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Comment by idkyall | Hacker News Reader

It almost seems like the crypto space has, from my perspective, conflicting narratives:

1. Institutions/governments are bad, and manipulate currencies for evil purposes, Bitcoin is good because they can't manipulate it, etc.

And

2. Institutional adoption is a good thing because it will bring money into the space and cause the next bull run and we'll all be rich, etc.

I mean, when has Blackrock(or really any privately held corporation with shareholder profit as priority #1) ever had good/pure intentions in line with 1? They don't care about Bitcoin being "the future of money", they just want to make a buck off the commissions. Same deal with the various futures and derivative products based on its price. Or maybe they're just trying not to say the quiet part loud?

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Why does it matter? BlackRock can't print extra bitcoins, can't take them away from you (unless you give it to them to manage it first), can't block you from spending it one way or another, can't prevent you from sending it to someone else, can't block you from receiving it from someone... so, yeah.. the only problems are market manipulations, which ave been happening from day one.

In comparison, governments can print extra money (and they did, fucking up the economy with that), they can block your accounts, they can block accounts from people you want to send money to, they can block international money transfers if they don't like the other country, and in case of fully digital currencies, they can implement all the conspiracy theories, from social scores onwards...

Didn’t crypto just crash and the bottom fall out on a bunch of coins/tokens because of mismanagement and scams? seems like Goverment or crypto people fill find a way to screw with the system

> mismanagement and scams

Just because some coins are mismanaged or are scams does not speak for the technology in itself. Only to the fact that a lot of crypto "investors" don't actually understand crypto.

This seems like the crypto version of "no true Scotsman" mixed with the "just world" fallacy. If someone loses money to a scam or rug pull they "don't actually understand crypto". How do we know? Because they lost money in a scam or rug pull - if they understood crypto they wouldn't have done that. Meanwhile, the technology and ecosystem around it can't be questioned.

If someone cons you into joining a ponzi around selling vacations, don't get pissed at everyone enjoying their vacation if you fall for it.

If you think the government doesnt have the power to knock on your door and take away your bitcoin you are delusional.

Wrench-attacking one person is easy. Wrench attacking 10% of your population is impossible.

In CS terms - Digital Central Bank money is O(1) to control. Bitcoin is O(n2).

If that would be needed it would be taken into control

It’s not though and nobody needs a wrench. Pretty easy to prevent any institution to exchange crypto for dollars and then you have a black market only currency with a plummeting value and usage which is criminal.

> Wrench attacking 10% of your population is impossible.

With digital goods/currencies, you just need to compromise their software. It's actually a lot easier, logistically, to confiscate bitcoin from 10% of your population than to confiscate cash from the same. How hard and for how long do you think Apple/Microsoft/Google could resist a legal mandate to block/confiscate bitcoin passing through the computer/phone OS that you use?

> How hard and for how long do you think Apple/Microsoft/Google could resist a legal mandate to block/confiscate bitcoin passing through the computer/phone OS that you use?

FB used a fun technique to get into the Vietnamese market. They got enough users onboarded that the government had no choice but to let people use their apps or face a huge amount of backlash for denying people access.

Peasant: You can’t take our Bitcoins!

King: That’s a nice house you have. Give 1000 Francs per year to our treasury OR ELSE.

Peasant: Anyone got Francs? I’ll trade you these shiny Bitcoin.

Actually it's really easy. It works in exactly the same way we did it with cash. You wrench attack and punish those that don't comply and the rest will comply willingly. Of course if 10% of people decide they don't care about the law anymore you have a problem anyways but we're not there.

With modern ZK tech, the day is quickly approaching where the government won’t even know you have bitcoin in the first place

I look forward to see social implications of ZK tech. It will be different society, building trust will be different. ( trust between yourself, your family, your government ).

Im OOTL, what is ZK tech?

Zero Knowledge, a variety of technologies which leverage cryptographic proofs that someone knows something is true, without revealing the knowledge to the verifier. This is useful for privacy, rolling a number of transactions into one bundle, and many other use cases.

That's funny, same is true with any bank account... the California Franchise Tax Board recently emptied one of my bank accounts without any warning. They thought I owed them taxes, which I did not. I'll be getting a refund some day...

I feel a lot safer with bitcoin in a wallet than I do with my bank account.

I wouldn't advise making potentially catastrophic decisions based on a feeling.

I've held bitcoin in wallets for many years and the government has yet to take them (beyond the taxes I've paid). I'm not saying that it can't or won't happen, but so far, my personal experience is strongly in favor of the bitcoin wallet.

They didn't need to put a gun to my head or make any sort of threats to empty my bank account. I suspect they'd need to do that with my bitcoin wallet.

Not your keys, not your coins.

Sure... the thing is by protecting your savings from an imaginary threat you're actually incurring a much higher risk of losing them. I'm just informing you that this is a stupid decision, but whatever do what "feels safer" and see how things turn out.

What part of the FTB emptying my bank account without even telling me or asking permission was imaginary?

All of it.

Ok, that's rude and clearly diminishes this conversation.

They already lost them (at least for now, it'll take weeks, months, maybe years) by trusting those you have told them to trust.

How tone deaf can one be?

People are wary of these God-complex "elites" and their entourage of sociopaths wherever they go. It doesn't matter if it's them getting into Bitcoin or them getting into soup kitchens. The end result is always bad for society at large.

The TornadoCash arrest is still high up on HN. If you think completely unaccountable money is going to be left alone you are mistaken. I only fear that the backlash is going to be excessive and leave the rest of us with intrusive restrictions.

It’s just the return of the crypto wars from the 90s. And privacy isn’t going to go down without a fight.

You're arguing that crypocurrency is a form of stable currency that can be trusted.

This argument, frankly, seems bizarre, given the short and tumultuous history of crypto.

Crypto seems to have the same problems as regular currency

Most regular currency doesn't have insane amounts of inflation/deflation the way crypto does...

> You're arguing that crypocurrency is a form of stable currency that can be trusted.

Actually, I don't think the parent comment was saying that. They were just listing out the defining features.

> This argument, frankly, seems bizarre, given the short and tumultuous history of crypto.

Agreed, because the features that the parent mention are inherently what make it deflationary. I don't know anyone who would actively want a deflationary currency.

> governments can print extra money

Aren't most coins doing exactly that constantly when people mine them?

The coins have to be introduced to the market somehow. Mining is a fair, open way to distribute these new funds. Literally anyone can participate on equal terms.

In the case of bitcoin, the monetary inflation/issuance rate of bitcoin is currently ~1.7%, below the Fed's target for the USD, and will drop by 50% in 2024. https://charts.woobull.com/bitcoin-inflation/

And anyone with a bit of marketing power can create a new crypto currency.

As @aantonop has said for a long time... "the next bitcoin, is bitcoin"

https://www.youtube.com/watch?v=p0ftZgCEZos

Anyone with a bit of marketing power can create a new tech company. Tech is a scam.

There’s actually some truth to that. More than one tech company turned out to be fraud.

Exchanges can also print extra bitcoins.

> BlackRock can't print extra bitcoins

BlackRock can't print extra shares of the components that make up the S&P500 that most mutual funds/ETFs invest in either

(I realized after you were alluding to the US government printing USD, not the stock market)

I'm not sure these are irreconcilable.

I think the idea is that everyone on a crypto network is untrusted in an idealized scenario - no elevated privileges.

Institutions/governments have elevated privileges in their financial systems. For example, it's illegal for you to personally print currency while someone in an institution somewhere has currency printing privileges. Relative to you, they have elevated privileges.

Saying you don't trust government/institutions with elevated privileges in a system you operate in is different than saying you don't trust them to operate in any system with you. If your goal is to reduce the scope of their elevated privileges, than legitimization of a system by institutions/governments could be viewed as a net-positive: they're coming into your ecosystem to operate by rules you've adopted, not the other way around.

The argument gets fuzzy as you explore the edges. Some folks in some crypto networks do have elevated privileges through real world social contracts (i.e. core devs forking a chain) - and governments do have elevated privileges under threat of violence.

That has been the main narrative and delusion of the majority of Bitcoin and Ethereum maximalists. 'Bitcoin will be the world reserve currency', 'Bitcoin is a great hedge against inflation', 'It's the future of money', 'Ethereum will be used for everything', 'Smart contracts for DeFi, Healthcare, Law, etc will be the future', etc.

Hence this maximalism, is what infuriates the hard anti-crypto folks for years who are praying for the 'complete and total collapse of all cryptocurrencies' and suggesting 'All of it should die in a fire' and a 'Total ban on everyone using them'. We have heard the same calls for this for more than a decade, yet it's 2022 and they are still here, which tells me that the anti-crypto folks are also under their own delusion and crypto is not going away that easily.

A more realistic outcome of what will happen to crypto rests all on the regulations, which many companies have been waiting for before re-entering again into using them. This is the reason why it won't 'just die in a fire' easily or that it won't 'take over the current system'. The regulators are not after Bitcoin, Ethereum, etc. but are after the truly decentralized privacy coins, privacy tools, etc to be banned from exchanges, de-listed, contract addresses blacklisted etc.

The reality is the two camps that will be disappointed are the absolutist pro-crypto folks and the absolutist anti-crypto folks as both of their utopian goals are unrealistic. With regulations around the corner, this makes sure that customers like Stripe, MoneyGram, etc hand picks cryptocurrencies that work for their use case, especially the ISO 20020 compliant cryptos.

Like it or not, crypto regulation and compliance is coming and that will allow cryptocurrencies and projects to survive and at the same time it will weed out the useless meme projects.

Proof-of-waste systems have to go as well, or a lot more than bitcoin is going to "die in a fire".

I disagree with your maximalism definition, it usually refers to the opinion that all other crypto is worthless garbage and [BTC/ETH/___] is the only one that will survive. It's possible to have those extreme pro-crypto opinions without being a maximalist.

> I disagree with your maximalism definition, it usually refers to the opinion that all other crypto is worthless garbage and [BTC/ETH/___] is the only one that will survive.

Right. However, the difference is that I'm observing it all with the facts involved and balanced perspective that goes behind the headlines. So far, the whole thing looks like a similar process of the dotcom boom and bust cycle.

My general point is that not all of these 20,000+ cryptocurrencies or crypto projects will all survive the test of regulations to come. Just like not all the 10,000+ dotcom companies that rode the hype train decades ago survived either after the speculation, hype and mania. Only a few crypto projects / companies that have survived these crash(es) and have some compliance with regulations, were the ones that are to be used by many companies.

It's a logical and a very realistic outcome, which is not even close to being a 'maximalism definition'. I'm not the one promoting a single true coin to takeover the current financial system or 'pricing everything in sats' or suggesting that 'blockchain + NFTs will replace and be used everywhere from medicine, law, real estate and in space'.

The narrative for 90% is “number go up.” Institutional is good if it make number go up. Institutions are bad if they regulate or do anything that make number not go up.

To be fair, retail stock market investors behave exactly the same.

I do wonder who is still in crypto for the tech, at least in europe I don't know any senior dev that speaks positively about blockchains from a technical POV

My understanding here is regulation would open the door for many more institutions to pour in, solely from a confidence perspective. Ergo, "to the moon"?

So in the end instead of a new form of money that’s separate from central backs what we get is a… hollow stock. It’s a stock in nothing but the hype about the stock. Once the hype wears off then what?

It will probably bubble up for a while and crash again. Remember cryptocurrencies have no practical purpose. They are only worth something because of the expectation that a greater fool will show up later willing to buy at a higher price. But we also know that there's a limited supply of fools, so sooner or later the bubble has to pop. And this will go on and on until governments intervene. This is my prediction.

This is similar to another pair of conflicting narratives:

1. We will soon all be using $CRYPTO_CURRENCY for day-to-day payments. (Implying that the value of said currency will be stable enough, so that we can measure the value of objects – i.e. determine their price – and store our savings in that currency without high risk of losses.)

2. $CRYPTO_CURRENCY is definitely going to go to the moon in the mid- to long-term future because of 1). I'm putting all my money on it.

Yeah. And all the mouthpieces on YT talking about how significant this is are assuming BR really believes anything in anything. All BR may be doing is setting the world up for a crypto pump/dump of Shakespearean proportions.

I'll continue my own relationship with BTC, but always qualified by knowing the world is mostly lies. Human, All Too Human.

I don't think those two narratives are really conflicting.

Governments can manipulate money and they can't do that with bitcoin because they have no control over the supply. At the same time for the Bitcoin to be significant enough for it to have any impact on governments and money system it needs to adopted as widely as possible so institutuonal adoption is good.

Also the best thing about bitcoin for me is that it doesn't depend on narrative because it survived all narratives and thrives unhindered by their content and validity or the lack thereof.

All monetary systems are dependent on narratives to have real world value. If everyone stopped believing in the value of the dollar, it's real world value would plummet. The cash in my wallet would still exist but it would be of no value for buying real actual things. Bitcoin is no different.

I don't think any actual currency ever died because people out of blue stopped believing it has value. The cause was always excess of supply.

People are slow. Things first become actually worthless, then people stop believing in their value.

https://en.m.wikipedia.org/wiki/Confederate_States_dollar

Belief has nothing to do with it. My taxes bills are all denominated in dollars. Even if I stop believing, I still have to get enough dollars to pay those taxes. Otherwise the government will use force to seize my other assets (real estate, cars, stocks, etc) and sell those to satisfy the delinquent tax bills.

Cryptocurrency advocates seem ridiculously naive about how money actually works in the real world. It's like they're all little children or something.

Why is it always dollars in US in this argument?

Why not Austrian corones in Austria?

Or Bolivian peso on Bolivia?

Or old Brazilian real in Brazil?

Or mark in German Weinmar Republik?

Somehow being taxed in those currencies didn't prevent them from becoming worthless.

So who's naive by the virtue of lacking historical and geographical perespective?

But your tax bills do not have to be denominated in USD. IF all the politicians agreed that taxes should be collected in gold, we would have a gold based tax system.

So what? There is zero political appetite in the US federal government for going back to a gold standard, or switching from the dollar to some other currency. It's pointless to even discuss such hypotheticals.

Agree I think you're either in it for the money or the tech, but sadly it seems those two are too tightly linked.

These aren't necessarily conflicting because institutions can't (or at least so far have not been able to) manipulate Bitcoin, no matter how much they buy or trade or promote

There are a lot more institutions than governments. Also private institutions don't write the laws that govern the money so there isn't really a conflict of interest.

How is it conflicting? #2 is just taking money/wealth out of existing institutions into the crypto. Seems very aligned and logical.

Seems there's space for both narratives in the Crypto world.

TBH I'd appreciate having access to some form of a regulated chain, which validates identity and has overseen safeguards for transfers and exchanges living side-by-side with the traditional chains that exist today.

I think it would be good for crypto in general to have both and you'd see greater uptick in usage for traditional commerce if you had access to both.

> conflicting narratives

It’s almost as if there is no central authority.

>ever had good/pure intentions in line with 1?

Intentions are free, bitcoin doesn't tell people what to think.

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