Crypto Winter, or Crypto Ice Age?
technollama.co.uk
technollama.co.uk
Crypto has long been criticized for being gambling and lacking utility. I think utility is finally trickling in, although currently in limited settings. If you look at _all_ of crypto from afar, there is a lot of noise and bullshit. If you zoom into the right applications, there are use cases that are gaining product market fit.
Another option that is often very convenient is the "Lastschrift", I can simply grant a company permission to withdraw money from my account. The protections for the customer are very strong with this, I can revert any withdrawal without any reason, so this is essentially no risk for me.
Sending money in Europe is free and increasingly often instantaneous 24/7. It will be very difficult for crypto to reach the level of convenience available on unified infrastructure created through sensible regulation. Lacking that, maybe Americans will have to keep settling for all these clunky, incompatible intermediated patchwork solutions like Zelle and Venmo and USDC-on-Ethereum and whatever.
While true, I do think there is value in a permissionless protocol that anyone can plug into like this. Anyone in the world can send USDC to someone else (and any bank can integrate with this). The same can't be said for banking systems.
Crypto is the only payment rail that is practically accepted nowhere (I cannot use it to pay 99,99% of the places I do business with).
I think it already works...
locally in EU means SEPA is available in 36 countries (includes some non-euro area and non-EU countries) and to more than 500 million people.
But the whole world is not Sweden. Even in America, which is relatively first world with relatively decent institutions, our regulators failed to coordinate a decent electronic money transmission system. Now imagine being in Turkey or LatAm or Sri Lanka. (Or even just being in Europe and needing to interface with anywhere outside the European utopia.) Agree that decentralized protocols come with many inherent inefficiencies and frictions. But when institutions fail, the only alternative are decentralized protocols.
In many ways I see the pro- vs. anti- crypto division coming down to how much people believe in institutions. Most crypto criticisms come down to an appeal to just focus on building better institutions rather than waste mountains of talent on overly complex decentralized protocols. "Instead of all this on-chain stablecoin nonsense, why don't we focus our efforts on electing better financial regulators, who can bring European like money transfers to North America and eventually the globe?"
Whereas I think pro-crypto people (myself included), tend to think of any attempts to change public policy as /dev/null. Most of the world is saddled with horribly dysfunctional institutions, and it's not easy to fix. I have much more confidence in our ability to engineer solutions than mustering the necessary political and social coordination necessary to fix governments, policy, regulators and institutions.
Now, what makes you think that the regulators in well-run countries will continue to accept this inefficient and unregulated money alternative full of scams?
Crypto currencies could be banned to quite an extent (mining, on/off ramps, maybe even the network traffic, which is unencrypted, if I am not mistaken.)
You can always count on one thing in government. Profit Motive! Gerry ginsler was the professor of crypto at MIT for crying out loud. I'm sure US politicians have tons of BTC.
Transferability is a basic primitive of crypto but not the only feature. Others like decentralized escrow and multi-signatory wallets achieve new functionality that is non trivial in traditional banking system.
Uhh, multi-signatory bank accounts are about as old as banking.
In comparison you and several friends can set up a m-of-n account in a couple of transactions, closer to the flow and ease of setting up a new WhatsApp group.
The value fluctuates but this is where users would typically send USDC or DAI which is pegged to the dollar.
My crypto transfers also arrive in seconds and there is no US company extracting rent, blocking my funds, asking for third party data, or dictating how a payment protocol should operate.
Brazil has had same business day electronic transfers (TED) since 2002 and next day electronic transfers (DOC) since 2001 or earlier. However people often didn't want to use them for small amounts because of the flat fee.
Brazilian also rarely use checks to pay rent, utilities and other similar stuff. Since 1993, we have a thing called boleto bancário which is like an invoice that has its own number and bar code ao that people can pay them at any bank (with some rare exceptions).
Brazil's Central Bank (BCB) recently-ish introduced Pix, a digital and near instantaneous electronic transfer scheme that is free for natural persons and that is supported by every bank and bank-like financial organizations due to a BCB imposition.
So overall I would say that banking in Brazil is way more standardized and practical than in the US.
Canadians don't live in the same country as Americans.
Canadians don't have the same banks as Americans.
Canadians can do money transfers instantly between any bank using e-transfer.
He was talking about transferring money out of the Canadian network of banks to a foreign entity (guessing based on it being denominated in USD).
As a European can you transfer money to, say, Vietnam without using clunky 40 year old technology like wires?
Not to mention that money send to a crypto wallet also needs to be cashed out locally, which takes both fees and time. And god forbid your crypto exchange goes bankrupt or decide to pause withdrawals
Interesting, for me e-transfers usually take around 20-30 minutes to go through (where the other party receives the notification with the ability to deposit it).
I prefer using cryptocurrency for near-instant transfers for exactly this reason. When I've gone to pay for items via e-transfer there's a lot of waiting around for the other party to receive it (and ATMs generally limit your daily withdrawal amount, so for me, withdrawing cash isn't a good solution for purchasing things over $1000)
clunky like for a flat fee of less than 5 euros available in a few hours as real money, directly available without having to setup anything?
the need for a new payment system not based on available infrastructure or an evolution of it is marginal at best.
Trivia: there is a video of Bezos telling the story of some customer sending money to buy books in the early days of Amazon hidden inside a 3.5' floppy disk.
Once they received the floppy they retrieved the money and shipped the books.
True or not, most things don't need nearly instant money transfer to work and that's a feature.
FedNow is supposed to launch in 2023.
https://www.frbservices.org/financial-services/fednow/about....
I also think you meant cheap, not free. By the way I find it funny that some banks tax the receiver, so in order to get money, you have to lose money :-)
That said, I know at least a couple of (admittedly rather large/corporate) companies that explicitly opted out of instant transfers for some reason.
As for fees, they tend to lure individuals with free this, free that, while taking kidneys and other organs from businesses.
I think the assumption a lot of people in crypto make is that everyone has a crypto account/wallet setup.
How do I send USDC within 5 mins? I would have to 1) Open an account on a crypto exchange app
2) Go through the KYC process and hookup the same wells fargo account to buy USDC.
3) Purchase USDC, usually while paying a fee. And then still wait the day for the funds to be sent from WF to the exchange.
4) Send USDC to address, while also paying a fee.
There is a reason international remittances haven't worked as a use case, for ex Coinbase just closed down that entire project. How would immigrants who get paid in Cash buy USDC and how would their family in Mexico or El Salvador be able to convert that USDC into local spendable currency. I hate western union but it works better than any crypto money sending service.
Opened bank website, selected "Transfer Money", entered the recipient and confirmed the amount. Got an email notification, and when the wire transfer clears we will receive a second email. This is pretty standard for the major US banks.
It's like people in crypto have never actually tried to use existing money transfer methods and just make up problems that don't actually exist.
So the 'call my bank' option won't work here and wire transfer is no different to transferring money in crypto as they are both irreversible.
But I don't know how entering a .eth/.sol/etc address or scanning a QR code to send USDC over is harder than typing in the sort code, account number, IBAN number, etc to do a wire transfer.
Because I don't possess any USDC and acquiring some requires me to open an account with Coinbase or FTX or whatever, send them dollars, and then purchase USDC. And even though sending the USDC has a low fee, the exchange fee for purchasing USDC is nontrivial (1% at Coinbase).
Oh I didn't know that's what the answer was. Having used both (and living in Europe), I'd thought the 'cheaper, faster' option OP mentioned was a modern wire transfer service.
On "famously expensive and slow" Ethereum, the USDC transfers took 15 seconds and cost under $2. Oh and even better, I was able to just use a simple human readable [X].eth address, instead of an incomprehensible string of routing number digits.
And yes 15 seconds is slow.
Indeed, a human readable address is nice if you trust whoever gave it to you (ENS is naming not identity, someone else can register dcolkitt.eth or dcolkit.eth or dcollkit.eth if they like).
There's some good bits and some bad bits. Not advocating for or against crypto.
It’s true that US banks are slower at transfers but most people don’t hit that often enough to balance out the extra cost and risk, and if they started losing significant amounts of business it’s a lot easier to improve there than it is to duct-tape performance, privacy, or fraud protection onto a blockchain.
I get pretty tilted when people complain about the banking system, because most of the "problems" they're complaining about are features. A really good metaphor is a programmer complaining about being forced to use a version control system, and wishing they could just dispense with all this pointless waste of time. "All this thing does is cause me trouble" — well, yeah, because you've never experienced the problems it utterly eradicated.
It's a Chesterton's fence issue at best. At worst, it's wolves repealing the laws that prohibit eating sheep.
That’s not as dodgy as e.g. Tether’s claims were but it’s not bank-level and I would weight that into my personal risk assessment, especially given their past history of printing new tokens whenever they get in a jam.
Receiving CHF (Swiss Francs) via an IBAN transfer 1) cost a lot, 2) take several days.
Switching to a traditional money transfer provider requires KYC'ing.
I was once denied because my website seemed sketchy. It just has my company's name and a link to my personal homepage. I already have customers, so my first motivation to create a website was so that money transfer providers think I'm actually running a business and will allow payments.
A CBDC will supplant most use cases for crypto simply by being a practical currency.
What will be left is pretty much what you have now --- criminal activity, anarchist cult and naive speculation.
Sending someone USDC for international payments is admittedly much easier, but you’re likely going to run into expensive regulation on that front since it carries too much money laundering risk
You're going to be the edge case for a long time.
But the builders just keep building, advancing the tech and extending its capabilities. Largely because cryptocurrencies are a fascinating engineering problem, which combine cryptography and distributed systems in a way never done before, and which also incorporate programming language theory, networking, computer and network security, economics, and law into the mix. It’s one of the most multi-disciplinary technologies there is. Like catnip for engineers, they just can’t stop building this stuff.
There's a finite amount of people to buy-in next cycle
Nope [1].
A big question is, can Bitcoin miners (and validators on other blockchains) survive? Going to get some useful empirical evidence on that question over the next few years.
If you want to finance the un-financed or create decentralized finance go into fintech, crypto is just a bad implementation of fintech... If you want to change the world go into Biotech or Energy tech.. the next thing to change humanity is probably a better battery not a better foreign exchange market...
And if you just want to get rich by taking money from fools I would recommend setting up an online casino, there are companies that sell white labeled platforms for online casinos and those extract money from poor people with 10th of the cost to the rest of humanity and takes way less effort to set up!
First result in google, not an endorsement [1] https://www.softswiss.com/white-label-solution/
said some electric car manufacturer.
oh no, engineers will start to talk about cryptography, privacy preservation, zero-knowledge proofs, distributed systems, Sybil resistance, game theory - instead of talking about the next hot frontend framework. /s
Centralized exchanges may be consuming minds - like those people who have only ever interacted with crypto through buying a shitcoin on Coinbase and hoping it will go up next week, and think they have a good understanding of what crypto and the blockchain is.
At some point value and utility always converge.
A good heuristic to predict the value of something: would you get them if they were free of charge?
The only difficult thing is to predict when the convergence occurs.
The asymptotic value of Bitcoin is $0.
Yes. FOR NOW. But public decentralised blockchains have interesting properties (enabling ownership , Liquidity , composability) and lots of smart people are trying to use those properties to build interesting apps.
These apps are not there yet. I am optimistic that some good apps will be launched in next few years that make use of those unique properties enabled by decentralised public blockchains.
Your "ownership data" does not have any intrinsic value. It only has value because an external authority (your Government's justice institutions) is able to enforce it.
Writing something on a blockchain has no magical effect. You cannot remove necessary third-parties like that.
> Most corporations which currently store my data proved that they cannot be trusted and they only look after their shareholders. Not users.
True, but unrelated.
Example :- My education degree is something that I own. It can be very useful if I can quickly prove to the world that I indeed really have that degree. (like Twitter allows to prove you own an avatar NFT) . It would be super helpful if this was on a blockchain instead of some university database with a cumbersome process to avail transcripts.
I don't think you understood what I meant. I said it has no intrinsic value, meaning that it has no value in itself.
> My education degree is something that I own. It can be very useful if I can quickly prove to the world that I indeed really have that degree.
The fact that it is written in a blockchain that you have a degree has no value in itself, it only works if a necessary trusted third-party, the university where you got that degree, approves it. You are not in a decentralized and fully adversarial setting. You do not need (nor want, for efficiency purpose mainly) a blockchain to solve this problem.
What you want is a cryptographic certificate (just like an X.509 SSL/TLS certificate) of your diploma signed by your university, which would play the role of a Certificate Authority, and which you can trust because the government that accredited your university to deliver actual diplomas has a root certificate (it acts as a Trusted Certificate Authority) and has signed the one of your university with it.
> like Twitter allows to prove you own an avatar NFT
Twitter is a central authority and could very well associate any "NFT avatar" with any of its users without relying on any blockchain.
People will trust the institution – if a reporter calls them and they say “yes, they earned it” most people will not question it. If they say “never heard of them”, a record on a blockchain won’t help much because it disagrees with the canonical source and then you’ll be hearing about how that degree record was published in error or fraudulently, or that school is a diploma mill, etc.
Electronic records are nice but a 1970s public key signature works just as well at a fraction of the cost because ultimately it comes down to whether or not the reader trusts the issuer.
So as not to bury the lede, certificates of authority as to any legitimacy are a lot like Certificate Authorities; it's the Conway principle. They always want "revocation authority" and it's never "proved" unless they check it again this time... just for you!
I happen to still interact with people who are affiliated with the institution where I "stole" an education. I legitimately obtained certification for completing a course of study in numerical analysis; no cheating. A few years ago I don't know what they did but I strongly suspect a butt sniffing tool for alumni was introduced, because people started being like that.
Cutting to the end, a couple of years ago I ordered a transcript for $11, by regular post, paid with a check. I strongly suspect that now buttsniff shows something like "transcript available".
Why is it so difficult to find utility with this "tech"?
As long are you are not a criminal, ownership and liquidity are not huge pain, what is the real, tangible benefit of decentralized banking?
I am not convinced that monetary transactions should be above the Law, and for them to be lawful they have to be centrally regulated in some ways.
Capital formation for any common purpose without trusting 3rd parties. As an example -> there are some NFT vault DAOs where strangers pool together to purchase NFTs that are too costly. People Vote on proposals regarding which NFT to acquire and when.
The cryptocurrency is the only application that works because transactions are performative writings on the blockchain: they define truth. Once it is written on a blockchain that Alice has transferred X tokens to Bob, it instantly becomes a fact by definition, so you can trust what is written on the blockchain.
In any other application, what's written on the blockchain concerns stuff that are external to it. And what's written can thus only be valid if an external (and necessarily trusted, whether you want it or not) third-party can enforce or make what's written on the blockchain to be true. This means that any other application cannot actually exists in the decentralized and fully adversarial setting that would require the use of a blockchain: there is always another, more simple, more elegant, more efficient solution that can be built on top of the trust that must exists somewhere to make things work.
Also, a blockchain needs its cryptocurrency to actually work because there has to be an incentive to participate in the consensus mechanism whether it is PoW ou PoS or other variants, and the incentive cannot be external to the blockchain otherwise you need to trust the third-party which controls it.
Blockchains and cryptocurrencies are basically the solution to their own problem, and to nothing else.
There are bound to be other possible applications. Writing off an entire new tech because you can't think of them is just narrow minded and silly.
Escrow needs a third party. It destroys all your Blockchain advantage.
https://academy.particl.io/en/latest/in-depth/indepth_escrow...
Who proofs that the smart contract is fulfilled?
Or let's asked different: how does a smart contract solves the trust issue from items not on the Blockchain?
So in your example you can sell an ice cream for £10. When I buy it for that I pay £20 and you pay £10 and send the item. I eat it and we're both £20 down. So I want my £10 back and click a button. It then releases £20 back to you - the item price and your collateral, and my £10 collateral back to me.
I always thought that this part of a smart contract is ridiculous as it binds the same amount of capital as the transaction is worth on both sides.
It also doesn't fix the issue if someone with much more money than you wants to f** you over.
It also does assume you would find a good solution together just because of the capital invested but you know there are plenty of people who are not able to negotiate proper.
It just doesn't solve the issue and it doesn't solve issues like if the shipment is lost on sea. Or it's getting stolen.
A independent 3th party actually helps solving those issues.
The amount of collateral is configurable by sellers, and since buyers will soon be able to message sellers that means it's negotiable.
Normal companies with plenty of transactions per day don't have the motivation or money to put that much additional capital into the system.
Of course for a few transactions per month no one cares but I assume the goal is bigger than just a few transactions.
Sure, plenty of the mentioned items can run more efficiently on a centralized database but the question then becomes, “whose centralized database?” Blockchain is the only solution that provides credibly neutral and publicly interoperable accounting of digital assets, which could one day be 50% of the world economy.
> First, the entire financial system can and will be made digital
It already is.
> making every dollar you deal with every day a digital asset that can falls under blockchain
That is a very bold statement.
> Then, you have all online goods: (…)
Those all suffer from the exact same problem than physical assets, they exist and have a purpose outside the blockchain. You already have the oracle problem.
> credibly neutral and publicly interoperable accounting
This is again a very bold statement and facts disagree with you. Blockchains are not interoperable with one another and cannot be, for starters.
> which could one day be 50% of the world economy
This is pure wishful speculation on your part and is based on absolutely nothing.
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EDIT: I found "TAM"'s expansion: total addressable market.
Likewise, in-game items and other digital assets can exist in or outside of a blockchain. They can serve their original purpose when on-chain as well. I can expand on my point about interoperability:
Blockchains are not typically natively interoperable between them (exception might be rollups), but all assets on a blockchain are. If I create a video game and tokenize my items + currency, I suddenly open up a world of possibilities for users and developers to expand on whatever in-game functionality I can make with my limited team, like:
- Making items tradable on DEXs - Borrowing and lending services - New UIs and tracking tools - Clubs and clans that verify ownership - Derivatives and staking
In a world with tokenized assets, I could easily make a deal with a guy on the internet to let him stay in my decentraland property for 3 weeks in exchange for a ticket to a digital Marshmello concert - completely trustlessly and transactionally.
> “Blockchain is just like the early internet”. No, it isn’t. Satoshi Nakamoto’s paper was published in October 2008 ... <proceeds to compare age of Bitcoin to the age of some modern tech corps>.
Nothing about the original statement is predicated on the age of the tech. Even if it did, I don't see what modern tech corps have to do with anything - they didn't build the internet. Also, on age, the early internet dates back to the 60s and was still considered "early" 30+ years later.
> There are centralisation and technical problems with these solutions, but let’s ignore those for now, and call these systems for what they are. Second layers act as a reminder that the original networks cannot scale, and need a second network on top of the network to operate. This is an admission of failure.
If we ignore the technical problems, 2nd-layer seem like a practical solution to a problem. Why is that a failure?
(now I know that they DO have technical problems - so maybe let's talk about those specifically, instead of making weird nonsensical statements)
> “Bitcoin is digital gold”. It isn’t, gold is gold, it requires no maintenance fee, once it’s mined [...] Bitcoin [...] need to be maintained by miners using electricity [...] at least to keep the mining running.
Why is mining excluded for gold and not for Bitcoin in your analogy?
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As for my own opinions...
> Concluding, will crypto die?
This is two questions:
1. Will the crypto market die? Hopefully, though I'm less than optimistic.
2. Will blockchain tech die? Of course not. It's not very useful but it has niche applications - there's plenty of obscure tech that's kept around by enthusiasts, so I think we can be sure that even after the last cryptobro is bankrupted, there'll still be a group of geeks somewhere hacking on the blockchain for fun.
With gambling, unless it's illegally rigged, you know your expected value will be say $0.90 for every $1 you put in.
However, in return, there is a possibility that you may have a one in million chance of getting back $100 for the $1 you put in.
Crypto, on the other hand, is a Ponzi scheme. It has no internal value and the current owners of crypto are paid entirely through the money brought in by the future owners of crypto.
Now, to be completely fair, I don't think the majority of crypto backers perceive it as a Ponzi scheme. There were many people working in the space (maybe even the overwhelming majority, although that's unlikely to be true anymore), who actually believed that Bitcoin had real value because it could become a real currency. Similarly, there are people who actually believe that Smart Contracts, and NFTs are actual useful technologies.
The problem, however, is that
(a) none of those technologies have panned out, possibly because blockchain simply does not solve the problems people actually face...it solves the problem of "What if the entity who owns the database we are recording our transactions in is unreliable". In practice, this does not seem to be a major problem at all, and further, blockchain appears to be a terrible way to solve this problem.
(b) Even if the technologies are useful, the limited tokens and the fact that they are largely hoarded by early adopters, simply serves to enrich those early adopters, which drastically reduces the utility of any crypto based technologies for future users, the ones who are actually using the technology. Crypto tokens are an implicit tax on technology. It would be like if Google was invented, but to use Google you necessarily had to pay $0.10 every search, but that cost is ridiculously dynamic, often jumping up to $1/search as well. Google would never take off and it would impose an insane tax on everyone else, and society as a whole.
The latter is why crypto in its current form isn't just a successful/unsuccessful tech, its an actively society damaging technology.
Agree with this in that chains like Solana and Ripple are controlled by the startup folks or the big VCs. I avoid these centralized money grabs.
People have been doing highly speculative investment in many different areas and this is clearly not something that will die.
Crypto has been a fantastic vehicle for that because of the hype and the lack of regulation, but this won't last, people can't be fooled forever.
Of course there will be other vehicles, hopefully less destructive than this one...
because: "Bitcoin needs to be maintained by miners using electricity" like they say?
Gold doesn't need continued mining to continue being gold.
No, I don't. Where I keep my valuables is my business, and it depends on how much gold I have. People kept gold long before safety deposit boxes at banks were a thing.
And, paraphrasing above: why is secure storage included for gold and not for Bitcoin in your analogy?
Sure but the other options often increase risk or have a different cost. Some Vietnamese friends used to keep money in their house and then had their homes invaded. I imagine that's not entirely uncommon.
> And, paraphrasing above: why is secure storage included for gold and not for Bitcoin in your analogy?
Oh that's my point - we should definitely take in storage costs for both.
If you're all about Second layer scaling, why not just use existing second layers like VISA? If you're transacting via a trusted second layer to provide scaling, you might as well have that as a layer over the dollar, or gold, or other stable asset.
You may be thinking of Ethereum and any other “crypto” claiming to be “Web 3”, where they want to store and run entire websites on their distributed database. But that’s not Bitcoin.
This goes in hand with forkability - lots of rollups are open source - and composability. You can withdraw your L2 tokens back to L1, and put them in another rollup. If VISA or PayPal blocks your account, you are stuck.
Regarding (2), why not have a functional implementation right from the beginning? (Analogously, why have a really bad OS fixed by the application layer?)
The point in (3) is really about availability and value in times of crisis. Gold is already mined, as you hold it.
On your second & third points:
2: Improving tech over time is good. Creating perfect tech on day 1 isn't realistic. The early internet was built on a lot of tech we no longer use (or are a attempting to move away from)
3: The "I already have gold but no bitcoin in a time of crisis" qualifier seems odd and contrived. Gold is a resource valued for its scarcity, Bitcoin is an attempt to move away from artificial scarcity of fiat to mathematically guaranteed scarcity. Ultimately they share problems: mining of physical goods is environmentally destructive and tying economic prosperity to inflating resource value based on scarcity instead of utility is also ultimately problematic for society in the long term. So the analogy does work -they're fundamentally very comparable. The primary differentiators are (a) the scale of cryptomining is greater per-unit than for physical resources (+ transactional impact), and (b) Bitcoin's got a whole load of extra bad problems that gold doesn't: e.g. instability.
Why would the store of value or the unit of account or the medium of exchange (the money) determine prosperity? The public accounting ledger provides transparency and auditability as a service which can reduce friction to economic prosperity. Neither gold nor Bitcoin creates a fun day at the beach - or whatever your measure of prosperity may be.
That's easy to say in hindsight, but the utility of the internet was debated as hotly back then as the utility of cryptocurrency is today.
> By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.
https://www.snopes.com/fact-check/paul-krugman-internets-eff...
Today, effectively the only people still saying cryptocurrency is revolutionary are those who are directly financially invested in it—and there are many, many highly technical people who understand the technology very well who say it's nothing but a scam.
The Internet took decades to reach “I can buy cat food from my home PC” because that’s how long it took the underlying computing and networking technologies to go from the first recognizable proto-technologies to the point where they enabled mass-market usage. If you start your clock in 1994 (or 2007) you can make that time look shorter, but it doesn’t change anything.
Similarly Uber was able to launch a GPS-based smartphone app only a few years after the first smartphone, because the technologies of 3G cellular, OS, portable computing, GUI, GPS, distributed systems etc. were all extremely mature by the time the smartphone launched. But if you measure from earlier points in the “portable computing” timeline you can make Uber look like a multi-decade pipe dream.
There’s no reason to believe that the technical barriers facing cryptocurrency (scaling, UI, key management) will follow dramatically slower or faster tech development curves than those previous technologies. There are still plenty of reasons to question whether there’s a “killer app” once the tech issues are sorted out, but they clearly aren’t yet.
I think the tech companies are relevant because they pivoted to find useful applications on top of that basic infrastructure, which the hundreds of blockchain companies have failed to do. AOL made millions even even people were held up by dialup and other limitations, for example, because things like chat were popular and low bandwidth.
The early internet comparisons are complicated by the history of computing – adoption was slow when computers filled a large room and cost millions, for example - but I think that has a similar story. Even when a PC cost as much as a car and you were looking at 300 bps modems on phone lines billed by the hour, people found things worth paying for and there were profitable companies with fairly large subscriber bases by the late 1970s. There were people who met online and were grandparents before smartphones became common!
In contrast, blockchains were globally available on day one with no constraints other than their design limitations. There’s no problem which you could point to like a telecom monopoly, the severe hardware limitations prior to the mid-90s, etc. which would keep popular usage low.
But to build up that momentum and trust takes a lot of time.
I'm not necessarily saying Bitcoin should do this or that I desire it. Just stating one reason why it takes time.
1. Its harder to store gold
2. Its harder to verify the integrity of gold
3. Its harder to transfer gold
The rest of the points are in a similar vein, picking the worst, most literal interpretations of the arguments. Of course only gold is gold, the argument is that Bitcoin might be used as reserve currency.
VCs are pouring money into this space. Do they care about adoption? Nope. They know that this largely unregulated, liquidity challenged space that’s too technically complex for the average rube is the perfect ground to make wild, wild returns.
Unless something changes drastically on the regulation front, the story will repeat itself. VCs and early adopters will buy tokens in the “ice age”.
Come next cycle, the media will start hyping up crypto again, bringing the retail rubes pouring in. And then the VCs and early adopters will walk away with their 50x returns, leaving retail with the bags
That is not argument against cryptocurrency. It is just a recognition that the first implementations had shortcomings that could be improved upon.
The internet did not emerge in the 1970s/80s with the functionality it has now.
>>Nope, I would love for a decentralized system to emerge, I’ve been an advocate of decentralization for 20 years. But crypto ain’t it. It’s highly centralized, and it has a propensity for inequality that makes capitalist economies look like anarchist communes.
I don't buy it. A truly decentralized system cannot be censored. It enables exactly the kind of free-for-all that the author criticized it for back in 2011. [1]
The author wants centralized regulatory gatekeeping and control, without calling it that. This is the case with most of the avowed opponents (as opposed to mere skeptics) of cryptocurrency.
[1] https://twitter.com/technollama/status/83187937738625024
A bit off topic but I would like to read more examples of technological vampires or zombies!
What I keep coming back to is that something worth zero is still trading at $20k.
If you want to make a private purchase online, not tied to your identity, I really don't see a good alternative.
Relying on YouTube videos that anyone can create is highly suspect and should be easily recognized as a logical discrepancy/potential fallacy by otherwise intelligent technical people.
The fact that it is not points out a huge hole in their education, reasoning and thinking process. It is the end result of being highly trained but poorly educated in my opinion. Quite simply, many crypto cultists failed to grasp the overall limits of their own knowledge and control and paid a heavy price for it.