Is Web3 Bullshit? (Transcript)
blog.mollywhite.net
blog.mollywhite.net
Stories from that site were posted on HN 72 times: https://hn.algolia.com/?q=https%3A%2F%2Fweb3isgoinggreat.com...
Molly's succinct write-ups are interesting to read. They are critical of the industry but never unfair. I drop by every few days to catch up. If a topic bears additional investigation I can dig deeper. Molly's work helps me easily sort through an entire class of news that I would probably just ignore. I hope she keeps up the good work.
Sorry about the delayed reply. I have busy schedule today.
Don't get me wrong, some (a lot) skepticism is healthy but I'd argue this site is the most one sided site on the internet for this topic.
Someone needs to keep a tally on the DAILY grifts, frauds, and scams in crypto because on the other end of the spectrum you have fraudsters with significant financial incentives to keep bringing in new money however they possibly can.
This site is one sided but relative to the relentless hype beasts of crypto it’s essentially the equivalent of a lone person in a huge crowd saying to themselves: “is anyone else seeing this shit or is it just me?”
I don't want to defend crypto because I also believe it's mostly scams, but saying that all of a ~$1T industry is a scam and absolutely useless just means that you're either ignorant or have political incentives.
You will rarely see them together having a normal discussion about the issues and possibilities or even see either of them compromising on their ideas.
Do not listen to the extreme of either side. Especially those like [0] and ones that have a rushed a book on Amazon to sell you on the subject on how all of it will 'die in a fire'. [1]
There is no comparison. Both are totally extreme in their rhetoric and using that as engagement farming for their grift. Either publicly promoting a cryptocurrency or rushing a badly written book without disclosing a conflict of interest after the author's failed blockchain company shutdown which he has been hiding from everyone since the company was killed by blockchains like Ethereum, and Cardano.
> There's no reason to try to "both sides" this.
There is no point in you trying to be absolutist on any extreme side. Either way, both sides will compromise on their delusional ideas; both crypto maxis and skeptics. Only some blockchains are here to stay and the others won't be around.
> There's zero possibilities there. None. This isn't a new thing I'm saying either. We already tried the "print your own money" idea during the free banking era in the 1800s, we've known for that long it's a terrible idea that doesn't work.
The whole of crypto would already have been 100% and totally banned, everywhere a long time ago and the regulators already know that it is unrealistic and extremely difficult to ban and stop all of it. China has tried it, yet crypto is still there despite the 'ban'.
Crypto isn't going anywhere and you know it but refuse to admit it. Not all of them will survive and even the author of that book once admitted that.
They're both completely nuts. I'd rather debate a flat earther.
I mean you can argue that it's too on the nose or too linearly opposed, but a centrist / 'both sides' argument won't offset the heavily funded multi-billion pro-crypto industry.
At the very least it seems like it is in the realm of possibility.
For a few years I was like, "Wow, Ethereum is cool! Haha, imagine email over ethereum where recipients charged a fee, goodbye spam! Solidity is a pleasure to write in! Decentralization is cool! Oh wow, ZKsnarks!"
Now, I'm thinking, "Ok, where are these cool blockchain things?" All I see are:
- Cryptocoin exchanges or lotteries, but that's not interesting, - NFT exchanges which are too reliant on centralized services to be interesting even if they weren't full of scams, and - "Layer n+1" platforms which promise to be the foundation of something cool. (Maybe a "Layer n+2" platform?)
None of these are cool. I want there to be cool decentralized Things. The only three interesting things I've found are (1) notarization, (2) datascience and profiling data from publicly available blockchains.
- Self custody of wealth, without having to deal with gold
- Payments that don't rely on a middleman like PayPal, Wise, etc, who are known for regularly blocking legal transactions, and sometimes stealing the funds
- Commerce with real privacy (Zcash, Aleo, Aztec, etc)
- DNS without the censorship or rent-seeking
I'd say most of us in the blockchain space are focusing on making those use cases cheap, secure, frictionless and so forth, rather than trying to come up with cool/interesting applications.
1. Something besides strictly processing payments, and
2. something that is not better served by existing technology, and
3. something that is meaningfully decentralized.
I think the ENS is the 'coolest' of that list, and hits all three of these points.
But I think we can agree ENS is not a convincing example that cryptocurrencies aren't a scam. Auctioning off strings (which may be later sold or rented) is similar to DNS. Except, we know some domains which point to fun sites (like wikipedia.org or tvtropes.org).
A 'cool' example would be some 'cool' Etherem .eth domain. (But not wikipedia.eth, which appears to be hoarded by someone hoarding .eth domains, and not tvtropes.eth, which is actively being auctioned off for $1300 by someone else hoarding .eth domains.)
I don't see how Virgil's story implies some kind of reliance on centralized services? Yes, if a domain owner is unavailable, it will eventually expire; that applies to ENS and DNS equally.
I'll preface this by saying I'm not claiming you personally are doing this, but I've noticed a shift in the tactics of the crypto hucksters now that the shine has worn off. They'll concede that the current landscape is "mostly scams" (or at least, that it is marred by some "bad apples") while touting some vague future utility that crypto will eventually unlock. The claim here is that the skeptics are somehow wrong for dismissing this potential.
Yet instead of making any specific claims about valid use cases, they'll attack the critics for going "too far" in their critique of crypto, to try and sew a seed of doubt and leave the door open.
I've been watching this space for ages. I see literally nothing with any utility here, and it all looks like scams (or, somewhat more charitably, casino chips) to me. I don't see why we should demand that anybody hedge on this assertion and I applaud anybody who was willing to stand up to the madness back when it wasn't quite so fashionable to do so.
What makes it worse is that the cryptobros co-opted Web 3.0 (the semantic web) for their branding. Granted, it was probably out of ignorance rather than malice, but it still rankles.
I have heard others say terms such as "industry 4.0", "agtech 5.0", etc. My reaction is the usual WTF!
It is no longer "cool" to say anything after v2.0. It is not about the version number but rather a differentiator. After v2.0, you are just forcing it and it is something like people who keep talking about what great things they did in the past while distancing themselves from the present.
Here is something, HTML stopped versioning after v5.0, and I love that. It is just plain HTML for all of us (even if the specifications have internal versions).
So, no, anything after v2.0 is just cheesy.
I was lucky to be amongst those developers who participated in spearheading the Web 2.0 thingy. I developed a whole lot of Rich Internet Applications (RIA) powered by the Flash Player, and then went on to do a whole lot of Ajax, Web 2.0 without it too.
Having been though the whole v2.0 shebang, it was widely uncool and most derided it as a pure marketing play. I mean the term was coined to sell tickets to a conference.
No one could agree at the time about what v2.0 actually was in a way which is not dissimilar to how web3 is currently being pushed. For exemple, you think that RIA applications in Flash are part of Web 2.0. I would definitely say it's not.
Oh yeah, and loading spinners.
"we finally found a way to make money with this shit"
through advertising money. Old tech.
Since the millennium, I've not seen anything branded with a future year. It's a fad / fashion trend. It'll come back again once people get nostalgic for it.
The "web3" label has been created upfront to get a halo of Web's influence and legitimacy, while in reality it's nothing but a store-brand soda calling itself a "cocacola2".
The author might not be free from agendas of her own however, a will to shoehorn the web into something according to her own fancy. That too will fail.
Smarter ones have realized that using big opaque tech trends can be used to create a lot of FoMo to drive more and more dumb asses into a spiral that will make them richer. A classic Ponzi scheme.
The other side of web3 has not gotten that much attention. Simply because it's hackers motivated curiosity much more than greed.
So while web3 might be doomed, this crypto thing is not going to die a natural death. At this point, the evidence seems to favour a crypto-heavy future. It isn't inferior to gold in terms of having a niche. Much less likely to get confiscated too.
The "much less likely to get confiscated" is potentially a negative too e.g. confiscation of the profits of crime benefits society. Whether it is more positive or more negative depends upon home much you trust your government to be benevolent.
Practically, right now? Yes. Theoretically, in the future? Who knows.
Personally, I have taken an interest in things like Consensus and Voting DApps on the Ethereum and Solana blockchains. Solana in particular runs its DApps on Rust, and Ethereum can (potentially) too in the future once they create their new virtual machine.
So I think it is still too early to tell if Blockchain will become the revolution it is promised to be. I think some crypto (in ETH and SOL) can be kept as a diversification tool, but beyond that, I would not invest (for example) my whole net worth into anything Web3 currently.
Crypto bros and Web3 critics will continue to grift for more attention, books, Patreons, etc on the boom and bust of the crypto market lifecycle.
> As technologists, our duty is to develop responsibly, and we should be striving for more in the web, pushing to evolve it into whatever web3 may turn out to be, and chasing those ideals that could make the web truly wonderful.
Wonderful? The free software movement would like to have a word with you.
The same technologists that hijacked the point of open-source and free-software and grifted on that until it meant 'Thanks for your free work', are the same ones using it for their spyware products at surveillance tech companies, further creating the dystopia that crypto is already making worse.
Of course, like the free-software movement has failed in their goals in stopping the proliferation of spyware on the web thanks to these 'technologists', they will also fail at totally destroying crypto and have already accepted that it is here to stay with regulatory intervention.
Once again, that will come at a cost to only some crypto projects surviving.
For all of the problems in the cryptosphere, traditional LizardFi isn't doing especially well either. My view is that the regulated cryptosphere will feature the worst of both worlds. CBDC is lurking somewhere nearby in this scenario.
There will always be a market for open frontiers. Gatekeepers will always seek to fence and capture these areas. New technologies will emerge as the old areas are locked down. Pioneering individuals will always find a way.
https://www.forbes.com/sites/qai/2022/10/03/kim-kardashian-f...
So what we're saying is that Kim Kardashian is not necessarily the best source of financial wisdom?
Oh how we laughed.
We are trying to get our first contentful paints down to 50ms as web2 devs.
Meanwhile web3 services struggle to stay up at any kind of load, let alone be anywhere comparable to performance.
I think StableDiffusion is a good example of Web 3 because it decentralises the use of generative AI. If you have your own models you can interact with them to solve various tasks instead of using the web or external APIs, and getting tracked and censured in the process. AI creates a new private safe space for expression (A Room of One's Own).
For SD, web3 has been worse than useless, because machine learning has been hindered by the miners hoarding GPUs.
Cryptos, tor, etc have their uses. Those uses are basically buying illicit products and services remotely.
They don't make much sense elsewhere and ironically the constant speculation on price (I'm guilty of this) is killing it's original use case!
This.
This is what we should expect from journalists.
Don't we have this with the Fediverse?
We have a bunch of hype tech like IPFS but I’m still yet to see a single website using it. Tor onion sites are still the most useful tool there is for censorship proof hosting.
Currently we have a fatal flaw where ISPs are able to start disrupting traffic to certain IPs. They aren't hosting it, but they are a middle man from end user ISPs to the host ISP.
It would have been nice if all the crypto bros had built something actually useful for decentralized hosting rather than hype scams that don't work for real world usage.
However my thoughts around Fediverse is more that you own your data, you can transfer your data about and corporations can't shut your down.
However, it is still effectively democratic access to the data when anyone can look at the chain to get the information. Whether that's any better than anything else that already exists is doubtful but it does reduce the value of ownership as shown by NFTs.
(saved you a click)
Will blockchain work as a store of value? No
Will blockchain work for art? No
Will blockchain work for the web? No
Web3 is just another problem domain people up the pyramid chain are looking to expand their MLM into. Since blockchain (as with herbal life, etc.) isn't effective at almost anything, this will pass.
It's so laughably ineffective that I think we dont even really have to argue much with it. "Blockchain technology" takes the computing power of an apple watch and realises it with a data centre.
It's so bad its self-exposing to most non-gullible people.
I think we can wait for Web3 to pass, as with NFTs.
Next it'll be HousesOntheBlock, MedicalRecordsOnChain, etc. this will all cycle out over the next decade until gov's start to see the massive crypto losses, and as with the opiod pandemic, step in.
One would hope most govs would regulate it into oblivion soon. As soon as the pyramid scheme around crypto is broken 99% of its fanatics won't be desperately searching to find a use case.
Remember, with crypto, people's lives are actually invested in it. This ain't Rust. It's Rust but each keyword was $50,000 you need.
Key revocation certificates come to mind as a good case for a public blockchain. NFT's for domain ownership makes a lot more sense than paying monthly. The whole trustless thing means users can provide compute for each other rather than tolerating an ad-riddled central point of failure.
You know, the stuff that doesn't need hype and is just the right engineering call.
Rights are fundamentally modal, ie., "what ifs". The exercise of a right changes depending on context, and that context includes how a given society inteprets its meaning at any given time. Hence lawyers, judges, etc.
Algorithms are fundamentally non-modal constructs, ie., "always if". And whilst "perhaps" (but probably not) reality can be described by an algorithm, it isnt any that is "always if" at the level of social phenomena.
Ie., maybe atoms are simply deterministic, but their aggregates (eg., people) are not. And so it is unlikey any finite computable representation of social life will ever, eg., account for "a change of taste in the law".
Blockchains are distributed immutable logs which impose massive computation costs on appending to them. They're a niche technology that, does actually, model money. That's about the best use-case as a model for money.
But they're terrible at implementing money. Beaten by a simple piece of paper at every turn.
Ownership is an interpretation - I agree with that. It may be an interpretation of the blockchain (Namecoin). It may be an interpretation of the land deed (house). It may be an interpretation of records that a registrar stores (DNS) or at RIPE (IP addresses).
I don't see any reason blockchain is any different from the others. People either respect the underlying data storage or they don't. Algorithms have nothing to do with it, nor do computational costs. Moving paper isn't cheap either.
Revealing a secret cannot be forced by the court, be it a password, or a recipe. Best courts can do it "encourage" one party to do it. Even then it might be in vain, if the information was forgotten. Courts do deal with it somehow, more out of necessity than choice. That would be more similar to getting the keys to a domain or any other blockchain asset.
But also that isnt what is meant by using the blockchain for ownership. For this, people are assuming that the verification algorithms of a blockchain "with some extra steps" are somehow supposed to replace contracts and the legal system.
That is what my comment targets. This misunderstands contracts, rights and the need for a legal system.
If you're just interested in having your legalese registered in public across vast data centres and provably appended to a log, etc. then sure.. that's possible. But incomprehensibly motivated. Since, of course, our current system ("paper") provides vastly more features.
Paper has extremely cheap privacy, modification costs, proof of ownership, etc. Features only blockchain tech could dream of...
Unrelated, but actual paper is not cheap. Storing it, finding, modifying, and synchronizing between parties interested in the data involves people actually going places and moving stacks around.
Even if you think about single-owner databases of records, those fail at preserving the proof of ownership. The ownership of the record is clear - it's in the hands of whoever has it. The record itself - the actual proof of ownership - is forgeable unless backed by cryptographic signatures, and easily eraseable unless made public. And to solve both, we gravitate back to blockchain-like tech.
And I'm not all that excited about money. It's just boring. You could build consensus about anything and you choose... account balances?
But sometimes you need a log that can't be altered by threatening to fire whoever has write access to the data of record. The strategy of not having any infra worth attacking is valid against some threat models.
If I have evidence of wrongdoing by a nation state, I like that I can put a hash of that evidence on a blockchain and no amount of deepfakery to the contrary will allow that state to create evidence that provably preceeds it.
If I have the kind of enemies that can dns-poison a whole continent in order to keep my voice from being heard, I like that I can use a crypto domain that I "own" to periodically update the corresponding nft with the merkle root of the latest version of my manifesto blog. This lets me get new versions to readers who have my blog's name without worrying about whether a DNS registrar, certificate authority, or ISP is gonna interfere.
The reason that crypto sucks for money is that the value of a token is subjective anyway, so having an indelible record of who has how many tokens of whatever flavor doesn't buy you much since people can turn their backs on the token's value without bothering to attack the recordkeeping behind it.
But the fact that anybody with the knowhow and access to the code can participate--you don't need to be buddy-buddy with somebody in a privileged position--that's kind of cool.
So if the hype can carry the technology far enough that it's no longer an electricity hog (and it pretty much has) then when everyone's aspirations about using it to get rich fail, it'll still be around and useful for computing in the presence of powerful adversaries without having your own IT department, or for enabling participation in non-money social protocols at scale without having to submit to a gatekeeper.
And I think that's pretty cool, even if I can't retire on it.
How do handle domain squatters and legal disputes?
> whole trustless thing means users can provide compute for each other rather than tolerating an ad-riddled central point of failure.
What compute? If you exchange money, you explicitly trust that person to provide you with services or goods (and/or explicitly trust the "smart" "contract" running the transaction to be correct which, you know ... [1])
[1] https://web3isgoinggreat.com/?id=almost-300000-stolen-from-o...
2. I'm talking about providing compute in lieu of money.
I want to be able to tell users of a service: you can pay me $5 per month for access via my node, or you can run your own node on that phone you have lying around with a cracked screen, and then you don't need to pay anything.
What if I chose NFT domain to scam people, impersonate someone or squat?
> I want to be able to tell users of a service: you can pay me $5 per month for access via my node
If you exchange money, you explicitly trust that person to provide you with services or goods (and/or explicitly trust the "smart" "contract" running the transaction to be correct which, you know ... [1]
Well that's a shitty thing to do, and a limitation of the technology, but it doesn't make all uses of that technology invalid.
> If you exchange money...
You're missing my point. It's the case where no money changes hands that I'm interested in. If we have technology that can function without custodial trust, then I can pay my subscription fees by helping host the site that I'm subscribing to.
I wanna turn everybody's pile of phones with bad batteries or busted screens into a distributed datacenter which we can use as a cheaper alternative to aws & friends provided we're willing to cooperate with each other.
Yes, it's a shitty thing to do. And yes, it's a limitation of technology. I never said anything about "all uses". All I asked is, quote:
How do handle domain squatters and legal disputes?
> It's the case where no money changes hands that I'm interested in. If we have technology that can function without custodial trust, then I can pay my subscription fees by helping host the site that I'm subscribing to.
So, no money is changing hands but at the same time you "can pay your subscription fees". So money is changing hands.
> I wanna turn everybody's pile of phones with bad batteries or busted screens into a distributed datacenter.
And to do that you:
a) find enough phones with bad batteries and busted screens because there aren't that many: people tend to repair them or change them
b) motivate people to run your software on them
So with b), people are going to run your software just because they, ahem, trust you?
--
Well if they're paying (in terms of the use of their hardware, electricity, and internet connection) to keep the distributed service running so that they can use it, then presumably they trust its author (and its dependencies) to some degree, right? Otherwise they wouldn't want to use it. Trust is a necessary ingredient to most cool things, and as long as it's explicit trust I got no problem with it.
People trust that folding@home or bitcoin mining is not going to open their network up to attack or some other malicious thing, so I don't see how this would be any different.
The question is not do they trust me (an author of a dependency of the service that they want to use). That happens all the time. The question is can that service's author offload "hosting" to the users without requiring that they trust each other?
For certain very restrictive applications, the answer is clearly yes. IPFS users host each others' content all the time. But can "hosting" here be safely expanded to a wider and more useful set of actions? Because if it is, I think that at the very least we could all deal with less downtime, pay less for remote compute, and see fewer ads.
DNS isn't content. And protection against scammers, squatters etc. isn't moderation.
It's funny how even the most primitive societies had rules, and laws, and ways to upholding them. But the crypto utopia where "NFTs make sense for DNS" is invariably "you don't get these protections" and "engineering is full of trade offs"
> Trust is a necessary ingredient to most cool things, and as long as it's explicit trust I got no problem with it.
If there's trust you have exactly zero need for the crap that is blockchains etc. Because our society is built on trust.
> For certain very restrictive applications, the answer is clearly yes. IPFS users host each others' content all the time.
IPFS is really, really small. But when police comes knocking at your door for storing someone else's child porn, you will quickly learn that blindly storing someone else's content will not help you.
> But can "hosting" here be safely expanded to a wider and more useful set of actions?
Of course not. Because you keep assuming that trust is a technical/engineering problem. It's not.
If people want to revoke trust in the bank or the law or AWS, they're probably going to need technology to shore up the gaps made by the loss of trust.
I'm not assuming that you can derive trust from technology alone, but I do think that you can use it to get more out of whatever trust you have.
So. Back to the question about NFTs and DNS, which is literally about trust: How do you handle domain squatters and legal disputes?
Oh wait. I know the answer to that: "Technology limitation, you don't get protections" and something about "engineering trade-offs".
If you want to insulate your dealings from action by third parties, you use crypto. If your crypto is sensitive to action by third parties, that's a bug. I don't know why this is so hard to understand. If you don't like it don't use it.
When most people name something, they don't think: "golly, I better make sure the ministry of truth can step in and rename this thing if I'm being bad". And when people want to reference a named thing, they're more worried about whether the reference will fail than they are about whether whoever named the thing had to name it differently than they would've preferred due to hazards in the namespace.
Besides, isn't squatting more of a problem because your ownership lapsed and some jerk bought the domain out from under you? If ownership doesn't lapse, the only problem is when the squatter gets the name before you have even distributed it--just pick a different name and distribute that one instead.
And legal disputes. What legal disputes? I name my variables whatever I want, what laws am I going to run afoul of by naming my blog whatever I want? If the content is illegal, go censor the content, the only reason that it's customary to censor the name is because that's the weakest link. DNS NFT's would move the weakest link to... I dunno, IP addresses maybe? That'll be something that the cops have to figure out, but it's not a naming system's problem to handle its adversaries' needs just because it has less attack surface than its predecessor.
It's also why Web3/crypto is encountering all the problems solved over time by the traditional finance system as it converges on the reality of human nature and how people actually behave.
There are use-cases for a completely trustless interactive ledger - however these are so niche as to be irrelevant for the vast majority.
The cost of the domain is insignificant when compared to the cost of the site itself e.g. development and hosting.
You're solving a problem I can't imagine more than a few dozen people deeply care about.
If you're hosting on IPFS you just have to make sure that some device somewhere has your content pinned. There's a raspberry pi in my closet...
Data is referenced by cryptographic hash so there's no need to authenticate the source. The hardest problem in that space is getting new hashes to your audience when you make updates.
You should read the NIST blockchain technology overview because you clearly don't understand how to make the right engineering calls.
It's not. It already exists without a blockchain[0]: https://en.wikipedia.org/wiki/Certificate_Transparency
[0]: since it's a source of confusion, with the definition (and explanation) of what a blockchain is given there: https://www.schneier.com/essays/archives/2019/02/theres_no_g...
> Logs are operated by many parties, including browser vendors and certificate authorities.
Why should we trust browser vendors and certificate authorities? They're high value targets and therefore more likely to be targeted.
As for Schneier, he asks:
> Would you rather trust a human legal system or the details of some computer code you don’t have the expertise to audit?
If I don't have any evidence that the code will fail in the way I'm worried about, but I do have evidence that the legal system frequently fails in the way I'm worried about, then maybe the code.
But whatever the case, I definitely prefer a legal system that has to worry about being replaced by code than one whose dominance is assured.
You're mentioning that as if blockchain somehow solved this problem. It doesn't. At best, blockchain moves trust around and you end up with a system that won't resist the test of time and end up converging to what you already have, but worse.
There are capabilities here that have never existed before, it seems likely that something radical will happen in time. There is already a lot of money sloshing around, and it takes a while for innovations to sink in.
-Buying drugs or illegal porn
-A terrorist
-A libertarian that opposes taxation
That's not how society works thank god.
I don't want to post PII info publicly from this account. But, in practice (ie, we're long past theory) if I want to accept payment as roenxi I can. And if I use something like Monero, it'll be extremely anonymous. There'll be a use for that sort of tech to someone and for legitimate purposes.
It's a conflict that isn't going to be ended any time soon: social control is used for good and for evil. We celebrate social disorder in Tiananmen Square and fear it at the U.S. Capitol. It's not like we can pick one side, order or disorder, and feel completely safe with our choice.
[1] https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
My bank had them for a while, they cost 5€ but they are currently (and have been for a few months already) unavailable due to "widespread fraud".
Last time I looked at ETH and BTC I spent a good 30mins trying to figure out how much the transaction would actually cost me and if it depended if I clicked GO at an opportune moment. And yes, I admit that this might have only been a difference of cents, but I wouldn't know that beforehand.
Here is a Monero address. Things sent there ends up with me. I advise against sending anything to it. Are you going to post your IBAN and account details?
I don't actually know what my IBAN is, but assuming it is my account number I'm not comfortable posting it here like I just did for a crypto address. This technology is something other than what I've had access to before.
Personally if I want to send money quickly and securely, be it within the UK or internationally, I use the banking system. It's cheaper, its faster, its more secure and if someone makes a mistake it is easily reversible. I even send a monthly remittance to Madagascar for free, and its not exactly known for its advanced banking system what with it being the 4th poorest country in the world. Yes it takes 2 to 4 days to get there, but I can pay anyone within the EU instantly or if its an American there's always paypal.
I'm 90% sure at this point that the main reason that cryptocurrencies became so popular (apart from the opportunities for massive fraud and bilking of the gullible) is because the USA has a banking system that has barely evolved since the 1980s. I mean they were still flying cheques around in 2004 and I still have American businesses trying to pay me by cheque on a regular basis in 2022. When you consider it through that lens it's no wonder Bitcoin sounds like a good idea.
Sending money with a UK bank or PayPal is the opposite of privacy preserving. The convenience of it is fine for UK to UK and EU banks, not great for private, secure, instant and international payments.
In the real world, if you have an actual asset, you physically ship it, and it costs money, but I have something in my hands. In cryptocurrency fantasyland, I can buy drugs with it. Or shitty NFTs.
Needless to say that DEXes exist as well so you can exchange without using a "trusted" exchange. And CBDCs aka "gov stable coins" will come as well at which point the risk of holding it is exactly the same as holding paper money and less risk that holding fiat in your bank account because CBDCs would be a balance direly by the central bank so you avoid the traditional bank which could go bankrupt.
Just to be clear I dont think using crypt as a replacement for cash is a proper use case. Buying coffee with crypto and all that stuff is rather silly at least today.
I think crypto as a means for payment has its real use case in international transactions. There are millions of people who send money back home from all around the world and no traditional banking dependent service can even remotely compete with crypto. You can no use all the fast local apps that do not actually move any money just change balances between its own users.
Its only a matter of time before companies will use crypto for this as well if they deal with international payments. Crypto in this case will just be the bridge currency and its value or whether it goes up or down does not matter. I might send CAD and you get USD the exchange is done automatically from CAD to crypto to USD. You dont need a bank who takes a fee or gives a bad rate because this exchange can run over public DEX where everyone get the best rate aka the actual market rate. Nothing outside of crypto can do this. Every other solution has a middleman who sucks out a profit and make the system worse for everyone + is a risk especially if that middlemen is in another jurisdiction.
What do you mean when you say “this will pass”? Herbalife¹ has been in business for over forty years; Amway² for over sixty; Watkins Incorporated³ for over one-hundred and fifty! The MLM business looks alive and well. I wouldn’t be surprised (but haven’t checked) if the widening gap in income inequality resulted in more people falling for scams and get-rich-quick schemes.
¹ https://en.wikipedia.org/wiki/Herbalife
Fortunately in my country people are forced to invest in a pension plan so they can't blow it all on crypto. We don't have 70 year old people flipping hamburgers at McDonald's lol.
But as far as crypto, as soon as it starts to even plausibly compete with any aspect of the finical system, it'll be regulated to oblivion -- even if it were a good idea.
No government on the planet would tolerate a rival private army, nor likewise a rival private economy.
It's tolerated at the moment because crypto is just casino chips, and mostly a "useful honeypot" for exposing its criminal users via pretty transparent public records.
However blockchain is also just such bad technology with no competitive use cases -- unlike herbal life products, you can't drink a blockchain ledger.
My sense is that the emporer here is so naked, and the product so useless, that each time the fantatics try to undress him, many realise the issue.
There's lots of routes to crypto's downfall, and all of them are vastly more likely than any "application" taking off.
Or Lebanon right now, which has USD as a competing currency rather than crypto. I tend to agree with this perspective--that all states should see a private economy as an adversary--but there are a lot of states that can't effectively resist forces like this.
That said, is there really a proven use case where people are using cryptocurrency to buy burritos? I think the private economy meme is out over its skis. I have seen places where you can buy a six dollar latte or a bag of cocaine with Bitcoin, but these are use cases which are heavily predicated on a functional underlying fiat currency.
The commodity which is called gold was indispensable in the ancient times. Metal vessels which cannot be oxidized were the best way to drink liquids, like water or wine. Pottery made out of clay is not ideal, because it's porous surface absorbs the wine taste, so when you put water in it, you taste the wine of the previous night. So, a commodity with an absolutely unique user case, tends to increase in price. Drinking water is a so frequent and fundamental human activity, that the best commodity for that user case, it follows that would be pretty expensive.
Blockchain has a unique user case as well. It's purpose is to decrease the amount of spam in the internet, by making it more expensive. Is there any better way to stop spam, instead of making it more expensive? I would love to hear about it! Energy annotation of information, is the only way to go, if you ask me.
Blockchain can be used by citizens to attest to ownership as well. This however is not a unique use case, government does that as well. One can easily imagine citizens chopping off the ownership of a house in 100.000 pieces for example, and putting that in the blockchain. You want to buy up a cup of coffee? Transfer the 1/100.000 of it to the coffee shop. Does the coffee shop wishes to track all their ownership they gained selling coffee? They wear their oculus headset, and they can keep track of all the points in the city in which they own a piece of it.
Aside of these points, cryptocurrencies, exchanges and crypto are ridiculous, people should invest in something which they understand.
It is certainly why BTC tends to have a implied floor around cost-to-mint; but that is more the psychology of its use. It's floor is zero, as with anything: whilst a token on a blockchain has no productive value below its (energy) cost-to-mint, that doesnt create buyers at any positive price.
One issue is that I don't see deliberately making computation less efficient as something unique to blockchains: we can make present systems abitarily energy-intensive by adding hash-computation work to them. We dont need immutability and distribution to do that.
However, I'm not sure in a world wish such high negative externalities on energy consumption, selling deliberately high energy cost computation is plausible. Unless spam can be shown to have similar externalities, as a problem, it's vastly less significant than our global energy crisis.
Services which perform computation to reduce spam, almost certainly, perform far less than the blockchain alternative. Minting a coin for each YT video uploaded is a vastly inferior solution than: 1) YT charging for posting videos; 2) YT building & running anti-spam systems; 3) YT charging users for access to videos; 4) YT requiring users having to hash something before uploading, so costing them some energy, etc.
Indeed, (1) solves all the problems in a vastly more efficient way for every person involed.
>I think the blockchain as a deliberately computationally expensive ledger is an interesting idea, and at least a plausible account of what resource could count as a commodity.
That's exactly the idea.
>It is certainly why BTC tends to have a implied floor around cost-to-mint; but that is more the psychology of its use. It's floor is zero, as with anything: whilst a token on a blockchain has no productive value below its (energy) cost-to-mint, that doesnt create buyers at any positive price.
Yep, that's exactly it. BTC however has huge transaction fees which limits it's applicability as a spam prevention tool. Small comments in Quora, or Twitter cannot be annotated with 10 cents of a transaction fee, it is too expensive.
>One issue is that I don't see deliberately making computation less efficient as something unique to blockchains: we can make present systems abitarily energy-intensive by adding hash-computation work to them. We dont need immutability and distribution to do that.
At first glance, yes, we can create intentionally expensive computations without relying on a blockchain, that would serve the same purpose. In reality we cannot. Special computer hardware (ASICs) could generate much cheaper PoW annotations than general purpose computers, and sell it to spammers. Blockchain economic incentives ensure that ASICs will be used by the miners first and foremost.
That one point is exactly the genius of Bitcoin. The competitive system of blockchain miners, ensures that over time the best hardware and programmers to create the most efficient PoW, will be bought/hired by the miners first.
>However, I'm not sure in a world wish such high negative externalities on energy consumption, selling deliberately high energy cost computation is plausible. Unless spam can be shown to have similar externalities, as a problem, it's vastly less significant than our global energy crisis.
That's a valid concern. However energy, and electricity more specifically, is dirt cheap and abundant in many places of the world, in which no human lives in a 100 mile radius. Solar panels in the middle of a desert for example. Time of the day plays a role as well. A significant amount of energy is wasted, just because humans don't consume that much energy, that time of the day.
>Services which perform computation to reduce spam, almost certainly, perform far less than the blockchain alternative. Minting a coin for each YT video uploaded is a vastly inferior solution than: 1) YT charging for posting videos; 2) YT building & running anti-spam systems; 3) YT charging users for access to videos; 4) YT requiring users having to hash something before uploading, so costing them some energy, etc.
Well, YT the video service could charge for every video uploaded less than a cent, let's say 0.1 or 0.01 dollars in Bitcoin, not BTC. Most video creators couldn't care less, if they pay 0.1 cent per video. Spammers however care a lot. In case someone uploads millions of videos, money suddenly start to add up. Tens of thousand of dollars for a spammer to pay, means he will stop spamming soon. Different charging methods could be implemented as well. Maybe charging a dollar for every 100MB of video is preferable. Charging methods could vary a lot. Reputation lists and trees, could create different charging methods as well. Relevant: https://www.youtube.com/watch?v=Olkb7fYSyiI
But at the same time, taking this as a given, that's even more fatal than my claim as to its uselessness.
The product is to impose a verifiable energy cost on computation on a counter-party to one (of many) mass communication (etc.) services for the sake of "kinda, maybe, roughly" improving the net quality of that service.
It reads to me like Herbal Life's vitamin supplements being discovered to cause cancer.
I don't mind YT requiring it's users to spend $0.1 in energy to upload a video -- in principle it's a neat form of "hidden taxation" that manages to target "the right people".
In practice it seems a collective-action failure with a high probability of bad negative externalities (ie., spammers siphoning off cheap energy causing a delay in green transition) which is better solved thru the usual mechanism of collective action: institutions, laws, etc. and attenuitive systems (spam checkers etc).
This book is one of many which documents this and their shady practises, which are predatory and should be illegal. https://www.amazon.com/gp/product/0964879514?ie=UTF8&tag=geb...
For example, the legend of how Space Shuttle components are transported by trains and thus built into sizes suitable for train tracks, which are built based on the size of wagon tramways, which were built on the size of rutted roads, which were originally built by the Romans for their horse drawn carriages, and thus the Roman road gauge of 4 feet 8.5 inches is now part of the spec of the Space Shuttle.
I don't think anyone can deny is that there is a significant amount of engineering work that is going into blockchain technology. Thus I suspect there is going to be nontrivial amounts of future technology built on blockchain or blockchain related infrastructure.
In 2017 everyone was saying that "blockchain" was the future of everything and you'd be a fool not to invest. Sure, it hasn't proven itself yet, but it's still early! Imagine if you could invest in the Internet in 1994!
This line doesn't work anymore, because it's been five years and blockchain still hasn't proven itself, and no-one's come up for a use for blockchain except currency speculation, money laundering and scams. It's hard to convince people that we're still only in the early days when you've been saying the same thing for years with no progress.
So now, blockchain has been rebranded to "web3", and we can go through the whole hype cycle again and hope no-one notices that nothing's changed. Web3 is the future! It might not have proven itself yet, but it's still early days! Imagine if you could invest in the internet in 1994!
Thankfully the noise seems to have mostly died out since the big crash earlier this year. I except that the next time there's a bull market we'll go through the same old bullshit with another new buzzword. It'll be early days, like the Internet in 1994!
I don't invest. I bought some Bitcoin as a try-out way back when it launched; just a few dollars-worth. They'd be worth a fortune now. But even then, transaction speeds were very slow. I've never been much into investing, and I don't have a taste for risky, volatile assets.
Actual blockchain is really detrimental to this new order scheme, because tokens on blockchain are harder to print, that's why real beneficiaries are moving to the stabletokens, which are practically CDBC, but issued not by shady banks but by actual criminals, some already convicted on the previous financial crises, like dotcom bust etc.
What is the argument here? Players shouldn't profit, developers should not profit or nobody should profit? If you start from a Marxist perspective, of course you are going to have a problem with a market based system.
It's just another financial scam promising to create money out of thin air, and it even reinvented sweatshops as a side effect.
Apply your principles to a sports tournament or poker series. The stakes create excitement for players.
[edit] It creates a perverse model where every app is expected to create its own little Ponzi scheme to entice people with. Then, your job is to market the token not the service. Any service that actually invests in building a product people want can deliver that product faster, simpler and more efficient without the token.
I'm going to remember this line, it's so good and true.
Not really. Libertarian anachocapitalists usually lean toward Bitcon/Monero, and not Web3 programmable hipster altcoins pumped by corporations.
What made the early web magic was the manual labour you had to put into the social dynamics of the spaces you created.
Algorithms and blockchains may help to facilitate the creation of new spaces but they won't solve the social dynamics that create real human connections, virtual or otherwise.