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Comment by epochbtc | Hacker News Reader

Two things can be true at the same time:

- Bitcoin was and is a massive, historic accomplishment in creating digital scarcity for the first time and the long term effects are still playing out.

- Virtually all of the "crypto" or Bitcoin 2.0 schemes in the 15 years since have been scams. Essentially a way for a tech founder to mint tokens out of thin air, and then try to convince others to treat them as money so he can get a huge (fiat-denominated) exit. Stablecoins are basically the only crypto innovation of note that have achieved PMF.

Don't confuse the former for the latter!

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Though, there’s a part of me thinking that the basic idea of creating artificial scarcity for profit is hard to separate from scamminess. It’s giving De Beers.

The entertainment industry tried for decades to achieve artificial scarcity for profit. All scammers?

All the ones trying to do that, yes.

What are you talking about - the entertainment industry is the most famous scam industry ever, giving the most famous artists just enough money to keep them dependent and pocketing 90% of it themselves.

Ah yes, independent computer game producers adding copy protection were scammers.

Do those represent more than a negligible share of the entertainment industry?

I do think there’s a difference between charging a price and creating artificial scarcity.

This isn’t to say that the entertainment industry hasn’t pulled some awful shenanigans. But they’re generally willing to sell to as many people as are willing to pay the price they set. For the most part they haven’t tried to place hard limits on how many total people are allowed to watch a movie and control it with some sort of limited edition resellable token. That was an innovation of the NFT folks.

Disney Vault comes to mind instantly. There was also limited periods for buying deluxe/collectors' editions of both movies and games.

(Releasing collectors' editions of an IP before the very first episode/movie/game/etc is a whole another issue just by itself.)

Yes. Far worse than crypto, because they manufacture scarcity of access to human culture.

> The […] tried to achieve artificial scarcity for profit. All scammers?

Yeah, I don’t really see a difference between scamming and certain types of rent seeking. So many things could fit in the blank there, not just the entertainment industry.

If:

  - you’re not creating value
  - you’re exploiting the value someone else has created
  - you’re engaging in anticompetitive, anticonsumer behavior
  - etc.

You’re rent seeking and the only reason we’re don’t use the word “scammer” is because the concentration of wealth of the western world is built on rent seeking behavior.

You are forgetting Ethereum which is the defacto main standard and driver in the "crypto industry". Most of those chains are in fact EVM based (so outside of Bitcoin, XRP or Solana).

The people in and around the Ethereum Foundation are solving very interesting problems but nobody talk about it on HN. For example I believe they are at the forefront of the use zero-knowledge proofs.

Just dig into [0].

Is the Ethereum Foundation and broader project dedicated to pumping the cryptocurrency ETH? obviously not and they are not by far the top holder of it.

The fact that the crypto is not providing real returns is actually one of the main criticism of the project.

- [0] https://ethereum-magicians.org/

Ethereum promised smart contracts where "code is law", but rewrote the rules of their system when a bug was found in the first popular smart contract, the DAO. That's when I lost all interest in it.

Cool. Do you still use computers, or?

I think it’s okay. Crypto devs can’t make a hard fork each time they want to revert something, and even if they do, people decide how much it’s worth to them (by staying on the old chain, like ETC in this case).

People’s opinion is the ultimate law. If you find a loophole in a contract that gives you everybody’s money, people will just take it back.

What is the main success for an Ethereum project that solves something that can't be solved without crypto or in a hugely more efficient/better way? I'm a crypto skeptic and I've never been introduced where crypto actually solves a problem.

Read the GP comment again. I don't know if Ethereum has, is or will ever get to whatever grandiose goal they have. But the one thing that I love has done is provide intelligent people with funds to research things like ZKSNARKs and similar cryptographic constructs.

It's like war: We don't like war, we don't like people being killed, but man, the amount of technology progress made during war is good.

So, even if you hate crypto; the fact that it is enabling research in cryptographic theory (even if for stupid goals) is good.

> enabling research in cryptographic theory

Yes but ... most/all of this research is for solving weird self-made problems created from some flawed premise like "we need a decentralized sequencer" or "we need a hash function that can't be profitably made into an ASIC". A lot of the zk research is for "roll-ups", themselves a horrifically complex "solution" for Ethereum's inability to scale its consensus.

> creating digital scarcity

yay?

Username checks out.

BTC is nifty but it is far from world-changing. Nowhere near the impact of Bretton-Woods, Nixon abolishing the gold standard, securitization of mortgages, petrodollars, ZIRP, etc etc.

Also, bitcoin alone would have never gained as much value if it wasn't for the 2019-21 defi explosion. Ethereum is integral to the cryptocoin story, period.

The first thing is false or worded poorly. Before Bitcoin became globally popular, there were many examples of digital scarcity driving significant transaction volume: Early online games with tradeable game objects, gimmicks like Million Dollar Homepage, etc.

Valve hired economist and future politician Yanis Varoufakis in 2012, when Bitcoin was well below $1000, to study "in-game economies" (i.e. digital scarcity) because it was such a big deal in their existing online games.

That last example postdates Bitcoin, and even Bitcoin entering public consciousness (in 2011), so why bring it up ?

Bitcoin was not much in the public consciousness by then. It was trading at ~$10, mainly on MTGOX. It's likely its transaction volume was much lower than other non-crypto digital assets (and MTG cards) at the time.

2011 is when it had its first big public boom - and bust, accompanied by even generalist press reporting on it.

And the nerds at Valve would have been *in particular* aware of it. So causality is more likely to be reversed in that example.

You claiming that Valve hired an economist to study digital scarcity, not because of Valve's booming ingame economies, but because Bitcoin was at $10. Sure.

No, I want to insist on Bitcoin's intellectual legacy. Before ~2011, only a handful of niche nerds at the intersection of cryptography and (goldbug) economics had heard of related ideas. After ~2011, everybody had, and started building their own (like Etherium).

Why is artificially creating digital scarcity, something that isn't actually difficult, an achievement?

Scarcity is not a virtue.

>massive, historic accomplishment in creating digital scarcity

accomplishment? like, something big and good?

of course you would include bitcoin in the latter, too, right? Right?

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