Crypto Is Not Like the Early Internet | Hacker News Reader

Crypto Is Not Like the Early Internet

ez.substack.com

6 pointsinterblag11 comments

As a preamble, I think all current mainstream cryptocurrency implementations are scams (by intent or ignorance). And I see no evidence the technology is going anywhere other than more rebrands to confuse people and steal more money.

However, the article misses something I think by conflating "early internet" with early technical and gaming application rather than "early e-commerce" or something a bit broader.

There was a time when is was not clear why a company would have a website, online presence, or web store, there were lots of failures by people that didn't get it, and lots of naysayers calling bullshit on why companies all wanted to be "on the internet". Turns out there were lots of good reasons.

Crypto is not the same in that it's basically 100% scam at this point, and the cycle is much tighter (as in all tech) between ideas and attempted exploitation. But it is the same in that there are some underlying concepts that get people excited but don't have any real use yet. They probably won't, but in 1997 it was probably pointless for companies to invest in building websites.

Tldr, anything is possible

It's been 13 years

Bitcoin has been around 13 years, but smart contracts only 7, and DeFi only around 4 years. Institutional-quality MPC wallets have been around less than two years.

Smart contracts are called triggers and automated workflows in other contexts. They have been around for decades. The crypto-world innovation, if you can call it that, is removing the possibility of undoing or reversing the action, and the misguided idea that programmers can write code that works reliably all the time, otherwise known as hubris.

DeFi by other names dates from prehistory.

Yes, Vitalik has proposed calling smart contracts “persistent scripts” instead. It’s the trustless execution on-chain that makes them unique to other programs.

Whether or not they existed in other forms doesn’t change the argument that they are unique to crypto as of roughly 7 years ago and have made a huge impact on the ecosystem.

A huge impact in terms of discovering bugs and getting hacked, with no recourse. Everything is “unique to crypto” because the “community” reinvents the wheel and gives it a cool-sounding name. Everything has a huge impact because the ecosystem is both volatile and fragile.

How are “persistent scripts” different from any other code? Transient scripts aren’t very useful.

“Trustless” is a meaningless buzzword. Anyone using the script trusts the developer and the people who control the blockchain it runs on. I think the history of Ethereum shows how that works out.

> The Ethereum network forked after an incident in July 2016. At that time, attackers exploited flaws in the smart contract code of a prominent application running on Ethereum called The DAO. In response to community concerns, the Ethereum Foundation implemented a hard fork to roll back all DAO-related transactions and allow the DAO's original contributors to reclaim their funds.

(https://help.coinbase.com/en/coinbase/getting-started/crypto...)

Not so smart, and not so decentralized after all.

I trust my bank and its persistent database triggers and scripts far more than I trust the clown car of amateurs running Etehereum. Pretending that something is innovative doesn’t make it so.

Serious software bugs and hacks are not exclusive to smart contracts. Just look at the Equifax hack or the 737 Max tragedies. If you only look at the worst outcomes of a system of course you’re going to assume it’s all worthless, but that’s not a fair representation of the reality. Smart contracts allow anyone to deploy an application to a global computer that will host the software indefinitely for all to access, with essentially zero downtime for five years running. That global computer will also take care of 100% of your logging and accounting for you and replicate it on millions of nodes around the world within seconds.

Banking APIs are a total integration nightmare, while smart contracts can easily integrate with one another through standard open source interfaces, allowing for contracts to build on top of one another’s code and liquidity in unique ways and in a fully transactional nature due to the shared execution layer.

You also don’t have to trust the developer of a contract to do what they claim, because the protocol’s code can be publicly audited and transactions can be simulated.

All I’m trying to say is yes, smart contracts are innovative - these are just some of the ways that they have improved on traditional computer programs.

Of course, you do have to trust a network. The 2016 hard fork was problematic, but Ethereum has come a long way in 6 years and is magnitudes larger in scale, with no similar breaches of consensus since. It has proven itself to be extremely trustworthy.

I would trust Ethereum, wherein every single fraction of a cent can be publicly reconciled and accounted for since inception, over Wells Fargo, which is involved in ongoing class action lawsuits over fraudulently opening checking accounts and stealthily reordering transactions to increase overdraft fees.

The so-called “global computer” runs on the internet, and the nodes are just servers. Blockchains built on top of the available substrate cannot be somehow more capable, stable, reliable, or persistent than what they run on.

Software bugs are a fact of life. But if my bank makes an error I have recourse. If my debit card is stolen I’m protected. Wells Fargo may be greedy and corrupt, but it’s not a Ponzi scheme, and they can’t rugpull and disappear with depositor accounts.

By that argument then no software can ever be innovative because it all runs on Turing-complete computers that could have done that already.

Refuctio ad absurdum. The internet is already a “global computer” that can store programs indefinitely and run them based on triggers and schedules. Calling the Ethereum blockchain a “global computer” and scripts “smart contracts” gives the appearance of innovation without any actual innovation. The main contribution of blockchain/crypto so far is ridiculous energy consumption and enabling crime and fraud. In terms of software development or computer science there’s no innovation, just claims of innovation hiding behind buzzwords and hype.

> all current mainstream cryptocurrency implementations are scams

There are some non-mainstream ones though that provide genuine innovations while not allowing its creators any financial rewards (the latter can itself be seen as an innovation).

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