Why I'm less than infinitely hostile to cryptocurrency
astralcodexten.substack.com
astralcodexten.substack.com
2) The author strongly implies that skeptics are skeptical because they have fallen for scams (by "clicking on spam emails"). Insulting the intelligence of your opponent is also not a compelling way to refute an argument. I have always been skeptical, I have never been scammed, and I don't think I'm unique.
3) The author's research found that the scam rate "seemed low." Molly White is probably the person working harder than any other to track this scam rate, and her "grift counter" currently reports losses of over $12 billion.
https://www.statista.com/statistics/1272903/cryptocurrency-t...
I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back.
We've just created 2 million dollars of daily trade volume, err, economic activity.
When looking at value stolen by scammers, what matters is not the daily trade volume, what matters is how much money was put into the ecosystem [1], and what fraction of it was stolen.
[1] Which is a lot less than 180B/day.
This is the rub. If you’re using mcap and mark-to-market rates for total value stolen, it’s completely reasonable to use the same rate to evaluate the size of the system.
https://dune.com/hagaetc/stablecoins
I guess you could argue the billions in daily transfers are wash trading, unless the transfer is part of an exploit, and then it’s not wash trading?
Edit to downvoters: I actually meant it unironically. Thiefs often want to "cash out" as soon as possible. I'm not saying it's a net good, but it feels "real and gritty" as opposed to many other crypto transactions.
Uniswap liquidity providers charge a fee for every swap, proportional to the volume swapped, so faking volume like this would be prohibitively expensive.
If dogs and cats were fungible, and there was a market for fractions of both that could be exchanged in and out of, and contained hundreds of thousands of USD in standing liquidity, and the value of your dog was $1 million, and the cat was also $1 million, then sure. Swapping the dog for the cat is approximated by $2 million to the same accuracy that many assets (houses, stocks, etc) are described in notional value.
So to what degree is trade volume indicative of anything in other things?
Seems like an apples to oranges comparison there.
https://www.security.org/digital-safety/credit-card-fraud-re...
Fraud losses are definitionally realized losses, whereas gross crypto transaction volume includes things like a single entity rebalancing funds across wallets or exchanges.
On a chain with low or zero fees, a single actor can trivially generate billions of transaction volume like that on a single day.
The comparison is suitable to show relative scale: $12B over some years sounds like a lot, until you realize it is a small fraction of the total crypto market. Likewise, you could paint VISA as being rampant with fraud by pointing to the many billions lost per annum in credit card fraud, but this represents a small percentage of all VISA activity.
Source: https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog...
"If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation)."
(also some legal ones, tho)
It's a feature, obviously. Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons?
Ofc it's bad from the perspective of the people who want control over you. Good.
Because some illegal transactions are illegal for very non-dubious reasons, but crypto doesn't make this distinction. (Crypto made ransomware a profitable endeavor.)
Same with cash. Which governments increasingly constrain, for this reason.
Yet there are not as many people commenting enthusiastically about wanting cash to disappear / fail, or suggesting similar measures against it. (KYC, AML...)
Why is cash okay, but _digital equivalent_ is not? When physical transactions are less and less relevant? Why make the decision to basically leave these advantages in the past?
I don't think preventing ransomware attacks or financing terrorism is worth losing the capability to transact freely online. Potential totalitarianism is way more scary than 9/11.
Quote from a book, "Manna":
> With the arrival of robots, tens of millions of people lost their minimum wage jobs and the wealth concentrated so quickly. The rich controlled America’s bureaucracy, military, businesses and natural resources, and the unemployed masses lived in terrafoam, cut off from any opportunity to change their situation. There was the facade of “free elections,” but only candidates supported by the rich could ever get on the ballot. The government was completely controlled by the rich, as were the robotic security forces, the military and the intelligence organizations. American democracy had morphed into a third world dictatorship ruled by the wealthy elite.
> Ultimately, you would expect that there would be riots across America. But the people could not riot. The terrorist scares at the beginning of the century had caused a number of important changes. Eventually, there were video security cameras and microphones covering and recording nearly every square inch of public space in America. There were taps on all phone conversations and Internet messages sniffing for terrorist clues. If anyone thought about starting a protest rally or a riot, or discussed any form of civil disobedience with anyone else, he was branded a terrorist and preemptively put in jail. Combine that with robotic security forces, and riots are impossible.
Because exchanging cash requires physical presence. The introduces friction and requires putative criminals to take risks that they don't have to take with crypto, which makes crime less lucrative.
Crypto is not a digital equivalent to cash no matter how much you say it.
I can pay my tax organisation with cash. They explicitly list the acceptable forms of payment. I cannot send them any sort of crypto currency. Cash is also legal tender. There are times where not accepting cash could have legal consequences. I can reject crypto as much as I want.
I can't help but think these lines of argument are intentionally deceptive. If you just repeat it enough times, other people will as well.
Straw man based on a made-up quote. The article does not mention "useful for illegal transactions" anywhere. The article mentions legal transactions in only two occasions:
- "Bitcoin is rarely used for legal transactions"
- "Bitcoin has never been used to any significant extent for legal real-world transactions."
If you feel the need to refute what the ECB claimed, show where bitcoing is used in any significant extent for legal real-world transactions.
Not even El Salvador, with their push to adopt Bitcoin as the nation's official currency, Bitcoin transactions saw any significant uptake.
Not being allowed to buy/possess drugs is a stupid law, but preventing illegal transactions in the public financial system is a feature, not a bug. If you want to buy drugs, do it the old fashioned way - you know, the way society did it for thousands of years prior to bitcoin.
A scam transaction is one where one party would not have committed said transaction had they known the truth. It is an unwilling transaction (aka, scam).
An illegal transaction is one where both parties are willing, but the state deems said transaction is illegal under their purview. I argue that there should be no such a type of transaction - the state should allow _all_ transactions from _all_ parties that are willing. The illegal part should only apply to an action resulting from the transaction, such as hitman for hire.
e.g, The act of paying someone to kill someone else is legal, but the act of killing is illegal. The act of paying someone for an illicit drug is legal, but possession is illegal.
Why should it be legal to pay somebody to kill? That seems insane to me. Especially since the laws in many countries could/would hold financial institutions liable for any murder they inadvertently facilitated by processing that transaction. If it wasn’t disallowed by the state, the private institutions would prohibit it of their own accord. What’s the difference?
There are also many laws regarding incitement to violence and the like. Paying a hit man would be that, no?
“I don’t want the government to tell me what to do” is childish. Tell me why a society should tolerate the ability to pay for a hitman if we’ve already agreed that murder is wrong?
Why? Why is it better to actively facilitate the act of paying an assassin than it is to not do that?
> if we lived in a society where all flow of money goes through some govement entity
Lovely strawman you've built there. However, I don't think I claimed that all money should flow through some government entity. For the record, I don't think it should. Making the act of paying for an assassination illegal != making some government entity responsible for the flow of all money. Holding both the assassin and the payer responsible for either killing somebody or conspiring to kill somebody doesn't seem unreasonable to me.
> we would be in reality some button presses away from Orwell style dystopia.
[citation needed] go work in government and then tell me that anything is "some button presses away" from anything else.
for assassinations, may be we currently all agree that it isn't good to allow it to happen. However, that is only just an extreme example, for which it is something most people would agree should be illegal. But what about other actions?
Killing the ability to transact, regardless of the subject of a transaction, is detrimental to change, and entrenches existing powers/authority. These existing authority should not feel safe implementing new laws, if there are ways that could circumvent them. This makes the authority remain honest, and only implement laws that would have popular support.
You have successfully convinced me that you’re either a parody account or GPT-4 in training. This is insane.
IANAL but paying someone to kill someone else is definitely illegal, even if they don't kill them. Isn't that what they got the silk road guy on?
today, yes, the transaction for paying the hitman is illegal, as is the act of the hitman.
What i'm saying is that bitcoins could be a method for which transactions can be made without interference with the state, regardless of the subject of the transaction.
The legality of the transaction's subject is a separate argument.
Yes - legally this is fraud.
> An illegal transaction is one where both parties are willing, but the state deems said transaction is illegal under their purview.
And in every single place I know of in the world, fraud is illegal.
Don't waste our time with this.
The discussion in this HN thread has been calling both of the above "illegal", and not distinguishing between them.
Is this parody?
The first opium war started in 1839, so even in China, "not quite two centuries" is much more accurate than "centuries at least".
A good argument could be made that these substances weren't really banned in the US until the Controlled Substances Act of 1970. The word "decades" is pretty reasonable.
> If you want to buy drugs, do it the old fashioned way - you know, the way society did it for thousands of years prior to bitcoin.
I’m more making the case that you should just go buy drugs with cash instead of pretending that bitcoin is the only way to do it.
The current head of the ECB, Christine Lagarde, stated this year that "inflation came from nowhere". And this is your source of information on this topic?
It's like referencing a study on climate change by a fossil fuel producer in the 80s.
These are people that will boycott people and products remotely associated with crypto.
I don't think the author is trying to argue against the type of skeptic you describe. In fact, they seem to mostly agree.
In short I think you are misconstruing the argument.
Also, if you want to talk about fraud rate, you need a denominator. A big sounding number by itself is meaningless.
All of this is the same with a crypto sceptic. I don't think you can assume crypto has to be a scam or more aptly a speculative investment scheme searching for a purpose. Some day, we could be convinced that crypto is super valuable for solving X, and the day it happens is the day I look to it with interest (still waiting).
P ~= 0.3
> and agnostic theists
P ~= 0.7
My personal opinion and observation is that many people choose to take a stance on topics despite having no need to do so.
I think they would be better served remaining agnostic on most topics despite their priors leaning one way or another.
I don't think this is correct.
Theism vs atheism has pretty drastic impacts on how you live your life. If you believe that you are going to hell unless you do X, Y and Z, you are going to make sacrifices to accomplish those requirements.
I agree theism vs atheism might make a big difference, but I don't see a meaningful difference between agnosticism and atheism in how I would approach life.
Even when it comes to ruling out theism and Gods, it only really matters if you rule out vengeful gods that might punish you for not worshiping them.
If I were 90% certain that a god did not exist, What would I stand to gain by committing to atheism and holding it to be, absolute truth.
I think a more mundane topics are a better example, e.g. the political or social topic of the day.
On the other hand, if you think it's more like 1 in a million, and furthermore that there's a similar chance of other versions of God or other gods existing who have completely different demands on your behavior, then it's a lot more sensible to say "fuck it, I'm going to ignore such possibilities". Which is a practical difference.
I do agree that lots of people would probably do better if they were more comfortable maintaining uncertainty in general.
It might motivate you to more actively oppose policies motivated by religion which are harmful to society.
It might motivate you to openly express your views and thus provide emotional support to other non-believers who are trapped in situations where they cannot express those views without risking physical harm. In Saudi Arabia, for example, being an atheist is a capital offense. And even in the U.S. there are many people in situations where coming out as an atheist puts them at risk of ostracism and destitution.
A polytheist could have a confidence interval on the number of gods (lower case g) that exist (e.g. "I am 90% sure that the number of gods is between 10 and 20"). But that is not typically what one is referring to when speaking of atheists and agnostics.
This looks like the sanewashing[1] anti-pattern. Numerous comments say exactly this, every time it comes up. It's great that you personally have a nuanced opinion on the matter, but you should be careful about speaking for others, or saying what skeptics believe.
From a quick search of HN of "all crypto scam", filtering out ones that aren't endorsing the view, or are throwaway accounts:
https://news.ycombinator.com/item?id=33566892
https://news.ycombinator.com/item?id=31012827
https://news.ycombinator.com/item?id=33524215
https://news.ycombinator.com/item?id=33654880
[1] https://andrewaustin.blog/2022/02/14/sanewashing-its-more-wi...
2) I don't think he's arguing that everyone who thinks crypto is a scam is that sort of person, he was saying that most people who have been scammed are.
3) Molly White's number's agree with OP's. $12 billion vs a market cap of $858B is roughly the same percentage identified in the article. And before you complain about the use of market cap as denominator, market cap is also the numerator being used by Molly White's analysis, so it's the correct denominator.
1) People should be more hesitant to speak in absolutes. Unfortunately it’s possible that having a nuanced take is inversely correlated with the tendency to post noisy comments online. Maybe, regardless of the underlying stance of “most” skeptics, some more honest dialogue is warranted. Point conceded.
2. Hm. If that’s the case, the author’s assertion that most people who have been scammed are the kinds of people who fall for scams is fair, but not going to change many minds.
3. This is discussed ad nauseam below, so I’ll just add a reminder that we’re debating the author’s statement that “big crypto projects are very rarely scams” as evidenced by his google search. He goes on to say that “Crypto is a few hundred interesting projects, plus a long tail of thousands of scams.” So, most crypto projects are safe if you just ignore most crypto projects and only consider the most dominant. Realized losses vs unrealized market cap aside, the dynamics that incentivize that long tail of scams are worth worrying about in my view.
For 3, I think his statement as written "big crypto projects are very rarely scams" is clearly not literally true in a meaningful sense, and it's right to criticize him for that. However, I think a weaker statement like "The people that complain that crypto projects are scams are overstating how dense the space is with scams" is probably more accurate.
It's sort of hard to determine how to weight an analysis of the density of scams in a space. Certainly if you weight by project count, it'll be quite high. If you weight by market cap, it'll be considerably lower. But to your actual point, I agree worrying about scams in crypto is very important, and I read the OP as (admittedly, somewhat carelessly) trying to argue against the view that "all" or "nearly all" crypto projects are scams.
I think a better way to state it might be something like: Post dotcom bubble pop a lot of people were saying "those internet companies were all scams", and they were right in some kind of media-attention-weighted sense, and maybe even some other senses. But there were certainly a lot of real and important companies there, and even a lot of near-real-and-important companies that were just a little ahead of their time and didn't make it, and I don't think it's fair to dismiss most of them as scams.
I'd definitely say crypto is still in the pre-making-it stage of its lifecycle, and it remains to be seen whether any of these projects will end up being say, the Google or Amazon of this space, that survives the winter and goes on to do meaningful things. However, even if they all die, I think it's fair to say that e.g. Ethereum and Bitcoin were sincere attempts at building novel technology.
Is this any different from the stock market? There are about 6000 companies listed on the NYSE and NASDAQ. According to [1] there are about 10,000 penny stocks traded OTC. Not every NYSE/NASDAQ company is legit and not every penny stock is a scam, but we're still looking at an awful lot of fraud out there.
Seems like the incentives for financial fraud are obvious and eternal.
[1] https://www.nytimes.com/2021/03/18/business/penny-stocks-tra...
Around the same time, some people realized that bitcoin was deflationary. And, you had two groups: One started hoarding coins and pumping it, and the other group realized it was a pyramid and had too good a conscious to participate. And, the pumping continued until today. And, maybe some people are sour?
Then, for 14 years, tons of money was dumped into it, and not much happened. It's still mainly used for black market goods. It still has terrible user interface. The transaction rate is still low. The transaction fees are high. And, it's too easy to have your coins stolen.
If you live in a stable economy with good governance and a trustworthy financial system, you don't need crypto. Unfortunately, that does not describe everyone in the world. It may not even describe half of the world.
ie, it's not fine.
I agree that, in the case of Bitcoin specifically, it's still primarily used for black market goods (excluding speculation, of course), among relatively wealthy developed market users. However, there are a non-trivial number of genuine users among economies with less stable banking systems, as the OP points out. And it isn't true that fees are still high and tx rate is still low, the lightning network solves that problem. It hasn't seen super widespread adoption yet, but the technical problem, as far as fees and transaction rates, is essentially solved. What you are correct about though is that the UX is still pretty terrible for the average person. However, in some places, that UX is a better alternative than the one they have access to locally.
1) Fiat is controlled by government --- we don't trust it.
2) I know --- let's build de-centralized, trustless money without government.
3) Yikes! Government must save us from the fraud hellscape we have naively created.
4) But wait --- isn't crypto with government oversight and control basically just fiat all over again?
5) Crypto isn't trustworthy, I think we'll just stick with fiat --- the unwashed masses.
6) Wait, without the masses on board, crypto can never be a real functioning currency.
7) I think we'll just stick with fiat --- cryptobros.
I think we're currently at about step 4 or 5.
The more aggressive skeptical argument is that cryptocurrencies can be looked at as a banking system with no government backstop at all, which are vulnerable to a systemic bank panic and run the system -- creating contagion effects that will ultimately knock down all the dominoes. Financial systems are all vulnerable to the fact that they are not stable systems and so they all need circuit breakers and need automatic measures in place to backstop the system in the event of a panic (critics of the argument that I'm making will point out that doesn't produce any certainty of stability, but they miss the point that those measures do make the system more stable). Without those, they'll definitely hit a systemic panic and will unravel sooner rather than later.
This was pretty well encapsulated in two paragraphs:
> In the same way, everything about the crypto economy is worse than the regular economy. The only excuse is that it’s decentralized. This means you can use it for all of those cool things - sending remittances, circumventing corrupt banking systems, resisting authoritarian governments - that are hard to do with regular money. Of course subjecting yourself to a difficult constraint is going to be harder than not doing that!
> If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation).
I still think NFTs are silly though.
One country (Trinidad and Tobago) where I speak to a friend who is often complaining about dollar shortages and government-imposed forex controls is not on the list.
I don't think cryptocurrencies are currently being used to solve the problems the article is assuming it does as much as the article's thesis suggests.
A lot of the "oh you're only anti-crypto because you're so financially privileged" inclusion is pretty disingenuous, if not predatory.
Lots of average Joes saw a superbowl ad, put their money into a large, well-respected exchange that didn’t promise impossible returns, and lost everything! I had a nontechy relative call and ask me how she should go about selling her (literal traditional paint-on-canvas) paintings as NFTs! For a little bit there it seemed like there might be enough momentum for cryptocurrency to become too-big-to-fail before skeptics even had time to object.
It also underplays the extent to which the kind of cryptocurrency stuff techies react negatively to is still explicitly or implicitly boosting that vision. Cryptocurrency as the tor of money is reasonable but also not something that for-profit companies have much incentive to be involved with. But next time I see a project whose target market are those living in countries with completely nonfunctional financial systems, people trying to escape authoritarian governments, or sex workers, I’ll think twice before being negative.
Anyway, a few days later I had to explain the whole situation to an artist friend who'd heard the story and wanted in. Argh.
---
[1] https://moxie.org/2022/01/07/web3-first-impressions.html
To me it feels of a kind with the sports betting sites you see advertised everywhere nowadays and those CSGO skin betting sites that steamers were (and still are! See the People Make Games video on this) advertising to twelve year olds.
Happens in everything. Corporations can fail. Trad-finance institutions can fail. Sovereign currencies can fail.
I still think that beats centralized finance, where I'm barred from investing in, say, startups. Because I'm not ~~rich~~ accredited investor, lol. Ofc that's for my safety, because apparently reducing opportunities of non-rich people is 'protecting' them.
For some bizarre reason one doesn't need to be an 'accredited' to start their own business. I wonder what's the logic here? Government should clearly fix that issue - after all, if investing into sth like OpenAI (for example) is considered risky, then starting your own business is straight up delusional.
> I had a nontechy relative call and ask me how she should go about selling her (literal traditional paint-on-canvas) paintings as NFTs!
What's wrong with that? Is selling physical merchandise bad too? Or digital goods in general? Commissioned digital art? Why is it illegitimate and, say, autographs aren't? Frankly, I find it to be a more elegant system than these other approaches. It would be nice if it caught on someday.
> For a little bit there it seemed like there might be enough momentum for cryptocurrency to become too-big-to-fail before skeptics even had time to object.
How great! "Skeptics" are a bit of a weird name for this. Tech innovation doomers is more fitting, I think. Narratively, I'll admit, you guys are currently on top somehow. VR, Metaverse, AI, whatever Musk ever does... (well, AI doomerism isn't quite universal yet, maybe).
Truly amazing, let's not ever do anything different or new, it's all shit after all.
(also, maybe I'm delusionally optimistic, but I don't think it's quite over yet)
Corporations can also succeed. Circular perpetual motion machines leveraged against their own bullshit to claim ever-higher valuations while telling folks "you don't need to know about crypto, just give us your money" on TV? That's never gonna work out. It's fundamentally broken.
You try to equate crypto skeptisicm with general anti-innovation thinking but... what was the innovation in FTX or Luna or [insert other implosions here]? Seeing hype as innovation is hardly sound thinking.
Show me some actual "future of investment" innovation and see if I'm as critical about it. Or any non-fintech innovation for that part. Lots of interesting technological developments happening, they just mostly aren't in the crypto hype bubble.
The fundamental value of physical artworks is getting something pretty to put on your wall. The fundamental value of a digital commission is the existence of an image that otherwise would not exist. The NFT-theoretic concept of digital ownership isn’t inherently invalid or meaningless, but it’s not something that most regular people were ever going to find valuable, and it was being used as a smokescreen to obscure the fact that most of the value of NFTs came from speculation.
That call really soured me on the whole thing because it was firsthand evidence that cryptocurrency boosters were scamming ordinary people by convincing them that they were opening an Etsy store when they were actually buying casino chips.
I didn't realise it had finally gotten to this point, I guess FTX was the final wake up call? I hope it's true because once hype is out of the picture so are the millions of vultures and it is once again possible to discern new and interesting ideas from the noise that saps our attention in this area.
The need for law enforcement authorities to achieve Total Information Awareness over all private financial transactions stands opposed to a vision of ubiquitous electronic cash, with decentralized and peer-to-peer electronic transactions.
Apparently providing both privacy to buyers and following AML and income reporting laws at the same time is crossing some line because "the government is always wrong".
It is kind of like following the law is frowned upon in the cryptocurrency space which is why any competitor that can actually follow the law must be nipped in the bud.
I don't believe crypto users care about privacy except maybe when they use Montero.
It's the intersection of the sets of uses that (1) benefit from no government oversight, (2) absolutely need to have their ledger distributed and (3) perform better than whatever solution is currently used.
A lot smarter people than me have already concluded that the only use cases in that intersection are illegal.
You might argue that "it smells like tyranny then" and cite the transfer of value in and out of oppressive or failing countries, but that seems to be the single and only (and still illegal) use of crypto currencies.
The crypto defenders whose only argument is "JUST WAIT YA DIDN'T WAIT LONG ENOUGH FOR THE PROPER USES TO EMERGE WTFBBQ" - we've waited long enough I think.
FTX, through its acquisitions, was technically "highly regulated", yet it collapsed. Several other centralized financial services, including Celsius and Genesis, collapsed.
In contrast, in this latest cycle, no leading DeFi applications collapsed or lost any customer funds. They operated flawlessly through all of the market turmoil.
Are there some examples you can point to? This seems like an interesting space.
> leading DeFi applications collapsed or lost any customer funds
What DeFi applications do you consider leading?
They are all built on top of Ethereum. They operate without human intervention, providing exchange facilities, lending, decentralized staking, stablecoins... The basic primitives of an automated financial system.
There was some other thing with using US based debit cards over there, apparently it was an easier flow to fill up the US accounts and have them use it over there than to do a bank to bank transfer.
What about the crypto side of it?
Somewhat off topic, the Space Pen was researched 100% with private funds and both the US and USSR space programs bought them retail, in contrast to some of the stories floating around the internet.
You pretty much know you're reading a rationalist if they use phrases like "less wrong", "mildly opinionated" or now "less than infinite".
Is there some reasoning behind those phrases? Rejecting the null hypothesis as a way of life?
Why not just say "why I'm still bullish on crypto even though everyone says the opposite"?
Also, "bullish" is generally a financial term, and in this case may refer to "price go up" which doesn't seem to be the intent of the article. The article is stressing usecases not price.
Oh I know just the type you mean. Of course, a type of person that is infinitely more annoying is the crypto evangelist explaining to you why they are making the world better because their startup is making it easy for grandma get in on the crypto revolution with her retirement fund.
This is ironic understatement. It's not a rationalist thing, it's a joke!
To my ear, saying "I'm still bullish" rather than "I'm less than infinitely certain about X" is the weird sounding one, like someone's trying really hard to signal to me they know and care about stocks and investments and stuff. To be honest I don't and still get confused on which is which between "bearish" and "bullish".
The other phrases are also vague enough that they are not really helpful. If you're "mildly opinionated" enough about something to write a blog post about it, I'm starting to how much degree is actually meant with "mild". If to people are mildly opinionated about somthing, who does have the stronger opinion?
I agree that things are often complex and not clear-cut, but I don't see how trying to mush everything into featureless grey would help here to gain insight.
"Less than infinitely" to me made sense too, it's what I would've liked out of my friend on the topic of crypto or really anything where we don't see eye to eye. I don't want an "omg you're right what have I been thinking", but maybe "I don't know about your conclusions, but I'll consider what you said and maybe they'll change my mind or maybe they'll help me better form my own arguments."
My impression of the title is that the essay is a response to the largely maximally hostile stance many take towards cryptocurrency projects, and his attempt at moderation of that stance.
It's the same thing with any sufficiently divergent dialect, you lack the context so you fill in meaning from your own context which is incorrect leading you to these conclusions. It's just linguistic compression focused on a cluster of common avenues of thought to make communication faster, easier and more precise when in those realms.
Which is to say, this is just a propaganda rhetoric strategy: the opposition don't have valid points, they're just crazed by their hatred. Don't try to understand what they're saying because they're crazy and can be ignored.
Which is...not true. The fact that not enough people wanted DEC products might be a marketing issue, but more likely is that other companies made stuff that they wanted more.
It's like a last, desperate grab that's deployed when the argument has exhausted itself.
The author's view is tangential to bull/bear in the financial sense. From the article:
> This post is emphatically not intended as a claim that crypto will go up more, or that it won’t go down a lot, or that there won’t be any more disasters or scams7. It’s a claim that aside from its going-up ability, crypto is still a set of interesting technological solutions to regulatory problems.
Read a bunch of papers in computational complexity theory (or any other subject) and you will see similar phrases pop up.
Heck, compare hacker news comments with some other forum website and you will probably notice subtle language differences.
If you would like to understand why they use weird vocabulary, here is a request which I expect will induce frustration and then clarity:
“Please explain how someone can be similar to a bovine in their relationship to crypto”
Oh, that's easy. When looking at the carbon footprint per unit calorie, bovine flesh, is much larger than vegetarian options. Same with water and land use as well. It's actually significantly worse for your health as well. There are practically no up sides to consuming beef, except the taste.
That's what it means when somebody is bullish on crypto: they want a currency that has little upside and is horrible for environment.
> Is there some reasoning behind those phrases? Rejecting the null hypothesis as a way of life?
Not being snarky, but perhaps dumb: of all expressions above, "null hypothesis" is the one I understood the least.
Basically an attempt at applying statistical reasoning to reasoning in everyday life. I don’t have a problem with the vocabulary as much as the way this group speaks: upspeak, overuse of “kind of” when they don’t mean “kind of” and a peculiar sort of thinking stutter when formulating a statement. It’s amazing how prevalent it is.
This writeup cites remittances, but last time I looked into it, crypto was a) a minor player in remittance markets, and b) is growing slower than many incumbents and new entrants, so that feels like a weak example. I haven't looked into banking in Vietnam, but I would guess there is a similar story (ie crypto is a niche, not on track to serve any sizable portion of unbanked Vietnamese customers, weaker success than several non-crypto mobile apps). I'm in the market for a nice writeup on some market where crypto is actually winning.
https://mirror.xyz/mattdesl.eth/_F9vQAUeeBB9AJNwMNaE_G5kTcl1...
Crypto is big in Vietnam, entirely as a cultural thing. They love games and they love finding creative ways to make money. They really got scammed well in the ICO days. DeFi didn't get big because they were still butt hurt from ICO days and because well, they don't understand the concepts in DeFi. Collateralized loans and providing liquidity just went over most people's heads.
That said, there are a lot of unbanked people there. Women in the north still put gold fillings in their teeth to store wealth "safely". They also have great inexpensive 4/5G everywhere and smart phones. There is a huge younger generation. Most people use cash and the largest paper(plastic) note there is about $22, which makes larger purchases a struggle.
It is ripe for innovation and digital P2P payments. The huge blocker is the government, which will need to be in control of all of this. Otherwise it'll all be black market dealing.
I've seen so many people quote a Youtuber as their source for a belief that it's crazy. Even when the primary sources are available. But that's the age we live in.
And who might that be?
- Conflating crypto with exchanges, or Bitcoin in particular with oportunistic scams.
- The complete nonsense about PoW being 'detrimental to the environment'. It's sad that even technical audiences fall for this at all.
- Speculating on its price has nothing to do with the use case, which is to transfer money without an intermediary. You certainly can, but it has nothing to do with the objective so any criticism about this is disingenous.
Bitcoin (and some others such as Ethereum or Monero) just work, and and has worked extremely well for over a decade. I was able to pay for hosting and plenty other services anonymously, to circumvent local restrictions when nothing else worked, transfer money to family abroad, etcetera.
And yes HN is extremely vulnerable to propaganda due to a mixture of lack of common sense, lack of life experience and snobbery.
> Big Crypto Projects Are Very Rarely Scams
I mean, seriously? This is a month after the fallout of FTX, we have seen crypto projects in their net worths in Billions to get revealed as ponzi schemes in their purest meaning, and that's the best SA can offer up?
> If you split $1000 and invested it equally in all the top crypto projects of 2015, you would now have $25,400. If you invested it in the biggest cryptocurrencies by market cap of 2020, you would have $2,700. Stablecoins aren’t really an investment, but if you put it in the top stablecoins of 2020 anyway, you would have $964.30. Exchanges definitely aren’t an investment, but if you put your $1000 in the best crypto exchanges of 2020, I think it would all still be there (FTX wasn’t on the list; maybe it’s too new).
This is tired shill-speak (consider what happened if you "invested" in 2021 instead), to the point where I doubt if Scott Alexander himself wrote this or if someone offered him a large but undisclosed sum to write it for him. Probably as a damage control to the EA circles, who have undoubtedly lost a lot of faith in crypto as a follow up to the FTX fallout.
From the article:
> If you split $1000 and invested it equally in all the top crypto projects of 2015, you would now have $25,400. If you invested it in the biggest cryptocurrencies by market cap of 2020, you would have $2,700. Stablecoins aren’t really an investment, but if you put it in the top stablecoins of 2020 anyway, you would have $964.30. Exchanges definitely aren’t an investment, but if you put your $1000 in the best crypto exchanges of 2020, I think it would all still be there (FTX wasn’t on the list; maybe it’s too new).
Footnote 4:
> The one big exception was FTX - I think people did think of it as one of the good ones, and would have included it in lists like these if it had been around a little earlier. But this is why I disagree with people who said it should have been “obvious” it was a scam - it was in a reference class where scams are actually very rare!
My point is, you can always pick your time frames arbitrarily to make any case that you want, and I can make the opposite case by picking my favorite time frame. Seems really sketchy that ACX is committing to this level of fallacy.
[1] https://finance.yahoo.com/news/robinhood-coinbase-ftx-heres-...
That said, i agree with the author that original bitcoin works well enough in places where modern banking is dysfunctional. Its everything in the crypto world after that point i have a problem with.
I also agree that most crypto projects more err on the side of really really stupid and not outright steal your money (although that exists too).
Basically, i agree with all the authors premises and still think crypto is on the whole terrible. I suppose the issue is that the author is arguing against a very weak strawman - nobody is literally infinitely against crypto.
So, like individual Indians use 37% as much cryptocurrency as individual Vietnamese (adjusted for PPP).
It's a good way to show comparatively where cryptocurrencies seem to have some utility as measured by the fraction of an individual's financial power.
For example if vietnam had a single crypto user, and nobody else in the world used it at all, you would have a similar skewed graph, but clearly it wouldn't demonstrate utility.
But I don't think it's actually misleading in this case, and we have other information available that clarifies that there is not a single Vietnamese cryptocurrency user in the world (and, I guess, 0.37 of an Indian user...?).
There is a measurably large amount of cryptocurrency activity in the world, but most of our (or at least my) awareness of it is as a western techno-futurist/financial/cryptobro phenomenon. This graph is really useful in demonstrating that that's not a very accurate view.
It would be very bad if it were the only datum on cryptocurrency the reader had. But that's not the audience of this article.
> Ukraine has already lured some Americans and Brits in the crypto industry, and they didn’t come because they’re sticklers about the rule of law. Instead, they rhapsodize about everything from affordable restaurants to unhinged raves. Better yet, the government has not a clue about what they are doing or how much they earn.
> “There are no rules,” says Mr. Chobanian, with an odd kind of civic pride. “Well, there are rules, but you can break them. It’s the perfect balance between absolute anarchy and possibilities.” ** > Even without another revolution, Steven Hanke, a professor of applied economics at Johns Hopkins University and a vocal Bitcoin skeptic, argues that the combination of Ukraine and crypto sounds like a fiasco in the making. Most studies he’s seen have found that roughly half of all Bitcoin transactions are for some illegal purpose. To him, this is not an industry that Kyiv should target with enticements. ** > “I like that it’s corrupt here,” says Mr. Sawhney. “Here, we get to play the game that only elites in the U.S. play. I don’t need a lobbyist. I need to pay someone at the border, I can. I need to pay politicians, I can.”
Framing it as just being about people trying to escape a broken financial system and nothing more ("Do Vietnamese people love trading monkey gifs? Are Ukrainians especially susceptible to Ponzi schemes? Is Venezuela laden with techbros?") is extremely misleading.
But sure, let's defend a system that is "worse than traditional finance", because it's "sort of decentralised" (traditional banks are sort of decentralised too, to be honest), even though that creates big problems like ransomware.
No, but you could legitimately wonder what 15 years and the money that was invested in cryptocurrencies could have done to help solve the root problems, instead of marginally helping a few people while enabling scam and ransomware.
Do you have an idea how much money could be stolen from governments thanks to cryptocurrencies? North Korea is pretty good at this. Counter-productive solution now < perfect solution in the infinitely far future, IMO.
The issue that I have with this perspective is that it doesn't actually solve the underlying problem - it just kicks it down the road. As soon as crypto becomes big in a country with failed governments and banks, it's going to become the primary target of those same governments and banks.
>Governments can take lots of actions against crypto. They can ban it. They can prevent banks from accepting it. They can search the blockchain to hunt down users. But governments take lots of actions against protests, tax evasion, and drugs, and those things still often succeed. The point isn’t that governments can’t ban a thing and send police after anyone who does it. The point is that there are only so many officers and detectives. If you make something too annoying to crush, the government will put in a half-hearted effort but mostly redirect resources elsewhere.
Editorialized: https://cointelegraph.com/news/china-returns-as-2nd-top-bitc...
Even a fairly authoritarian society with strong incentives to crush cryptocurrencies (https://www.marketplace.org/2021/05/20/chinas-crackdown-on-c...) wasn't able to get hashrate, much less usage, to anywhere close to zero.
I guess I'm curious: what levers do you figure Western societies could deploy that'd be more effective than the Chinese approach? From my perspective, this state of affairs is a decent existence proof that fully eliminating cryptocurrency use is difficult even with access to authoritarian methods.
nb: above links don't include 2022 data and I couldn't quickly find that, so if that data affects the quality of the above argument I'd appreciate the correction
You can't have it both ways: if cryptocurrency is the be all and end all of avoiding government censure of other activities, why would it not be a high priority to crush it compared to those other things? If it is not, then is it all that useful?
Cash and banks are easier for the government to control than crypto
That is all that there is to the argument!
Maybe the difference won't be significant, but I see no reason to think (nor to think the opposite) as of now. Do you have one?
I am saying you don't get to hedge your argument like this: crypto cannot be both an important part of evading government censure, and too small to be worth government effort to censure.
If someone wants to make the middle ground argument, make it, but you're starting from the position of government already engaging in significant regulatory interest in the use of cryptocurrencies.
as for hypothetical crypto underground economy, nobody has really explained how exactly you are supposed to convert those liberating coins into physical goods (that makes all retail illegal?). Which makes it not an argument but a very fuzzy dream.
Mesh and satellites might reduce this. Maybe even ham radio. You don’t need to send much data to send a crypto transaction so sending it using an audio modem on a low frequency is probably fine.
There are also crypto notes being developed which is an interesting development.
> I ended up using four articles for this experiment:
> Most Promising Crypto Projects Of 2015
> Top Stablecoins Of 2020
> Best Crypto Exchanges Of 2020
> Biggest Cryptocurrencies By Market Cap Of 2020
> …which between them described 54 different crypto projects1. Looking back at these from our position in late 2022
Wouldn't a time scale of 10 to 20 years be better to gauge the trustworthiness of something like this? And if that's not possible due to crypto being new, aren't all of these points kind of moot and guessing at best, in regards to absolute claims, not niche use cases?
Would you use a bank that opened just a year or two ago and consider putting a significant part of your money there? Would you use a framework or an operating system, or a language that is a year or two old? I guess it depends on one's risk tolerance and the desire to take advantage of perceived benefits (or just speculate, in the case of crypto).
Though my risk tolerance is lower than that and I'd be late to the crypto "party" in particular, personally.
I'm also not saying "ban all crypto", but make it a lot harder to pump in money from the clueless masses. When my Uber driver is shilling shitcoins, crypto is in need of more regulation, and then we can figure out what to do next.
This is a myth. Those pens were not that expensive, they were made for use-cases on Earth and happened to be used in space, and they actually work better than the $0.10.
> In the same way, everything about the crypto economy is worse than the regular economy.
Good that they realize that.
> The only excuse is that it’s decentralized.
Except it's not. Not really.
I'm surprised they did not go on with "the other excuse is that it removes trust", to which I would have answered: "Nope, it doesn't".
So yeah, it's worse, except in countries that have bigger problems (corruption, unstable political system, no banks). Ever thought that maybe it would be worth fixing the bigger problem, rather than trying something that is worse?
> And a lot of them say things like “our democracy is in danger” or “this could be our last free election ever”. If you really think January 6 was a close call, where do you think we’d be if Trump had succeeded? ... If Nancy Pelosi’s text messages are any guide, Democrats have joined libertarians in the “actually pretty worried about the government becoming an oppressive dictatorship” club. I don’t think they can say with a straight face that there’s no chance that we ever get fascists who use financial repression as a tool of control.
This is a very, very good point. It's like the "you don't need a gun you have the police... The police are killing people for fun" thing, it's always the same people saying both these things. If you really believe that America is on the precipice of fascism, you should want a way out of that repression. In most cases I believe it is cognitive dissonance, but in cases where I'm being asked for donations I'm convinced that this disconnect is deliberate and malicious.
We have instantaneous online banking systems and for the unbanked they can simply register for an e-wallets.
Is it just small scale enough that no one has passed specific laws against it? I don't see how it helps once they do?
https://www.upress.umn.edu/book-division/books/the-politics-...
There's no value in creating competing cryptocurrencies. There's no reason why the world needs another Bitcoin.
All these scammers do is they fabricate a reason why they should exist, a project, a team, a foundation, and a "genius" person on top to give it a face. All this is just a facade to fabricate demand for their private money which they printed for themselves. This is why crypto is a scam.