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Comment by lkrubner | Hacker News Reader

Except by 2000 there were hundreds of Web companies that had become real companies. It was obvious that Google, eBay, Yahoo and Amazon would survive the downturn of 2000-2001. While there were many bad ideas, there were obviously many good ideas that had become real businesses. And this was just 7 years after Congress had change the law to allow commercial activity on the Internet.

By contrast, Bitcoin is almost 15 years old, but in all this time, no one has been able to find a large-scale use for crypto, other than financial speculation and buying illegal drugs and evading national capital controls -- in other words, it remains almost entirely used for criminal activity.

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Speaking of Google (as one example), it went from research project to impacting daily lives (including mine as a teenager in flyover country) within two years for a couple of million dollars (max - inflation adjusted). The crypto ecosystem has had tens of billions of dollars invested in it (not to mention countless token scams, etc) over the past decade and other than people with gambling accounts on exchanges (which are internal order books and don’t touch a blockchain) there is no meaningful usage.

No one with any kind of intellectual and rational honesty can compare the development of the crypto ecosystem to the internet, web, etc. Tens of billions of dollars and a decade later there still isn’t a single crypto Google.

Looking at the dot-com era, it probably would be more likely to compare crypto to the sudden rise and collapse of the 'dark fiber' companies.

https://25iq.com/2017/11/11/the-1990s-telecom-bubble-what-ca...

"Om Malik wrote a book on this period in which he estimated that $750 billion vanished when the telecom bubble burst. That’s a reasonable estimate in my view. The most interesting questions about a phenomenon like this are always: Why did it happen? What can we learn?"

It's also a bad design for its intended use as a digital currency. There are fundamental design flaws which mean Bitcoin will never be a world currency - pseudo-anonymity, distributed ledgers, chained transactions, lack of central authority, all come at a cost and solve problems most people don't have.

> , all come at a cost and solve problems most people don't have.

Oh yes

> lack of central authority

This is one thing that really gets my goat. Money is hard to define but one property of money is that is serves as a web of trust. That trust has a source, a central bank.

A fiat currency is as good as the central bank that controls it.

Crypto has no trust, by design. It cannot fit into that space. It cannot replace fiat currency.

You don’t like the use case for crypto, you don’t accept the narratives it’s proponents put forward and you conveniently fail to mention the objective measure of value we can actually use to compare: market capitalization. I’m sure you would believe that Bitcoin only has the market cap it has because people are speculating on it, when in reality the reason it never dies is because with each wave of speculation there are new people who store wealth in it. A subtle but important difference, objectively measurable ignored by this argument you put forth I’ve now read 100 times.

Crypto is a lot like politics - people feel entitled to their opinion on it whether they possess sophistication, competence, open mindedness or not.

speaking of "narratives" ...

"market cap" is a terrible metric. Inflated assets often have very high market caps.

Look at the recent wave of "market cap" reductions on other stocks of questionable value like Facebook.

Market cap is not a narrative, it’s the only objective measure so far in our dialogue.

> recent

That’s great you point out the importance of long term trends, I shouldn’t even have to articulate my point now.

But why not go deeper anyways? Market cap for Bitcoin is a proxy for hashrate, which is a measure of security. Steadily increasing floor across its entire lifespan.

Market cap is meaningless bullshit.

I mint a billion tokens, sell one to a friend for a buck, I suddenly have a billion dollar market cap.

you pitching that "market cap" proves bitcoins value is a narrative..

You can make the case that everything is a "proxy" for whatever you like.

"Facebooks market cap is a proxy for ... which is a measure of ..."

If market cap is critical, when bitcoin has a major "correction" and the market cap drastically falls, what does this indicate?

Just because something is the only objective measure doesn’t mean it’s a good measure.

The only objective measure of HN comments I have is the length of those comments.

Does that mean I should be basing how good a comment is only on how long it is?

Here's a great example of the "value" of market cap for you:

"Theranos Inc., a consumer healthcare technology startup, was once valued at $10 billion, and its leadership claimed it would revolutionize the blood-testing industry."

What is the "market cap" of this Ponzi scheme these days?

According to you, market cap is critical and a $10 billion market cap seems like a big number so??

Market cap for Theranos is a proxy for investor stupidity, which is a measure of gullibility.

Totally not what is takings place with the COIN markets.

Market capitalization is objective but isn’t a measure of value but specifically financial value.

Also, Bitcoin doesn’t have a market cap. It’s a currency. No one talks about the U.S. Dollar’s market cap because the whole idea is a nonsensical invention that Cryptocons have used to sell the idea that crypto currencies are investments while still calling themselves currencies to evade regulation.

The fact that the cryptocons have invented market cap as a measure for something they claim is currency is in itself a huge red flag.

Sure they talk about the market cap of the US Dollar.

It’s the M1, M2, and M3 money supply. The shadowstats website has done a phenomenal job tracking it over the years objectively. Check it out.

This comment is old but I'm commenting to respond and for future reference.

The adjacent concept is called "money supply" [0] which is, as far as I can tell, the equivalent of "market capitalization" but for currencies. Specifically, for US dollars, the "M2" money supply looks to be around $25 trillion [1].

I don't like that Bitcoin with the language used to describe stocks and bonds but whether Bitcoin enthusiasts use that language, it's certainly being adopted by the public, so we're kind of stuck with it.

Had you been more generous in your reading, you could have filled in "money supply" for Bitcoin, which currently stands at just under $400 billion (~19.2 million bitcoin @ ~$20k/btc). The generous conversion interpretation of the US dollar "market cap" (aka "money supply") is $25 trillion.

People can and do talk about the US dollars "market cap", they just call it something else ("money supply"). People also buy and sell currencies, very similarly to stocks, via foreign exchange markets.

[0] https://en.wikipedia.org/wiki/Money_supply

[1] https://ycharts.com/indicators/us_m2_money_supply#:~:text=US....

Which of the mentioned use cases do you like? Financial speculation, evading capital controls, buying illegal drugs?

Which use cases that you like were not mentioned?

Why don’t you actually mention what the equivalent of Google in the crypto world is/could be?

The inability of cryptocons to speak in specifics is another major red flag.

> Except by 2000 there were hundreds of Web companies that had become real companies. It was obvious that Google, eBay, Yahoo and Amazon would survive the downturn of 2000-2001.

Yahoo seems to have struggled with becoming a real company.

But not until years later. Yahoo was still very much a player in the industry after the dot-com crash.

> Yahoo was still very much a player in the industry after the dot-com crash.

Perhaps, but were they a "real company" at the time? If so, when did that change?

I mean, what do you mean by a "real company"?

It was independent—not owned by any larger parent—until it was bought by Verizon in 2016.

It wasn't particularly "hip and up-and-coming" past the early 2000s, but it was still operating, independent, and profitable for years after the dot-bomb.

They became a "real company" when they signed the search deal with Google and stopped using Inktomi (search had been a secondary feature of Yahoo until that point; the real "value" was seen in their Big Blue Wall of curated links). That was also roughly when they finished fully integrating Viaweb (Hi, PG!) into their store. This was if my ancient memory serves roughly exactly during the April 2000 crash.

I think this is a decent response but it's not completely fair.

It was obvious to me that when Google came out, it was a game changer. It wasn't obvious to everyone and I remember at least one article talking about how Google wasn't really search because it could only find what other people liked and couldn't actually understand the things it was searching (the article was old, I can't find it, sorry).

EBay was a front end for Beanie Baby sales before it became legitimate.

Yahoo before Google, much like the rest of the search engines like AltaVista, was a cesspool of irrelevant links to porn.

Amazon was great for books but being the "Sears of the internet" was a laughable idea until it wasn't.

As an aside, it was obvious to me that Wikipedia was also a game changer. I remember having many conversations with people thinking that an online encyclopedia would degrade into a radioactive comment forum with anyone and everyone saying whatever it is that they wanted, without any relation to reality.

I agree that cryptocurrency has been around for a while with not a lot of use cases to show for it but I also want to point out that until "Web 2.0" came around, the internet and online services were still very niche. It wasn't until social networking took off that it became widely adopted. It wasn't until smart phones existed and became cheap enough that everyone took the internet for granted.

You're using metrics from a previous iteration and imposing them on a new technology. Maybe it's appropriate but, in my view, it's tone deaf to what the underlying technology is.

Cryptocurrencies are, in my opinion, more akin to the early days internet infrastructure. It's lower level foundational technology that can be used for applications to be built on top of.

As a fundamental technology, it is getting widespread adoption, as can be seen by the volume and value. Real world people are using it to exchange money. We can argue about what percentage of that money is "valid" and for what purpose, but it is being used.

Again, in my opinion, we're seeing the growing pains of a new technology that has potential but hasn't been widely adopted. People have funds that are hard to move out of the cryptocurrency space so any outlet for spending within the system, like with NFTs, gets amplified.

EBay was a front end for Beanie Baby sales and the same arguments levied against cryptocurrencies could have been levied against EBay (and I suspect they almost surely were). Telling people you would order toilet paper online was laughable in 2000 and considered hype, just as saying you could order toilet paper without a bank account now.

I don't have a crystal ball, I don't know what the future holds but the visceral hate that I see against cryptocurrencies seems more rooted in emotion than in reality. I saw the same hate for start-ups mid 2000s. I'm advocating for circumspection.

> Cryptocurrencies are, ... akin to the early days internet infrastructure. It's lower level foundational technology that can be used for applications to be built on top of.

No sign of anything, that is not a scam of some sort, yet.

The foundation is wonky. The distributed ledger algorithms have no utility and a huge cost.

Some interesting ideas in it that may make their way into versions of digital cash versions of fiat currency.

But the foundation? It is rotten, absurd, costly

> other than financial speculation and buying illegal drugs and evading national capital controls -- in other words, it remains almost entirely used for criminal activity.

Speculation is the main use. How is that criminal?

Speculation with false pretenses, just with the purpose of defrauding investors is criminal.

Maybe not criminal, but a dependency on Greater Fools for capital gain feels immoral.

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