Blockchain Solutionism
blog.mollywhite.net
blog.mollywhite.net
Meanwhile India revolutionized digital payment without any fanfare, by making something that can be used by billions of people today. With zero hype. It just works, and it's boosting the country's GDP by at least 1%.
Meanwhile meanwhile the ghouls of Silicon Valley are busy promoting inefficient solutions that don't work at all. It's like those hundreds of thousands of empty houses in China. It's all a ghost town, but we can't stop hearing how great it is. Can barely buy a pizza with cryptocurrencies, but it's the future. We reinvented music with Web3, but we have 600 users, because our tone-deaf service is unintelligible to normal people, and we are too far up on our asses to make something people want.
People don't want Web3, they want to eat, watch TV, work to get paid, talk to each other, sleep, marry and fuck. Your service should address pain points in these normal activities, not make up new problems. Oh gosh darn it, the site I use to Netflix and chill with my girlfriend is not decentramalized, take all my money, I never knew it needed to be decentrifugalized while it's playing in the background. Said no one ever.
What you're also missing out is on how the current monetary system and monetary base work, and why central banking is problematic. You've lost probably more than 10% of your own buying power over the last year at no fault of your own, and you never questioned it. The housing market is now impossible for average people to enter (especially in cities), as easy, low interest money has inflated home values and the house price to income ratio has gone steadily up and to the right. These are signals of broken money; this is what blockchains are looking to solve.
These are real pain points, and part of why I was very excited about crypto circa 2017-2018. It's been five years now, and the builders in the web3 community seem to have stagnated on this, taking a wide tangent into digital art, online clout, and ponzi schemes. The currencies themselves are limited on transaction throughput and trade like traditional risk assets, level 2 networks haven't lived up to their initial hype, and we have come to find that decentralized, immutable currencies are problematic to work with in many situations.
From my viewpoint, it doesn't look like crypto's going to break us out of the local maximum that is central banking/MMT
Have you tried any recent ones? zkSync, Optimism, Aztec.
Although they are still a work in progress; see EIP 4844 and zkEVM. Check back in a year or two if you want to avoid beta-testing and have something that meets the hype.
From my perspective, there is no "web3" community. The consequence of easy money is you get a lot of bad products that inevitably fail. This is not limited to crypto, this is the tech industry in general (social networking, big data, social commerce, location based social, etc.). Groupon, Google Wave, Foursquare, delivery service X, etc, they come and go. So I don't put much stock into the hype, there will always be fads and trends.
> level 2 networks haven't lived up to their initial hype
https://bitcoinvisuals.com/ln-capacity Lightning capacity is up and to the right: this is people running nodes, risking their money on beta software. Nodes are up, channels are up. Will this be it? Who knows. I'm a patient person, laying a railway cross country takes time.
And why central banking is problematic?
> You've lost probably more than 10% of your own buying power over the last year at no fault of your own, and you never questioned it.
And how the blockchain resolves this issue?
> this is what blockchains are looking to solve.
... how?
The process of any "thing" organically becoming money looks like the following: 1) Collectable 2) Store of value 3) Medium of exchange 4) Unit of account
Gold followed this path over 8000 years as it emerged as the strongest money through international trade. Societies in many places used different kinds of money at different points in times: feathers, gems, giant immovable boulders, etc. But those monies were always displaced by technology, when they could be collected or mined faster or more efficiently, resulting in debasement. Gold was the best store of value because it could not be rapidly debased; its scarcity allows it to only inflate by a few percent a year, and it maintains a pretty constant stock-to-flow ratio.
And so being common enough to be popular, but rare enough to be difficult to obtain, gold became the world's "money". Ironically central banks still hoard gold, with the US having the largest storehold in the world. However the US and world powers would terminate the gold standard, unpegging dollars to redeemable gold, allowing for government control over the creation, distribution, and management of money. Historically, ancient fiats have failed, and I suspect with a long enough time horizon, 100% of all fiat currencies will fail. But we now run an experiment in which the ability to grow unlimited debt is a "feature", where central banks determine the cost of money for society, where the creation of new money or its policies is easy, and decided by a few.
Bitcoin is a decentralized, censorship resistant, permissionless network. It acts a ledger, a way of keeping track of nominal value in a way where anyone can participate (send/receive, create addresses) from anywhere in the world. It is open source programmable money. Compared to gold, it is magnitudes cheaper to transmit, store, and secure. The protocols are defined and transparent which makes its creation rate predictable. The supply is finite, and so it cannot be easily debased, making it a powerful store of value.
> censorship resistant
You know, everything at scale will be regulated. For example, in Germany it will (and for parts it is already the case) regulated by BaFin. You know, the same institution which regulate banks. Beside how unpredictable cryptocurrency is. TBH, I would better stick to money regulated by some constrained entity than by people how don't have any clue how local and global economy works.
The value of open source networks is adoption, and people will not adopt a crypto that has been hijacked and controlled by any entity.
So we have a growing cohort of people who are emotionally all-in on blockchain. They've planned and built their careers and reputations around it.
it does seem it is a solution looking for a problem.
But now in the modern era, I couldn't find those or a way to create a long-term savings account for a minor.
But I was able to create a crypto wallet with a small portfolio of Bitcoin and Eth. It was easy to give to her and her family: just tell them the secret 12 words and explain how to install a crypto wallet.
What is striking to me is that most people do not even understand what cryptocurrencies are. I sampled some of my (not so technical) friends about how anonymous bitcoin/etherium are, none of them knew that it essentially publishes the bank records of everyone as a fundamental part of how it works...
A blockchain essentially is just a database. And so many times I have heard people proposing a "novel technology" where they just replaced a regular database with a blockchain, e.g. "why not track logistics through a blockchain". The trouble is that in every case using the blockchain made things worse. In what application do you have to defend against mallicious attack and can not rely on a central authority? In how many cases do you even want to not have a central authority? Money is basically the only semi-plausible use cases where just replacing the blockchain with a normal database doesn't improve the system.
- creating a secure timestamped append only log of signed messages
- apps like multisig wallets, privacy preserving rollups, cross-site attestations
- creating a global namespace registry for social networks[1]
- building other things on top of these primitives, like disintermediated collectibles for games, art, web communities..
[1] https://www.varunsrinivasan.com/2022/01/11/sufficient-decent...
For example multisigs, without crypto, require a trusted and centralized custodian, and if you are lucky you might get a permissioned API that exposes a few end points that were dreamed up by engineers at Stripe or some new tech-startup digital bank.
The closest example might be to point to TCP/IP which makes up the web and is (pretty) decentralized. Companies and even monopolies compete on top of this protocol but no single company wholly owns it. Although, ensuring decentralization tends to be a much more strongly considered goal in blockchains than what we’ve seen on the internet.
It’s a long read but “The Crypto Story” does a pretty great job at distilling some of the motivations: