They should stop just short of regulating the underlying cryptocurrencies themselves. Just treat these institutions like they're banks.
The problem with not regulating a currency at all, is that it implies a permission for someone to print it at will. Cryptocurrency is no exception to this scenario; you are asked to trust the developers (technocracy) and node operators (50%+1 attack and all the usual power dynamics of the rich having more say than the majority) to not do it. The most important question you must ask yourself is, how long will the interests of that elite continue to align with yours (if they ever did).
The dream of a decentralized, community-run, grassroots infrastructure died sometime around the first GPU PoC - Satoshi themselves expressed discontent, saying GPUs would trivially out-mine the common man.
Communities can self-regulate because they run on trust; it's extremely difficult to build trust in a system designed around distrusting every single one of your peers.
Not a problem. This is determined by code in ways everyone can see and understand. It's actually better than governments printing money whenever they feel like it.
The economic impact of money printing is actually minimal. Most inflation is actually generated by fractional reserve banking and their loans which is already something exchanges do. BTC maxis don't seem to grasp this fact.
> you are asked to trust the developers (technocracy)
You are asked to trust code. Either way I'm actually OK with this. I actually trust them a whole lot more than the communists in charge of my country's economy right now.
> node operators (50%+1 attack and all the usual power dynamics of the rich having more say than the majority)
The only problem with this is it turned out cryptocurrency mining is not actually as decentralized as it was supposed to be. It should have been one CPU one vote but it turned into massive operations involving custom hardware.
New cryptocurrencies need technology to fix that problem. Monero uses ASIC resistant proof of work algorithms to mitigate it.
> The dream of a decentralized, community-run, grassroots infrastructure died sometime around the first GPU PoC - Satoshi themselves expressed discontent, saying GPUs would trivially out-mine the common man.
Exactly. That's the true tragedy of cryptocurrencies.
That's just a slightly more wordy way of saying "technocracy". An overwhelming majority of people in the world (including cryptocurrency enthusiasts) are incapable of following through a fizzbuzz program, let alone an SHA256 implementation, and the hash algorithm is barely the tiniest building block.
> Monero uses ASIC resistant proof of work algorithms to mitigate it.
Proof of waste stopped being sexy the moment we realized the environmental impact, and continuing to defend it on any "practical" merits is shortsighted at best.
> Exactly. That's the true tragedy of cryptocurrencies.
With all of your doubling down on technocracy, I find it odd that you defend a concept that, by design, began falling apart as soon as it started gaining traction. The original idea was noble, but it was almost meant to be perverted. What we should have done was to get back to the drawing board: how can we build distributed/decentralized infrastructure that actually helps people.
So? It's still more open than traditional finance. You can actually see how it works if you try. Unlike some central bank's political machinations at some abstract far away place. We need exactly one guarantee: that nobody can change how the system works to benefit themselves.
Besides... The overwhelming majority of people do not even understand the nature of money itself. They do not understand fractional reserve banking. Most people think inflation is caused by the government printing money. Somehow that's not an argument against having money.
> Proof of waste stopped being sexy the moment we realized the environmental impact
Not this nonsense again. Even at the peak of the last bullrun, it didn't even amount to 1% of global energy consumption.
> The original idea was noble, but it was almost meant to be perverted.
I agree it was a noble idea and that it failed. I disagree that it was "meant" to be perverted.
> What we should have done was to get back to the drawing board: how can we build distributed/decentralized infrastructure that actually helps people.
Agree. At this moment in time, I think Monero is closest to that ideal. I am not opposed to even better and more decentralized technology. Ethereum's zero knowledge proofs are very interesting.
When you put it in these terms, we should also just de-regulate fuel, plumbing, and electronics, because the combined lead poisoning won't kill as much as 1% of the population.
To me you all seen plenty happy to buy made in China computers to post your environmentalist takes with and it makes it really hard to take any of it seriously. Maybe after the world is done taking care of the truly impactful stuff we can revisit this proof of work debate.
Seems to me like gambling, speculation, and proof of waste all perfectly fit the definition of "comfort and privilege".
> Maybe after the world is done taking care of the truly impactful stuff we can revisit this proof of work debate.
It's crazy how much we can agree on!
The only problem is, PoW is considered harmful even by the larger crypto community, to the point where alternatives were not only considered, but also implemented (e.g. PoS). I'm more than willing to reconsider PoW's merits at a later time (as you suggest), under the condition that all ongoing PoW schemes are paused until we're done dealing with these more important things. I think it's a perfectly reasonable compromise.
I have nothing against proof of stake, I think it's fine but inherently less decentralized than proof of work. The whole idea was that anyone with a computer could participate and be rewarded for contributing to the decentralization of the network. In order to actually participate in ETH proof of stake validation, you need to own 32 ETH. That excludes vast amounts of people including myself.
It's a tradeoff and I'm not entirely sure it's worth it. Compared to the current status quo of huge centralized BTC mining operations it certainly looks attractive. There are better proof of work implementations though like Monero which better guarantee 1 CPU = 1 vote. I'm not ready to write it off yet.
> I think it's a perfectly reasonable compromise.
I don't accept that compromise.
Proof of work generates not as much wasteful byproducts, but far more relative to its current utility. Not its potential or idealized utility, but for what it gives now.
The cost-benefit on those two examples are at vastly different sides of the spectrum.
And your argument that because of that, we can't take claims about proof of work seriously doesn't hold muster. We can still do things about it. Just like we can still do something about the fountains at the Kardashian homes just being fresh running water (they were annoyed about the cleaning process, so had the bright idea to just install a drain and have the fountains be an open tap, so one of their homes was using 1/2 million gallons a month of water).
Ironically, to you, that's a drop in the ocean and we should let them do it because it doesn't move the needle.
You can also see how those work, it's just that they're boring.
https://www.ecb.europa.eu/press/govcdec/mopo/html/index.en.h...
> They do not understand fractional reserve banking
Entertainingly the crypto people managed to immediately re-invent it, in several different forms, because it turns out to be inextricable from the concept of credit.
Credit has pretty much existed in humans decided to settle down and plant crops. What exactly are you planning to replace the last 10,000 years with?
Getting close to 1% of global electricity consumption to do a piddling quantity of transactions is a massive amount of waste. This is, like, 5 orders of magnitude or worse less efficient than normal banking networks, or about the same usage as all televisions.
Proof of Coverage was an interesting form of POW, and had the advantage of doing something -potentially- useful with relatively low power consumption. [1]
[0] - Life things happened alongside delays on getting the actual 'miner' so... IDK where it is now. oops.
[1] - The odd question I never quite got far enough in the setup to ask myself was whether this was, in and of itself, a bizarre side-step around reselling internet services.
What made crypto big was making trading approachable to the common man, mostly through sophisticated loan systems.
As for the developers, they could write code to print a billion bitcoins if they wanted to, but for it to take effect everyone's gotta agree to run it.
Holdouts will find that old-coin transactions never succeed, and will have no other choice except to walk away in financial ruin.
1) Removing the attacker directly (PoS) / changing the hashing algorithm to remove the attacker (PoW)
or
2) Submitting to the whims of the attacker
it would be a no-brainer to just remove the attacker. Embracing an attacker-controlled chain seems like a strictly worse option than removing the attacker, no matter how messy. It seems like a choice between disruption or certain ruin.
An attacker at that scale would certainly understand this game theory, and realize that if they attack, after some potentially very messy shake-out and serious temporary disruption, they will soon have no influence over the chain anymore.
That's the goal, to remove intermediaries and trust.
There are permissionless and trustless application, but HN likes to use centralized scams like FTX to dunk on crypto and feel smug.
It'd be like me pointing to bernie madoff and saying "see, I told you all of the stock market was a scam!"
You are talking about a fringe minority or crypto transactions. everyone else is talking about the reality on the ground.
This is the libertarian version of "true communism has never been tried". Of course people wanted to reinvent the financial system, it was profitable to do so.
The tragedy is nobody's actually using it because everyone's too busy feeding their money into literal banks and speculating with it.
To borrow a phrase: Nice idea, wrong species.
The libertarian ideology, like many others, is at best an extraordinarily naive interpretation of the individual and the world.
Most people have no use for that, or speculation upon that, and just want a money that's simple, easy, fast, and reliable.
A decade after bitcoin, no-one but crooks and when-moon fanboys use it. Contrast that with AI: the moment it hit the retail market every man and his dog is using it for everything.
I've gotten paid for services via Monero.
> money that's simple, easy, fast, and reliable
That was my exact experience with Monero.
Ever tried to set up a Stripe account for GitHub Sponsors? I literally had to open a new bank account for that. With cryptocurrency, you just generate a private key in your wallet app.
> A decade after bitcoin, no-one but crooks and when-moon fanboys use it.
Yeah, that's kind of my point. It's tragic. I don't understand it.
To the layman, a single unfamiliar word or concept equals "my money will disappear".