At some point there won't be any more suckers left. That's when crypto will really collapse.
[1] https://github.com/trustwallet/wallet-core/blob/3.1.0/wasm/s... [2] https://github.com/trustwallet/wallet-core/pull/2240
Honestly, it's so bad it makes me wonder if a bad actor could have had influence over such a decision in this case. Reports of Trust Wallet accounts being randomly pilfered without some plausible other cause might go some way to figuring that out.
This is an issue of standard libraries, whereas WASM is a specification of an execution environment. WASM doesn't have a standard library, since it doesn't even have a canonical source language!
It's like demanding that x86 or aarch64 offer better Unicode or SVG support.
What we can do is provide well-tested and ergonomic high-level cryptographic libraries; I don't see how we can enforce their use.
Though admittedly, it seemed terrible if there wasn't, so I would be happy if the post can be proven deficient. I'd have ordinarily assumed many options available in the .js ecosystem, instead accepting it's a WASM OS-access issue.
You raise an important point though: crypto is not for the faint-hearted. "Be your own bank" has exactly that much responsibility attached. Many don't fully appreciate that.
Is it not that way for you?
I don't think it will collapse. It has found product-market fit: mostly gambling, some money laundering and crime, and some legitimate use for international wires and payments under oppressive political conditions (this last part is the smallest amount by volume).
There will occasionally be attempts to pump some new use case (e.g. NFTs), but these are just casino advertising. They'll draw in some new suckers/players and the cycle will repeat.
The maximalist cult will continue to exist as well, patiently awaiting the coming of the space brothers in the form of a massive economic collapse causing Bitcoin to "moon" and become the new global reserve currency. This is identical to the goldbug cult of previous generations and involves many of the same types of people. Apocalyptic cults can exist for a long, long time and failed prophecies do not deter true believers.
this was the case in the 90s pretty often.
now we choose to highlight properly run organizations and advances, while largely ignoring the rest. new problems presented by home computing and electronic funds transfer didnt go away.
its more likely the same will happen with crypto assets and industry. when I look at mainstream news like Bloomberg, thats what I see already.
The real question is how big the risk is relative to inflation, central banks collapses, bank runs and all other types of institutional risks.
No. False equivalence.
The other examples have a long history of applications that add value to people's lives (as well as disbenefits depending on your viewpoint and ideology).
Crypto-currency has never yet demonstrated any significant value to normal people, though plenty of the latter.
Cryptocurrency is different. No government is able to steal your Bitcoins by printing some more colored paper.
Yes today there are issues with volatility, but conceptually cryptocurrency is better than fiat money for the reason written above.
But if you like getting robbed every year then of course continue using fiat money.
Not all loss is theft.
Converting dollars into something that isn't dollars, which doesn't get you as much of that something, is a different concept. It is the value of the dollar is lower.
> Cryptocurrency is protected from this by design.
Not really.
Today, bitcoin dilutes holders through inflation tied to securing the network. Eventually, that inflation will end, but not in some of our lifetimes. Ethereum was inflationary but is now deflationary thanks to burning of transaction fees and the switch to PoS. The tokenomics of all chains can be changed over time, even bitcoin. It requires a fork of the chain that everyone follows. When inflation for bitcoin ends, I could envision miners agreeing on a fork that better protects their interests.
No, I cannot agree with you. If I had 100 dollars and then the government devalued them so that they are worth 98 old dollars then how is it different from taking 2 dollars out of my pocket? It is the same thing just called the other name. Of course, the government won't use words like "take out of the pocket" or "rob", they have scientific names for that like "monetary policy".
What you’re complaining about is the price of 12 eggs going up by $2.
It isn’t that you now have $98. It is that eggs are more expensive.
Of course the solution to that, is to print more eggs.
Part of the reason why inflation rarely goes down.
For example, this site [1] states that in recent years the inflation in Japan was about 0% on average. This proves that it is possible to keep inflation around zero. Maybe it is because Japanese government unlike Western ones has respect for hard-earned money of its citizens. It seems that Japanese government doesn't put its hands into citizens' pockets.
I have also read this article [2] but it offers no explanation for outstanding stability of Japanese economy.
[1] https://www.worlddata.info/asia/japan/inflation-rates.php
From the technological level is also about the freedom to experiment with finances where regulations don't enable to. Even if it is at a sandbox level.
“At some point there won't be any more suckers left. That's when banking will really collapse.”
The news every day sends the message more urgently that a global hard money that can never be debased by money printing and that is free from the whims of governments and dictators is sorely needed.
However, one of the next Ethereum upgrades (ERC-4337) will make it possible to safely recover wallets without a key seed phrase. Its implications seems to be huge but I am not deep enough into it to explain how exactly it is going to work. Perhaps somebody more competent than me can elaborate on that.
This isn't a tradeoff unique to cryptocurrencies: Cash works exactly the same way (qualitatively, if not quantitatively, in terms of the risks of losing access to it) – if you store your life savings under your mattress, they can be stolen easily or burn down together with your apartment.
Precious materials like gold are probably the best you can get as the material itself has some value.
Because of those properties they become a store of value (representing the work and rarity) which then makes them a useful proxy for trading that value, which increases their rarity/value by taking it out of circulation when used as a store of value.
The difference being the currency in this case has no inherent value to fall back upon.
For one, gold, enables the electronic device you used to post your comment.
But all of that is extremely contextual. If it turns out there's a huge reserve of it somewhere, it will crash in value. Or if things crash badly enough there may be other things to worry about. Eg, a community that desperately needs water is probably more interested in pipes than gold.
That's what interesting - only a tiny amount of gold is needed. This wouldn't work with lead.
>this doesn't explain why people were greedy for gold thousands years before.
You're asking me to do this research?
Why is this a bad thing?
This is repeated by the crypto people as some kind of root of all evil, and it puzzles me.
I see monetary policy - including the ability of devaluing a currency - as a powerful tool central banks have to keep the economy working.
I fail to see how "hard money", which normally comes peppered with some vague desire for a deflationary economy as desirable. In my view this would very quickly turn into an intolerable distopia.
Does this seem normal to you? Imagine you are a patient and you took data like this to your doctor. Would he say you are healthy after having such a gradual rise all your life and then complete chaos?
If things have been going great the past few years I’d say maybe it doesn’t matter, but things don’t seem to be going great for anyone except the wealthy (those by nature closest to the money printer).
https://www.aspeninstitute.org/blog-posts/charts-that-explai...
>Since 2007, wealth has declined for all but the top 20%.
Oddly (or not oddly) enough that’s when the monetary base graph starts skyrocketing.
Yes. Currency is a mean of exchange, nothing more.
Economy is essentially how to satisfy the needs of its participants with the limited resources available. For the graph that you linked in a somewhat alarmist fashion to make sense, you need to compare it with a plethora of other information for it to make sense.
What is the productivity of people and corporations? What are the level of imports and exports? What is the cost of living? How much in taxes did the government earn? How adequate are the expenses in infrastructure? What is the level of debt held by the public and private sectors? Is that debt sustainable?
All those are just questions that I haphazardly put together while writing this reply, and they all tell other facets about the state of the economy that the money supply won't tell you.
>>Since 2007, wealth has declined for all but the top 20%.
>Oddly (or not oddly) enough that’s when the monetary base graph starts skyrocketing.
A deflationary economy would massively widen wealth inequality, as it heavily favors capital holders (as money itself gets more expensive over time).
A lot other things happened after 2007 that helped increase wealth inequality. I see the "skyrocketing" money supply as a side-effect of those things.
Correlation does not mean causation.
For all the talk and posture of it being a return to "hard money", all it is used for is as another investment tool for the wealthy.
And that is me giving it the benefit of doubt.
Inflation makes people work harder, but it's not the right thing to do, and not good for the economy in the long term. Economy is not just the GDP; it's also happiness, freedom and mental health.
All productivity increases in the economy should belong to the people who are working and saving their money. They made the decision to limit their consumption and wait for cheaper products.
Inflationary currency is very unethical, and will result in total centralization of wealth when productivity keeps increasing.
As someone who knows a doctor or two in the Bay Area, where it's apparently common for self-diagnosed charts to be texted in panic by clueless patients at 2AM, this analogy is apt.
Hyperinflation is bad, but there are ways to solve it.
Deflation is potentially worse.
And companies sometimes dilute the value of shares. It's part of the risk in investing in a company.
On the other hand, companies can use buybacks for the exact opposite effect.
Either the company's board and leadership are trustworthy (i.e. are acting in the best interest of all, not just majority or voting, shareholders), in which case they'll have carefully weighed the cost (dilution) and benefits (additional capital) of issuing new shares.
Or they aren't – in which case dilution is one of many problems and it's questionable why I'd want to continue owning shares in that company.
In 2009 and 2021, the USD’s “board and leadership” has shown it’s willing to massively inflate its existing liabilities to help it solve its severe problems.
It’s very questionable why any country with large trade surpluses would want to hold US treasuries at this point. That’s precisely why China has brokered energy deals denominated in RMB, and BRICS is exploring a basket of their currencies to act as a new reserve.
Fair point – then maybe they shouldn't!
But I'm not a large country; I need to pay for rent and food in USD, and my highest priority for the USD accordingly is short and medium term price stability for those two things. For long-term savings, there's other assets.
If the USD continues falling short on short term price stability as well, I agree that that would be a major problem.
Central banks may be useful in preventing banking crises every ~20yrs as happened back in the 1700s and 1800s. But even that’s not a certainty since the two most severe banking crises in history - the Great Depression and Global/Great Financial Crisis - happened under the watch of central banks. Some even argue the latter occurred because of the central bank keeping interest rates too low too long.
One benefit of central banks is to depoliticize monetary policy by moving it away from the Executive Branch, and giving it a consistent, Congressional mandate that it must prioritize in its policy and operations - low inflation and high employment. That’s probably one of the few indisputable advantages they have.
As for whether inflationary or deflationary money is better, I don’t know. Both have their pros and cons. The more I go down rabbit hole on each of these, the less decisive I am about it. But this website makes a comprehensive case for deflationary money, fwiw: https://wtfhappenedin1971.com/
After the switch to burn a portion of funds on every transaction as well as the switch from proof of work, to proof of stake, Ethereum is now deflationary [0].
Say what you will about the cryptocurrency experiment, it will be fascinating to watch the effect of this over time.
"There's a sucker born every minute" — P. T. Barnum
After that 'discovery' in the mid-1800s, there seems to be an endless supply, and at today's higher brithrates and infant survival rates... we can't really expect that they'll ever run out ;-P
https://en.wikipedia.org/wiki/There%27s_a_sucker_born_every_...
As long as there is survivorship bias I think it will survive. Can think of it more as a poverty tax, like the lottery.
When there is a possibility of easy money, people will overlook every kind of red flag and inconvenience.
That's a really weird definition of "privacy". Crypto currency makes it easier for them, not harder. They don't even have to go to the effort of getting warrants because you're literally giving them your data saying "Track me, please!"
https://www.forbes.com/sites/kellyphillipserb/2020/09/14/irs...
> will decide they don’t need financial privacy
The block chain is publicly auditable. That's the opposite of privacy.
> that can get locked for having the wrong opinion
Any actual evidence of this happening?