutters reduced the amount of contaminations. Oh and maybe kick some arses at Western Union into reducing their rip-off rates for international currency transfers.
In the pursuit of this, crypto supporters have blasted exorbitant amounts of excess CO2 into the atmosphere for very little work done in over a decade.
And it literally doesn't do anything. It was adopted as a national currency by one country and hardly anyone who lives there seems to use it. It doesn't by-pass international sanctions. It's not free from government regulation like the criminals want.
All it seems good for is divesting money from technologically illiterate rich people who jumped on the bandwagon, advertised their crypto holdings, and have poor or non-existent opsec. It's a scammers' dream: it's way easier and far more profitable to rip these people off than to run a scam against a bank or old people.
If your goal is truly altruistic and you want to see more transparency in the financial system, access for people from all economic and diverse backgrounds, etc: get into politics, banking, or just vote. Start a non-profit think-tank and hire analysts to help inform positive policy changes.
The technology behind this stuff is pretty useless at providing financial services because those systems are social/political systems. Technology is but a small part of supporting them.
I'm afraid crypto will become a tool to launder money, escape taxes and do all sorts of things that are illegal with normal money.
It might already be the case and be full of corrupt practices, but I can clearly see people defend it on a political premise of libertarian ideology.
By the way, I wonder if Russia is involved a lot with crypto.
Where do we go from here?
Citation needed.
(This is actually me being charitable; it's not remotely "unquestionable", and in my view it's not even supported by the evidence available.)
That's is the problem with some of the crypto-critics and the crypto-maximalists as they are just as bad as each other attempting to demonize, categorize and outrage one another with such absolutist rhetoric with zero evidence.
It really doesn't help.
I had trouble reading beyond that in the second sentences. You can’t just retroactively assign a political affiliation to the origin of an algorithm application.
I suspect but cannot prove that we could argue any political leanings we like.
To be honest, I don't know much about BTC. I'm coming from the Ethereum side of things.
It's just tech. If people like it, it belongs to their political side. If they resent it, it belongs to a political side they also resent.
I think, the main difference is that anarchism is about people can do what they want.
Some interpret it as capital can do what it wants. I don't subscribe to that interpretation, but many crypto people do, sadly.
There is also another conversation to be had about minarchist/libertarian ideas basically wanting to remove all the good bits of the state (creating public goods, giving weaker participants of a system protection, internalising externalities via regulation etc.) but keeping the bad parts (police and military with their massive potential for rent seeking and state capturing of money pots, not to speak about violence and abuse).
Very well said. As someone who was a "libertarian" in my high school days, I ultimately abandoned the philosophy after realizing that it was at its root far more about "property" than "liberty" and ought to have been termed "propertarianism". Furthermore, none of it's logico-moral justifications for property rights actually worked for the most fundamental forms of property (land and unproduced natural resources).
> "anarcho-capitalist" is inherently paradoxical
Well, anarcho-capitalists believe that there are ways to provide property rights outside the state. As a minarchist, I'm skeptical about it, but if you believe it there's no paradox.
On the other hand, I do find deeply paradoxical the left anarchist stance on rejecting capitalism but also (AFAIK) reject any means to stop its emergence in society.
> There is also another conversation to be had about minarchist/libertarian ideas basically wanting to remove all the good bits of the state [...] but keeping the bad parts
As a minarchist, I strive for reducing the weight of the state as much as humanly possible. Justice, defense, and a minimal social security net are the only services I can't think how to provide without the state. If you think these are the bad parts I'd love to hear a viable alternative, maybe you can make me fully anarcho-capitalist ;).
Re your criticism of left-anarchism, one of the big unsolved challenges in my eye is exactly your point: how do you keep per from pooling? In a sense, you also need a "state" but one which has as it's explicit goal the self dissolution - which is of course the same paradox that ancaps face. The difference to me is that it seems to me more feasible to build societal systems and cultures that disperse power if we build our ideology around consent and cooperation than to build a society where the central building block is the by-necessity cooperation of small dictators who somehow are supposed to also respect their weaker neighbors private property rights. The former seems like positive feedback loops are possible (and we see spontaneous cooperation like this emerge throughout history, without any powerful person pushing it) while the latter...was the robber barons and cleptocrats of the 19th,20th and 21st century
Re your question, I don't like to quibble to much about this if it doesn't have a possible payoff, but do you believe in e.g. environmental regulations, provision of public goods via a regulated healthcare system, basic education etc? If yes then I think your position might be rare amongst self identified minarchists. If not, then do you see how e.g. natural monopolies like healthcare or highly influential realms like healthcare are open to power concentration and state hijacking?
Beyond that Bitcoin's design decisions (deflationary currency, trustless) embed a political ideal. Algorithms can very well be political, it's absurd to argue otherwise. For example taxes are, effectively, algorithmic in nature and I don't think anybody would argue that tax brackets are apolitical.
> “It’s very attractive to the libertarian viewpoint if we can explain it properly. I’m better with code than with words though.” - Satoshi Nakamoto
The impression you get from Satoshi's writing and the people he associated with (e.g. Hal Finney) is that he seemed more left-leaning if anything.
There's a strong right-wing bent to the community NOW, I don't think there's any doubt of that, but to call its ROOTS "right" is unfounded
They were all about gold standards and hard money and auditing the fed as well.
Basically they were the Ron Paul folks.
because it consumes too much power?
because it created wealth out of farts
because it promotes money laundering
because it promotes toxicity (pump and dump)
because it is backed by the USD
because USA owns the majority of it
because it is centralized (exchanges)
because it is CIA's testbed for the digital USD
I don’t know why one can try to assign a left/right political affiliation to a technology that is on neither side and can be used by anyone.
Everyone knows she is hilariously incorrect on that one.
In my view, less centralization is the at the bottom what libertarianism strives for, so it makes sense crypto is seeing as supporting it.