Tyler Cowen asks Marc Andreessen to explain a Web3 use case [video]
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So at that point (Summer 2011), I took a long hard look into the mirror, discussed this with friends, both on- and offline, and everyone was struggling to find real use cases that didn't involve crime. When then, later in 2011, Litecoin and the other alts came on the scene, without any real difference, I left the crypto scene.
Now, over 10 years later, the number of real life use cases not involving crime is still scarce. That's a bit embarrassing, if you ask me.
(Edit: small correction)
I was quite young at the time, but I've since learned that just because something has no value, doesn't mean you can't make money trading it.
There's probably a third utility, which is having lots of Bitcoin means you have lots of dollars, which means people know you're rich and want to date you, be friends with you, party with you in Miami etc. But it's interesting to notice (this is a bit trite but I think not totally) that people still tally crypto wealth in dollars ("he's a crypto billionaire" doesn't mean he has billions of bitcoins) so the utility of bitcoin seems to implicitly be that it's worth lots of dollars.
Bitcoin was never supposed to be like a modern currency. It was an experiment to create something like gold except with the property that it can be easily transmitted and stored by individuals. The theory was that we only had fiat currencies as a proxy for gold because gold lacked these properties, and if it had them, it could be used as a universal kind of cash. I think our understanding of the dollar system was poor back then because it was the first time we questioned it. The term “fiat” that we use so much implies that value rests upon some common belief. This has been exposed as ridiculous by observing any individual or even entire nation that lost faith in their mandated currency and tried using a different system. They were annihilated. It turns out that the system is much more than a popular delusion; it’s a real visceral power structure. Then the Bitcoin value thesis became the common belief that the current system is unsustainable globally across the board, and something has to fill the gap when it fails. This was also challenged in the last boom by actual acceptance and integration with the existing system, so maybe it will be more like a slow mutual transition to something like global reserve status alongside gold, with young male nerds and Indian housewives using it as decoration. Every boom starts with some kind of systemic failure and ends with a crackdown. The next I would guess will have something to do with a major war that essentially backs Bitcoin with physical force to achieve equivalence with others. It’s not something I’d like to see, but it’s the next logical step in these cycles of escalation.
Avoiding people with guns coming to your house is a valuable utility, in my opinion. I can't comment on the other part.
Depends on who you think of as "we".
If by "we", you mean "economists", then no. This is elementary economics.
If by "we" you mean "tech bros", then yeah, maybe this was a novelty to them, along with everything else in economics past the first couple of weeks of Econ 101. So the economists watched them fast-forward the last three centuries of economic history in a decade.
It doesn't take a war to back Bitcoin. What it takes is convincing a major government to replace its currency with a blockchain version. Which is what various central banks are doing. Except it won't be Bitcoin. It'll be a "proof of stake" system, where your "stake" is your existing currency, and the central bank holding a majority.
It'll never be Bitcoin-brand crypto because the bitcoin owners don't have the guns you mentioned. They missed the very first lesson on why any currency (not just fiat currency) works. They could have asked the economists, but being tech bros, figured they knew better.
Professional economists have been and continue to be three generations behind reality in their discipline. Ask them today what gives the dollar value and they’ll sound like Do Kwon talking about UST: “well, we trade bonds to stabilize the value, and also we have all this gold to back it up in case anything goes wrong.”
You’re right that Bitcoin has no guns. The question is what happens in a regime change situation, which seems to be very likely in a certain part of the world.
1. real real-world scarcity
2. artificial real-world scarcity
3. artificial digital scarcity
4. real digital scarcity
Bitcoin's scarcity is (3).
(4) is the holy grail, but it's seemingly impossible b/c of the double-spend problem (easy copying).
Bitcoin's scarcity is artificial.
Even if it was real, since it allows forks - it's unlimited:
21e6 * (1 + nForks)
nForks → ∞
Here's why artificial scarcity doesn't work:
This is sort of why we have "accreddi investors" law in US, so risky financial instruments are only touched by people who understand the game.
But he always seemed kind of full of BS with Opsware and stuff and cashed out by selling to a greater fool, I think HP or something.
So I’ve always looked at his offerings and not understood why they are valuable.
I never thought he was trying to scam, but this clip seems to be total BS to the extent that they are just cashing in on a more broad set of greater fools.
If a large group of people want crypto it will exist regardless of the engineering merits.
transcript and audio: https://conversationswithtyler.com/episodes/marc-andreessen/
You like the idea that you're a contrarian.
One kindof criticism of social media is that it's very performative. Many solutions I've seen involve the idea of adding some kind of friction. "slow to process" is obviously bad, but the idea of adding costs to things isn't one I'd outright rule out.