Is it wrong to assume that this is because the industry is mostly built upon a house of cards or because of bad actors? Objectively asking.
As you may notice, this also describes the tech VC bubble of the last decade, too. However, where normal tech has already found its use cases and does real things for real people in the real economy, downside is a little more capped. If you want to be generous to crypto, it's currently tech in 2000, where almost everyone has a total nonsense business model, but that a lot of the vague ideas will eventually find some variant with product-market fit. If you want to be less generous, it's all a house of cards.
EDIT: I'll also add that, of course, thinking very carefully about which narrative is true here and being right is the stuff fortunes and careers are made of. The people that weren't dissuaded by the tech crash in 2000 profited handsomely by thinking carefully for themselves about what was actually true and what information was actually latent in the financial crash. Of course, the tulip true believers in 1638 didn't fare nearly as well.
For all the problems with gig economy companies, they're not crypto. Uber fell from its high, but it's still facilitating rides and deliveries.
Ironic, given that the narrative during its rise was that the "Best and Brightest" were working in crypto and everyone else was fighting over the "B" level people.
Bitcoins scalability issue should have killed off al notions that it could ever gain widespread usage as an alternative to traditional currency for regular payments and after that it became yet another speculative derivative without any real backing in real world assets.
It was never actually going to replace fiat currencies for most people and the industry is absolutely dominated by exotic financial instruments(mostly of the ponzi variant), run by a mixture of fools and scammers.
There is probably scenario's where a temporary blockchain can solve some synchronization issues but the idea that a single static blockchain will replace traditional dynamic structures for organizing the economy is basically not viable.
That's a good point. If nothing else, the stupid money caused more practical exploration of ZKP and other exotic math constructs than we'd seen in decades previously.
I'd like to see more "toy" exploration of this stuff as the money drains out. That's where interesting things are going to come from, for a while. Time for a zero-knowledge app to select lunch destinations, a dating matcher that doesn't leak before the reveal, secret agent spy communicators for kids...
Lightning is not viable, because it requires "watchtowers" to check for early state commit attacks. Not everyone will be able to run such a server.
But, for instance, Bitcoin Cash has larger blocks (the reason for the first fork of Bitcoin). However, in spite of its technical advantages, adoption severely lagged compared to Bitcoin. I wonder why that is.
Security isn't/wasn't the concern, the trade-offs exist to ensure verifiability in the most trustless way possible (low hardware and bandwidth requirements). This enables a decentralized system which is open to any participant and keeps miners accountable. If running a node is limited to miners and exchanges and requires a renting server racks there is just no point.
> Lightning is not viable, because it requires "watchtowers" to check for early state commit attacks
This is inaccurate. LN has shortcomings currently but this isn't one. Without a watchtower your peer in a channel can force close it while you are offline by publishing an outdated state on-chain and attempt to defraud you, but if at any point before the end of the grace period (usually ~2 weeks) you are online and you produce a more recent state you get the whole balance of this channel back (this is how dishonest peers are punished). This is one channel mechanism (Poon-Dryja), another mechanism (Eltoo) which doesn't require as much monitoring/penalties will eventually come but depends on changes to Bitcoin protocol which are still pending.
Secondly theses optional watchtowers which automate this process minimize trust a lot as they can only publish the most updated state IF and ONLY IF the counterparty in your channel published their outdated state. So they have no real custody of your funds.
Lastly solutions like local federations (Fedi to name one) can address your concern of people not being able to run servers, if the users aren't content with the public offers of existing watchtowers.
> But, for instance, Bitcoin Cash has larger blocks (the reason for the first fork of Bitcoin). However, in spite of its technical advantages, adoption severely lagged compared to Bitcoin. I wonder why that is.
Because having larger blocks is not a technical advantage if your goals are the principles mentioned in the first paragraph. If you intent to compromise on these then just build a centralized database, it will be more efficient and at least you won't lie to people pretending that your system is open/decentralized (like Bcash supporters do).
I can not thank you enough. I was under a wrong impression, and you have provided me with easy-to-search-for terms where I can get more info.
I see now there is a larger-than-I-thought grace period (which I thought was ~3 days) as well as penalty for fraud attempts.
2 weeks is a reasonable time to be away, like going on vacation.
And at the bottom of it all, one of the first dominos to tumble, was a company called 3 Arrows Capital, which promised to generate revenue by buying crypto-dickbutt NFTS... and then went on the run. I'm not even kidding.
They lost borrowed funds in a ponzi scheme called Luna. I get that you wanted to poke at nfts, but the last remark may make someone think this is how it actually went down.
Yes, I'm sure that Terra/Luna was a big part of it, and you're right that it's worth calling out, it may even have been the single biggest factor. But it wasn't the only way 3AC squandered invested funds.
Perhaps Terra/Luna should be called out as the first domino to fall, it was indeed spectacular. If it was a ponzi it was a complex one with extra steps, an algorithmic stablecoin that was metastable at best, and IIRC a lending protocol that charged less for loans than it paid for deposits. All sorts of crazy.
But 3AC still invested in dickbutt...
I can't see how much they paid for it, it was a transfer. Maybe someone sent it to them as a joke, who knows.
In any case, it was around the time they were created, so easily it 20x to today's price.
I guess they should have invested more in cryptodickbutts.
Look it up if you don't believe me.
I’m intrigued by crypto but merely because I’m a nerd. I don’t care about crypto when it comes to my day to day life.
Now.. the question remains as to whether it would be the same, if it tech was not made so accessible ( some people would be forced to learn since the bar was high ). I mostly think that battle is already lost.
Thunderbird[0] has pretty good (see what I did there?) PGP integration[1]. The UI is decent and there is discoverability support with various key servers as well.
But that would require folks to break their addiction to web-based email and use an actual email client. As such, I won't hold my breath.
[0] https://www.thunderbird.net/
[1] https://support.mozilla.org/en-US/kb/openpgp-thunderbird-how...
The blockchain, being a public ledger, ensures that transactions are accurately recorded and can be publicly verified as such.
But it’s been centuries since the actual accurate recording of transactions has been an issue. The real problems are far removed from this. When was the last time you heard about people complaining that they paid off their Visa but it did not credit them for the payment?
Meanwhile, real problems that people do face, such as a vendor not providing you the goods or services that you paid for, are still a problem with blockchain.
The fundamental problem with cryptocurrencies are that they add a whole lot of complexity to solve a problem which is a trivial issue in practice at best, without providing any tools to solve the actual problems people face and in many cases making it harder to find solutions for those problems.
Not just still a problem. Far worse off a problem. Chargebacks exist for credit cards and most bank transactions including wired funds. Send the crypto the wrong way at the wrong time or to the wrong place? Poof. Bye bye money.
This problem is not trivial, and as far as I can see crypto is the only scalable solution to it outside of legislation that isn't ever going to happen.
What about the privacy implications of having nearly every payment on the planet go through 2 megacorporations?
And I can see the response now, while every crypto transaction is public, it's a lot harder to tie identities to wallet addresses than it is to tie a name to a credit card number.
That's a silly claim. Ethereum forked because of a hack and enough people wanting to undo it. Tether regularly freezes funds (https://www.coindesk.com/business/2022/11/10/tether-freezes-...). Ownership of a cryptocurrency can be made a crime. Developers can be sanctioned and arrested.
Tether is centralized and a scam (and arguably a scam because it is centralized) and irrelevant to the discussion. Anyone can make any token they want and run it according to whoever's rules; this logic would indict the entire internet based on the existence of badly moderated websites.
And cryptography can be made a crime as well. Meanwhile, in the world we inhabit today rather than infinite hypothetical ones, no such thing is happening outside of totalitarian governments, and despite their effort, not one single crypto currency transaction has ever been successfully censored.
The two diverging lines were very much unequal.
> Tether is centralized and a scam (and arguably a scam because it is centralized) and irrelevant to the discussion.
Arguing Tether is irrelevant to the crypto space is absurd. (I agree it's a scam. That's a major problem for the whole ecosystem.)
> And cryptography can be made a crime as well.
Correct. You can censor cryptography. https://en.wikipedia.org/wiki/Export_of_cryptography_from_th...
What is your point? Surely you aren't arguing that the governance of one specific token in the broader crypto ecosystem invalidates the general uncensorability of crypto transactions? Because that would be pretty fucking disingenuous as a false equivalence.
Being able to use money electronically without a 3rd party is something that wasn't possible before. Anyone wanting to cut a credit card out of their deal or choose a currency other than their what their country mandates can now do that.
https://medium.com/@qroshan/block-chain-solving-imaginary-pr...
These institutions can also screw you over by massively inflating the crypto bubble and then crashing spectacularly, tanking your value and poisoning the public perception of cryptocurrency.
The 'point' of cryptocurrency may well be to avoid dependence on centralized institutions, but the effect of cryptocurrency has been to enable all this nonsense. At this point in time you can't say "well it's not crypto's fault!" because it absolutely is. You don't just look at intent when assessing outcomes.
This is pretty well established, almost to the point that it doesn't need to be said.
Since the major collapses were by organizations which had a monopoly on creating their own currencies ("tokens") you could call them 'central banks'. Note I am not defending cryptocurrencies -- I am pointing out that you calling something 'gibberish' when people do have an understanding of the meaning is not productive.
How can one tell that with a straight-face when the poster-boys of crypto (like Coinbase, FTX, ConsenSys, Circle, Uniswap, Binance etc) depend on centralized actors like VCs and Stock Exchanges?