Also, it needs to be said that Nvidia is probably just jumping on the next marketing bandwagon by pivoting to LLMs after the collapse of crypto. This doesn't seem like a principled stance they are taking.
> Crypto has its positive uses, but you have to balance those against the negatives of slow transfer speeds, speculative bubbles, scams, energy consumption, and carbon emissions.
How people balance these things out is subjective, but I see it as a question of values. If for example, you believe that what safety net that crypto offers from government destruction of currencies is of paramount importance, then it might outweigh any conceivable negatives. Conversely, inflation and government destruction of currencies is (IMO still sadly) not even in many peoples' radar screen. Everybody's cost-benefit analysis would be different here because their values and knowledge are different.
> Also, it needs to be said that Nvidia is probably just jumping on the next marketing bandwagon by pivoting to LLMs after the collapse of crypto. This doesn't seem like a principled stance they are taking.
Agreed. And we can all predict that if/when Crypto makes any kind of big financial comeback, many people who tried to signal their virtue by denouncing it will adjust their public position on crypto and happily make money on it.
Hell, I'd be very surprised if the people personally involved in this story don't hold at least some crypto as a "just in case" sort of side-bet even while publicly denouncing it.
Thanks, I appreciate that. I don't have any financial or personal stake in crypto so I don't have any issue criticizing it and I am pretty pessimistic about it at this point. But the irrational hatred and dismissal of crypto sometimes bothers me more than the irrational optimism.
I don't think the safety net argument works because there is so much physical and political infrastructure that crypto depends on in order to function. To run a cryptocurrency you still need a functioning power grid, datacenters, internet, and chip manufacturing/importing, all of which depend on a pre-existing political system and economy. I find it implausible that we will migrate all of these systems to run 100% on crypto with the current state of the technology. You could argue that it's feasible with some hypothetical much-better-bitcoin, but that's just speculation at this point and not something I would want to stake the future of whole societies on.
I'm not sure about the necessity of political infrastructure, but crypto depending on physical infrastructure is relatively true because I have to assume that calculating Bitcoin transactions by hand without a power grid is more of an involved math problem than most humans are able to do. We all (or I think most of us) want and need a stable and functional society with the lights staying on to function.
And that stable society is what I'm concerned about with Fiat currencies. Without being backed up by anything, there is nothing that actually limits how much money printing can be done. We're already starting to reap some of the benefits of short-sighted policies in our current economies and have seen many historical examples of what happens to societies that ruin their own currencies.
In contrast, as one example, Bitcoin can only ever have 21 million units. This limitation alone is worth almost any negative, IMO. And let's examine those negatives. Are they actually a big deal? Slow transactions in a layer 1 crypto suck, but are a relatively minor and solvable problem in the grand-scheme of things with different settlement layers being possible. More electricity usage than is ideal is a cost to be sure, but to me seems like a relatively minor issue when the technology for cleanly producing large amounts of electricity has existed for decades through nuclear power. To me, Bitcoin's negatives are real, but are far closer to the category of "minor inconveniences" than "fundamental flaws".
But Fiat's negatives have the potential to be a civilization ender. A dead government currency can cause unbelievable chaos on the level of "bodies piling up in the streets".
Good list on the negatives, but don't forget child trafficking, drugs, and other illegal uses. Like you, I have a hard time seeing a net positive when you add it all up.