Cryptocurrency as alternative to capitalist, for-profit privately owned networks | Hacker News Reader

Cryptocurrency as alternative to capitalist, for-profit privately owned networks

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2 pointsEGreg19 comments

Cryptocurrency inherently cannot oppose capitalism, because any good, distributed currency cannot control the distribution of wealth.

Capitalism extracts rents beyond cryptocurrency. There is an investor class.

It is like the difference between Disney Dollars (utility tokens) and shares in Disney Inc. The latter introduces a third “parasite” class of people into the economic system, besides customers and vendors.

There's nothing that prevents an investor class from existing in cryptocurrency, too. I could give someone a loan of 100 $ETH to go start a corrupt Bitcoin tumbler, or convince a few venture capitalists to invest in a wash trading exchange. Cryptocurrency has no safeguards against that behavior, because it is administratively trustless and and judicially blind. That's a good idea for some purposes, but as a reliable store of value it's a snipe chase. Parasites will always exist as long as there's money to be made, and much like you revealed in your previous comment, starting a cryptocurrency is exceptionally lucrative if you can convince people it will be worth something.

Frankly, I'd rather have a parasite class than a class that relies on thievery, scamming and miscommunication to make their money. Parasites extract money from businesses. Crypto totalitarians extract money from the working class.

Yes, "in cryptocurrency" in general it can exist. But in a particular project, such as Ethereum or Bitcoin, it doesn't because the initial people can only sell their tokens once. They don't also exert additional disproportionate influence after they've sold all their tokens, unless they also have shares. And the whole point is to move to 100% tokens and 0% shares.

What I'm trying to say is that your point is moot. Bitcoin, Ethereum, and every currency made in their likeness still have predatory classes of users. Value is easy to extract, the users are largely oblivious and the transaction process is complicated and new. Scammers, hucksters and VC alike is already in this market segment, you won't fool anyone.

Plus, Bitcoin's creator still has a non-insignificant amount of Bitcoin set aside for them. If they're alive today, then they totally exert a disproportionate amount of influence over their own currency.

This bullcrap can be easily displeed by the simple fact that all currencies are designed to be limited in supply and deflationary.

It means that if I get as much as a single coin now, it will be many magnitudes more valuable than fractions of a fraction of a coin available to anyone born 50 years from now.

This alone is significantly worse than whatever capitalism we have now.

Not all. Just the ones that want to act as a store of value. There is nothing inherently about smart contracts that necessitates this. However, people DO want to prevent the possibility of a small group of people suddenly inflating or dumping huge amounts of the token.

> Just the ones that want to act as a store of value.

No. It's all of them.

> There is nothing inherently about smart contracts that necessitates this

What do "smart" "contracts" have to do with this? There's a simple fact of life: every cryptocurrency has a limited supply. So, the people who got to it first will get significantly more than anyone in the future.

Smart contracts are what powers most tokens. That's what it has to do with it. You can put any rules you want, but typically you want to prevent a small group from inflating or dumping the coins. How you do that is up to each designer.

It still wouldn't matter. There's not a single cryptocurrency on the planet that will deliver us from capitalism until it's market cap surpasses the USD (hint: as long as the IMF exists, this will never happen). Until then, the US government still dictates how capital moves. Furthermore, even if crypto wasn't a second or third-class currency, there's no fair system of governance or administration that could assure that capital is being distributed equitably. You're suggesting a system that is ripe for abuse, and then denying that anything bad will happen because you haven't put forth any concrete solutions. You can wax philosophical about decentralized network and fighting "the man" all day, but this kind of armchair debate is why nothing ever gets done in the crypto space. The advocates refuse to let their actions speak louder than their words.

You keep responding to something else that has literally zero relevance to what I'm saying, and to reality.

Facts of life:

- all cryptocurrencies have a limited supply

- all cryptocurrencies are built to be deflationary

- in all cryptocurrencies 50 years from now people will be getting fractions of a fraction of a coin because currencies have a limited supply

- if you get one/two/ten <coins> of whatever currency early, they will inevitably make you rich in comparison to anyone 50 years in the future because you got hold of something that is by definition in limited supply (well, in case this particular coin has any particular value or even exists in 50 years)

None of this has anything to do with inflation or dumping coins, or "smart" "contracts".

Ethereum and DOGE unlike Bitcoin have no fixed supply cap. Many other cryptocurrencies like Cosmos and Tezos are inflationary and have adaptive inflation rates built into the protocol.

> It means that if I get as much as a single coin now, it will be many magnitudes more valuable than fractions of a fraction of a coin available to anyone born 50 years from now.

This is an investment thesis that may not prove to be true. If it was a factual statement that was certain, everybody would just move all their funds to Bitcoin.

> have no fixed supply cap

> Many other cryptocurrencies ... are inflationary

So, no different than any current currency

> This is an investment thesis that may not prove to be true

It's not a thesis. It's a fact of life aka reality. The only thesis about it is whether a particular coin will even exist in 50 years.

It's also a fact of life that practically no one uses cryptocurrencies as actual currency. HODL was the rallying cry as Bitcoin was rapidly increasing in value. What a nice alternative to capitalism you got there.

> So, no different than any current currency

Except there isn’t a centralized actor manipulating the supply and issuance, and it’s distributed to block producers as a reward for securing the network.

> It's not a thesis. It's a fact of life aka reality

So a single BTC will be worth millions in 50 years, got it. If that is a known fact, we all better start buying.

"Except there isn’t a centralized actor manipulating the supply and issuance" and "distributed to block producers as a reward" are mutually exclusive

> So a single BTC will be worth millions in 50 years, got it.

If bitcoin (or any other supply-limited coin) remains popular for such an extended period of time: yes, yes it will. And not necessarily millions in relation to other currencies. Even within itself. It's limited.

Example: "The Solana Foundation has announced that a total of 489 million SOL tokens will be released in circulation. At the moment, about 260 million of these have already entered the market."

There are 9 billion people in the world. By the very definition of a limited coin whoever got hold of the initial supply will be richer (in Solana) than anyone who didn't get there in time. Forget 50 years from now. Already now there aren't enough coins in circulation.

> "Except there isn’t a centralized actor manipulating the supply and issuance" and "distributed to block producers as a reward" are mutually exclusive

No. The protocol defines the supply, issuance and inflation rate, but - assuming we are talking about a decentralized network - a single actor cannot manipulate it. Solana is an example of a centralized crypto currency upheld by a single entity.

> whoever got hold of the initial supply will be richer (in Solana) than anyone who didn't get there in time

The same happens with US dollars. It has a limited supply, but more is printed and entered into circulation each year, creating inflation. This is like a decentralized crypto currency, but in US dollars a single country controls the circulation, and users of the currency cannot fork the protocol.

Bitcoin is one of the few popular crypto currencies that aims to have a hard limit in total supply with no plans for adaptive issuance or inflation.

> The protocol defines the supply, issuance and inflation rate

Without diving into specifics I will still assume this is a very simplistic thing that doesn't even begin to cover the necessities of a currency.

And yeah "there's no one controlling this" except, you know, the people who program the protocol.

> Bitcoin is one of the few popular crypto currencies that aims

Bitcoin is the popular cryptocurrency. Let's not pretend any other cryptocurrency are even on the radar in comparison.

“without bothering to understand how this works I will assume it doesn’t.”

> And yeah "there's no one controlling this" except, you know, the people who program the protocol.

Which can be anybody as there is no single group of developers - it is governed by social consensus, and if enough users want to change the protocol they can do so with EIPs or a fork.

> Bitcoin is the popular cryptocurrency.

By price - not usage or fee expenditure, aka block space demand.

The debate shouldn’t be between capitalism vs socialism. That’s a false dichotomy.

UBI + Gift Economies may be a far better system, wherein participants have disposable time that they can use to collaborate on stuff they like (wikipedia, science, open source software and drugs, creative commons and more)

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