“But it’s like the early Internet!” shouted the Emperor’s coinholders. “The Internet wasn’t yet useful a mere, um, thirteen years after its invention either.”
I can see how people in their twenties would fall for this argument because they can’t remember. The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access. Email and ftp alone were killer apps. A bit later came Usenet and IRC and MUD gaming. There were things to download, people to meet, flame wars to participate in. People would stay up until 4am to get a chance to go online in university shared facilities.
With cryptocurrency there’s nothing to do. You could pay $100 to buy a “cryptokitten” or whatever, but then you’d be stuck shilling it on somebody else somehow. The community is a mix of Scientology-like groupthink and multi-level marketing sales pitches. The early Internet was infinite times more fun.
I can't agree with your point hard enough. Really useful nascent technologies all have this pattern—they grow incrementally more interesting and constantly gain applications.
Bitcoin followed this pattern for a while. But then at some point it started to regress on that axis. You could no longer buy a pizza with it, you could no longer mine it, and it got too flooded by scammers to use safely. There's nothing to really DO with blockchain unless you buy into the subculture. That's very different from early internet, early web, early radio, you name it.
Bitcoin didn’t regress, what actually happened is that its fundamental flaws ended up eventually dominating whatever early enthusiasm allowed them to be ignored. It was never going to work, for a variety of reasons that were incredibly apparent at the time.
“Why did it regress” is much less interesting than “why did anyone ever fall for this?”
Sure, but a lot of early technologies move laterally in some unexpected direction, and it was reasonable to expect blockchain stuff to do the same. Maybe the original idea could never fly (even in 2008 you didn't have to be a genius to see that evading financial controls would be the chief use of a working cryptocurrency). But likely someone would find a really neat twist on it and find the blockchain equivalent of VisiCalc, and that would happen again and so on.
What's interesting to me is that the original idea was clearly brilliant, but never found any of those lateral steps. It's kind of a string theory for programmers now.
There was no reason to believe it would move laterally, for both technical and social reasons.
First, the underpinnings of Bitcoin are ideological, namely in Austrian economics. This means that any change that caused any inflation would be socially resisted.
Second, most of the issues with Bitcoin stem from the lack of a central authority to do things like chargebacks and handle conflict resolution. It is not possible to solve many of the issues of Bitcoin without a central authority, and that was not going to happen for obvious reasons.
Yeah, but when you took away the money part and just looked at the technical idea of a distributed chained ledger with no central point of trust, that was cool. At least, it was cool to me. It seemed like it might go in some interesting other direction.
Bitcoin was a fascinating technical trick, but it's also been a worked example of the difference between "interesting", versus "feasible" or even "a good idea".
As soon as it claimed to be money, then it was all about the money. If you look at early BitcoinTalk, you'll see a pile of scams that are extremely similar to the jargon still used in crypto to this day - the scammers got in very early indeed.
There's one application that I always wondered why it didn't take off as a blockchain based element, a DNS replacement. It's one of the cornerstones of the internet and the web (which to many people is the internet) and the centralized control over it is definitely a drawback and a shortcoming.
It’s because DNS already has a centralized authority, which is necessary to create gTLDs and manage the sale of brand new domains. Once you have an inherent central authority, a lot of the benefits of a blockchain goes away.
ENS has largely replaced DNS in crypto. Most dapps integrate ENS to display human readable names for addresses and it supports arbitrary TXT records so some apps are using it as a shared profile of yourself that you own.
I could write a bunch of words to explain why a non-financial pivot isn’t technically possible, but instead I’ll just ask this: “if the blockchain is so useful, why hasn’t anyone done anything with it beyond Ponzi schemes and fraud?”
When it was actually spendable without huge fees, and before any sane person thought of it as an investment vehicle, Bitcoin had a killer app: Poker and probably fair online gambling. That, however, did not fly with certain governments who didn't want to declare crypto a "thing of value," let alone a currency, but needed to in order to control and tax offshore and onshore gaming. Once you can't spend it on entertainment and it lost its function as a medium of quick exchange, it lost most of its reason for existing. That just happened to coincide with the deluge of suckers who wanted to hodl it. Source: I built a startup Bitcoin gaming site in 2011.
Technically your git repo is a blockchain. Those are pretty useful.
I hear that darknet markets tend to use cryptocoins. Which while probably mostly illegal, isn't a Ponzi scheme and isn't (necessarily, depending on what's being sold) fraud.
> Technically your git repo is a blockchain. Those are pretty useful.
Only if you have a wildly incorrect view of what a blockchain is.
Merkle trees are part of a blockchain, but they are not blockchains on their own. What you’re missing here is that blockchains also include something to determine which branch is the correct one, to protect against double spend attacks. This is why “blockchain” gets a different name rather than just being called Merkle trees.
This is being downvoted, but it hits the point on the head. The differentiating feature of blockchains is removing the reliance on social capital from a technical system. While interesting from a theoretical PoV, it's mostly an answer begging for a question when you consider that social capital is still the driving force in each level of the stack except the technical level.
I saw a guy brag about swinging from altcoin to altcoin making a profit but then talks down Monero because "hard criminals" use it.
I thought that Monero at least served some purpose as a currency even if it goes against the wishes of some countries' governments. The fact that there are people that talk down cryptocurrencies that are actually being used as a currency really put things into perspective.
It's just multi level marketing schemes all the way down.
A merkle tree is distinguished from a blockchain (as the distributed part is effectively removed).
Amusingly enough the darknet use of crypto may only be possible because of the Ponzi-beginnings. Criminals are unlikely to accept Pokémons as currency until after they see others doing it.
Git is called a distributed VCS for a reason. And a blockchain is of course a Merkle tree. This part of the basic ideas behind crypto-coins is useful without doubt. But that's not the point.
The actual interesting and novel thing about crypto-coins was solving the "trust problem" of a distributed ledger. But this solution, to be honest, is quite clumsy: PoW. But nobody ever found a better solution until now. Any other proposal is kind of centralized somewhere.
The question that needs to be asked is now "Do we really want, or even need, a fully decentralized 'value moving system'"?
In a world where you could ultimately trust someone else the answer would be clearly "no".
But when there is on thing to learn about humans than it's "never ever trust someone ultimately as you're going to be scammed by those people eventually". Just look at what government do around the globe…
As long as this fact doesn't change (and it won't change until we create a new species of intelligent beings, better than us) there will be room for something like BitCoin. And as those are distributed systems there even doesn't need to be any agreement on that point.
The Bitcoin is the scam. Its "price" grows only due to Ponzi con men involved. By design it is not suited to be used for anything on scale but the Ponzi schemes. It can't be a substitution for money even if it claims to be. Its number of transactions per time unit is very limited. It's not a solution for fast "double spending" resolution as one doesn't know when the consensus can be final. The technology is on another side unsuited for small scale deployment because then the "proof of work" is small enough that it whoever wants can indeed overpower more than 50% of the rest but using more computers, even from the cloud.
And then there is what we do know about what happens in practice:
"We found a proliferation of press releases, white papers, and persuasively written articles," Burg et al wrote on Thursday. "However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development."
"Blockchains are typically public, their contents transparent to anyone with an internet connection, but the one behind Excelsior Pass will be private, meaning only parties sanctioned by IBM will be able to check the contents."
But the blockchain is the protocol for updating the information where other players aren't trusted. As soon as any "party" can be "sanctioned to be able" there's just no need for blockchain at all. It's just selling of snake oil, and yes, IBM is indeed doing it.
Now who'd expect that? The technology company uses the hyped technologies to sell their services and products, even if the said technologies don't make the products any better?
I've read somewhere that banks use blockchain internally. I mean levels of trust can be different within a company. Maybe you don't want anybody to be able to modify the ledger's history.
If you were a bank or a set of banks and just "don't want anybody to be able to modify the ledger's history" and you know what you are doing, you actually don't want to use blockchain. Because blockchain doesn't mean "nobody can modify the the ledger's history". It means "for it we have to use "proof of work"". But the "proof of work" means "whoever has 51% of the computing power can take over all".
Of course, blockchain promoters would tell you that "there will be something else, comes Really Soon (tm) which won't use "proof of work"."
One can more efficiently use public key cryptography, hashing and signing without the blockchain for any other problem than "implementing bitcoin."
The usual use case isn't intra-company controls but replacing the clearinghouse / inter-bank settlement layer. This still does seem like a potential actual use for a blockchain, but "we can replace ACH" gets you maybe a couple hundred million at most, and for a lot of work. Easier to just scam people.
I never quite understood how that might happen. I kept hearing how it was distributed when it isn't. How the blockchain was going to change the world, when not a single example beyond Bitcoin itself could be given. Healthcare was mentioned, but no application... It's right up there with all the other crazy ideas of the last decade or two (Mongo, agile, Google Glass...)
Taking away the money part you'll probably want to replace "distributed chained ledger" with "distributed database" or "state-machine replication". There's actually a nice academic literature on this topic of having distributed databases that have strong notions of "commit". This is never the case with stuff that gets called "blockchain". I've yet to encounter something that isn't a variation on "rate-limit the ingest so we have time to replicate operations world-wide" or "create internal monkey-money incentives for agents not to diverge from corretness", both of which are trivial hacks that don't advance anything from a scientific point of view. Not my field tho, so here's the few refs i know.
ps: actually i remove "chained" from the idea. If you want to keep the whole authenticated linked-list thing and do it right you'll end up somewhere near https://irmin.org/ (a generalization of git), which is very useful, but doesn't tackle the "strong decentralized commit". You'll probably want to either centrally manage the "lastest-hash(s)" (like git is usually done), or pair it with a state-machine replication protocol. In that last case it may seem useless to use the chained thing if you already have a real replication protocol, but it is much like using public-key crypto for encrypting small ephemeral symmetric keys and encrypting actual data with symmetric crypto: it's an optimization.
There’s a reason why the blockchain algorithms are quite different from Raft et. al.; blockchain systems need to deal with the existence of hostile actors, while most consensus algorithms need to deal only with unreliable actors. The existence of hostile actors changes the requirements a lot, and goes to explain why cryptocurrencies went a different way.
Respectful disagree, i believe you are factually wrong. Wikipedia already lists 2 paxos variants that have byzantine security. Not sure about their implementation, but in production there is also SCP, which is used for real-money transactions by the stellar network. All these actually have proofs of some security and liveliness properties under some byzantine faults. Additionaly, blockchains themselves don't solve this problem properly: they don't even have a notion of "commit", any transaction could be reverted, it is just more and more intractable to do so, thus every property is much weaker and only probabilistic.
>Wikipedia already lists 2 paxos variants that have byzantine security
One of those mentioned is Fast byzantine consensus (FBC) [1]. FBC provides an optimal algorithm for a 2 phase commit system w/ byzantine agents. But FBC requires that each correct process sends a message to each other. This is O(n^2) and does not scale. Bitcoin (specifically, others differ) maintain some of the invariants with extremely high probability over time. High enough to be useful. In exchange, bitcoin's network scales much better. Really, it just needs O(n) messages to confirm a transaction.
Of course, PoS like Ethereum's takes much inspiration from byzantine paxos. But I wouldn't call this a solve problem, and crypto has innovated in this space. We can just debate whether or not the innovation has been worthwhile ;).
Please dont mix Austrian economics into the picture. The few "austrians" that took the bait for BTC are either stupid or scammers at heart. I consider myself the student of Austrian economics, i work as a gold dealer, and both me and hundreds of my clients (whom many likewise are "austrians" or libertarians) believe BTC and cryptos are a scam.
String theory for programmers is close to my take. I always think of the STTNG episode where the Federation comes up with a weapon to kill the Borg by giving them an impossible but deeply fascinating problem to ponder forever.
Cryptocurrency seems like that for endless numbers of tech nerds. It’s even worse than the impossible shape they were going to use on the Borg since it plugs right into humanity’s biggest cognitive vulnerability: gambling.
Maybe it’s a weapon sent by aliens to make halt our technological progress. 25 years from now cryptocurrency will have soaked up all surplus capital and locked it into a Ponzi and all our best minds will be churning out increasingly Byzantine coin hacks. Then the hypervelocity impactors start arriving…
The extremely messed up incentives make it impossible to even have an honest conversation about it’s merits or issues. If there are any legitimate uses for blockchain (and that’s an if) they’re lost in the noise of 10,000 get rich quick schemes, outright frauds, and bad actors.
100% this. It's the world's greatest machine for generating motivated reasoning. People buy in during the pump and get incredibly motivated to join the immune system for their chosen coin.
I spent a long time giving NFTs the benefit of the doubt because I didn’t really get it and I couldn’t get anyone to explain it to me who wasn’t also VERY invested in their outcome and unable to concede the possibility of any downsides.
What are your thoughts on NFT's after giving it the benefit of the doubt? I, too, wanted to give the NFT space a chance because admittedly I wanted to cash in while the gettin was good. But after digging into things before I dipped my toes, the whole thing smelled foul, even if people I know and respect are making good money in that space. It's just off to me, the motivations, moreso than the tech & function & problems it purports to address/ solve. A big ole hype machine that doesn't seem like it has real depth, integrity or soul, to use a bit more flowery language.
Well, if your question is just can you make a buck off them, I'd guess you probably could. But I don't like gambling and I'm more interested in whether there's anything of lasting value here. Tl;dr I don't own any NFTs and have no plans to buy any.
The NFTs that just point to a painting or a youtube video, I don't think so. They don't do anything and I don't think owning them will be valuable.
The NFTs of, like, NBA clips I can sort of understand as digital trading cards. Being purely digital I think they're inferior to the baseball cards I collected as a kid, but I can kinda see it. But 1) they don't need a blockchain; a public database would probably work better for everyone and 2) I don't think sports trading cards are generally a good investment.
There's something maybe interesting in the "creator economy" angle where like a new podcaster auctions off NFTs of the episodes to early fans, who then become invested in its success. If the show takes off, newly minted NFTs will go for more and more money benefitting the creator and the secondary market will appreciate for early supporters. To be clear, I don't think this is actually a good idea for a lot of reasons... but it's interesting.
All the games and pets and racehorses seem like junk.
I think the idea of digital collectibles is a novelty. Just like real world collectibles. People talk about it like it's a world changing thing, and it's a lot of bullshit. There's not a whole lot about it that truly requires decentralization.
Like, sure, NFTs hypothetically make it so that ownership of Top Shots can persist regardless of whether the company that operates it survives. But would the actual Flow blockchain survive the demise of Dapper Labs? I kind of doubt it. And where would the Top Shots I supposedly own continue to be hosted? It's effectively just a centralized marketplace.
I've tried to think about what would truly be unique and interesting about decentralized NFTs, and to me, they make sense if they hold credibility independent of any producer. So, something like a tradable auth role that is respected in many spaces. Kind of like an identity, except that I think the concept of a role makes a bit more sense as something that people can trade. Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
To me, that's where it starts to enable something that's unlike what's existed before, but it's still hard for me to imagine a real use case. And that's core of the problem of the crypto world: the technology solves problems that don't map on to existing B2B or B2C services. It's literally a solution in search of a problem.
> Like, sure, NFTs hypothetically make it so that ownership of Top Shots can persist regardless of whether the company that operates it survives.
They don't confer copyright or licensing or anything at all other than a URL. This means it would be illegal to build a site that displays such content, and it would get instantly DMCA'd into oblivion.
My issuing an NFT of the Mona Lisa is basically me grabbing a museum map from the Louvre, circling the Mona Lisa on it, signing my name, then selling that map to you for big money. The map doesn't given you a license to display the Mona Lisa. It's just a set of instructions re: how to find it alongside my signature. If they move the painting to a new location, it gets stolen, destroyed, or the Louvre is shut down - well, tough. And anyone can do it, with any map of the Louvre.
> Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
Event tickets have one issuer and one point of redemption. Generally, Ticketmaster is on both sides (they own the issuance via Ticketmaster and they own the redemption side - the venues - via Live Nation). It's not in their interest as a business to relinquish even the tinies bit of control.
Right, an NFT of off-chain property represents ownership of...the NFT. Its value is reliant on a community ascribing value to it. There are real world analogs to this type of ownership, but it's not as revolutionary as breathless NFT fans are making it out to be.
Agreed on the unlikelihood of NFTs supplanting event tickets. I'm just speculating on the type of novel product/ecosystem the technology enables. But building a compelling experience around this concept is a whole other challenge. It remains to be seen whether someone eventually does. Even if that happens, it doesn't mean we're talking about an entire new market of significance.
I'm just using tickets as an anchor to something that already exists. My point is that if the credential of owning the NFT were recognized throughout an ecosystem of unrelated organizations, that might merit building it on a permissionless blockchain. Few people are bothering to explore such ideas. I think you're right about it being hard to monetize, but people once thought Facebook was hard to monetize.
I guess I'd just say absence of evidence isn't evidence of absence, when it comes to the utility, but a level of outside-the-box thinking is required that no one's motivated to do when you can simply mint NFTs of URLs and sell them for absurd sums of money.
It's true that copyright is not transferred but courts may well recognize the buyers right to display those images on a website as implicitly given. If you are minting an NFT today, putting the file on IPFS, accepting the fact that it will be freely available across the internet, and selling to someone "digital ownership", you will I think fins it hard to convince a judge that you did not intend to grant such a license.
Also, consider that in NFTs, the only one selling an NFT to the Mona Lisa is Leonardo.
No one is talking about assigning copyright. The question is about a license to display the content on a website. I am fairly certain you have heard of non-verbal contracts before. For example, here is what the UK government has to say about an implied copyright license:
Anyone can also sell a signature of Clooney. And yet no one does, nor would anyone buy it. This is not something that plays into a serious analysis of the NFT space, and so I am not sure why you would want to find it interesting to talk about.
They even recognize the entire point of NFT is artificial scarcity. How could something fly which has the word "artificial" in the name??? On the other hand, artists/creators could sell copyright along the digital artifact. Then it could be for real - as soon as you can hold a future-proof proof of that copyright, and not a mere URI to some random server storage.
You won't find an uninterested party anywhere near crypto, but this is a discussion between an NFT issuing artist and an anti-crypto gentleman about NFTs. They're friends so they get into a back and forth, and the artist I think does a good job of explaining what they like about them. [1]
Fees high, world too stable, heavy speculation. Cryptos forced to trade on centralized exchanges to avoid fees, making it a much crappier version of something like PayPal. Doesn't help that there's an unending supply of people more than willing to participate in ponzi schemes creating massive volatility and turning the "currency" into the commodity.
By the time the dotcom bubble burst, email had completely changed the workplace, search engines had completely changed the way people found information, chat rooms had produced an entire online culture, and more. Just think about all of the people on HN who claim that the internet was the best it ever was in the 90s.
Trading on a DEX is free trading on an exchange costs you fees.
People are just lazy and use exchanges because they provide easy to use apps and stuff and cash out to fiat etc. but this changes because exchanges are horrible at staying up when the market moves fast and everyone wants to trade.
Sologenic DEX [1] is an modern UI for a DEX to trade.
Cutting out the middlemen was once a key point of p2p and decentral systems. It was kinda lost with all the non tech savvy people storming the crypto space.
That is how cash still works to this day. It's not about fraud or not fraud: it's about settlement finality. If you hand over cash to someone for a transaction, you have no guarantees you'll ever get that cash back in the event of a dispute. This is how crypto works.
Which is why consumers enthusiastically abandoned them for credit the moment they could. Purposefully going backwards is both silly, and something you’ll never convince the average consumer to do.
Consumers didn't enthusiastically abandon cash. Credit cards were introduced in the 60s, it took several decades for credit cards to overtake cash and it only happened because of the convenience factor for credit vs carrying cash as well as alternative debit cards that work just like credit cards. Credit was regularly rejected by stores and businesses as recently as one decade ago.
I don't use dispute resolution unless someone actually stole my credit card number like when my card info was jacked at a gas pump one time. Credit cards are quite insecure and we still have to type in all our personal info online every single transaction which is dangerous and dumb and makes the whole system vulnerable to credit card fraud in a way that crypto isn't. When you use crypto you simply sign a transaction message, you don't have to give away your private keys to make the transaction occur.
Folks didn't 'enthusiastically abandon' sound money for credit (or even the early IOUs which were a sort of primitive cash) the moment they could. You're retconning a bit there. Folks were extremely reluctant for a long time on account of all the schemes and fraud. Sound familiar?
That's just what humans do to each other. New tech is always like this when there are gains to be made.
Some folks look at the trend that central banks have been on and the creep of financial surveillance and think purposefully going backward in some areas isn't silly at all.
In the end, it's software you don't have to use. Nobody is forcing anyone to opt in, right (you know, like the credit bureaus who in America force you to opt in if you intend to... I dunno, participate in the economy in a meaningful way)?
Consumers adopt the currency that is most convenient to them. The lack of adoption of bitcoin after 12 years of existence shows quite clearly that bitcoin doesn't have the properties that consumers want in a payments system. Until that changes, bitcoin stands no chance of becoming a medium of exchange. It might continue to be mildly popular as a get-rich-quick-for-free scheme for some time though.
You're still kinda waving that broad brush. For one, not every consumer is most concerned with primarily with convenience (lots of scams are convenient as hell), especially tech-savvy folks in 2021 who have begun to internalize the fact that conveniences always come at a cost. There are lots of super convenient services that I could use to move money around but which I don't use because I am not comfortable with the trade-offs (primarily financial surveillance and security concerns).
Second, adoption is way up and btc is only one cryptocurrency. It gets first-mover advantage in this market (unfairly, probably) and so continues to be a bellwether despite the fact that it is a relative dinosaur, technology wise. I'm fine with that, personally, despite the problems with the technology.
That you haven't adopted the tech doesn't mean that adoption is failing, you know. There are more users every year (this is difficult to pin down for obvious & good reasons, but the indicators are solid) and no technology with millions of users globally, including institutional adopters, can be said to be failing.
Further, to call any payments technology 'mildly popular' which safeguards USD 1.5-2.5 trillion (total cryptocurrency market cap, BTC accounting for over 760 billion alone, despite the recent corrections) in deflationary wealth undermines your argument to the point of bad faith. Is the cryptocurrency market overheated and full of nonsense? Of course. But let's do the analyses with level heads at least.
Bitcoin is just one crypto. But the fact that Paypal accepts crypto as of a couple months ago isn't enough to show you adoption is happening? Or that Visa is settling USDC payments on Ethereum? https://finance.yahoo.com/news/visa-settles-usdc-transaction...
Humans have been using credit systems for millennia. The implication that in the olden days people only walked around with bits of gold in their pockets is a bit of “retconning.”
I think my use of the word 'credit' was a distraction here and that's my bad, but folks absolutely walked around with valuable metals to use as a medium of exchange when moving other valuables was very difficult or impossible. And there were scams then, same as there are scams now. I don't want to type out of the whole history of money as I understand it (Jack Weatherford's book was pretty good), but suffice it to say that history repeats because humans-as-behavior-machines are repetitive.
Credit cards didn't exist 1000 years ago. We aren't debating about credit systems. And yes, people walked around with shiny pieces of metal in their pocket that they used for transactions for thousands of years. At some point after the printing press was invented, the move to paper currency occurred.
Well, the parent post was saying that people were initially hesitant to move to credit systems, so I'm confused. :)
If we're talking specifically about credit cards, the credit card went from new invention to ubiquity in a couple of decades. But I think that's too narrow a scope to look at, to be honest.
Early credit systems did not depend upon the printing press; think of the widespread use of tally sticks in medieval Europe to enable illiterate low-technology credit systems.
It's really hard to approach this anthropologically, IMO, because so many other variables change. Less complex economies do fine with "local communism" and person-to-person debt, but it's hard to imagine using such a thing to order from Amazon. Conversely, coinage historically was useful if you had to exchange with someone with whom you didn't have a personal relationship (say, you're traveling to a faraway land and you can't just provide an IOU), but that's somewhat obsolete now.
I guess my conclusion would be that these historical analogies don't shed a lot of light.
I'm actually really interested in learning more about historic transitions between different system of currency. I've found lots of information on Wikipedia about the steady states, but less on the transitions. Any sources you can recommend?
Jack Weatherford's book on the history of money was pretty good. Lots of tracing the transitional periods as valuables give way to abstractions give way to further abstractions on the abstraction-- and documenting where they chafe (reliably, they do).
I don't know where you're sitting right now. I'm sitting in Europe, and credit card transactions are quite common where I live. Europe is a big place. Even within the EU there is plenty of room for difference.
A generalisation like this is no better than the frequent occurrence of HNers posting articles headlined with "the nation" which mean "the USA".
Oracle problem; the ETH blockchain can only speak authoritatively to things on its own chain, for anything else you need to trust a central authority to feed in information about the outside world, ruining the point. This is why a lot of what happens on that chain is just creating ICO tokens and placing bets on various on-chain things, rather than any meaningful off chain financial transactions.
Eventually it should be a sensible choice. The goal is for crypto (not bitcoin) to be more economically sensible to run credit card style infrastructure. Clearly, this is not currently true but I expect it will improve to the point where most services use some aspect of crypto because it makes sense economically.
No, it will not be a sensible choice. There are some pretty deep, social problems in the crypto space that make this an extremely unlikely outcome.
The fundamental issue is that creating scalable, cheap credit infrastructure for mass economic activity is fundamentally in opposition with creating an investment that will continually gain in value. You see this really clearly in Ethereum, where’s gas fees can be exceptionally high compared to traditional financial institutions.
Ethereum's gas fees have nothing to do with the price of the base asset: it has to do with limited block size availability. When the network is congested, block size is limited and this causes transactions to be bid up in an auction format to get in first.
This is one of the costs of decentralization. However, recent advances in Zero Knowledge Proof cryptography has paved a path for Ethereum to take to get to VISA scale and beyond and be able to process 200K transactions per second (at pennies or less per tx): see https://zksync.io/ and https://starkware.co/.
I think you're mistaken. Cryptocurrencies are anarcho-capitalist money. They're not economical or user friendly because that would mean they cannot be decentralised. Anarcho-capitalists are okay with that because for them their ideology is more important than practicality but the general public will never adopt a payments system that is more expensive and less practical than the alternatives.
I'm not expecting the average person to adopt a crypto payments system any time soon. Currency is only one aspect. B2B will come first.
There are already a large number of crypto projects partnering with existing businesses to address real problems. I don't see a minority ideology standing in the way of this.
They have been trying to sell blockchain technology to businesses for a long time. Nothing has come out of it despite millions spent in r&d and marketing.
Visa is a business and they used the Ethereum chain to settle a payment in the form of the USDC ERC20 token. Now, they're just getting started. But from my perspective, I've seen virtually every function that I enjoy from my bank replaced by smart contracts in the past year. And the only thing that's really holding me back from closing my bank account altogether is the legacy integrations that exist. And that will fade with time.
Sure, but they aren't using a blockchain themselves, they're simply letting their clients settle some transactions on the ethereum blockchain. It's not really an example of a business using blockchain technology to its advantage. If they had deployed a blockchain and used that to process transactions, that would be more convincing, but so far I don't think they've done that.
No, they are literally using it, providing resources for it (in the case of Deutsch Telecom), and settling transactions on it. Why would you deploy your own blockchain when you can use a public blockchain like Ethereum and plug into the rich ecosystem that already exists?
They are not. They're offering a pre-paid card that users can top up with their crypto.com wallets. [1]
The Crypto.com Visa Card is a prepaid card. Broadly speaking, prepaid cards are the same as debit cards. The difference is that debit cards are linked to your bank account, but prepaid cards need to be topped up. In our case, you can top up using bank account transfers, other credit/debit cards, or cryptocurrency.
And Deutsch Telecom isn't using a blockchain either. They're selling data to a company that then puts the data on a blockchain. That's not using a blockchain.
Deutsch Telecom operates Chainlink nodes, which are a decentralized method of writing data to the chain. They are paid in LINK for providing this service.
And Visa clearly said: that Anchorage will be its “digital asset settlement agent” and that it will “integrate [its] treasury systems with Anchorage.”
“After further testing and additional conversations with clients, partners and members of the regulatory community, we hope to launch this capability for other partners in the year ahead,” Visa said in a blog post about the news.
Sorry, man, nowhere in this press release it says Visa is settling transactions on the ethereum blockchain. It says it "plans to offer USDC settlement capability" in the future. And in the footnote they specifically say that this "does not refer to the movement of funds from individual consumer accounts". Deutsch Telecom hasn't even done a press release, so we don't know what their alleged involvement with Chainlink entails other than presumably selling them some data. If this is the best evidence of a supposed trend of blockchain technology adoption in the business world, it strongly suggests that such a trend does not exist at all.
I observe the exact opposite: people do not like accepting the risk of payments that can be reversed because the buyer does a chargeback scam, or used a hacked paypal account.
Multisig escrow is also better in every way if people want to involve a third party in case of a dispute
Right, the thing is if I want to involve a third party (and I definitely want that), I wouldn't use a decentralised system to begin with, because decentralised means inherently inefficient and therefore expensive.
Correct, you have to trust the extra signer to make a good faith representation of what happened in reality. That makes the transaction inherently trustful.
You can build a system of reversible transactions on bitcoin or any other currency (people already have). It’s impossible to do the inverse in a non reversible system.
We have non reversible payments already. It's called wiring money. People generally avoid using it unless absolutely necessary, because it's expensive (much like bitcoin) and most of the time, it's not what you want.
Wiring money isn’t a great analogy. In the US it’s expensive for consumers just because banks can charge a lot for it, but ACH isn’t really more or less reversible (I.e., both are, to a degree) and is free. Conversely, in SEPA, wire transfers are free/inexpensive and in my experience people routinely use them for consumer payments.
The depository institutions themselves don't actually pay much at all - FedWires are about $0.033 to the DI. Some DIs offer domestic wires free of charge like my bank does.
SWIFT international wires do cost the DI more, but not several orders of magnitude more. I don't happen to know that number off hand.
Some retail banks charge a lot for wires because they can - people don't use them frequently (as to your point its not what people want most of the time) and usually only for bigger purchases so the fee matters less.
However, if this is something you do more often, banks offer steep, steep discounts over sticker.
Its called "settlement" when its final. You probably dont need that ever or dont even know there is a difference between a payment and settlement but financial systems do know the difference very well. They just hide it from the end user. Settlement is the actually difficult part the rest is just moving numbers around. After all fiat is mostly digital.
And BTW no we dont need bitcoin for this at all its depreciated tech. But other DLT can be very usefully.
There is a reason CBDCs are a huge topic in global finance.
| It's bad now, but in the future it might be great?
Not be able to reverse transaction is not a feature, it's a fundamental flaw. There is absolutely no advantage to the consumer or the producer to have all transactions immediately permanent.
The rest of your comment reveals your bias: You don't really care about it working technologically, you just wish you had made money on it.
Except that transactions are not final, your scenario is exactly what crypto is great at, there are many ways you can set up an escrow for any transaction to protect multiple parties, for example by using a multisig wallet (1).
I get the feeling that the underpinnings of your argument points are based on not being very familiar or well read with the technology around Bitcoin and other cryptocurrencies, especially Ethereum. Your coming at it from an end user or armchair quarterback point of view, not someone who actually does development in that space; if you did, you'd know that one of the reasons Ethereum was created was to provide a digital escrow mechanism, and has been around for over 5 years. So no, your example isn't based on reality.
I'm confused about why Bitcoin is being discussed in the past tense when both usage and price have both grown significantly over the last year. Is it already dead? Could have fooled me.
Sure. They'll sell at the peak and buy at the bottom because it's a well known 4 year cycle programmed into the protocol. If the price is expected to appreciate 5-10x from any other asset in the market every 4 years that's a bet you should make, even if the timing of the peak and trough is hard to see. But the price floor increases over time as the trade becomes better known globally and the lottery odds expand. Eventually there is so much noise it all evens out and becomes a generally smooth slide into a stable store of value. It's network science and game theory that I personally consider much smarter than anything I could create (having deployed technology built on network science in exchange for money in the financial sector). And much more democratic than is possible in the traditional financial world. Frankly, the longer I study this the more impressed I am.
Usage as in number of network participants. People investing time, energy, risk into the system. Miners, traders, validators, second layer operators. Similar to members of facebook, servers in the internet. Price as in market price. And I'm only talking Bitcoin here.
Right, there's lots of interest in Bitcoin as a speculative investment, but no longer as a payment network. That's the part that people are talking about in the past tense. The idea that bitcoins themselves have utility beyond being something valuable that can be owned.
It'd be like if the number of Facebook accounts kept rising, but hardly anyone posts content anymore. If I were a Facebook investor, that would worry me.
Right, but supply inflation moving from 1.76% per annum to 0.88% per annum is roughly speaking utterly meaningless. People just latched onto this idea because they're using too few data points.
And the idea that miners have a god-given right to make $100 per transaction, $40m per day, and therefore if the mining reward halves, the price of BTC must inevitably double, is obviously preposterous.
Has non-speculative use actually grown? The ability to actually buy stuff with bitcoin looks to be on a downward trend, and the fact that the price has changed significantly over the last year feels like a negative for actual use of bitcoin.
Identity theft and ransomware are different classes of financial fraud, saying that one helps the other is like saying that petty crime helps murder; it doesn’t make much sense.
The argument is let's ban cryptocurrency that'll stop ransomware, which doesn't hold true. All you need is a fake identity or corrupt banking system to siphon off the funds you stole with your ransomware.
This common retort is so tired, can we just stop with it once and for all. The price history of Bitcoin is irrelevant to the arguments given here against it.
Not to mention the opposite ill-intended argument can trivially follow: "this thread is full of people disregarding the arguments against bitcoin because they are invested in it"
I agree with you. Both versions of this argument have to stop in favor of actual discussion (which, it seems, there is a good amount of in this thread)
The problem is you’re looking at a technological dead end (Bitcoin). There’s no innovation there, financial or otherwise, just momentum. However all you have to do is to turn your eye adjacent to the dapp space and see where developer and user adoption is definitely happening. There’s no shortage of “stuff to do” in DeFi and over the past few months the pattern is that it maxes out the transactional capacity every single network it touches. There are currently multiple networks in production (BSC, Polygon, Solana) that have billions in TVL and handling hundreds of transactions/second right now and no shortage of contenders/alternatives and a huge amount of innovation at every layer.
Complaining about nothing to do on Bitcoin feels like complaining how empty the gopher server are after everyone’s moved onto the web.
Crypto only solves problems crypto itself created. DeFi is a perfect example of that.
The reason is that blockchain can only offer its trustless, decentralized and permissionless guarantees to things that are wholly representable on-chain. As soon as you try and sync it with the real world, the real world is the source of truth and the chain representation is meaningless.
Further, by boat anchoring solutions to the fundamental inefficiencies of blockchain, you leave your chain solutions at a material disadvantage to centralized, permissioned solutions anyways. This creates huge adverse selection bias, leaving only the criminals and scammers using it.
Concrete example: Sia has 800TB of storage - total! - in spite of an $800M market cap and millions spent on R&D. You could achieve the same result with a half of a 1U rack of hard drives and $40,000 - or a few bucks on AWS. Why? Because why on earth would anyone use it?
On the other hand, Chia has 1.5 exabytes of wasted hard drive capacity loaded up with bingo cards lol.
This is crypto.
DeFi is particularly fun, it's basically just decentralized 2008, a way to extend way too much leverage to people who simply should not have it, in exchange for fanciful 3-digit percentage APR to lenders.
I think it's easy to get lost in the weeds on this. What was the fundamental innovation of Bitcoin? It was a blockchain that functioned as a decentralized ledger that allowed un-trusted parties to verifiably exchange value without a trusted intermediary. Game theoretical mechanics were added to try to prevent collusion, resist censorship, and to make the network permissionless, to varying degrees of success. What is the cost of this? Obviously, massive inefficiency. Bitcoin's solution to the Byzantine Generals problem (which was previously unsolved) was to propose that everyone store a copy every single transaction that ever happened and have everyone verify that, and then to protect that network, to instigate a Red Queen's race incentivized by a self-reinforcing reward mechanism. Is this an optimal solution? No. Did design decisions lead to perverse consequences that the creator(s) didn't intend? Yes. Is this also extremely limited in functionality due to it's original design constraints (which have since ossified, perhaps intractably)? Sure. And do most things require the function that a blockchain (or decentralized ledger technology in general) provides? No. But, it does solve a very real problem, and all of this "waves hands" is part of the process of discovering where it's most appropriate.
I think what's being lost in this discussion, since almost no one posting here is either passingly familiar with the past decade of crypto-economic research, or with the current state of the art in "crypto" technology (almost none of which revolves around or even involves Bitcoin these days). Almost all of the promising new networks provide at least 1000X transaction throughput at 1000X+ transaction efficiency while retaining decent Nakamoto coefficients and allowing some level of computation ("smart contract") and composability. (Yes there is also plenty of useless stupid stuff that sadly is a huge waste of resources, but hey, we survived Dotcom Bubble. It's just part of the process.)
I don't begrudge anyone who doesn't see the potential there, just as I don't worry about anyone who might have said that the Internet's impact would be no greater than the fax machine (in fact, a single Nobel laureate chimed in early on to both of these sentiments) - whether this turns out to be true will depend largely on the people who choose to build their vision and prove people wrong... or not.
Also, there's no question it's all a damn mess, but much more broadly than crypto.
> No. But, it does solve a very real problem, and all of this "waves hands" is part of the process of discovering where it's most appropriate.
It solves a technical problem - the byzantine generals problem - but does it solve a problem people have? I don’t know anyone who’s had the Byzantine generals problem personally.
A major challenge is that there is an enormous disincentive to choose the best solutions, since advocates tend to own a lot of coins. If you’ve got a considerable portion of your wealth wrapped up in btc then something showing up and eating btc’s lunch is bad for you. This is very different than many other fields of innovation, where friction to move to better options is far far lower.
I've been trying to give this part of the world an open-minded go over the past couple weeks. I do think it's true that many of us got excited about Bitcoin, which is definitely a dead end, and when we realized that we closed our minds to the entire "industry". But the DeFi world is definitely different and if it's also a dead end, it isn't for the same reasons that Bitcoin was.
Having said all that, I still can't figure out what the hell to do in the DeFi world. It seems like all I can do is lend my assets to people who also have nothing to do besides speculate or themselves lend their assets to other speculators. I can't figure out anything to do that pushes out of the speculative bubble in any way. Maybe you can help me?
It's become gold. Preferred by criminals, untraceable (gold is a single stable isotope, basically untraceable). A store of wealth. And you can't buy a pizza with gold, either, and there are tons of scammers who love gold (I remember, about Thailand, the scammers would conspire to get people's gold, a few would talk loudly about how jewels were going up, then someone else in your trip would just happen to mention, despite not wanting to mention it, that there was a great new jewelry offering discounted jewels, whatever, the point was they wanted the tourist to go to buy gold, then trade that gold for fake jewels, because then he couldn't get a refund).
Companies like Chainalysis have unwound and track the large majority (probably 80%) of Bitcoin transactions. Bitcoin’s lack of fungibility and any semblance of transactional privacy is actually one of the arguments against its suitability as a currency.
Gold also has a fatal flaw, there's only so much of it, building a currency based on gold (ie the US dollar on the gold standard) limits the size of the economy, it can't grow if you can't pay for stuff - it's why we left the gold standard.
Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.
It doesn't limit the size of the economy. It incentivises saving over investing, since the value of the currency tends to increase as the economy grows. Modern fiat currency is designed to disincentivise savings and incentivise investing, in order to supercharge economic growth.
A counter-position from the Austrian/Chicago school is that supercharging growth drives malinvestment, and they can't be entirely wrong about that - I've seen tons of dumb money flow into dodgy companies during tech booms.
It incentivizes holding currency instead of making productive investments with your capital. Currency only has value when it moves, not lives under your grandma's mattress.
Inflation incentivizes investment because you are going to lose 2% per annum if you don't.
Fiat offers you the maximum flexibility because you can back your personal economy any way you want - if you want to back it with gold, just buy some. If you want to back it with crypto, bless your heart, buy some.
The current economic system is in trouble because people save too much damn money, that money has to go somewhere, anywhere, otherwise you get unemployment and underemployment.
Interest rates are low because everyone is saving, nobody is borrowing, nobody is investing.
You might have difficulty measuring out two atoms of gold to change hands, but that's dwarfed by the difficulty in measuring out two Satoshis - given that they aren't a physical thing at all. So, if you can keep track of it with Satoshis, why couldn't you keep track of it with gold atoms?
That is, if your position is "Bitcoin isn't limited like gold because of Satoshis" then the same argument works equally well for gold with atoms, doesn't it?
That is, gold can't represent the entire economy because nobody would pay so much for a gram of gold, but why would they then pay that much for a quanity of the even less physical Bitcoin?
90% of all bitcoin ever have already been mined. If your solution to the limited number of bitcoins is rampant deflation you probably don't have a viable currency
Deflation is awesome. It's way better than inflation. It incentivizes you to not buy stupid junk that pollutes the world, you only buy the stuff you really need/want.
Growth of the economy without growth of the money supply leads to deflation, which harms consumption and investment, because hanging on to your money becomes competitive with actively doing something with it.
A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.
When I look at the IT industry, I see deflation that has been going on for at least 50 years. Every year you can buy more computer for less money.
Yet, people keep buying computers. Why?
I would argue deflation has been the most significant driver of the IT industry in the last 30 years and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
On the other side you have inflation that kills savings. And since most people save with a goal in mind, not because it's fun and exciting, the higher the inflation, the longer they will have to save before they reach that goal.
The majority of wealth is owned by the top 5%. Are they really spending a significant fraction of that wealth on computers? Deflation is never about what people buy, it's what they keep.
>I would argue deflation has been the most significant driver of the IT industry in the last 30 years
No it hasn't. The IT sector drives deflation and there is nothing wrong with productivity improvements. You just got cause and effect backwards.
>and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
Inflation increases future incomes. If computers cost the same but you get higher salaries that's a good thing.
Perpetuating the fear of deflation is the greatest feat the Fed has ever pulled off.
Deflation is good. Every wage earner becomes more wealthy as their rate of pay buys more. Sticky wages arent a problem with deflationary money. Hell, at least half the complaints about the modern economy are the result of inflation. But, no, deflation would utterly destroy the economy.
Wages have kept pace with inflation over the last decades. This means they earned more currency units over time. If we had 0% inflation, they would earn the same number of units. With deflation they would earn fewer units.
If you want to change the amount of wealth low-income earners have, stop focusing on the units. This is not JPow's fault, it's a job for congress - it's social and fiscal policy not monetary policy. This is just a quixotic quest against the wrong opponent.
If you want to help low-income folks, advocate for unions (so labor can push back against capital), advocate for wealth taxes, higher marginal taxes for the rich, minimum wage indexed to inflation, a strong social safety net and national zoning laws to stop metros from preventing adding enough housing supply to meet demand. Things that would help.
That was from 2013, and written from the perspective that gold represents “real” worth - some platonic ideal constant measure, but it doesn’t. It’s a deflationary non-productive asset whose value is speculative and usually varied with general fear of inflation. Inflation is benchmarked against CPI. This is goldbuggery and fringe economics. By the way; that’s from the Forbes opinion piece section, not Forbes proper.
The author suggests you cannot measure inflation except by dividing by the spot price of gold. This is false, and why we have the CPI.
>Every wage earner becomes more wealthy as their rate of pay buys more.
You will get wage cuts because it becomes harder to employ you at your currency salary or you just get fired. If you can't find a job, deflation will have made your life a lot worse. You are also incentivized to stick with your first job because future jobs will pay less than past jobs. Basically you hope you build a stash of cash in your 20s because your potential to earn money shrinks with every single year but your wealth gains in value from doing nothing.
We are running into that problem with Bitcoin and land. Do you really think that if you signed a contract to get paid 10 BTC per year in 2017 (when it was $20k) that you will still get 10 BTC today? (at $38k). No, you will get 5 BTC this year.
>Hell, at least half the complaints about the modern economy are the result of inflation
Pretty much all of the complaints about the modern economy are about inadequate attempts to fight off deflation. The Fed has reached a point where it cannot do anything to fight off deflation, it takes a pandemic to fight off deflation, that's how bad the situation is.
Just take a look at Japan, they have deflation and nobody is jealous of their economy.
> Every wage earner becomes more wealthy as their rate of pay buys more.
Income is not the same as wealth. Savers become wealthier, debtors (such as anyone with a mortgage) lose wealth.
> Sticky wages arent a problem with deflationary money.
Um, what? Your last sentence was all about how deflationary money guarantees wage earners increasing pay in real terms. That makes the sticky wages problem much worse.
No, economies based on gold or bitcoin can ONLY grow by inflating their currency ....
At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
You’re going to need a bit more evidence on the “criminals love gold” point. Your thailand example just shows people will scam for small, valuable, fungible things.
Gold didn’t have a rep as the hub of black market transactions before bitcoin.
No it did not, but art did and still does. A lot of art in the future will have a non-fungible identity on chain. It's starting and will only grow rapidly.
The nascent cryptocurrency economy experienced a deflationary crash due to the hyperdeflation baked into the protocol. The currency became useless as such and was mostly abandoned, and then the shell of it was picked up by scammers who are now using it to run a Ponzi scheme.
I’d put that deflationary crash right at the point you mention. I remember it. Bitcoin ran up to crazy levels in 2017 while it was simultaneously abandoned, which is what a deflationary currency collapse looks like.
Bitcoin’s designer(s) were brilliant cryptographers but crank economists. There’s a reason nobody takes that kind of superficial pop Austrianism seriously. It would be possible to design a viable cryptocurrency but it won’t happen until the current crop of cranks and scammers goes away. Right now anything actually workable in the space is tainted by the nonsense.
Why are you measuring a specific cryptocurrency vs. the whole Internet? The correct comparison for the Internet would be "all cryptocurrencies."
Bitcoin "regressed" (really, specialized) because it got so big that it became speculators' favorite, which made it too expensive for anyone but speculators to interact with. Then, other cryptocurrencies that aren't so expensive to move around were created, and people who wanted to use cryptocurrency as a medium of exchange moved to using those instead. So now the ecosystem supports two applications (investment, exchange) using different tools specialized to those purposes, each better at that thing than a single cryptocurrency trying to "do it all" would be.
I have bought a lot of pizzas with BTC (and other cryptocurrencies), as the local food ordering platform accepts it. Worked grear, but at some point the crypto payment processor started requiring KYC. I'm not gonna upload my passport to pay for pizza. I dont know if this problem is because of crypto or excessive regulation.
Use of cryptocurrencies for transactions is also limited due to tax treatment - in the US and many other countries you are expected to calculate and report capital gains for every transaction. Of course this sort of treatment won’t be done for CBDCs (algorithmic stablecoins with governance tokens is the answer here. I’m still waiting for someone to combine this with a reasonable mobile UX, feeless transfer, and transactional privacy. All these properties exist independently (Frax, Nano, Nano, Monero, for example) but not in a single product. Yet.)
Every time I read a comment like that, I feel like there’s a fundamental gap in understanding the field. Bitcoin hasn’t regressed, the tech has just evolved a lot since then but most people just know about bitcoin.
I've studied some of these, in varying depth. But it honestly seems like we've built a tremendous amount of impressive technology that currently has very little impact outside of its own ecosystem, in terms of enabling new industries or consumer services.
I’m not sure how you’re qualifying impact. A lot of people seem to have unrealistic expectations for these currencies to take over right away. It’s just not possible without massive adoption, stability, etc. It takes time to get there, technology-wise, and ecosystem-wise.
If I wanted to be more optimistic I would look at the level of adoption today as insane compared to 5y ago.
I've been using Bitcoin to get paid for a couple of years at this point (programming work for overseas clients), and I haven't gotten scammed yet. I'm not engaged in money laundering, vaporware, fraud, ransomware, or gambling, and only the usual amount of delusion. And I don't even buy illegal drugs!
And, yeah, 13 years after the internet's invention was 01982; not only couldn't you get so much as a weather report online, much less IRC, but many of the early interesting experiments like NLS at SRI had shut down, and more and more places were disabling guest access to their hosts — you couldn't run so much as a game of ADVENT without getting a username. And a password. Things were seriously regressing. The only people you could talk to on the internet were other people who really bought into the subculture, of which there were a few tens of thousands.
So why does Bitcoin have tens of millions of users 13 years after its inception, instead of only tens of thousands like the internet?
If you live in a country with a highly functional banking system and
no kleptocracy, Bitcoin is probably a bit puzzling unless you have
family in Cuba. But it’s not puzzling at all for those of us who live
somewhere in the middle of the broad spectrum between Switzerland and
Somalia, because most places have a little kleptocracy. Argentina
is a stable democracy, far from being “a failed state,”† but if you
want to send US$500 abroad via non-Bitcoin means it’s basically
impossible, and the only broadly available savings vehicle is real
estate (“ahorrar en ladrillos”), which of course grossly inflates
real-estate prices, with a substantial part of the capital city
occupied by empty apartments someone bought “as an investment”.
Historically, Argentines have saved by buying dollars, but that’s
limited to US$200 a month now, and then only if you have a
non-under-the-table job (about a third of total employment is under
the table):
You can see that in September 02019 when this measure was imposed the
price of a dollar was AR$63.50; now it’s AR$155. So whatever savings
you had in pesos in 02019 have lost 59% of their value to peso
devaluation.
In 02001 a lot of Argentines had saved dollars in their
dollar-denominated bank accounts. This did not preserve their savings
through the financial crisis that year; the cash-strapped government
limited withdrawals to a trickle, then converted dollar deposits to
pesos at a one-to-one rate, then released the exchange-rate peg, at
which point peso went overnight from being worth US$1 to being worth
US$0.25 before settling at about US$0.31 for the next few years. The
US did something similar in 01933.
Some might suggest using “alternatives to banks like credit unions
where customers—as owners—hold more power,” but Credicoop depositors
suffered the same two-thirds confiscation of savings as depositors in
for-profit banks. And they pay the same 3% tax on bank transactions
including checks. That’s more than a fast Bitcoin transaction fee of
US$15 for transactions over US$500.
But we’re not a failed state. There are no gangs of bandits roving
the streets in Argentine cities (though there are some pretty bad
slums where you’ll get robbed if you wander in without knowing
anybody). Courts, free public hospitals, and roads continue to
function, though there are more potholes than a year ago. Argentine
infant mortality is 10 per 1000 live births, down from almost 20 in
the late 01990s and the same as the late 01980s in the US; life
expectancy at birth is 77 years, worse than Switzerland’s 84, but the
same as China and Hungary, and better than Saudi or Mexico. (Somalia
is 54.)
Most of the world is worse off than Argentina, although not
necessarily in such a statistically transparent fashion. About one
fourth of the people in the world are unbanked, 51% here in Argentina;
even advanced countries like Russia, Hungary, and Uruguay have roughly
a quarter of the population unbanked:
And if your family lives in a country like Iran or Venezuela subject
to US sanctions, and you live in the US? Good luck sending them an
ACH, instant or otherwise!‡ It’s well known that Bitcoin is very
popular in Venezuela, which kind of is a failed state, so one of the
Venezuelan governments is trying to tax Bitcoin remittances at 15%.
Bitcoin handles a few billion dollars per year in such
remittances. This might seem like a trivial amount of money to someone
in a rich country, but in poor countries, it’s enough to keep several
million people alive.
Even in the US, it’s common for the police to confiscate large amounts
of paper currency just because they can (“civil forfeiture”); US bank
accounts are probably fine for US$100K but probably somewhat risky for
US$10M if the bank thinks you don’t seem like the kind of person who
ought to have it. US$10M in US$100 bills fits in a box you can wheel
around on a dolly, but Bitcoin is a lot more practical. (And of course
US$10M in dollar bills loses about US$200k per year to inflation.)
Transaction fees are usually high enough that you wouldn’t want to use Bitcoin
to pay for a can of Red Bull or even a restaurant dinner. But it’s
extremely practical as an alternative to Western Union or US$100 bills
or gold, even with the current very high transaction fees. At the
moment, the Bitcoin transaction fee is very low—the median Bitcoin transaction fee
in the last block was 0.00678 millibitcoins, which is US$0.25:
Three months ago it was at what I think of as a more normal rate of 0.31 millibitcoins, US$11, which is lower than the 3.4% spread you’d pay to a jeweler or black-market money
changer for transactions over US$350:
So, Bitcoin doesn’t have to be a cypherpunk utopia to be a big
improvement on the status quo ante. For those of you living in
stable countries where your worries are things like “instant and
extremely low-fee ACHs” and “decentralized utopia”, this may be very
confusing, but try to remember that most of the world lives in places
with much more pressing concerns, concerns that Bitcoin helps a lot
with. And you may live there too, soon—the loyal subjects of Kaiser
Wilhelm in 01913 certainly didn’t expect that in 15 years they’d be in
the middle of a hyperinflation episode that remains legendary a
century later.
I think that, by providing workarounds to the people who need them, cryptocurrencies probably not only ameliorate the most immediate and pressing concerns of poor parts of the population like Venezuelan immigrants, but probably also adjust the power balance in a more liberal and democratic direction. This will improve the chance of those concerns being ameliorated by public policy over the next decades as well. But it's hard to tell what will really happen. The potential disaster scenario is that, by making most taxation impossible, cryptocurrencies destroy the modern welfare state without providing anything to replace it. So the public hospitals close, the enormous police force starts to support itself by extracting tribute, and the infrastructure decays. Pretty similar to what's happened in the US over the last 50 years, in fact, only more so.
However, at this point I think the modern welfare state is already doing a good enough job of destroying itself without any significant help from cryptocurrencies—as evidence, I can point to Maduro, Macri, Bolsonaro, Trump, and Brexit, and metonymically to the social changes they betoken. So at this point I'm more worried about cushioning the collapse than preventing it.
† We’ve remained democratic since 01983, electing presidents from
three different political parties (UCR, PJ, and PRO), and there’s no
serious insurgency. It’s the economy and government policy that
are ruinously unstable, to a point that seems satirical to anyone
accustomed to the US, but is lamentably common worldwide. Rich people
sometimes say they don't know of legitimate uses of Bitcoin outside of
“failed states”.
You give convincing arguments in favor of BTC for folks living abroad in less-than-stable states. But these very arguments for which it is acclaimed have clear flip-sides that should be worrisome for those very same folks you claim it's suited for.
Safeguarding hard physical cash is something most everyone, old and young, technically literate or technically illiterate, poor or rich, intrinsically knows how to do. And when it is stolen or lost, there are viable approaches to pursue with favorable probabilities of a happy resolution: tell a police cop to see if they can catch the thief using detective work, you could try looking around if you think you might have misplaced it, etc.
With BTC on the other hand, ensuring your wallet isn't had by committed and technically proficient bad-actors or that your wealth isn't all erased in the blink of an eye with a hdd crash or a distressed acquaintance wiping your data away, you can't expect normal people to be up to the task of combatting all of this. And retrieving stolen BTCs from bad-actors living a continent away is a task that police cops are not up to doing or even the slightest bit capable of. You are a really smart guy kragen, I'm sure you won't forget your computer's password one day or have your wallet compromised, but someone like my mom or grandma would, and the thought that simple mistakes and viruses and computer illiteracy could and probably would be the thing that leaves someone's wealth irretrievably erased without much avenue of recourse saddens me, and makes me wish that people in our profession who understand this would stop encouraging its usage.
I come from a nation that ranks lower than Argentina in stability. My family went through this very dance of receiving money from abroad and having to go to WU to get it. The risk of a bad accident happening is infinitesimally small in that than with BTC.
I agree, Bitcoin isn't zero risk. But compared to my experiences with banks and WU the risk is manageably low. I have to give someone my passport and home address in order to receive money via WU, so I'm exposed to the risk that buddies of the WU employees will rob my house later. I've had to pay a collection agency thousands for fees charged on a bank account that was empty and that I thought was closed. I've had my bank ATM card cloned by a skimmer on an ATM while I was traveling overseas, and I've had my bank credit card stolen out of my pocket on the bus. I've had WU give me ridiculously unfavorable exchange rates, and there was nothing I could do about it. In none of these cases are the police of any help; they exist to help the rich, not normal people.
With either banks or Bitcoin, you can hedge your risks by converting to fiat currencies. But with fiat currencies, you can hedge your risk by converting (partly) to Bitcoin.
So maybe you should buy your grandma a Trezor. What country does she live in?
> I'm exposed to the risk that buddies of the WU employees will rob my house later
In comparison to getting your wallet compromised by viruses searching for it (and they will probably become more aggressive and adept as BTC usage increases), the chance of this happening I feel is exceedingly low. And avenues of recourse exist: there are clear leads to follow on for an investigative team.
> I've had my bank ATM card cloned by a skimmer on an ATM while I was traveling overseas
I know that my credit card covers me for this and I would get my money back if such a thing were to happen to me.
> I've had WU give me ridiculously unfavorable exchange rates, and there was nothing I could do about it
And BTC transaction fees are ever-increasing. And so is its environmental cost.
My grandma lives in .pk. I fear she would not be capable of understanding the concept of BTC or Trezor as she can barely understand how a TV remote works. She does very much grok the concept of cash money though, and is quite fond of exercising her freedom with it.
When I first explained bitcoin to my mom and her friends, they didn't get it.
The second time, I explained it, they didn't get it. The third time, I sat them down, and made them learn how to run full nodes, run a few commands on the command line, and use bitcoin. Western Union is certainly not guaranteed, nor tyranny proof. If the governments of Argentina or Pakistan need the USD bad enough, they will every dollar Western Union is holding for recipients. To keep the story quiet and the money flowing in, they may imprison the recipients and their families. Desperate times call for desperate measures.
Reminds me of the old adage about technical solutions to social problems. Cryptocurrency isn't going to un-fail these states, all it does is enable the wealthy to evade currency controls and reinforce the downward spiral. If someone lives in an oppressive regime it's governmental change they need, not worldwide abandonment of financial regulation just so the lucky few can escape.
The majority of the Venezuelan economy exists outside its borders, because that's the only place where it can exist.
Currency controls are actually preventing the recovery of the country. They are a short term fix for a short term problem but they create long term problems in the process and those long term problems are definitively the worse poison.
The wealthy can already evade currency controls; that's what it means to be wealthy, at least in a place that has them. Bitcoin and similar systems enable the poor to evade currency controls, as well as frankly confiscatory regulation like the bank-deposit-conversion episode I mentioned, precisely because it's accessible to everyone, not just the lucky few.
I've already addressed your point about governmental change.
In Argentina? Some of them use LocalBitcoins, while others walk into a storefront that advertises Bitcoin or remittances to Venezuela, and hand over their pesos to the guy behind the counter. There are also groups on WhatsApp and Facebook to find counterparties. That's the reality: Venezuelan refugees, who I guess are "criminals" to Maduro's regime and people like you, and illegal aliens like me, who I guess are "wealthy".
In reality what's probably happening is the person in Argentina is taking Pesos and transferring the money in some manner to a US account that supports Zelle, which has become the payment method of choice in Venezuela. The remittance is then sent to someone's friend's account using Zelle, and then used for payments. Bitcoin transaction fees have just been too high to make it viable for remittances.
Maybe in some cases, and maybe sometimes the settlement method changes behind the scenes without the customers being aware of it, but keep in mind that opening US accounts is pretty difficult for Venezuelans in either Venezuela or Argentina. And Bitcoin transaction fees have never been so high as to make them unusable or even uncompetitive for weekly or monthly B2B settlement, and, as I pointed out above, today Bitcoin transaction fees were around US$0.25, which is low enough to be viable even for a pack of cigarettes, though I think US$10 is more normal.
Over the counter? People still trade and meet in person, you know? The reality is the US petrodollar is the preferred currency of choice for criminals.
The poor can’t afford btc. If it were to become the normal method of transacting, people would get on average one transaction each per decade or so. That means that transaction fees will be obviously way too high for the global poor to possibly use.
> I've been using Bitcoin to get paid for a couple of years at this point
How do you turn your Bitcoin into food, housing, utilities, and other necessities?
> And, yeah, 13 years after the internet's invention was 01982
The Internet was not available to virtually anyone in 1982 much less 1969. Nor was the ARPANET of 1969 even remotely similar to the Internet. TCP came about in 1974. IPv4 in 1982.
> So why does Bitcoin have tens of millions of users
It doesn't. It has a lot of speculators, and a handful of users. And no one knows or could possibly know how many there are.
> How do you turn your Bitcoin into food, housing, utilities, and other necessities?
I sell it for dollars to people in person; some of the dollars I have to change into Argentine pesos before I can spend them. Isn't that how everybody does it?
> The Internet was not available to virtually anyone in 1982 much less 1969
It was available to almost anyone who knew someone who had access, which is the same situation as Bitcoin. Precisely what Maciej is complaining about is that so little of the economy is hooked up to Bitcoin is that most of us can't buy a pizza with it without going through intermediaries.
> Nor was the ARPANET of 1969 even remotely similar to the Internet
It was remotely similar; it provided telnet over a packet-switched network, with routing. You could argue that substantial technical changes happened in Bitcoin over the last 13 years, too. Maciej did, in fact, make that argument: he pointed out in particular the dramatic shift to centralized intermediaries like Coinbase (the ANS.NET of Bitcoin?) and from CPU mining to GPU, FPGA, and then ASIC mining, as well as the proliferation of alternative cryptocurrencies. We could also mention segwit, the BCH schism, Lightning, BIP39 and Electrum seed phrases, and lightweight clients like Electrum. Those changes are not over yet. So the situations are in fact quite closely parallel.
> I sell it for dollars to people in person; some of the dollars I have to change into Argentine pesos before I can spend them. Isn't that how everybody does it?
No, most people just spend their currency directly on the things they need to purchase, actually.
> It was available to almost anyone who knew someone who had access
That's not even remotely true, and is also a tiny number of people.
> It was remotely similar
But... it wasn't. As I already have shown.
The ARPANET, then the Internet, have all gone through steady evolution. It has not spent 13 years stagnant or regressing in terms of either design or use.
Just because you read somewhere that "ARPANET was the predecessor of the Internet" does not mean that ARPANET was the Internet.
This is willfully ignorant and motivated reasoning. Crypto has more uses than I care to even list, in fact it’s quite easy to come up with many of them, but it’s weird that people who’ve set in their ideology against it won’t ever budge. In another thread I listed out a handful, and it was so interesting to see people do what always happens in political fights: they take a small subset of the idea or just one of the things that they feel they can best counter, and counter that, conveniently ignoring that they aren’t really engaging with the point at all but rather very small branches of the argument.
If you care to see, it’s in my comment history not long ago. And the thread is fascinating because at best the replies just cherry pick and do semantic tricks like this.
Crypto has a wealth of interesting uses. Tech company co-ops, incentivizing content curation, new and organic stock distribution mechanisms for open source projects, and of course the giant one of providing a far better investment and transfer vehicle to the non-first world countries.
I mean, I can totally see the arguments that it is wasteful, or a bubble, overhyped, and not reaching its potential. But the ones who say it has no or next to no uses are in my opinion on the same plane as Krugmans “the internet will be less useful than the fax machine” or the classic Slashdot iPod “less space than a nomad” comment. It may take even 20 years to prove it, IMO that’s not unreasonable, but it will be claim chowder I’ll be happy to revisit.
If proof of stake works out, there’s no doubt the next Google will be a crypto company that gives revenue back to the user base to incentive good contribution. Content sites absolutely will be totally disrupted. Well look back at writing reviews for the Yelps and Googles as being anachronistic, “why did we used to give all this content to the largest company in the world for free”. Instead, a crypto-based Yelp or Reddit that used a coin and distributed it fairly in relation to contribution would absolutely blow up.
I think VC is also better done with coins in general. Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock. That’s a 10x more incentivized early adopter because they actually could make something more than lunch money.
The reason crypto is blowing up isn’t because it’s a ponzo scheme. It’s because laws around accredited investing are truly the most egregiously disgusting instantiation of class warfare ever to exist, and finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it. All the “pure” crypto companies are total bullshit, minus many BTC and ETH, because they have no product. That I agree with. But in time you’ll see a huge growth in companies that are simply normal tech companies with novel tech/uses, but who build in community ownership, rewards and incentives that actually share profit with their user base.
Again: why do people not get paid for contributions to Pinterest, Yelp, Reddit? These are companies paying millions of dollars to employees, and 100% of their content is given to them by users. In a better world they are actually run by the community, owned by the community, and developed in the open.
> If proof of stake works out, there’s no doubt the next Google will be a crypto company that gives revenue back to the user base to incentive good contribution.
Any company could do this with fiat currency today. "Crypto" has nothing to do with it.
> Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock.
Likewise, there is nothing stopping a company doing this today without "crypto".
> finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it
You're ignoring the existence of the stock market, index funds, exchange-traded funds, fractional share purchasing, Robinhood no-fee trading, etc.
Crypto gives the ability for the community to actually control and be confident they won’t get slowly squeezed out, because you can actually codify control. So no, you can’t do that with a traditional company. And I’m somewhat sure it’s not legal to pay users in micro shares of common stock, but even if it was, you have the same issue of the stock having almost no value as it could at anytime be devalued as the company has total control. Again, it may be possible, but crypto makes it obvious and easy and strongly enforced, whereas some sort of legal paperwork setup will never achieve the same confidence.
And your final response is an absolutely perfect example of cherry picking. I said VC, you reply with index funds. Laughable.
> Crypto gives the ability for the community to actually control and be confident they won’t get slowly squeezed out, because you can actually codify control.
This is nonsense. Sure, on a technical level, you can ensure that Google2 will only have 10,000 crypto-shares, and will never issue any more. Regular Google can issue new stock and there's not much that can be done.
But the volume at which public companies or even private companies trade stock is so huge that there's no use case you can imagine that would tank the stock. You're talking about micro-payments -- Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google). Google1 could issue a million new shares of the stock to pay its moderators, and all they'd do is tank the stock price. But all their most valuable employees are paid heavily in stock. They wouldn't be happy and would quit or riot. It's a soft-regulation on that kind of silly behavior.
Despite 20+ years of "pay users to use the site" being an obvious conclusion, almost no site has done this in a meaningful way. There are hardly any even paying people in funny money / company scrip. All I can think of are Eve Online and Steam. You can't convert money OUT (regulations) but you can use their chuck-e-cheese tokens to buy stuff within their business. On Steam, the money you get per value the user puts in is a pittance. Valve takes a 30ish % cut on almost everything you do, even "secondhand" trading card transactions.
You can speculate that financial regulations are preventing it, but I think it's more likely that the owners of Google2 would much prefer to keep as much capital for themselves and not let its users/"staffers" get a slice. Similarly, Google1 pays its low-level moderator staff very little (compared to an engineer or upper level manager). Most corporations turn a profit. That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin. If you can't fork the coin, then it sounds like regular stock or company scrip.
The argument of traditional stock being worthless isn’t just that they could dilute, which they could in any number of ways, but they could end sharing anytime, change the % share, or do any number of the squeezes for-profit VC companies end up doing like ”introducing” prioritized white-labeled content. Again, the trust is what matters.
> Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google)
Google pays tons of content people, they also have 130 billion in cash.
Google2 may make the mistake of being greedy, but GoogleN may not because they have a team that realizes less greed = users paid more = more incentive. Forking is a feature not a bug.
Success being correlated with fairness in equity distribution, users having stake and say in the platforms they use, creators having contracts with how they earn their living that can’t be changed on a whim, and if they ever do change, it’s by a democratic process, and creators then being able to vote with their feet to fork.
Seems like a good thing.
> even they have ad dollars siphoned off by Google
> That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
To be clear, I think these companies need to be non-profit but still pay their team well (a fixed rate to some sort of inflation basket that tracks competitive engineer salaries, for example).
What is unclear to me, is how these remittances work in practice. I get that in the US you can exchange USD to Bitcoin with a credit card and then send that to a person in, say, Venezuela (or share the wallet password). But how is it converted back to Venezuelan Bolivar? I can't imagine you buying a pizza with bitcoin in Caracas.
Side question, why do you write your years with a leading zero? I've never seen that before and it has quite a cognitive strain for me.
I haven't been in Venezuela since 02006 so I don't know how people there cash out of Bitcoin. I'm guessing nobody has a clear view of the whole system, since being transparent to Maduro's thugs is not in the interest of any of the participants. If I had to guess, I'd guess that Venezuelans who are fleeing the country sell their dollars for Bitcoin, and Venezuelans whose family is abroad buy them.
One thing I do know is that a lot of overseas Venezuelans whose remittances are via Bitcoin don't know Bitcoin is involved. They know a storefront where people transmit money to Venezuela, and the guy there tells them where to instruct their family members in Venezuela to pick up the money. How the agent in Venezuela gets paid is no concern of the customers; they only care that the money they give the guy arrives safe and sound.
Are you in Venezuela? I notice that that article is about something that was expected to happen, not a report on things that actually have happened... what's the story on the ground?
> why do you write your years with a leading zero? I've never seen that before and it has quite a cognitive strain for me.
Not OP, but I had the same question and did a few seconds of cursory searching to no avail. But rather than cognitive strain, I found it opened up a much larger vista on the perception of time and our seeming place in it. While I am unlikely to adopt it, perhaps the experience would be even broader with a few more zeros tacked on! ;-)
Relatedly, I like the Human Era notation for expanding the idea of years, where 1 AD is equal to 10,001 HE to denote approximately ten millennia since the start of human cities and agriculture, i.e. civilization. We're living in 12021 HE now.
I have no idea why you are being downvoted. This is absolutely valid reasons for bitcoin to exist, but you don't have to be a failed state.
I'm from Canada, and moved to Australia. I was moving money from Canada to Australia, it was easier, faster, and cheaper for me to move that money via crypto (I used Eth rather than Bitcoin at the time) than going through the banking system.
It’s the long date concept, promoted by the Long Now foundation [1] which promotes long-term thinking and gives a nod to this by writing years in 5-digit format.
The irony with the GP’s post is that I can’t see using Bitcoin, with its current incredibly-high power usage and associated environmental destruction, as long-term thinking in any way, shape or form.
Bitcoin doesn't have associated environmental destruction right now that I know of. I assume you're referring to its energy consumption, but at the moment it's a subsidy to renewable energy, because nuclear energy and fossil fuels (except for flare gas) are too expensive to compete with super-cheap wind, geothermal, hydroelectric, and photovoltaic energy.
Now, at some point in the future, Bitcoin might become an environmental problem; the cheapest ways to get energy have been environmentally destructive in the past, and they may be so again. Maybe in 50 years we'll have to campaign against Bitcoin miners who want to convert the mass of Jupiter into energy with their fusion reactors or black-hole clusters. But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
It is simply not true that if governments removed all fossil-fuel subsidies today then electricity production would become 100% carbon-free overnight. There are massive issues around supplying base load (requiring cheap energy storage tech that doesn't exist yet), construction lead time, limited materials, workforce, and so on and so on. Then the non-fossil-fuel energy sources have their own environmental costs, e.g. we aren't able to recycle grid-scale batteries or turbine blades yet and those produced today may never be recycled.
For the forseeable future energy production cannot be carbon-free. All uses of energy, including Bitcoin mining, will continue to impose an environmental cost. For those of us who believe Bitcoin achieves nothing useful that can't be done better some other way, that cost translates into a pure negative.
> The Harvard Business Review article I linked above goes into some detail about how this happens.
It doesn't make the argument you have just elucidated, which is an interesting one. I'll think about it.
> Because you judge our lives useless, you engage in motivated reasoning to find excuses to sweep us away,
"Bitcoin not useful" != "your life is useless". I think you have invested rather too much of your identity into Bitcoin.
Regarding "Roca", please check my HN bio. My real name is "Robert O'Callahan" and 'roca' is a handle I've used online since 1990. I have never heard of your "Roca" before.
I explained that for years I've been making a living by getting paid in Bitcoin, and that there isn't a better alternative. To argue that Bitcoin's uses are unimportant, you must argue that it is unimportant for me to make a living, much as Roca did with the Native Americans he murdered and enslaved.
1) You could just as fucking well be paid in something that doesn't use as much electricity as Switzerland.
2) Electricity is one of the few things that are about as fungible as money. All your blithering about how "crypto uses only the most environmentally friendly energy!" is bullpucky, since that only means that some actually useful stuff must now run on other, less environmentally friendly energy.
3) You misspelled "I sincerely apologise for my unfounded and calumnious accusation". Please stop being such an egregious arsehole.
① actually there isn't an alternative, except for working for Argentines, who are desperately competing for the available jobs.
② electricity is fungible, but not portable or storable, and is almost all generated within 200km of its point of use (and well under 10 milliseconds). Also, the supply of electrical power is not fixed; it is rapidly expanding in response to demand. So one use of electricity does not imply less electrical power available even for other things in the same location. https://news.ycombinator.com/item?id=27449443 has a much deeper dive on the issues.
WRT "roca", I guess the Author of my story has quite a sense of humor. You clearly didn't create the account or choose the name to argue against measures that limit the powers of the Argentine government to abuse fiat currencies, since you've been using the name on HN since 02014, and I believe you when you say you've been using it online since 01990.
Yet imagine my perception when I find that someone has popped up here to argue against such safeguards, and he's using the name of the guy whose face is on the $100 bill, whose fame primarily derives from commanding genocidal Argentine government abuses against the peoples in Argentina who didn't use the Argentine currency, and who is also the most famous person in the world by that name. The Roca $100 bills are gradually being replaced—all the ones I have here have Eva Perón instead of Roca on them—but it's only been, I think, a couple of days since the last portrait of that white-supremacist rapist visage has been inflicted upon me, when I got my change at the supermarket on Monday.
So, I hope you can forgive my error of assuming that the astounding degree of relevance of your chosen name to the topic at hand, which I take to be the social value of alternatives to the state-imposed currency system in Argentina, was intentional partisan trolling on your part, rather than a sort of absurd coincidence of cosmic proportions. I should have at least checked your HN bio, as you say, before assuming ill intent.
I continue to maintain that your dismissal of the utility of Bitcoin bespeaks either an astonishing degree of willingness to prioritize your own interests, and the interests of people like yourself, over the interests of people like me; or an astonishing degree of confidence in your own judgment of what causal relations obtain in Argentina over the judgment of those of us who live here.
After this exchange, though, I don't blame you if you don't think much of my judgment!
There are cases of Bitcoin mines stealing electricity and fossil fuel powerplants being retrofitted for Bitcoin mining there is no way miners care about the source of their energy.
Patently false. Bitcoin put a dollar value on under-utlized energy. That can be coal, hydro, whatever. If you believe that Bitcoin is just a more wasteful version of Paypal or ACH, then it matters a lot that this subsidized energy is being converted into waste heat by a bunch of special-purpose ASICs that have no use outside of *coins, and take a lot of metals and energy to create and ship, on limited-capacity fabs.
I ctrl-F "subsid" in your link and don't see any source for your claim. Bitcoin puts a dollar value on (subsidizes) -ALL- energy. If there's a dirty coal plant you can run in your backyard without the government shutting you down, Bitcoin wants to know about it.
Your claim is (1) bitcoin takes energy (2) renewable is cheaper than nonrenewable (3) bitcoin is causing tons of new renewable capacity.
If that were true, why isn't every power plant in the US renewable? How on earth did Bitcoin manage to get this capacity that nobody else has? Money talks, right? Why aren't the mayors of San Francisco, New York, Chicago etc. trumpeting their new 100% renewable grids?
Then you might say that Bitcoin is tech-enabled and decentralized, you can run a mining rig near any energy+internet source. But that's equally true of a cloud compute farm. The fact that bitcoin is pointless hashes and not cloud compute is a historical quirk. Any Bitcoin node/farm could be replaced with an identical-power-usage server farm and do more good for society.
I'd like a source on your Bitcoin only uses renewable claim. I think if I run a miner on my home PC, which I believe has some natural gas in the energy mix, that argument fails.
> But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
I wrote this whole comment without getting to the end of your inane post. We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy). But your wordsmithing here is bad faith. Your argument is basically "governments thought people wouldn't be complete jerks, and Bitcoin sure proved them wrong!" Yeah it's human nature and perhaps inevitable, but 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Bitcoin is an ongoing real time climate catastrophe. Get back to me when China and the US ban all forms of carbon-emitting energy production. Until then, those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find. I suggest cloud computing as a baseline. "environmental destruction right now" is exactly the current state of things.
It's disappointing that you felt the need to post such an aggressive and poorly informed comment, without, as you admit, even bothering to read the comment you were ostensibly responding to. There is a great deal more information about most of the points you touch on in my comments from today: https://news.ycombinator.com/item?id=27449443
I don't think bitcoin is "causing tons of new renewable capacity", if by that you mean inducing people to bring up many new power plants; its overall power usage is estimated at only about 12 GW. By comparison, PRC installed 71.7 GW of new wind power in 02020; at China's historical wind capacity factor of 22% that'll be 15.8 GW, more than the entire bitcoin network. Including the parts that are running off hydropower and the parts that are outside China.
> We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy)
I wasn't talking about implicit subsidies, which aren't enough to make fossil-fuel power price-competitive with renewables. I was talking about explicit subsidies. Like when I was in Venezuela you could fill up the 20-gallon gas tank on an old car for 19¢, because the gasoline was subsidized. That's the kind of subsidy that can make fossil fuels cheaper than renewables: you can run your bitcoin farm off a gas generator. It's not just "failing to tax them".
> 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Yeah, that's not what I'm talking about.
> those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find.
Not really. I mean, a little? That 01967 Buick swilling that 1¢ per gallon gasoline is producing almost exactly the same amount of CO₂ as if the gasoline were getting burned by a nice new Honda motorcycle (or generator), and it's also producing a fair amount of unburned hydrocarbons and even methane. That matters a lot to the kids with asthma who live next door, and the global warming potential of the total horrific exhaust cocktail is a bit higher than if it were cleanly burned to CO₂ and H₂O. But, from a climate-change point of view, the high-order bit of the problem is that the government was subsidizing the burning of fossil fuels, which results in a lot more fossil fuels getting burned.
So the real problem is not what the energy is getting used for, but that the subsidies make it attractive to get that energy from fossil fuels instead of solar, because you pay for solar but the government pays for gasoline. If bitcoin mining could bring those subsidies to an end by making them suddenly much more costly, which I doubt, then so much the better.
But really, zooming out a bit, Venezuela is not the main culprit in climate change. Whatever happens there isn't going to have a big effect on climate change, one way or the other, until things chang a lot. Europe and the US are the main culprits.
> Bitcoin is an ongoing real time climate catastrophe.
12 GW is about 0.07% of total world marketed energy consumption. There's an ongoing real-time climate catastrophe, but at the moment Bitcoin is almost as much of a distraction as plastic straws. Not that it couldn't get bigger.
That seems like a compelling use case. The next thing I wonder though is whether that can exist without the ponzi scheme on the side. Is it the remittances, or the ransomware and speculation that funds the infrastructure?
Re fun stuff to do, you can speculate. In 2017 I put a modest amount in some ICO and it went up 100x. That was actually more fun for me than trying to make Compuserve work back in the 90s.
One of the most interesting aspects of crypto to me is it's like printing money - having held some bitcoin and having it in an account is rather like the government printing it and giving it to you as a grant. It doesn't directly create goods or services but it does have an effect for better or worse.
Holy crapballs, yeah it was! I remember when I learned HTML in 1996 and put up one of those blinkety animated GIF homepages on the hosting space given (for free!) by my local dial-up ISP. They had a local chatroom and I spent hours and hours chatting with locals from the same city--even met some of them! I read the hacker's manifesto and about phreaking and all of that stuff, found Usenet, played Quake over 33.6kbps dialup with a 300ms ping and still wiped the floor with people. I remember when mp3's came out. It took me 5 mins to download my first one. C&C music factory--everybody dance now!
But that's just nostalgia part. The reality is that nowadays the internet is ad-laden crapware/spyware that is scheming every second of every day to get you to do something--sign up for something, buy something, like something, rate something. Your eyeballs, your likes, your hates, your friends, your vices and quirks, are worth billions to multi-national corps who hope to never have to give you customer service, who keep you at AI-defended arms-length, but will happily sell your attention (won through their latest crack-like invention) to the highest bidder.
It feels like the internet is infested with the worst of human carnival barkers and con-artists these days.
The early internet was overrun with this stuff too. Remember Bonzai buddy? Or the ad serving tools that’d claim to pay you for every hour you’re connected to the internet?
I remember Usenet before Eternal September and before Canter and Siegel, when the backbone was NSFnet and before the National Information Infrastructure Act of 1993.
If someone was doing anything commercial over e-mail or usenet you could contact their "sysop" or their upstreams and have them removed.
Wow, blast from the past! I actually got a check from one of those pay per hour ad services more than 20 years ago, and to this day it's still the only check I've ever received :-)
(It was 15 USD so costed almost as much to cash in Europe as it was worth)
Hmm. It’s interesting to note that skeptics seem much more invested in being right about crypto being a scam than proponents are in it being here to stay.
The more time passes, the shriller the cries of skeptics become, leading me to believe that skeptics are emotionally invested to the extreme in the failure of crypto. I rarely see any carefully considered, informed opinions just tulips and drugs and money laundering lol. You know what is used for drugs? Cash. You know how money is laundered? Banks. You know what is worthless? Venezuelan currency. Sure, crypto, just like any fungible asset, is used in these ways... but none nearly as much a fiat is.
I’m becoming convinced that naysayers are more and more afraid of having been wrong and missing the boat as time goes on.
Every day Bitcoin fails to go to 0, it gains legitimacy as a store of value and means of payment.
I guess that is pretty nerve wracking if you made a hasty decision early on to pretend it wasn’t happening, and now it seems like you’re being left in the dust, still preaching from your soap box.
It’s been more than a decade. It’s here to stay. It will get better, but it’s not going anywhere.
I've evaluated Bitcoin probably 10 separate times. I regret not getting in at time #1 when it was $30, but I know I would've sold at $35 or $50 or $100 or $1000 based on where I was economically then.
I have no regrets investing in broad market index funds, because I know what they represent, how they work, and how even if Amazon drops to 1/10th of its value I still own a small slice of the company. If bitcoin drops I own a bitcoin, which no adherent can explain the purpose of.
There's no "there" there. It doesn't do what it's supposed to do, most of the adherents don't know what they're buying, the "store of value" argument just makes it a worse version of fine art, gold, or real estate. The economic case for bitcoin is anti-fiat. Fine, but that's a minority opinion. Hundreds of millions of Americans buzz along in a fiat system and don't seem much worse for the wear. The massive COVID bailout kept millions out of poverty, kept food on the table, kept businesses open, etc.
"Failed states print money and crash the economy so they need bitcoin". Why Bitcoin and not another crypto? I can never answer that. Hardly anything in tech is forever. BASIC was once cool, now it's Python. Would I bet $30,000 that Python is the language of choice 50 years from now? No. Bitcoin is a cool proof of concept that is eclipsed tech wise by dozens of other coins. I'm still skeptical of other coins, and hardcore skeptical of PoW when the W is useless (hashing). Bitcoin is the top of the skepticism pyramid. There's no point.
> "I’m becoming convinced that naysayers are more and more afraid of having been wrong and missing the boat as time goes on."
"Bitcoin value has changed 200,000x in a decade and just halved in a few weeks."
"You're envious because you didn't get rich quick."
"I thought this wasn't a get rich quick scheme?"
"It isn't, how could you suggest such a thing? It's a currency used to buy groceries in Venezuela."
"Then why do you care about it - do you put your savings into the Mongolian Tugrik because it's a currency used to buy groceries? Do you go round singing its praises on the internet?"
"No, because they won't get me rich quick. It's still a currency, deal with it."
"Doesn't that rapid change in value make it a poor thing to use as currency?"
"It's unquestionably better than a hyperinflationary fiat currency in a collapsing state."
"Almost anything would be."
"You're just dissing it out of envy because you didn't get rich quick. Look at that - over $30,000/coin, nothing that valuable could be nonsense or scammy!"
"Tulips?"
"That's all you ever say, Tulips, Madoff, Ponzi, Pyramid."
"They were all things that had high valuations and were nonsense. At least tulips have some inherent value, unlike Bitcoin, you can't grow or eat Bitcoin."
"Ah! Ah! You can't eat gold!"
"Indeed you can't. If you like that kind of thing, do you hold any gold?"
"No, gold won't get me rich quick."
> "It’s been more than a decade. It’s here to stay."
I guess this is why you're religious - it's been here for a long time, many people believe in it, that's enough to convince you, yes?
I deeply regret that HN's system gives me at most one upvote to bestow upon this.
(Hey, couldn't it be something like one potential upvote per comment I read, in stead? And then I could give several of those from comments I don't deem worthy of upvoting to those I do.)
Every time a Musk tweet swings the value of BTC by 20% --- in either direction --- Bitcoin loses credibility as a store of value. "Price greater than zero" is not enough to make something a good store of value.
BTC as a means of payment is a joke. Most Bitcoin fans I engage with have actually given up on that. In fact, the scaling limitations of Bitcoin transactions are now touted as a good thing because that bounds the eventual energy usage of the network.
The Bitcoin cult is strong enough that I have no doubt Bitcoin is here to stay. It's sad, but it doesn't bother me. On the other hand it's obvious why Bitcoin HODLers have a deep financial interest in crypto being "here to stay".
The store of value concept makes no sense because such a thing cannot exist. When you buy Bitcoin you hope the seller does something that maintains the existence of an economy that exchanges their currency for Bitcoin.
You can't just pile up gold and then expect to get something for it if everyone else is dead. You need a group of people (aka economy) willing to work for the gold.
One difference between Gold and Bitcoin which I don't see discussed often is that it's pretty clear the people who got in first get the most gains. With gold, you can't do anything about that until you invent time travel. With BitCoin, as soon as you realise that, you have an incentive to spin up your own cryptocoin with the only difference being that you get in first. Other people have an incentive to get into your cryptocoin speculating that they can be in first, and then because they are in they have an incentive to hype it to others.
https://coinmarketcap.com/all/views/all/ I clicked "load more" until I saw 1400 cryptocurrencies, if Bitcoin is 12 years old, that's averaging a new cryptocurrency every 3 days since Bitcoin's creation. There's probably a lot more than that.
> Every day Bitcoin fails to go to 0, it gains legitimacy as a store of value and means of payment.
Bitcoin is a horrible store of value. It might not go to zero, but it’s fluctuates wildly.
I think for people who predicted from a decade ago that this was all nonsense, the case is there that it is.
Realistically, what are we looking at? What runs on smart contracts? What is being bought and sold with Bitcoin.
This answer is not nothing, but…I mean really? This is the revolution?
As far as legal uses, the only one that has any amount of traffic is speculation. That’s it. Are there other people using it occasionally for other things? Sure! But then we’re looking at, checks ledger NFTs?
All of this while burning through tremendous amounts of electricity. We’re talking over half a percent of the total energy consumption of human civilization.
What have we gotten in return? This isn’t like people pushing back against airplanes or paper or rice. There’s no denying that a lot of money is thrown around, but you can only talk about people being “left in the dust” if you can point to something worth, again, >0.5% of electricity consumption of the PLANET.
They really have cranked up the propaganda against crypto recently haven't they? I've honestly been lukewarm on it for a while: maybe someday it'll be a workable tech, but too many issues at present. But the way these people talk (or are being paid to talk), you'd think Bitcoin breathed fire and had horns. Which begs the question: what are they afraid of? And they ARE afraid of something. You don't launch a propaganda campaign against something you think is a joke.
A shitcoin wasting electricity and causing absolutely massive emissions of greenhouse gases is a first point. I'm not looking forward to the planet I live on being utterly fucked. And I'm even less happy about frat tech bros pumping bitcoin because it makes them money.
Yes I am afraid, I am afraid that I won't be able to acquire some real estate properties to rent them out at reasonable prices. This literally has nothing to do with Bitcoin.
Oh, I am also worried about not completing that robotics project I started, because I don't have enough time.
An interesting line of argument, and one which affords a number of potential avenues for enlargement:
- The Internet emerged from a community in which it afforded real and tangible benefits, without any one single locus of control. (Research universities, along with a number of government departments and a few major tech and defence contractors, principally.) Perhaps an alternate payment mechanism might emerge similarly.
- The Internet tools which did emerge ... were well-suited to a small-world network in which local reputations could be assessed and acted on (loss of campus-based access with administrators overseeing populations of a few dozens to hundreds, rarely more than 1,000, through the early 1990s). Effectiveness at larger scales and in more hostile environments has proved ... problematic.
- A clear statement of the problem(s) posed by present currency and payment systems is still lacking. Statements as do exist tend to be ... weakly grounded in emperical truth, strongly ideological (not necessarily a fault, but often one), and strongly resistant to actual demonstrated superiority after decades of effort.
I am essentially pasting an old comment of mine: The Internet was always something where demand--and desired applications--were vastly over capacity and capability. From the moment computers were networked, more people wanted to do more things over those networks, and both infrastructure and underlying technology had to grow to barely keep up (or, in fact, could not keep up--many long desired applications only became feasible in the 2000s or so). This does not resemble the history of Blockchains.
In the case of the Internet, people were doing either new things, or existing things more efficiently (e.g. sending emails vs. postal mail and fax, or transferring files vs. swapping disk media or printouts). As the Internet progressed, efficiency increased.
In the case of cryptocurrencies, people are doing existing things that can already be done quickly and efficiently vastly less efficiently, in a system that is purposely designed to be less efficient, where efficiency is in fact actively counteracted. Databases and online money transactions were possible before, at a fraction of the total cost inherent to the system and at vastly higher performance.
I can send unlimited amounts of money, anywhere on earth, for (at most) dollars in a few seconds. I don't need to rely on any government for any reason, and no government can stop me.
The Internet provided solutions to technical problems, regardless of any societal/political considerations. They may have resulted, but as a secondary effect.
When theorizing about societal/political benefits, take into account the societal/political problems cryptocurrencies created by inventing a machine that allows converting resources directly into money of miners' digital wallets without regulation.
Your sending any amount of money, actual practicality and realizability aside, comes at the cost of a lottery, where miners perform literally 100.000.000.000.000.000.000 computations per second whose outcome is completely thrown away, unless they are lucky enough to be one of the 6 computations per hour that win. This cannot be made more efficient: If computing one hash costs less energy, the difficulty will be adjusted to require more calculations to keep the target of 6 hashes per hour.
By the decentralized property of cryptocurrencies, it is by design not possible to regulate where the energy for this lottery is coming from.
I agree that proof of work seems to have outlived it’s usefulness as a mean to prevent spam on the ledger.
That being said, I still see proof of stake and proof of coverage as interesting way to maintain said ledger integrity in the like… 3 actually existing use case where a blockchain is superior to a SQLite instance with good security.
You’re talking about Bitcoin when there’s a multitude of other cryptocurrencies that are not trying to be the digital gold but rather a mean of payment.
Proof of Stake coins eliminate the electrical cost of mining yet maintain decentralization. ETH2 is live now but not fully in control of the network https://beaconscan.com/
Many other Proof of Stake blockchains like Cosmos have been live and working fine for years.
I have looked into proof-of-work in meticulous detail, I have not looked into proof-of-stake. If proof-of-stake exists and eschews the problems I have stated, then what I said here about the problems it creates does not apply anymore.
I have many other doubts against the usefulness and sensibility of blockchains in general, e.g. I have doubts how smart contracts actually succeed to reach their goals in a reality where humans make mistakes and courts are used to settle disputes and ambiguities. But these concerns then only affect the viability of technologies that I and others are not forced to participate in.
Proof-of-work on the other hand, as long as it continues to exist, affects everyone in that in incentivizes burning resources directly for money without regulation, no matter how dirty or wasteful.
I do not play videogames, I think all videogames are a waste of time. Not only do they waste enormous amounts of electricity, but they also waste untold hours in fantasy worlds of meaningless nonsense.
That said, I think everyone should be able to buy electricity and spend it on what they want, even dumbfuck videogames that waste their life away. If we play the "your electricity is bad, my electricity is good" game then it leads to the majority restricting the minority.
Instead, we should price electricity based on externalities and let purchasers use it as they want. If electricity is 100% clean and the buyer chooses to mine bitcoin, that's their value decision, just as you playing videogames is your (very stupid) decision, but I support your right to waste electricity on it.
This is obviously not true. You cannot buy, say, 3 million USD of bitcoin to transfer to another person who then cashes it out for 220 million rubles. More than one government will be clued in, many will stop you until you identify yourself, and it certainly won't be at most a few dollars to exchange.
You are 100% incorrect. I worked at Circle which had the second-largest OTC desk while I was there, and $3 million in BTC even back then was trivial. The markets now are ~25x more liquid than they were a few years ago. I don't think you know even the smallest thing about this industry because your comment is so entirely mistaken it reveals you are clueless. Converting from BTC to rubles is a different matter but BTC / fiat trades of major currencies is very easy for USD and I can't imagine rubles are difficult.
Either Circle decided to be legal with KYC after you left or you've forgotten about the part where they ID their customers, for the benefit of the government.
You're not sending money. You're sending tokens. People who say that they are sending money "on the blockchain" are being disingenuous.
You have to account for transaction fees into cryptocurrency, the blockchain transaction fee itself, and the conversion into the target local currency.
You left 2/3rds of that process out, conveniently.
These are 3D virtual world environments and people are using crypto to build an online economy. They are trading property, buying virtual artwork and creating galleries, setting up clubs and meeting spaces, etc.
> These are 3D virtual world environments and people are using (VIRTUAL CURRENCY) to build an online economy. They are trading property, buying virtual artwork and creating galleries, setting up clubs and meeting spaces, etc.
What you're describing here is Roblox (2006), which was launched 2 years before Bitcoin was conceived, and has attained a market cap of >$50 billion without any cryptocurrency nonsense. Or Second Life (2003). Or RuneScape (2001).
Cryptocurrency doesn't enable online trading with virtual currency -- if anything, it's dramatically _more_ difficult to use than either real plastic, or virtual currency sitting in a SQL table.
What it enables is theoretical trust in a shared ledger (handwaving that a Sybil attack isn't attempted by any of the massive mining pools); but this trust is assuming you're a computer scientist capable of auditing the clients and contracts. Yet, even professional programmers have lost hundreds of millions of dollars worth of crypto with programming mistakes and security flaws in their smart contracts and clients! If even professional crypto software developers can't take advantage of cryptocurrency's supposed benefits, how are the players of an online game supposed to?
The answer is of course that they have to relegate trust, in the same way that online shoppers relegate trust to Visa/Mastercard. The important difference being that only Visa/Mastercard guarantee your funds are returned if you're defrauded.
No, I'm not describing Roblox. Roblox is a great game and has many great characteristics, but this is bigger and broader than that.
Sybil attacks would be detected in an open network first of all. If you can pull it off, I invite you to try: there's hundreds of billions of dollars on the table protected by nothing but cryptography and game theory. Knock yourself out. I'm sure all the people in this space are idiots and haven't seen the holes you claim are there.
I'm old enough to remember when using a credit card was a hassle or seen as predatory on consumers and many people either refused to use credit or accept credit in their businesses. For several decades using a credit card wasn't any more convenient than using cash or check even. Over time, the scanners got better and faster, Visa and MasterCard integrated with ATM debit cards, and then mobile phones and swiping plugins enabled it all to get better. Now it's ubiquitous. But that ubiquity will make it all the more easier for merchants to adopt crypto.
It turns out there is already crypto insurance protocols like Nexus Mutual and Cover that will cover you if a loss occurs. Insurance is really just a business problem that is easily fixable.
On the plus side crypto is far more secure than Visa or MasterCard, because it works on public/private key cryptography and you simply sign a transaction rather than enter your name and address and all the same information you'd need to commit a fraudulent credit card transaction.
> Now it's ubiquitous. But that ubiquity will make it all the more easier for merchants to adopt crypto.
The point is that no-one needs to adopt crypto for payments because the existing payment platforms work fine, better than crypto. Making transactions immutable, requiring users to maintain perfect IT security, currencies swinging in value by 20% every time Musk tweets about them, etc, are regressions.
Second Life did this 3D virtual world stuff almost 20 years ago, and even managed to use real money with an exchange rate as well to do exactly the things you're saying are now new with crypto and blockchains.
Also for your other points - the games in this space are universally unfun to play with hardly anyone actually playing them; I can pay normal money to commission artwork; and I can use a zillion platforms that already exist to raise money.
They did, but they were an insular community as a result. NFTs allow for a common open standard to be interoperable between games. That helps create an economy where, for example, you can buy a digital artwork at a Christie's auction and display it in Decentraland and have it be verifiably authentic.
Second Life was awesome! This Metaverse trend is pushing that concept much, much further and it's giving ownership and utility to the makers.
I don't think any of that matters at all to people who enjoy the games or virtual worlds. I understand your point, I just disagree that it will matter in any way.
>you can buy a digital artwork at a Christie's auction and display it in Decentraland and have it be verifiably authentic
I can't imagine anyone would give a shit about someone's virtual art being "authentic" for whatever meaning of authentic NFTs pretend to claim. This is basically receipt porn at this point. Truly we're talking about bragging about wealth, one of the shittiest traits a person can have.
There is no reason whatsoever for Activision to join forces with Epic and let your Call of Duty gun skins cross over to Fortnite. Even if they do, both titans will never in a million years allow an indie shooter to be cross-compatible. It'd be free advertising for the smaller game.
From a competitive standpoint, why would I want Activision's digital locks (you can only import NFT'd content) instead of something like Second Life which is more open?
If Activision really wanted purchases to carry over, they could've made it happen. No NFT needed. An open standard does not imply NFT, and vice versa. The 360 era was probably the peak of the 'gaming interoperability' trend, and it went almost nowhere. Your Xbox gamer picture would show up in some games. Everyone knew it was authentic because MS uses cryptography and doesn't let you sideload third party images. No NFT needed.
Same reason my company doesn't like me displaying awards from my last company. The obstacle is entirely social rather than technical.
And how does it interoperate with the virtual artwork NFT ecosystem that is burgeoning right now? Can I use a song I purchased on Audius to play in my virtual pad on Decentraland while showing off some art work that I purchased on OpenSea?
Ethereum is transitioning to proof of stake which means the nodes will run on raspberry pis. At any rate, if you think data centers are burning the planet, you really should boycott the internet. Its data centers and mainframes all the way down.
If you think these defi projects are hurting the environment then you have not been paying attention to the industry. Proof of Stake, what most smart contract tokens are moving to, is very energy efficient.
Is anyone actually really sure that Proof of Steak is secure though?
Anyway, none of this matters because Bitcoin exists and is the dominant shitcoin (due to first mover advantage). All these other shitcoins can claim whatever efficiency, but it doesn't matter because that's a very isolated view of the problem. The shitcoin economy as a whole will still be fueled by mining unless somehow Bitcoin gets dethroned and the whole mining thing just goes away. I can't imagine that happening without the whole economy crashing completely into the ground – but that would bring all these efficient coins down with it.
Yes, they've been live for years. Bitcoin can't do smart contracts, it's not a Turing complete scripting language and it's very difficult to work with, so of course it matters.
The games may be bad (I don't know) but honestly at least the currency is being used for something. I personally disagree with in app purchases because it leads to game design where the cash shop becomes the solution to all the pre designed problems but criticizing game design isn't the same thing as criticizing cryptocurrencies.
The assets available for those games are ultimately at the mercy of the proprietary Unity client. If the company developing it decides to stop doing so or supporting certain assets, you might find the things you previously had become unusable overnight.
The "early internet" comparison is usually presented when talking about how clumsy and slow the technology is in its current state. The argument is certainly not presented in the context of how "fun" it is. There's nothing "fun" about finance (and there never will be).
In the context of technological state (how brittle and obtuse the tools are), the comparison between the two is right on the money IMHO.
I once configured SOCKS on Windows 3.1 so I could connect to the internet over a 9600-baud modem. In those days, unless you were in Academia, you didn't know anyone with an email address. Early Usenet and IRC had very little to offer someone who wasn't a nerd. FTP? MUD gaming? Come on.
You and I found the early internet interesting precisely because we were nerds to begin with. Don't mistake that sentiment for that of the general public. They mostly found it frustrating and boring.
No, it's not a good comparison. The internet was always state of the art and better at solving actual problems the worse solutions were tackling.
Fidonet was always, on a technical level, a worse experience than the internet.
BBSs have their charm, but were absolutely obviously worse at what they did that the internet.
Cryptocurrencies are just awful at solving real problems, compared to existing solutions.
Why are you talking about the general public? Are you equating "well the internet was only cool to nerds, solving their needs" with "Bitcoin is only good for its MLM speculation properties, and to buy drugs and murders"?
"Unless you were in academia"... So you admit that it WAS useful? And how it WAS much better than what it replaced? Because that's the opposite of Bitcoin.
Yeah! My brother was an expert in 1990 at 6. Me at 6 in 93-94. Except we most certainly weren’t.
You’re giving a completely wrong impression of how the early web was and the early internet. I wasn’t around for that so I won’t personally give my input but for the time, each iteration every few years was great.
If domain knowledge wasn’t needed by the 90s. When was serious domain knowledge needed? When did that stop?
Some people found the internet hard to use and found it required more domain knowledge than they had every single year since the internet snd web have been around. Including in the 2020s.
Comparing cryptocurrencies to the Internet is about comparing its usefulness, not it's understandability. I won't argue that people in general understood the Internet.
Take my example of Fidonet. If you were not a computer expert then you had never heard of Fidonet. BBSs? Maybe you'd heard of it in some news clip about the dangers of computers.
Hell, the only time non-experts even saw anything close to a BBS was probably the movie Wargames.
> You’re giving a completely wrong impression of how the early web was and the early internet.
In what way?
> I wasn’t around for that so I won’t personally give my input
You probably won’t see this any more so I won’t respond to rest unless you respond.
For your last point. Were you around for the development of Arpanet? I don’t think there are many people who were adults in the 69s in the few places arpanet was developed at.
—
So not being around for something doesn’t exclude you from being able to discuss internet related things.
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For understanding internet. I don’t think 99.9% of the population understands the difference between the internet and protocols like the web. Not sure that’s relevant any way tho.
Nerds, early adopters — whatever you want to call them, the online behaviors they pioneered became mainstream.
In contrast not even nerds are actually using Bitcoin or Ethereum for anything that interacts with the real world. All proposed applications are self-referential shell games like NFTs, staking schemes, etc.
If this is a superior platform for finance, where’s the real economic activity? Handwaving about “probably they use it in Venezuela” doesn’t cut it.
To answer your last question first, crypto clearly is a superior platform for finance, exactly because of the explosion in "self-referential shell games" - it's in fact an extreme democratizer of "finance" - anyone can create their own liquidity pools, it's trivial to create not just CDOs, but CDO2s, 3s 4s, and they all run 24/7 forever. (no, this does not have much relevance to "real" economic activity, but this is true of almost all financialization and the more people that people understand that the better, IMO)
They recent launched a governance token and DAO (many other projects have been experimenting with various types of on-chain governance models).
Both of these pursuits are widely applicable for creating sustainable models for funding and managing distributed common good projects.
Brave has over 25M active users and has built a model on their token to pay website users and creators for ads, as well as allow in-browser tipping, etc.
Many DeFi projects are experimenting with various novel forms of tokenomics (hold X tokens to access Y features; yield earned w/ Z tokens accrue to the developers) which are interesting alternatives for creating sustainable development/operational models for software.
There are projects that are doing interesting work bridging digital and physical assets (particularly in harmonizing the legal mechanisms for property) like Mattereum, but I'd argue even the simplest types of digital-only tokenization become interesting when it can be made composable with other dapps (eg, fractional ownership of projects that can later be made liquid on the open market or that can be collateralized). This ties back to the domain of not just coordinating, but incentivizing distributed collaboration/human resources.
Can you explain why I need a crypto(tm) Gitcoin and not just a cyber chuck e cheese token? I give cyber-chuck $1 and he gives me 1 cyber token. I can subdivide it 10,000 times and micro-tip any site I want. Why do I need cryptocurrency?
If your argument is that crypto would decentralize it, and guarantee a cap on coin totals, I don't buy it. That's not the reason a site owner wouldn't join a coin plan. "I would love to get paid, but I hate inflation too much to consider your proposal". Fantasy land.
That's easy and has nothing to do with what you're thinking (although you could hard-code/guarantee emission schedules if you built a smart contract on a decentralized platform) but let's ask, how and where do you redeem your $1 cyber-chuck? Presumably only with the issuer? With a crypto-token, particularly an ERC20 you have the ability to take it to any DEX and use (or create) a liquidity pool that you can then swap for high any number of high-liquidity tokens that you can use or cash out anywhere. (You can also perform price discovery and see if your $1 cyber tokens really are worth $1 on the open market, or utilize your newly acquired cyber-chucks to generate yield by providing liquidity, collateralizing it, etc).
Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO. While it may have a market value (it certainly has some value for those who want to participate), but there is a different purpose to this type of token (the same for utility tokens).
You propose a world where cyberchuck tokens are useless, but cyberchuck crypto tokens are readily traded on the open market. Cashing out requires people to value the token underneath, and that's a function of who governs the token (and what they let you do with it), not crypto vs. not crypto. Although currently "crypto anything" seems to boost the price of your asset, even if it's just Blockchain Iced Tea.
Fraud reduction by looking at the open market ("nobody's selling these $1 tokens for anything above a nickel!") isn't plausible either - you can do the same thing today by looking at YouTuber payout rates. Those aren't public but it would take the collusion of 10,000+ top tier YouTubers, many of whom don't like YouTube very much, to lie. If YouTube were ever threatened by a more open model (ex. on Patreon, you can see actual income for some creators), they might switch to stay competitive.
> utilize your newly acquired cyber-chucks to generate yield by providing liquidity, collateralizing it, etc).
I can do this with USD so we're really talking about that X day period where my tokens haven't become USD yet. Maybe there is or will be a crypto coin or five that do what Bitcoin was supposed to do - low fees, high volume, easier and cheaper than ACH or Paypal. But if those fees are low enough, I don't necessarily need to keep by cyber chucks as cyber chucks. I could convert to USD and then back into cyber chucks, if cyber chucks is the token of choice. But I think it's far more likely that out of the hundreds-thousands of current coins, the one you pick is going to be a loser in terms of long term utility. Safer to convert to USD and then into whatever today's hot coin is.
Even today, some stock options have surprisingly little price discovery (low volume, big difference between bid and ask price). And those are real, regulated financial instruments with a direct objective relationship to present and future value. I think they can be traded across the whole market too (buy at broker A, sell to someone at broker B). I don't get how, outside of speculation, Company X's coin is going to be worth more than that. Nor will it have better price discovery - there are multiple billion dollar companies who trade stocks and options.
In current "company scrip" modes (ex. casino chips) people generally don't hold onto the not-cash. They exchange it for USD within days. If MGM decides to screw over their customers and cut the conversion rate by 10x, (1) that might be illegal, (2) the % of total customers in history that will be affected are small.
We're also generally proposing micro- or mini-payments - if it's high dollar like a salary, you'll just get USD from working at a company. How many people would take a job at 1-to-1 equivalence in a crypto token instead of a USD salary? Today, I can buy stock in my company using the USD they give me. It's much safer to me because I can choose how much to put in. If I got paid in CompanyCoin that would be a return to the company scrip days. I'd be tied up in risk for minimal gain. If the coin is stable it doesn't matter if I can only invest my USDs every payday.
I admit I don't know much about ERC20 specifically. I still don't see why you can't make a useless token on ERC20. Analogous to making an app that works with all bank accounts that nobody wants to use.
> Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO.
People talk about using crypto for democratic community governance. I said this in another comment chain:
> You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin.
Open source is generally driven by a small core of contributors. I don't see crypto voting being anything but a rubber stamp on the current pool of high activity users. I don't hate the idea here but I also don't see much point.
> why wouldn't you do it on a (performant) blockchain
I don't see value here over JP Morgan Chase operating the market as a neutral third party. Maybe Chase won't really be neutral because they want to steer you to USD and not tokens. But there's gotta be some neutral party that can govern it, something like Coinbase.
Boring old databases and the tech of 10-30 years ago are more efficient than blockchain in all cases, afaik. No matter how efficient, the design of blockchain requires distributed workers verifying each other's transactions. On Chase's server farm, server A can trust server B. All I need is a ledger of how many tokens I have, and a way to convert to USD, the tether of the real world. I can use USD to get into Ether and those 1000 tokens any time I want.
> a 1000 such tokens can interact.
It's basically an API / standard for tokens right? Today I can make an app that uses the IMDB api, but if nobody cares, the app is useless. You can make an app that uses the latest hot tech (raytracing in GPUs) but if nobody likes what you made, it's useless. Same with ERC20, if I understand correctly. I can stand outside Chuck E Cheese and try to make a secondary market in tokens. Nothing illegal about that. Tokens are traded using the hand-to-hand protocol. Yet the number of such businesses is close to zero.
Gift cards for places like Walmart and Amazon are nearly as good as cash on eBay. Nobody buying them is worried about those companies issuing too many cards and crashing the currency.
A bank operating the platform is a good example. It is certainly possible, and people can and have taken the Ethereum Virtual Machine and ran it as a permissioned network. To the extend that we can trust Chase to do it, that would work fine.
But to that I would say that the banks haven't built it, and I don't see it happening or gaining adoption. Whatever they build will by definition not be an open network, and will likely not cross too many geographic borders.
It is sort of inconceivable that some 16 year olds would be allowed to run a lending protocol on the Chase blockchain, or even a random adult, for that matter. Plenty of people would find that positive, no doubt, but it is even hard to imagine a platform being built where companies in say India could get access to on the same terms as those in the US.
Ultimately, the permission-less nature of Ethereum is what has built the DeFi infrastructure we have today, which for all its flaws, is pretty impressive.
1) You just flatly contradicted yourself without even realizing it. The top level comment said "The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access.". When challenged, you moved the bar to "Well, it eventually became useful to everyone!".
2) You're condescending "I can see how people in their twenties would fall for this...", "Handwaving", "Shell games".
3) You've got some internal benchmark about what qualifies as useful that appears to mean "if it's not useful to me, then it doesn't count" (see comment about Venezuela).
4) You seem to think of yourself as some kind of gatekeeper or authority on nerddom.
I'm not going to change your mind about anything. I've been around the internet long enough to spot people pretending to want genuine engagement when they really despise your ideas and just want to publicly slam dunk on you.
I don’t know what you mean by point 1. The qualifier I used was “everyone who got access”, and I stand by that.
Initially only nerds had access and they couldn’t get enough. When access expanded to the general public, they couldn’t get enough either.
“You’ve Got Mail” is a 1998 movie starring Tom Hanks and Meg Ryan. The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
> The qualifier I used was “everyone who got access”, and I stand by that. Initially only nerds had access and they couldn’t get enough. When access expanded to the general public, they couldn’t get enough either.
My whole family had access. And the families of all my friends. They hated it. It was boring and complex. If you mean "everyone who sought access" then it's a self-fulfilling prophecy isn't it? You're either misremembering or engaging in disingenuous word play.
>The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
So 16 years is the benchmark? Seems arbitrary (because it is). Bitcoin is 12 years old. When the Internet was about 12, what did Newsweek say?
>If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
The discussion wasn't whether Crypto is a more important technology than the internet. It was about how clunky and shitty it was at the beginning. Nothing more. Stop trying to "slam dunk" on people.
There does not appear to be a point in engaging with you. You’re trying to trip up people on technicalities and anal specifics of amt of years as equivalencies for the 2010s and the 80s and 90s.
AOL was a bonanza. I didn’t use it but that started getting big enough in the mid 90s. I got on the internet as a kid barely in school in 93-94. It was vast to me. To my older brother, etc.
—
Your attitude and anger appears to be doing exactly what you’re claiming others are doing. Liken slam dunking on people.
Your experience does count. Your anger and seeming intent on winning the arguments no matter what could be tainting or tilting your positioning of your experiences as worse than they were.
You can go a bit later and talk Windows 95 time. The internet was a live enough by the mid 90s. If that’s not early enough then the argument is just silly.
If you date the Internet from development of ARPANET in 1969, it really wasn't useful for 13 years after its development. For one, the general public couldn't get on it. Two, the early Internet basically consisted of running a packet-switched network on top of the existing circuit-switched phone network, at drastically reduced efficiency. That was the only other network that existed, after all. Three, DNS didn't exist until 1983, 14 years after ARPANET and 10 years after TCP/IP. Four, the protocols you mention also didn't exist until the 1980s, ~15 years after the technology was developed.
I too got on the Internet in the early 1990s with e-mail, FTP, Usenet, and MUDs. I'm not actually an early Internet user. That'd be folks like my friend's dad, who worked at BBN in the 1970s, or the folks at Symbolics, who registered the first domain name in 1985.
Same with LAN parties. I was thrilled to buy my first network card, and a tee connector.
Even the fact that the first half of the day was mostly wasted with trying to get IPX and NetBEUI to work and TCP and UDP, and promising each other that we would not change anything until the next LAN party, and of course next time nothing worked either at first try. But it was fun nonetheless.
(The second half of the first day was obviously swapping all those music and video files)
The joy of discovering hours later why not everybody could "see" everybody on the network: ipx frame type, and different default values, 802.2, 802.3, pick one.
You couldn't Google that. Because there was no Google, and you were stuck in a basement.
What are your arguments though? I see no clear argument in this thread besides “bitcoin is bad” which makes it look like most people here haven’t investigated past bitcoin.
That, literally all by itself, would be enough for me to think building the internet was worth it.
You kids have no idea how much fun it was to go downtown to a travel agent just to find out how much it would cost to fly home from college for Christmas.
("You kids" should realize that most of the stuff done on the web today was done by mail or phone during most of the XX century, especially in a country as spread out as the US. Ring up the merchant with the order, sing out the credit card, done, was the MO from the 70s to the late 90s.)
I mean, yes. You’d need to go get the paper tickets.
Obviously there were variations on how people would do things and mail order existed but I’m speaking literally, that’s how we used to do it and when the internet came along it got way way better.
I was instantly hooked on Usenet when I got access in 1982. It was sometimes useful and always interesting. I had to be careful to limit my time reading it so I could get my work done.
It felt futuristic, here to stay.
Bitcoin feels like a great experiment and proof of concept. And someday a useful cryptocurrency may arise from the lessons learnt. But it won't be Bitcoin.
The comparison to Scientology seems apt in one sense. The CoS is known for silencing any unscripted commentary on the CoS that CoS does not control. They keep very aggressive legal counsel on retainer specifically for this purpose. Similarly, "crypto" seems to have a team of advocates present 24/7 online who actively try to suppress or counter any negative discussion of "crypto". It is like a Yahoo chat room devotd to the stock of some company. The company has a compelling interest to squelch that chat room.
People donate to CoS as well as "invest" in crypto; this practice has tangible benefit to the recpients of the funds. These beneficiaries do not want the benefit to end. They wnat it to grow. The suppression of "negative" commentary about crypto online is frightening to watch because it honestly seems to work. It is some sort of community-based censorship.
selection bias is so strong, that even if I walked you through exceptions to the things you don't like, you'd still fixate on those undesirable things, as if to say that the good-faith actors should stop acting in good faith and spend their time wagging their fingers at the things you don't like.
But complaining about something without taking the underlying behaviors in good faith and synthesizing alternatives doesn't really offer much for the people who are looking for the good things. That's why you won't get many good faith actors interacting with this, because it's better for them (and implicitly, the negation of your premise that it's all scams) for them to negate your arg by building more and more new things with crypto.
I see you haven't gone down the decentralized finance rabbit hole yet. It's the most fun I've had learning and playing around with in a decade. It's a lot like early web dev but with money.
Well, it's not like the governments have allowed crypto to work. Telegram's plans were forcibly halted, technically superior coins like Monero are banned from exchanges, and the elites (who ultimately benefit from the hegemony of the current fictional currencies) are continuously propagandizing against proof of work. Give it space first, then complain why it doesn't work.
I mean it took a decade for that internet you are describing to form in the 90s from its inception in the 80s. Even then, only a small fraction of people were participating.
BC has value because it a limited supply of a unique item that can be mathematically verified, even if it never solves all problems its advocates claim to want to solve in the world.
It might not have value to you personally, but it currently does to some people. Just like you might not value Micheal Jordan's rookie card, it is after all a supposedly limited supply piece of printed thin cardboard, there are plenty of people that do.
Let's pretend crypto currency tech didn't exist. Your local gov't wants to develop a digital currency that is verifiable, devoid of simple fraud and counterfeit, and is completely traceable by the general public.
All the smart people in the country would get to together and would come up with system that would end up looking a lot like block chain. The gov't would control all the nodes of course. They would contract out server maintenance (mining), charge fees on transactions (sales tax) and banks would hold your digital currency and give you interest (staking). Instead of stocks, companies would probably just issue, I dunno, something uniquely tied to them that equates to value, like a ... token?
It's not much different from what we do now, it just doesn't involve a bunch of baggage paper money has been carrying around for hundreds of years.
I definitely agree with the thrust of your point, but there was actually a period of time where none of the fun stuff you listed existed. Email and ftp had to be invented and implemented awhile after the internet was created. There was a period where there was nothing to do on the internet, it just predates most of us. But it was definitely a much shorter period and the killer apps were way more obvious even before they were created. It's still not clear, after all this time, what the killer apps even might be for crypto; it definitely isn't all the echo chamber speculation stuff that is all you can do now ("lend your crypto to other crypto speculators who can't do anything with it besides lending it to yet other speculators!").
Personally, I would like to be able to (legally!) program against my money and do stuff with it without being beholden to big banks. I think it would be cool if I could automatically send 1% or whatever of all my transactions to a charity of my choice, or if I could do my own "micro-finance" lending to farmers in developing countries, or other things like that which currently require a bank to implement it and me to use whatever they implement. But it is far from clear whether all this cryptocurrency and DeFi stuff is either necessary or sufficient to do any of this kind of stuff.
> The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access.
That's quite an absurd statement to make. I can easily find people right now that find no interest in the current internet, it's literally impossible that in the past it would have been different with way less interesting things to do on it..
There's a huge bias in what you state. I have no doubt that plenty of people who got access at the time found it interesting, but the thing you ignore is that theses are the one that found it interesting that got access in the first place.
Like sure email are incredibly useful, but to send to who? It's is right now that I can send them to 2 billions users, but in 1996, that was 16 millions... kind of much less useful, the chances are most people you knew, didn't knew anyone that was on it at the time... thus literally useless. FTP are nice, but plenty didn't used computers at all, sharing files meant nothing. I know so many right now that have trouble sharing files, yet FTP still exist... no chance they would have shared any in the past.
You are now on that team, the ones that don't have any use for it right now. It's fine that you don't find it interesting, but please don't be that old grandpa that scream "get out of my lawn" please...
> The early Internet was infinite times more fun.
Curiously, I've seen tons of people having fun with cryptocurrencies, in different ways, you are just not part of it...
They suppose both parties have equal power (money, ability to analyze the smart contract). I doubt most contract negotiations are like that. Signing a smart contract with Google, written by Google engineers, is like signing your own death warrant. You'd have to hire your own E&Y consultants to verify the contract doesn't screw you, and then we're back to the problems of regular contracts.
Perhaps useful in 1% of contracts, useless otherwise.
can you give some examples of them being legitimately useful and advantageous compared to the existing financial infrastructure?
haven’t seen anything where it’s actually needed or better. and basically all examples end up with some sort of trust needed at some point.
such as gambling on the outcome of a sports game. it would still require a dependency on some sort of Api to provide the sports results and then you’re trusting the api to give uncorrupted correct results… which defeats the purpose of “trustless”
You are thinking way too extreme. An API is still a hell of a lot better than a sketchy bookie. I would trust the former and not the latter. Which helps break up the centralization of betting because it is much easier to establish trust in a 3rd party source of truth than it is to establish trust in someone being financially responsible / honorable.
Will it improve the established market providers for sports betting? No. But that's the point. It enables people to make a small business betting shop
Decentralized insurance pools allow anyone in the world to tap into that liquidity. Allowing farmers and businesses in developing countries to get stability they've never been able to buy before.
Futures contracts so they can easily sell their products at a good price regardless of market fluctuations, transfers the risk to the investors.
Smart contracts are still in super early days, the first foundational building blocks are being laid. Soon many more things will be possible.
Then you haven't looked deep enough or maybe the subject matter doesn't interest you. Don't extrapolate your experience to everyone else. I find the DeFi space and the scaling issues and layer 2 projects being built pretty interesting. Web3 and the protocols being built around that are also worth a look. Sure, there are a lot of scams and vaporware, but that's also true of the early and today's internet.
Pauli, what are you talking about? Bitcoin, Ethereum or Cryptokitties?
What group are you talking about when you accuse them of "Scientology-like groupthink"? What comparisons can you draw? I think it's important you back up and explain what you're saying.
It's funny that these dismissive, trash-talk comments with zero value get upvoted on HN as long as it's against crypto. It really is a double-standard here. Ironically, that comment is also part of the groupthink.
I think the issue is that mostly these smart contracts and efficient coins are not the main attraction.
The main attraction is Bitcoin and recently Dogecoin. BTC is slow and costly and mostly a speculative play. Dogecoin is a joke, but also worth billions.
Also these coins are speculatively often first, and useful second. Not all but many. Thus instead of being useful for exchange, they become methods of speculation.
It is also used for fraud a lot -- both various types of pump-and-dumb, Ponzi and money laundering.
And on top of all that it is usually inefficient.
So what we need are digital currencies that are fast, stable, and that can implement smart contracts (but these tend to be buggy as hell with no roll back.)
But that isn't what cryptocurrency is all about these days. It has been overtaken with speculation.
If we could get the benefits I outlined, that would be amazing, but it seems that very few are actually interested in that.
"Smart contracts" (public finance bots) are basically Ponzi-as-a-Service. Someone launched an explicit "PonziCoin" on ETH even.
"It's just overtaken" is not a great take. The problems are way more fundamental – the whole concept of trustless irreversible digital cash just does not work in the real world for normal transactions.
its not about interesting but about adoption. Crypto is interesting to anyone who spend time getting into it. Not for the same reasons and that is why the adoption looks different, but its there and that is really what matters.
Smart contract platforms are only four years old. Only in the last 12 months have we seen significant throughput on public chains like Solana and Avalanche.
> A lot of intelligent observers look at cryptocurrency, see that it makes no sense, and reasonably infer that they must be missing something profound on the technical level. Tech culture has a nice tradition of not deriding new ideas, but we need to break it here and speak out
> [non-tech people] don't see the huge silent majority of tech people who know it's a scam. That's on us
It is on us. I never realized this before today. I'm pretty sure it's nothing but a pyramid scheme, but I always gave the enthusiasts the benefit of the doubt. After all, Elon is so cute when he's enthusiastic! But yeah he probably knows it's a scam too, what was I thinking.
> I'm pretty sure it's nothing but a pyramid scheme, but I always gave the enthusiasts the benefit of the doubt.
So go find out? I’m quoting you here for the “pretty sure” part. Do a deep dive. I’be done deep dives on Bitcoin, Ethereum, Cardano, Monero, Nano, Iota, Hyperledger, BSC, Uniswap, Tether, Chainlink and cursory glances at dozens of other coins/tokens.
I’m a tech guy. I work on an operating system/embedded systems. Nothing about blockchains, DLTs, crypto, at its core is a scam to me. The author saying the “silent majority tech people” know its a scam is such nonsense to my experience. Every tech person I know thinks either A) its neat/super cool, or B) they don’t know anything about it besides memes.
Sure there are tons of misinformation, scams, and bullshit going on. That’s everywhere and is not special to crypto.
Why can't the tech be neat/super cool and primarily be used to run a scam?
I mean bittorrent is neat tech as well but it's still primarily used for piracy. Doing a deep dive into how bittorrent works doesn't suddenly change the fact that 99.9% of torrents out there are violating somebody's intellectual property.
All I'm saying is, there's lots of super neat tech out there that's primarily used for not-so-super-neat stuff.
(sidenote, I actually think piracy is pretty neat, but it was too good an analogy to pass up)
Are there numbers on what the primary uses of cryptocurrency are? I would guess remittances, purchasing illegal things, purchasing legal things, and ransomware - but I'm not sure in what order.
I think the interesting use is more in the blockchain than the currency. Public, verifiable, tied to an identity, decentralized statements that can be used as public records or provide an audit trail. Cryptographically & blockchain secured bodycams is an example that I've been looking into recently
The problem is that the distributed consensus in a blockchain is only possible if that blockchain is also used as a currency. If you remove the currency aspect, it's no better than a Git repository, which also has a merkle tree ( but no way to say which repo is the canonical one).
I am not sure remittance counts as a "use", especially if it is only useful for remitting money because it is also actually "used" for settling ransomware payouts or buying cocaine.
Yes, though (to their benefit) traditional currencies don't work as well for ransomware. Possibly the same for illegal purchases.
Remittances seems like one of the true benefits of cryptocurrency... but that's why I'd like to know what amount of usage is actually that and what is, let's say non-beneficial.
I have a lot of digital artist friends who used to rely on live performances and installations for their money, now they're seriously killing it selling NFTs
Some of them opt out of more environmentally unfriendly stuff like Ethereum for sure
Personally I've developed systems for paying for everyday things like your bus fare or phone bill using crypto in a country where there's a hell of a lot less confidence in fiat (Brazil) -- hell check out the history of the Brazilian Real if you want an idea of what real candycorn money looks like
Personally I just feel a hell of a lot of privileged bullshit out of people arguing that crypto is some good for nothing shit. Yeah sure great try living in a country where your government is fucked. We truly don't live in some francis fukuyama neoliberal fantasy world where we can trust stuff like traditional financial markets which have gone and failed us in the non english speaking world time and time again. I welcome any and all alternatives
Wow, you can actually pay your bus fare and phone bills in Brazil with crypto? That sounds either very impressive or totally unbelievable.
I could not find anything on Google, so if someone could you link/cite to some actually used examples (I guess apps or utility website?) that would be very helpful. Sincere thanks.
As with anything cryptocurrency related, it's safe to assume that the justification is contrived and the actual use case is niche, at best.
My experience as a Brazilian is that I've never seen anyone using cryptocurrencies in real life. On the other hand, the government's new instant payments system (Pix), allows anyone with a mobile phone to easily make small payments. In less than one year since launch it's already ubiquitous.
yeah i mean not like a condescending tone is going to covince me to try and convince you to give away PII on this one i mean this account is linked to my name you can do your thing
Because email has no value except as a means of communication. Bitcoin and other cryptocurrencies are massive speculation scams. It's popular because everyone wants to hold one in the hopes it goes up in value. There's no reason for it to go up in value except that other people think it will go up in value and want to buy one too.
You're buying a number on a blockchain somewhere in the hope someone else will want it for more money, that's it.
there is no such thing. Too big to fail is another coded way to describe political allies and backers who get influence in the government through their contributions. The size of the problem isn't the issue, it's who has the problem that is.
it depends on how you count. if you measure "primary use of email" by number of emails, then yes spam wins out, but that's only because a tiny fraction of human users are sending out tens of millions of spams. if you measure "primary use of email" in terms of users, the vast majority of people who use email use it for useful, non spammy purposes. The same can't necessarily be said for cryptocurrencies, as far as trying to prove that cryptocurency has a large userbase that is not there just for speculation/inflation and/or illicit use cases.
Considering that almost all legitimate users have been priced out of the market due to ever-increasing transaction fees and increasingly draconian regulations (often stricter than for non-cryptocurrency) and the resulting interoperability issues...
Yeah, I think it's safe to say that the primary use of cryptocurrency nowadays is as either casino chips or a money laundering mechanism. The economics no longer make any sense for anyone else.
> Manufacturing, Music, Politics and now The final big boss, money.
Isn't that a "they laughed at Galileo" argument?
They thought the Internet was snake oil. They thought Napster was snake oil. They thought BitTorrent was snake oil. ... but they also thought Pixelon was snake oil.
I wouldn't agree that piracy is the same thing as a scam, so the analogy doesn't really works. When people download a bittorrent client, most of the time they know exactly what they're doing and that's what they're going to get. No scam here. The thing is that bittorrent moves information, and crypto moves money, and there's a bigger chance of things being a scam when it's about money. Maybe something like religions and sects would be a good analogy? Religions will bring you lots of information you may not care about, and sects will try to scam you of your money. But some religions have mandatory donations so the analogy isn't perfect.
I like your analogy. I'll add another. VHS. The early adopter to VHS tapes was the porn industry. No longer did people have to watch porn in a seedy movie theater, they could do it privately at home.
So, yeh, early adopters may often be driven by the seedy side of culture.
That's actually the best analogy I've heard, and I'm a crypto believer!!!
But it doesn't negate the value of the technology. Yes, piracy is neat and useful, but illegal. But was the benefit of piracy that you got free stuff? Or was it that it was an easier system than any other at the time?
> The author saying the “silent majority tech people” know its a scam is such nonsense to my experience. Every tech person I know thinks either A) its neat/super cool, or B) they don’t know anything about it besides memes.
Counterpoint: most "tech people" I know — including people who have worked in crypto — both know about it and also think it's a scam.
Well, I work in the field and I think there’s both. Scams and real technology advances that would blow anybody’s mind if they would spend a bit of time to look into it. I promise there is more than Bitcoin and dogecoin.
I think you’re being too literal. There are lots of tech people who quietly feel this way — just look at the comments here. The point is that they shouldn’t be so quiet about it.
If someone only knows crypto from stories in mainstream press or cable news, they’d probably incorrectly assume “tech people” are almost universally for it.
> Nothing about blockchains, DLTs, crypto, at its core is a scam to me.
I think everyone is talking past each other, because no one's exactly defining what the "scam" is, so you're talking about different things.
I don't think anyone's suggesting that, say, deep in the BitCoin code there is some algorithm giving Satoshi Nakamoto a dollar for evert transaction.
On the other hand, I believe that the vast majority of buyers are buying simply because they hope that someone else will buy at a higher price tomorrow, or next year.
This causes everyone to cheer-lead about how everyone else needs to buy or HODL, because they simply want to drive the price up.
For me, personally, I'd say this is what I'd call a "scam," in the sense that a MLM company is a "scam": that the motivation of the majority of people extolling the virtues of buying crypto tends to be simply personal enrichment.
Yeah. And I think some people see that and think, “okay I can get in on that too!” while others think, “this whole thing smells and can’t be sustainable.”
I fall into the latter camp. I don’t begrudge the former. I just don’t think it’ll last and have little taste for speculating.
The bit that is a scam is a social phenomenon, not a technical phenomenon. It's tulips, Beanie Babies, housing market bubbles; not technical. Assets rising in price are chased by people who want to surf the rise.
What is interesting about distributed ledger consensus via proof of work only remains interesting when there's a disconnect between the economy and good government. If your government is corrupt, or your economy is corrupt, you want the two to be disconnected. The problem is that the latter - corrupt economies - dominate over the former.
If you have a functioning government, you can use the legal system to enforce contracts, and then ledgers don't need to use proof of work. If you don't have a functioning government, or you can't let the legal system look at your contracts, then blockchain starts to look interesting.
Stablecoins like USDC, if everything around it is legit, can be viewed as a programmable dollar... circumventing everything and anything bank-related to do the same work. That's pretty legit IMO.
That’s a big if. People are offering 10+% interest for USDC, but not for USD. This implies massive risk, as those interest rates are much higher than junk bonds.
Ha ha ha. That would only be possible with a government issued digital currency. Any private company running a "stablecoin" is guaranteed fraudulent. Can't be legit.
I notice that you say "can be viewed as" not "are used for"... USDC is just used as a lubricant for crypto speculation. Payment or remittance providers don't use USDC because it isn't actually better. Sure, now you have a programmable dollar; why isn't anyone programming anything good with it?
You're not very good at experimenting then. I first bought BTC in 2013 because of a legitimate purpose: to pay for online goods (legal software) to a seller who wanted to completely eliminate any risk of chargebacks.
Completely eliminating any risk of chargebacks mostly shifts risk back onto the customer; I don't think it's a net benefit. Some businesses seem to intrinsically have sky-high chargeback rates but I'd prefer that those businesses simply not exist rather than put up with the existence of crypto.
I once bought donuts from a food truck with BTC and the donuts were good but the payment process was really slow.
I own a small online business selling custom-configured RPIs and chargebacks are terrible. Businesses build reputations but expect their customers to be anonymous every time. It would be far better if chargebacks were eliminated and customers could review the merchants to reduce fraud. Putting all the risk on the merchants is backwards.
The merchant is the one who has more capital and more information about the product he's selling. I think it's fair that the merchant bears most of the risk.
Credit Card/Chargebacks are not a silver bullet. Countries like India have alternative payment methods without chargebacks and some
Merchants insist on them.
Surely you recognize that this is a bad faith argument? The average transaction fee today is around $8 USD. That's a small price to pay for knowing that a transaction is set in stone.
Blockchain as a technology is definitely innovative. The problem is that, in practice, the way that it solves certain problems come with tradeoffs. This isn't a technical problem per-se, just that it doesn't (IMHO) solve any real problems better (given the tradeoffs) than other, more "traditional" solutions. That's not to say that you can't make money with blockchain tech (just like you can make money playing blackjack).
Please don't cherry pick the worst example and apply it for the whole population.
Tether is one stablecoin, and arguably the worst example since it is literally the one coin every coiner will agree with you is a bad stablecoin. Do a deep dive on MakerDAO's DAI instead.
It's not that the tech itself is a scam per se (although there are plenty of cryptocurrencies that were started with the express purpose of being a ponzi scheme or a pre-mined vehicle for a pump and dump).
It's just that widely available, totally unregulated financial instruments will always be primarily used to run ponzi schemes, pump and dumps and meaningless speculation (meaningless in that speculators are largely just speculating based on what other speculators might do).
This, this is a scam: https://fred.stlouisfed.org/series/M1SL Notice the 5x supply increase without a corresponding 5x in economic efficiency. Bitcoin is what it is. It's worth what people think it's worth. Just like gold. Gold has minimal practical use in real life but it was used as a type of money off and on for 5000 years.
I think they're referring to the ratio of household wealth to total value of the fed balance sheet. Which is a number easy to calculate and his claim is factually true (mostly because the fed balance sheet has never been bigger).
But while his claim is true, in a Boolean sense, I don't know what exactly we're supposed to conclude about the world based on it. This isn't a ratio I've ever seen talked about before.
I'm guessing they're insinuating that the size of the feds balance sheet is somehow related to inflation, which it is only in a fairly loose sense.
"A lot of observers", "Many people say", "Everyone says". Let's stop using weasel words, if you consider yourself a techie, come up with some real evidence-based arguments.
First it was a payment method, now the fees are too high. Then it was a store of value, but it is too volatile for people who want a safe storage. It's also not private, as appare tly payments can be traced back to their user.
So, what's left? I know you can still make money with it if you joined earlier and you're lucky. Same with a MLM, but at least those don't waste so much energy nor ruin the GPU markets.
- Instant loans without paperwork or credit agencies, algorithmically collateralized
- Micropayments to websites you visit rather than ads
- Electronic payments that can remain private if participants are smart. Much better privacy protections than electronic payment options like Visa/Paypal.
- Truly democratic governance protocols in which important decisions can be voted on in real-time by participants with skin in the game.
- The ability for a code itself, not associated with a human, to earn and hold money.
- Algorithmically enforced contracts that are more resilient to bribes and other forms of subversion compared to traditional court systems.
It's the transaction fees that get distributed to all the other coin holders that makes it a pyramid or MLM scheme.
In the case of Bitcoin, originally, every Bitcoin holder would also be able to mine with their own computer and receive transaction fees. This has since changed, so now it's only the miners with specific equipment that benefit from the transaction fees.
The fees collected for transactions is 0.15 BTC and the mining reward is 6.25 BTC. Mining rewards will continue declining and some day the only value of mining will be those fees, but until now they have been largely irrelevant to the point that some miners just mined empty block because it was simpler from a technical standpoint, and it was becoming a problem because it just generated congestion in the network: https://bitcoinmagazine.com/business/why-do-some-bitcoin-min...
So you may think it's a scam for other reasons, but your point about mining fees being the driving of the pyramid, ponzi or whatever, is completely wrong.
Beyond answering questions from friends and family & reading r/Buttcoin for entertainment, I just don't want to spend time debating the issue with the occasional enthusiast.
You're actually almost right. While Bitcoin was launched with lofty goals, it was pretty quickly overtaken by capitalist vultures who saw a low-regulation industry to extract money from people.
Importantly though, it's not an either/or. Capitalism is problematic and cryptocurrency is problematic. Both can be true at the same time.
Bitcoin inventors were anarcho-capitalists, an ideology that promotes an extreme version of capitalism where there are no governments and corporations have unlimited power.
But Bitcoin investors are mostly indifferent to the goals or mechanisms behind Bitcoin and merely hope to sell a coin to someone else for more than they paid for it.
It’s both. It’s not a scam in a sense that it is a store of value(digital property) to a small degree. But a scam in a sense that it can’t power every day transactions or day to day needs etc
This huge silent majority that know it is a scam doesn't exist.
Crypto is so large, complex and fast-moving that it takes thousands of hours to grasp.
If I'd make a list of 100 questions regarding crypto, an exam so to speak, I am reasonably sure that this silent majority can't even answer 5% of the questions.
Count me as one of the people in the silent majority. (Well, not exactly "silent" because I'm talking about it now in Hacker News, but the things I write don't usually reach the general public.)
You're right that cryptocurrency enthusiasts are always generating new work and coming up with new ideas. Actually, they do this a lot more easily than other domains, because the fact that their entire field is a scam means there are a lot fewer of those pesky roadblocks like "the idea not actually accomplishing the thing you think it does" to contend with.
The fact is that nearly all cryptocurrency projects rest on one of a few obviously-false premises. Like "systems that require every participant to store the entire history of transactions forever scale well", or "people in the real world want every transaction they make to be completely irreversible", or "digital legers are guaranteed to accurately track the state of real-world objects". If you dismiss these, you can dismiss all the projects that depend on them without needing to know the difference between a MerkleCat and a SatoshKitty.
The hard part is not the data structure behind it (Merkle tree) but the economics. An entirely new branch of economics has spun of it and it's far from trivial.
I can understand mapping out a new branch of a field is nontrivial. But I’d also hope that domain experts could explain it well enough to bring others to a basic level of understanding without saying, “it’s too hard.”
Reductionism can be applied to anything. I am confident that very few understand it just fine. Because it cannot be understood without taking a very serious deep dive.
It really doesn't. But that is a convenient way to dismiss criticism from everyone who isn't a crypto insider (which is a self-fulfilling prophecy -- the people who spend that much time on it will necessarily be bought into it, the people who are critical will have given up caring about it at some point so will never have the necessary "credentials" to talk about it).
There are non-technical heuristics that we can all employ, through our knowledge of history and sociology, that allow us to identify late stage bubbles (and the pyramids and ponzis that accompany them).
I don’t have a taxi driver but I do have taxi driver equivalents in my life that are currently giving me all the signals I need.
> If I'd make a list of 100 questions regarding crypto, an exam so to speak, I am reasonably sure that this silent majority can't even answer 5% of the questions.
I'd reckon that the average HN cryptocurrency skeptic would do better than the average person who's actually invested in crypto.
Reading the comments here, most of the criticism seems to imply that the technology has stopped at Bitcoin and that no other breakthrough has come after. “It consumes too much energy”, “it’s too slow”, “it takes too much space”, “the fees are too high”.
Answer to question two is yes for Bitcoin and all blockchain like that. There are some new ones like Mina who propose a different system in which you only need to verify the last hash.
Answer to question three is not restricted to Bitcoin. There are many other systems, e.g. Proof of stake (POS).
You got them all wrong. I wasn’t talking about bitcoin specifically but about cryptocurrencies in general. If you’re interested in learning I can help but not with that attitude.
It definitely exists. I'm part of it. I understand the technology perfectly well even if I'd fail on your list of 100 gotcha questions about irrelevant details.
I have several friends that worked in the industry professionally, for one of the few exchanges that takes KYC and such seriously.
None of them continue to work in that industry. One of them found it to be a net negative on their resume. None of them hold cryptocurrency.
There are many of us that are in fact informed, and have come to the same conclusion: this is internet tulips, and the music is going to stop some day.
If I made a list of 100 questions regarding Sciento-vibro-homeopathology, an exam so to speak, I am reasonably sure that this silent majority who think it's nonsense I just made up on the spot, won't even be able to answer 5% of the questions.
Because they don't know Sciento-resonant-homepathics. At all.
Twitter crypto-haters essentially act as the "anti" to the crypto-bro "pro".
Both repeat the same memes to each other in a self-reenforcing echo chamber. The underlying link is to political consensus. Leftist-socialist Twitter is eager to say that socialism is good because Bitcoin is bad. Trumpist-conservativist Twitter loves to say that Bitcoin is good because Joe Biden is bad. Nihilistic crypto permabulls are so hyped up that they jump into every thread to defend their favorites and their negativity is usually limited to the dismissive "sorry you want to be poor".
It never really goes anywhere. Someone comes up with a new crypto narrative - adoption, value, environmental impacts, human interest - and it's all you hear about for the next month. If you try to find good information you are presented with an opaque wall of obvious scams, not as obvious scams, and people who believe or do not believe in them.
There is interesting stuff going on, but the people studying it carefully are so hard to find through all the noise now.
Yet one would hope that if the discussion is on HN, then we'd rise above flamewars, and talk specifics, specific limitations, specific advantages, etc.
> Crypto is so large, complex and fast-moving that it takes thousands of hours to grasp.
The thing is, regular money is, from a certain perspective, also a "scam". A lot of the financial system is effectively make-believe, with massive conflicts of interest at every corner and dynamics that keep working because everyone believes they should - until, for one reason or another, they stop believing, and then you have 2008.
Crypto is just another big mountain of make-believe systems (and getting bigger with every new contraption), but it is so young that the games of pretend are still very visible; and the key actors in crypto are different from the key actors in regular finance, which means it gets a bad rap from the latter. But if it can survive long enough (say, 30 or 40 years), people will just stop pointing out the "scam" and will go along with it, because "why not? If it works, it works".
Fiat money has value because it is widely, almost universally, accepted in exchange for things of intrinsic value (food, shelter, toys, tools).
I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity. And in fact all of the fiat currencies I know of originated as representative money.
Bitcoin is not widely accepted in exchange for things of values, and I see no reason to believe that will ever change. Being able to spend it is the "killer app" of cryptocurrencies, and none of them have actually implemented it, despite many, many attempts.
Fiat money is legal tender, so "acceptance" suggests a choice that isn't there. Regardless, enforced or not, wide acceptance is of course no lie for hard fiat currencies. Fine.
Bitcoin in its current form should not be seen as a payment currency, instead as digital gold. A new asset class similar to actual gold/silver, real estate, stocks, etc.
Something to put part of your wealth in, hoping it appreciates over time. And as Bitcoin appreciates over time so well so far (12 years of 200% appreciation per year on average), it doesn't really make sense to spend Bitcoin. It is deflationary by design.
Bitcoin already is a killer "app" as such. An accessible way for anybody to preserve/grow wealth, a hedge against inflation and the lack of return on a normal savings account.
Your take on crypto for payments is needlessly pessimistic. It's inevitable, the winner just isn't clear yet.
> Fiat money has value because it is widely, almost universally, accepted in exchange for things of intrinsic value
No, technically fiat money has value because it is accepted by a government to settle taxes. Which is why it loses value dramatically when a state collapses or otherwise becomes irrelevant to the local economy. Because traditionally the state itself was the issuer of such currency, already we have a massive conflict of interest at the very start: when the state pays out his own debts in its own currency, it's effectively asking his creditors to believe that currency has some value in the real world, while also telling them exactly how much that is supposed be. To "solve" this problem they invented central banks, which are supposed to keep governments away from the process of determining the actual value of a currency, if you believe that they are as independent as they proclaim. In the end, what matters is that enough people believe that certain arrangements are fair, and that the government will still be there tomorrow asking them for taxes. As long as that's true, one might well use the currency as a unit to settle private trades too, but that is a consequence of the original belief.
> I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity
The key in this sentence is "widespread", which is something you can redefine pretty arbitrarily and hence move goalposts as required. In practice, other tokens have been used here and there, but in the end, what wins tends to be government-backed tokens for the simple reason that authorities will always enjoy a right to put you in prison if you don't settle your taxes in the currency they desire.
If you look at it from a technical perspective, any collapsed state where the local currency has been wiped out and internal trades are settled in USD or EUR (a pretty common occurrence), in practice is already using an non-government-backed token, something on which nobody in the local economy has any control. To these areas, it doesn't really matter that the USD will be accepted by the US Federal Government to settle taxes; they just need a unit, and since this unit is accepted at the fringes of their system, well, might as well use it internally too.
> Being able to spend it is the "killer app" of cryptocurrencies
No, being able to convert into other tokens at the fringes is the killer app. Which quite a few cryptocurrencies do have, although in an extremely fragile state. The longer they keep them up, though, the easier it gets, as more and more people believe that the underpinning arrangements are fair and exchanges will still be here tomorrow to exfiltrate value to prison-avoiding currencies.
> No, technically fiat money has value because it is accepted by a government to settle taxes.
Not true. There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires for taxes, fees, etc.
In fact, the origin of using taxes + coinage goes back to a pragmatic way for ancient kings to not have to organize the logistics of feeding and housing a large army. Pay the soldiers in coin. Require citizens to pay a tax in the same coin. Boom, they self organize.
Money itself came about far earlier, and was independently invented in multiple places. The example most people look at is temple complexes in the Levant, where debt records came first, and currency second. It was an adaptation of earlier gift economy behavior to enable scaling to groups too large to have intrinsic social trust, and allowing for specialization of labor in building and maintaining the temples.
David Graeber's book will educate you about all this.
This is an irrelevant historical tangent. The point is why and how money defines values today.
> There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires
If you'd read the rest of my comment, you would have seen that I explicitly address this case. Instead you went for a pointless appeal to authority about thousand-year-old situations that don't matter to the current environment.
It’s not on tech people to evaluate business impact or societal impact or economic impact. Sure, tech people could do that but most of our time is spent on designing or implementing software.
Let other people (non-tech or hybrid) comment on the idea. They have time to think about this.
Tech people can only help by explaining in understandable ways how blockchain/cryptocurrencies work. 3Blue1Brown has a good video on it.
Let’s keep the culture of not deriding ideas. We can’t predict human behavior or the future of it. Maybe something beautiful comes out of it, or maybe it accelerates global warming. I trust other disciplines to comment on that.
Understanding proof-of-work down to the very details, I can make some evaluations based on simple technical properties. For example, Bitcoin can never become "more efficient": If efficiency of computing hashes goes up, difficulty goes up to counteract this, and the energy usage remains the same.
This is different from almost everything else, where advances in technology that increase efficiency are usually a direct benefit.
All this energy goes into what is essentially a lottery for miners. Except for 6 hashes per hour, all of the literally 100.000.000.000.000.000.000 hashes per second get thrown away entirely, not even advancing the same miner, the same ASIC, towards one of the qualifying 6 hashes per hour.
are you seriously advocating for a complete lack of ethical awareness on the part of engineers? Pretty sure Volkswagen engineers went to prison for interfering with emissions software so precedent is kind of not with you here.
Based on the replies, I stand corrected, my bad. I am happy I voiced my opinion, because the replies convinced me that I was off base with my thinking.
It's not. It's an economy. If you haven't engaged with the technology or even have a surface level understanding of traditional financial tooling like derivatives, options, futures, precious metals trading, etc. then you shouldn't parrot what someone on Twitter says. Take the time to understand the existing system and how smart contracts work and some of the blue chip protocols like https://aave.com/ or https://chain.link/ and then make an informed opinion.
I could waste a huge amount of time refuting the author's points, but will make it more of a meta comment.
Crypto is vast, complex, and inherently not suitable for binary thinking. I've studied the space for months and have come to the conclusion that crypto is two-sided in almost every aspect.
Many/most coins are speculative, which you can associate with words like "greed" and "casino". Yet also provide wealth savings/growth to people locked out of it in our traditional system.
NFTs are a cruel joke right now, yet ridiculous as they are, may be a precursor to various groundbreaking uses having real utility, in an exponential way.
Smart contracts are largely dysfunctional, yet there's early success in replacing financial products like staking, lending, leverage. When it works, it's permission-less, which has interesting social benefits (access not defined by your identity/social class).
And so on.
I'm not here to debate any of these points, my only point is to not dismiss crypto as a whole (binary thinking) and to not underestimate it. The topic is too complex for it.
People have been saying this for over a decade now. Mainstream applications are just around the corner, wait and see! We have waited, and all we've seen is baseless speculation (which you call "wealth savings/growth") and scams. I see no reason to think this is going to change any time soon.
I mean, it is being adopted by pay processors like Square, PayPal, and Cash App, and is being accepted by some large retailers like Newegg and Overstock. Wouldn't discredit that as not being progress :/
This is another thing cryptocurrency enthusiasts have been doing for a long time: name dropping some companies who are supposedly embracing bitcoin but without any evidence of actual user adoption.
Newegg and Overstock don't even take payment in bitcoin. They allow you to use a third party processor to exchange bitcoin for USD then immediately transfer the funds to the retailer. There's no evidence that these payment mechanisms have ever been more than a rounding error in these retailer's sales.
It's a form of survivor bias, because companies drop bitcoin support as fast as they get it. I remember when Wordpress dropped Bitcoin because it there was more fraud than actual legit transactions.
> ...without any evidence of actual user adoption.
For example of Square:
> Its mobile payment service Cash App has been its flagship product. However, in recent times, while Square reported that cash transactions at its U.S. merchants as a percentage of overall transactions fell from more than 50% in 2015 to around 30% today, the bulk of the company’s revenue this past year – around 56% – came from Bitcoin transactions. Over the past year, revenue from bitcoin was $1.8 billion – a whopping 10X increase over 2019’s revenues in this category. [0]
So this 10X increase isn't an indicator of adoption then, they just made up this figure?
It's an illusion of accounting [0]. Due to the accounting standards, they book the total dollar value of the bitcoin they sell as revenue, not just the fees they get.
>People have been saying this for over a decade now. Mainstream applications are just around the corner, wait and see! We have waited, and all we've seen is baseless speculation
DeFi isn't even 2 years old yet. This whole space really only started building applications in the last few years. Ethereum itself isn't even 6 years old yet.
DeFi is just a rebranding of smart contracts, which are still a hammer looking for a nail. If anything, it's just more baseless speculation like GP said.
> Crypto is vast, complex, and inherently not suitable for binary thinking. I've studied the space for months and have come to the conclusion that crypto is two-sided in almost every aspect
It's always so convenient that cryptocurrency/smart contract proponents "can't be bothered" to give actual arguments. Your comment here is a poster child of "I don't have time to explain, so please take these baseless assertions that you are wrong. Sorry I have to go now, for unrelated reasons".
You have thing upside down. Crypto, its fast-moving technology and implications on the financial system, economics, politics and the media is so vast that it costs thousands of hours to study.
Your strategy is to say "you're wrong, prove me right". No, I won't be writing book-length comments here to convince some internet stranger whom is categorically against it.
I have no burden of proof. I'm not even a proponent or opponent. All I said is that it's complicated and two-sided, to keep an open mind.
If this were in isolation then yes I'd agree. And twitter is not the best way to make points.
But I'm pointing out that this is ALWAYS the argument pro-cryptocurrency. It's not this instance, but a pattern.
Cryptocurrency people refute entire books and deep analysis (from actual experts) with "everything you just said is wrong, but I have to go now so can't say why".
It's not this in isolation, but the fact that it's a cliche that's the thing.
It's comical. I'm not sure, but it sounds like you're laying the ground work for waving your hand and saying "book? By the time it's published the technology has moved on, so it's not relevant, so let's just ignore the whole thing" when the main arguments against cryptocurrencies/smart contracts are not about the details of the tech.
The arguments are mainly about the premises and the goals. What technical means get invented then becomes irrelevant.
I get what you're saying. You think I'm the typical crypto "bro" fleeing the scene as soon as some evidence need to be produced.
I'm not a crypto bro, so I don't need to defend the case for crypto. 6 months ago I was in exactly the same spot as most people here dismissing the industry as a whole.
Admittedly, largely based on hear-say and the mainstream narrative. Not by actually knowing anything about it. After taking a deep dive I've changed my mind on some aspects, but not all. I would not agree with my past self, I was ignorant.
Even if you do study it deeply and still conclude it's all garbage, it's an intellectually fascinating journey. You get to learn a lot about history, human psychology, our financial system, politics, trading...basically how the world works.
Interesting stuff to debate, but this is not the place. Fine.
It's probably not the place. But I'd like to say still that my opinion is not based on ignorance. The more I read (and I mean books too, not just rando's blogs and tweetstorms) on this, listen to pro-coin as well as anti, and talk to actual lawyers and economists about what problems the space actually has, the more I see it's just a scam.
Well, almost. Probably cryptocurrencies have more of a chance of actually succeeding in providing realistic microtransactions. Not BTC (PoW and way WAY too few tps, too slow, too high fees, etc...), but it's something traditional finance has failed to provide.
(cryptocurrencies have, for a decade now, also failed though. So I'm not getting my hopes up)
If you look at the total space, some 10,000 different coins/tokens, all but perhaps 10 are shit tokens. They have zero purpose but to pump and dump.
Of the remaining ones that should at least get the benefit of the doubt, here's my rough opinion...
Bitcoin is king and proven in its function as "digital gold". Based on its enormous market cap, network effect (100m users and growing exponentially) and one-of-a-kind performance of 200% per year on average, for 12 years straight.
Which is no guarantee for the future, but nothing is. Bitcoin is the invention of an entirely new asset class with unique properties, good ones and bad ones.
Ether and adjacent helpers (such as link) are also a winner, if you take the long term perspective. Almost anything application-wise is built on top of it (DeFi, NFT) touching potentially almost any industry one can think of.
It is true that most things built on Ether are crap and likely to fail, but that doesn't have to be true forever. The point is that even if 1% becomes successful, it's likely Ether-based. Even failed development on Ether grows usage of Ether, and the network effect quickly gets beyond the point of no return.
Compare it to the world settling on Git/Github for software development. This doesn't guarantee good or useful software, yet when such software is produced, it's from that infrastructure.
Besides Bitcoin and Ether, there's a few semi-serious outliers like Cardano and XRP. I expect them to fail fully.
So that sums up my opinion of the space:
- Bitcoin as asset class, long term.
- Bitcoin's Lighting Network for payments, yet needs to become more user friendly and get wide support (give it 3 years).
- Ether and helpers for a wide range of uses.
Bitcoin and Ether are not only here to stay, they will grow exponentially. Pretty much anything else is safe to ignore. For now.
But bitcoin doesn't scale. And incentives are not aligned to making it scale. So having it not scale is an unfortunate equilibrium.
It's consuming more electricity now than Sweden. It can't really grow exponentially. The world just does not have enough electricity for more growth at that rate. Unless you just mean "exponential in price", in which case that's just speculation, and completely disconnected from, as they say, the fundamentals.
Running out of reply nesting levels so responding to your latest comment here.
For its current purpose (store of value, so not an every day payment currency), Bitcoin does scale. Should for some reason miners be unable to gain access to more energy in the physical world, the protocol automatically adjusts the difficulty.
Scaling transactions has no relation to energy usage, only mining does.
As for its energy usage, that is a wildly complex topic, and it's moving very fast.
Energy consumption in itself is not a problem, it is only considered a problem when:
1. The energy source is not renewable
2. The consumption directly competes with purposes deemed more useful by society (perceived or real).
As for renewables, I believe the score to be somewhere between 30-50%, which is greener than almost any other industry. Furthermore, this score is going to rapidly improve as coal-based mining in China is in major decline whilst North America gains in mining. The NA mining companies have formed a council to report on energy usage and stimulate not just the use of renewables, specifically to go for stranded energy sources. These are types of energy that are locally available, yet too remote or costly to transport to civilization.
To sum it up, it's not as bad as the headlines say, and rapidly improving for the better.
Energy usage, not even it being dirty or green, isn't the heart of the debate though. Keeping devices powered on/plugged in costs more energy and serves no purpose, yet zero headlines about that.
Rather, the debate is that a lot of energy is consumed for what skeptics consider to be no purpose.
And now we do get to a hard divide. Believers and non-believers.
A true believer thinks of Bitcoin as the hardest money ever created, absolute scarcity as a one time human invention. This classic article is one of many making the case for it:
Read it with an open, but skeptical mind. If you're disgusted by it, your personal outcome is clear. If it does tickle some interest, this Twitter thread links to a few of such articles:
As for Bitcoin being speculative, yes and no. With a long term perspective, it is predictable to a degree. A dutch stock expert came up with a valuation model called "stock to flow":
Actual price action versus predicted price is so accurate that it's creepy. And there's a reason for it. Bitcoin's supply is entirely predictable and mining rewards are cut in half every 4 years, triggering the next bull run, followed by a bear market. Like clockwork.
Even the financial establishment agrees that Bitcoin is the most asymmetrical bet there is. The risk/reward ratio is one of its kind.
To translate that to any ordinary citizen: you pick a portion of your wealth you can afford to lose entirely. 10-25% of savings are often heard numbers.
There's a really small chance that this money, which you could afford to lose anyway, will be lost. A so-called "Black Swan event". More likely, the money would be halved and never recover.
Against that limited risk (due to your limited exposure), is a much higher chance of it multiplying by 10, 20, more...depending on how long you hold the asset. As in, almost guaranteed. For Bitcoin, not for the shitcoins.
This sounds like a sales pitch for buying Bitcoin, which is not my goal. I don't care if you do or don't. My point is to highlight the uniqueness of this asymmetrical bet. It has no comparison. There's no asset in the world with a risk/reward ratio this favorable.
Or, you can call it funny internet money that heads to zero. Either conclusion is fine, if its an informed one.
My main point on that was that the exponential function grows quickly. If it's all of Sweden today, then it's just a couple of doublings before it's literally everything. If you graph the current use this is not the far away future.
I don't have absolute proof, but you cannot hide the kind of electricity use without driving up demand noticeably, so actually people are already today paying more for electricity in order for someone to profiteer from hashing. We're all paying for this.
> 1. The energy source is not renewable
Or it displaces otherwise-renewable use into non-renewable.
Which (at this scale) of course it has.
> To sum it up, it's not as bad as the headlines say, and rapidly improving for the better.
I disagree on both points. The waste graph (and that's just electricity. Where do you think non-economical mining rigs go?) is growing exponentially.
> Keeping devices powered on/plugged in costs more energy and serves no purpose,
It's a problem, yes. But it's not true that it serves no function. "It's easier to keep it plugged in than not" is convenience.
I'm not justifying it, but yes actually it does have a purpose. Just like idling a diesel car outside my window while I'm trying to sleep does have a purpose.
> Bitcoin's supply is entirely predictable
Not really since an unknown amount is lost forever every year due to crashed hard drives and lost passwords.
For your medium link, it can be summarized as "an intro to bitcoin". And I'm surprised it was written in 2018, as it seems to have the naivety of a small child, with regards to both bitcoin and economics.
E.g. it doesn't motivate why we need to (effectively) get back on the gold standard. The "work" that was "proof of work" for my FDIC-insured bank balance is a combination of the value I added to my employer, and the value the market gave me for helping correctly price goods. I don't need my bits to be scarce.
> "However, because bitcoins are traceable on the blockchain, a particular bitcoin may become tainted by its use in illicit trade and merchants or exchanges may be compelled not to accept such tainted bitcoins."
Like I said. Naive. And this was written 4 years after Mt Gox, where 4% of all bitcoins that will ever exist, were stolen.
In a legal money laundering sense I would guess that maybe the majority of bitcoin out there is tainted, since tumblers actually cause 100% of their output to legally be tainted. And with it being circulated, the only "clean" bitcoin is from HODLers who have never moved it after mining.
> "Without improvements to the privacy and anonymity of Bitcoin’s network protocol, bitcoins cannot be considered as fungible as gold."
And in this very next sentence he's essentially saying "yeah but let's help the criminals hide it, and not do that tainted thing I just said".
He calls it "improvements".
> "Nation-states have shown a persistent proclivity to inflate their money supply to solve short-term political problems. The inflationary tendencies of governments across the world leave the owner of a fiat currency with the likelihood that their savings will diminish in value over time."
This is more naivety. E.g. in order to have our best future, we as a society actually don't want resting savings. I've been lectured by a friend because I have a coin jar, and that is money that isn't in motion. I wouldn't go that far, but there's some truth to the fact that money (in any form) at rest does nothing. Whereas money in motion does.
GDP is not a perfect model, but like many models it can be useful. And GDP measures the velocity of money.
So why "punish" people for hoarding cash (in any form) and not moving it? Because it's in society's best interest, or so goes the argument. This naive writeup seems to merely say (like other pro-coin ones) that taxation is theft, inflation is theft, etc...
Anyway, I think I've read this before (or it's just the same coiner dogma repeated ad nauseum so that it's indistinguishable from something I've read before).
I'm not disgusted by it. I don't get disgusted by uninformed naivety.
> As for Bitcoin being speculative, yes and no. With a long term perspective, it is predictable to a degree.
What I mean is that approximately nobody is buying bitcoin in order to actually use it. Unless they are using it to send money to ISIS, or something. No, they buy it in the hopes that someone else will pay more for it, later. That is neither payment, nor store of value.
Maybe one day it'll be more stable, and thus a better store of value. But I hope it dies way before that.
I don't disagree that these coins can be a good investment for the individual. But that's where the disgust comes in. It's profit over morals, with a spread never before seen. It's doing something evil (environmental impact), in order to profiteer from organized crime (anonymous currency). Even if you yourself commit no crime, it's you profiting from destruction[1], to fund organized crime.
You're essentially making the argument for a lottery that has (unfortunately) reasonable odds. That doesn't make it right, or good, or nondestructive.
I'm not sure why you think those bitcoin 101 links would be new to me.
[1] And I don't mean "destroying the old to create the new", no I mean literally destroying productivity and base resources. As if you could mine bitcoin by proving that you've burned medication. That is resources society had, that could be used, that you burned at the expense of others for your profit.
Funny you bring up the exponential video, a classic I haven't seen in a decade. But yes, I know it. Bitcoin's energy use isn't exponential towards infinity. As soon as it hits real world caps (lack of stranded energy, regulation, profitability ratio of miners in decline, difficulty automatically adjusts).
It seems we disagree overall on crypto, and that is fine. I'm going to selectively respond given the large amount of points you address.
As for the energy part, the technicals (energy mix, stranded energy, emissions) are a discussion on their own and reality on the ground is fast moving. I do not consider the issue resolved, I consider it smaller than projected.
In particular, your claim that the convenience and laziness of leaving electronics plugged in justifies wasting energy whilst using this same energy for sound money to be problematic, shows privilege.
Bitcoin is incredibly popular in Venezuela, Turkey, authoritarian nations with a rapidly inflating currency. One of very few ways for underprivileged citizens in said countries to protect/grow some of their wealth. In Africa, nodes are growing the most currently, as several projects aim to implement the same basic life raft.
Back home (developed nations), the youngest generations struggle to build up wealth. Never before in history have the young owned such small piece of the pie and never before were their debts so high. Middle class seems entirely out of reach for them. That's why it's not surprising that specifically they jump on crypto.
And lastly, even for those already in middle class not necessarily requiring crypto as a life raft, there's nothing wrong with them trying to build wealth, unless you also oppose to people investing in stock, real estate, etc.
You probably have the opinion that Bitcoin is not a solution for these people, but I want you to acknowledge that the problem it tries to solve and the macro backdrop that has led to its creation, is very much real. Bitcoin aims to be hard money, and hard money has humanitarian value infinitely larger than leaving your phone plugged in.
As for privacy, you're again being quite selective in your outrage. We know that almost anything able to connect humans can be used for good and bad. WhatsApp is end to end encrypted and proven to be used in terrorist attacks in Europe. Yet nobody has called for the ban of WhatsApp. You intentionally take the bad faith angle for privacy as if this feature was specifically designed to do unlawful things.
No, it is designed as part of the separation of state and money. A good faith goal, a humanitarian goal. Just like WhatsApp basically is designed for good, to allow billions of people to connect with each other.
Bitcoin is a store of value, yet a volatile one. That's because it's still early. It's likely to reach a 10T market cap. A maximalist would project 100T, but I'm not sold on that idea.
The more realistic projection, 10T, would not make it an existential threat to the existing financial system. It would just be digital gold. Bonds and derivatives are a few hundred times larger.
I'll end with a philosophical note. One you would wildly disagree with, but that's the point of a debate.
Our current system depends on perpetual growth. Maximize work, productivity, consumption, even population growth. Only endless growth keeps the system alive, and even barely so. It rapes the planet and cruelly still leads to enormous inequality.
As such, I don't consider it very much of a threat when money has no inflation or is deflationary. We should work less, consume less, and return to a more sane standard. This is going to happen anyway due to further automation.
The current system treats people like economic cannon fodder. If the current system has no regard for people, don't be surprised that people turn their back on it and seek a life raft or early exit.
Anyway, thanks for the debate, this was my last reply.
> Bitcoin's energy use isn't exponential towards infinity.
Nothing is. That's kind of the point.
> As soon as it hits real world caps
Do you think that will be before or after every single use of electricity becomes metered? We already lost most free tier trials of any sort of compute (CI, VMs, etc). I'm expecting that hotels will start metering electricity for guests at some point, because some asshole is going to rent rooms for mining rigs.
Someone's going to put a mining rig in the public bathroom. In the curtesy outlets in airports.
There is no "cap", it's a constant escalation of theft. All there is is a place of diminishing returns for the thieves.
> your claim that the convenience and laziness of leaving electronics plugged in justifies wasting energy
What the actual fuck. This is literally the opposite of what I said. Literally the exact words "I'm not justifying it" is what I said.
> Back home (developed nations), the youngest generations struggle to build up wealth. Never before in history have the young owned such small piece of the pie and never before were their debts so high. Middle class seems entirely out of reach for them. That's why it's not surprising that specifically they jump on crypto.
So you agree that it is speculation, not currency?
> there's nothing wrong with them trying to build wealth,
On that level, no. If you rob a bank to do it, yes.
> One you would wildly disagree with, but that's the point of a debate.
Ironically, no it's not. You think the point of debate is to increase disagreement?
But no, I do not disagree with anything you said after that. That's almost the only thing you said that was reasonable.
The misuse or "theft" of semi-public energy really is grasping at straws. All but Bitcoin uses or will use PoS, which requires little energy. Bitcoin itself requires such computing power that the petty theft of energy won't ever mine a single sat.
You didn't justify leaving electronics plugged in, you said it provided value: convenience. If you'd calm down and read between the lines, see the overall point that "value" is subjective. Surely we can point out several energy consumers offering questionable or no value. The popular narrative is that Bitcoin offers no value at all, which I tried to counter. Clearly it has value. Maybe not to you, but it does to 100m+ users and exponentially growing. And the value it offers ranges from a humanitarian life raft to pure greed, yet value it is.
True, I do not consider Bitcoin a currency as in a payment currency. Its currently useless for that in a technical sense, but also in a financial sense. You do not want to spend a deflationary asset.
I consider it an asset, banks literally call it a new asset class. Is it speculative? Yes and no. Short term it is, day to day its clearly volatile and actively manipulated by traders (doing longs, shorts, leverage). So as a "store of value" on the short term, it's a failure. With a bank account, if I put in 10K today, I can take out 10K the day after. With Bitcoin, that 10K might be 9K or 12K, who knows?
Longer term, it's less speculative. It's deflationary, aiming to at least counter fiat inflation, yet in reality far surpass it in growth, doing 5-10x price actions every halving, and about 200% per year on average. That's the track record. I can't predict the future.
I think the point of a debate is to discuss opposing views. They don't have to grow further apart, but they might. I also don't mind a hot debate, nor am I frustrated or upset with you. My point isn't too "win".
Still, nice to agree on one point in the end. Have a great day.
> The misuse or "theft" of semi-public energy really is grasping at straws.
It's not. What would you say to someone who went from store to store, and emptied the "take a penny leave a penny" tray into their pocket, so that nobody could have that anymore?
Even when it's not literally theft (e.g. credit card fraud or cloud services), it's abuse that destroys a resource, to the point where nobody can offer such a service.
> If you'd calm down and read between the lines,
I don't appreciate you lying about what I said.
> Surely we can point out several energy consumers offering questionable or no value.
So this is plain whataboutism?
1.3M people die every year in traffic, too. That doesn't justify setting a price floor on energy, or fast-turnaround ewaste.
> You do not want to spend a deflationary asset.
And if it doesn't die, it always will be deflationary. Supply is limited and people die, or lose passwords or hard drives.
"whataboutism" is a twitter stop word to kill reason. It's hypocritical to aggressively combat one energy waster whilst allowing or even demanding 200 others. It shows one doesn't care about energy usage or the environment at all, only about the ones they deem useful to themselves. Which is subjective.
Yes, Bitcoin will always be deflationary. I personally am not convinced it will eat up all wealth in the world in the way a maximalist believes it will. As said earlier, I'm thinking 10T max.
Should it grow to contain much more value, Bitcoin is more likely to be expressed as sats by default, and owning a full coin would be rare. Many want to do this right now due to unit bias. Newbies tend to prefer a 0.3$ shitcoin like Dogecoin over a coin as expensive as a luxury car.
Layer 2 solutions can work with a fraction of a sat, yet they can't settle this fraction on the core BTC network, nor would this make sense in terms of transaction costs. So I think they use some kind of buffering mechanism for that.
> "whataboutism" is a twitter stop word to kill reason.
That's not how I use it, at least. I use it as "stop changing the subject", and "two wrongs doesn't make a right".
What am I supposed to say to this distraction, if you're triggered by the word whataboutism?
> It's hypocritical to aggressively combat one energy waster whilst allowing or even demanding 200 others.
If that were the only thing about blockchain, then maybe. But it's not.
But also no, I don't think it's hypocritical in that abstraction level. There are doctors out there who want to help people, yet are not working on malaria. That doesn't make them hypocrits on malaria.
Yes, there is arguably hypocracy. Just like how you would save a drowning child if you walk past them, but you won't give $2 to feed a starving child on another continent, or $10 for a malaria net.
Maybe you actually do. But even then I'm saying you'll ruin your nice shoes to save the drowning child, but then you'll buy new shoes instead of using that money to save another life.
And then we have descended into a completely different point from the value of bitcoin. It's a distraction. You've effectively changed the subject to not have to discuss that you're making the world worse by pumping bitcoin.
In a world where children starve and die from malaria we don't have to discuss any issue at all. How convenient.
I'm not triggered by the word "whataboutism" or "two wrongs don't make a right", they are just word plays to end a discussion.
The way I see it, nobody really cares about emissions, energy use, pollution, the environment...at all. Most people commenting on Bitcoin are likely to enjoy a US middle class existence, or even upper middle class.
They have ACs running all day, 50 electric appliances in their home, move themselves with 2 tons of steel, indulge in purchasing clothes made from slavery in Bangladesh, consumables stiff from palm oil (destroying rain forests), likely regularly eat meat, take airline flights, and produce tons of plastic trash.
The above lifestyle, if it were to be deployed globally, would require 6-8 planet earths, by estimation. Yet there's no concerted outrage, call for regulation, outright bans on any single aspect of it. Obviously because that would mean giving up comforts you enjoy yourself. As it comes to principles, people have none as soon they are tested.
Therefore, it's much easier to attack something you don't use or understand, as there's no personal cost to it. I reject your environmental abuse yet will defend mine.
Still, its a fair and valid point that in a world of environmental collapse, adding to the pile doesn't help. I'm with you on that. I'm optimistic that it will be resolved, and rather quickly. Mining will pretty rapidly become renewable, CO2 neutral, focus on stranded energy, etc. A headline may be forthcoming this week even.
Dogecoin is shit because the creator says it's shit. When interviewed about its purpose, inflation scheme, energy usage, he openly admitted he considered nothing at all. It was a joke. Dogecoin has no functionality nor scarcity. It doesn't even have a development team.
Still, the joke is widespread enough for it to sustain for quite a while. If only enough people hold it, a full crash to zero becomes less likely.
The main differences with Bitcoin would be scarcity, the network effect, institutional adaption, L2 solutions, exchange support, ETF funds, etc.
The difference between a "serious" coin and a shitcoin is easy to see in price movement. When BTC dumps, say 30%, a shitcoin dumps 80%. A shitcoin is speculation only, whilst a serious coin is speculation combined with long term value, or the belief in long term value.
If you don't have an argument to make, perhaps it's better to say nothing?
When you come out and say, things are too complex to make an argument, it can read like FUD and whataboutism. As if you are attacking an idea that an argument _can_ be made.
I'm sure you didn't set out to muddy the waters, but after having muddied them in the middle of a lively debate, I think this is the sort of response you should expect to receive.
Coherent arguments against cryptocurrencies are readily available. The case for cryptocurrencies is shifting, contradictory, and often nonsensical. This means something. It matters.
I'd say the reason is that many people have already made their mind up and no amount of "actual arguments" will convince them otherwise, but sure, here are some examples of things enabled by smart contracts.
I guess it really depends on if you think the idea of decentralized finance is inconsequential. If you're happy with the idea of centralized finance, then I guess most of those things would be inconsequential. The argument for decentralized finance is more philosophical, and perhaps that is where most people are at odds with each other.
Regarding your second point, I understand what you're saying. I guess the benefit of doing that specifically in a blockchain/smart contract system instead if <insert your bespoke system + database of choice here> is you can take contracts that have been verified by others and deploy them on your blockchain and tweak the numbers and be confident on the output. Instead of blockchain, you could use any sort of "industry standard ledger/schema", but no industry standard ledger/schema exists and blockchains do exist.
ImmuDB was posted here the other day, it's pretty young but could be promising for businesses who want the benefits of blockchain without needing to use a blockchain.
Blockchain's biggest benefit is disturbed verification, so trust the community and not one authority. Right?
Yet the cost is distributed externalities like burning nonrenewables or wasting greener energy sources on inefficient or pointless calculations.
Are there any smart contracts or DeFi without the externalities problem?
And even if there are then is it wise to put money into things one doesn't understand? The DAO exploit makes me wonder if the juice is really worth the squeeze.
I sure hope so. But of course everyone invested in Bitcoin, dogecoin, and the others have a vested interest in that never becoming the thing to do. The ones with the mining factories are going to try to prevent this, since it's their competitive advantage.
It's not like pinboard made any actual arguments in his tweet storm, either, unless you count "we all know that cryptocurrency is a scam" as an argument.
If this were in isolation then yes I'd agree. And twitter is not the best way to make points.
But I'm pointing out that this is ALWAYS the argument pro-cryptocurrency. It's not this instance, but a pattern.
Cryptocurrency people refute entire books and deep analysis (from actual experts) with "everything you just said is wrong, but I have to go now so can't say why".
It's not this in isolation, but the fact that it's a cliche that's the thing.
The core things that blockchain stuff tries to solve are not actually the hard problems. The hard part of online commerce is not that customers can reverse credit card transactions. The hard part of contract law is not automatic payments. The hard part about property law is not atomic transactions of money and deed transfers.
So just off the bat, almost everything that is presented as a "solution" is not actually solving anything meaningful.
But it doesn't stop there. It's actually making the actual hard problems worse.
For cryptocurrencies, it makes courts all but impotent. A court can't compel you to pay child support, or return the money you stole. You can just say "no".
It's not trivial to track money, but the stated goals of cryptocurrencies is to make it hard or impossible to trace, and to compel.
It's not easy to find money laundering, or just criminal money being moved around. AML & KYC laws exist. They're not perfect. They can inconvenience legit people, and they can be gotten around. But they do help greatly.
The explicit goals of cryptocurrencies is to get around AML & KYC laws. This is what Pintrest was talking about.
So that's for "anonymous". We don't actually want someone to trivially move $1B anonymously.
We as a society, as a people, don't even want people to be able to send money any way they want. E.g. we don't want people to be able to send money to ISIS. There's a "baby and bathwater" argument that can be made here, but since cryptocurrency people don't even WANT to prevent this use case, it's not what they're making, or selling.
Like airline security, it's not effective because it's perfect, but because there's too much risk that one of the layers will catch you.
And the cryptocurrency dream is to remove all those layers.
Reversibility: People don't want this. One of the main reasons to use a credit card AT ALL is that people want reversibility. If that's all you wanted then you can probably just accept debit cards.
And as for smart contracts:
All smart contract systems need a way for a court to interpret the contract. The contract may not be legal, it may have been signed under duress, etc.. So all smart contract systems need this escape hatch.
So how is it adding any value?
And the hard part of contracts was never what's being solved here. The hard part is codifying your intention into legalese, and conflict resolution. The codifying is still there, but now it's computer code instead of legalese. But conflict resolution is removed? Why?
The most ridiculous one is "land ownership registry". You know who ultimately decides who own a piece of land? The government of the country it's in.
Do you think France will bow down to "math" if a French court orders a house to be sold, but the would-be seller is some anonymous "wallet" that refuses?
France would just "fork the blockchain", and the authoritative fork is the one backed by police who will come remove anyone who claims ownership of something they don't own.
In an extreme example, if the ownership of Mona Lisa was "on the blockchain", and a rogue employee sold it, do you think France would hand it over? Of course not. So it means nothing.
I realize this comment is all over the place, and not diving deep into any one argument. It's more like a survey (though not complete) of various arguments, that can then be explored in more detail. This comment is long enough already.
And note that all this is in addition to technical problems like PoW/PoS, electricity use, scalability, transaction speed, 51% attacks, etc... Even assuming all those are solved, the problem is the the very GOAL is a dystopia.
ISIS has figured out how to get funded long before crypto was a thing. Banks already launder billions and that's harder to trace than Bitcoin transactions. And now, like it or not, crypto already exists and is here to stay, so perhaps it's better to start building legitimate use-cases around it than to just mumble about ISIS from afar.
All of your examples seem very contrived for how crypto won't work. I can make up examples of areas where crypto won't help, too. It's not supposed to be the end-all use case for everything.
The lack of conflict resolution in crypto is a side effect of decentralization. When you're talking global interoperability and value exchange, conflict resolution is off the table anyway. What court am I supposed to go to if I wire money to a guy in Nigeria and he doesn't fulfill his end of the bargain?
Ownership of the Mona Lisa might not be one, but there are many use-cases where removing a centralized mediator has a ton of potential benefits. One example might be Basic Attention Token, where advertisers and users can get a better experience because there's no need to satisfy the Google Ads middleman. What's the use for a conflict resolution mechanism in online advertising? Same with device connectivity with helium network, or decentralized lending that can provide better interest rates because there's not a huge meatspace banking infrastructure to support.
> Illegal activity in crypto isn't as prevalent as you may think, and it's actually on the decline:
Do you have the source study? I don't want to give my personal data to a blockchain company, and they rejected both mailinator and gmail for registration.
> All of your examples seem very contrived for how crypto won't work.
I'm not saying crypto won't work. I'm saying every single idea that's been proposed won't work.
And the base problem is that the whole point of these coins is disguising "I want to create a world problem" as "I want to solve a problem".
"It's hard to get around [AML, KYC, tax, etc.] laws" is not a "problem" that needs to be solved. Yet again and again, this is what coiners propose as a potential "killer app".
> When you're talking global interoperability and value exchange, conflict resolution is off the table anyway.
Huh?
> What court am I supposed to go to if I wire money to a guy in Nigeria and he doesn't fulfill his end of the bargain?
Your bank makes it hard to do this, to make sure you're not being scammed.
And what problem exactly are you trying to solve? If you send BTC to Nigeria and the guy doesn't fulfill his end of the bargain then BTC by design doesn't allow any recourse.
Our current system may or may not be able to help you, but BTC goes out of its way to say "fuck you, you should just never have made a mistake".
But also, if someone moves $10B to Nigeria, you can bet your ass they'll find a way.
C.f. when one of the Pirate Bay founders, while living in Cambodia which doesn't have an extradition treaty, hacked some banks. VERY quickly that whole "doesn't have an extradition treaty" did not matter at all, and he got arrested and put in prison.
He should have bought bitcoin/monero. Noob. :-)
It's actually telling that he had full access to the bank's mainframe, yet still only managed to steal like a couple of thousand USD. The rest of the transfers were blocked or reversed.
So the system worked as intended. And as we've seen time and time again (cough, Mt Gox), bitcoin just doesn't work even as intended.
> One example might be
For many years now we've heard hypotheticals, but no actual solutions. The time for brainstorming should have been over, considering the HUGE environmental and crime impact.
At this point it all sounds like "it's not worked so far, but can we just continue setting fire to children? I think it'll do something good one of these days".
> decentralized lending that can provide better interest rates because there's not a huge meatspace banking infrastructure to support.
But can we have an actual solution, not just handwaving, here?
How are you going to solve the intersection between lending contract and laws? What about bankrupsy? What about court ordered child support? What about inheritance, death, etc?
These blockchain things are trying to solve what is actually the EASY problems, not the hard problems.
Like, what do you think will happen if you say "can I get a better interest rate, if I agree to be excluded from chapter 11 and chapter 7 laws?". Likely no, no you cannot. Your "math" doesn't magically make the government, judicial system, and police just "go away". And for good reason.
> Your bank makes it hard to do this, to make sure you're not being scammed.
Most exchanges also blacklist addresses to help keep you from getting scammed. People still get scammed, though.
> Mt Gox
A sketchy exchange hacked 7 years ago and many of the BTC was recovered. Good luck hacking Coinbase.
> hypotheticals, but no actual solutions
Basic Attention Token is literally a functional system working today, right now. So is Helium Network, The Graph, Unlock Protocol, Storj, Golem, Livepeer, and dozens of other projects that are actually making awesome innovations today.
> The time for brainstorming should have been over, considering the HUGE environmental and crime impact
So if we stop all crypto brainstorming and innovation, then mining and crime will suddenly disappear? What if I told you crypto innovation is making these things better, not worse - Proof-of-Stake is about to reduce Ethereum's energy use by 99.9%, only made possible by continued innovation in crypto.
> But can we have an actual solution, not just handwaving, here?
Yes, Compound and Aave are decentralized lending platforms that give you better interest rates than banks. Your points about bankruptcy don't apply here, because DeFi lending is designed so that you can't go into debt. Bankruptcy only happens when you're loaned some money that you can't pay back.
In meatspace, avoiding debt collectors and child support is still illegal, whether you're hoarding BTC or just putting cash under your mattress.
Even so, can we agree that if I'm paying for a newsletter subscription online, that the multi-trillion dollar meatspace infrastructure of banks, credit cards, bankruptcy laws, FDIC, and court settlements is basically wasted? Shouldn't I just be able to sign up to a website, instantly pay a fraction of an ETH, and be on my way, no banks involved? That's the core of what crypto promises: web-native money.
> A sketchy exchange hacked 7 years ago and many of the BTC was recovered.
4 years before that article.
> Good luck hacking Coinbase.
That's a matter of when, not if. Like I just said even actual real banks get hacked.
But it doesn't even have to be that clean. It's enough that one Coinbase employee has the opportunity for even one minute. I don't know how much they manage, but someone left alone (or conspiring, for a two-key system), and you can have all the money disappear.
And the thing is, they'll likely get caught in that case. But so what?
The average sentence for robbery is apparently 111 months. Now, I didn't do more research on that than a simple googling, but 10 years prison, and when you get out you're a billionaire?
And keeping in mind that during that whole prison time, your family is stinking rich.
> Proof-of-Stake is about to reduce Ethereum's energy use by 99.9%
Again, I'm not holding my breath. Especially since bitcoin HODLers will never give up, and bitcoin factories have financial incentive to continue the scam.
> So if we stop all crypto brainstorming and innovation
No. You should show some results after a decade of crime and waste.
> What if I told you crypto innovation is making these things better, not worse
I read this as "reducing the problems they created", not "making the preexisting problems less of a problem".
Great. Let me know when coiners consume less power than Denmark for 7tx/sec.
> DeFi lending is designed so that you can't go into debt.
How does that work? Let's say I have a DeFi loan, and then I get drunk and smash a priceless vase, now owing $100M to some art gallery?
So my assets and liabilites are now that loan, and my debt to the art gallery. I go bankrupt, and my assets and liabilities are renegotiated / forgiven.
And the solution can't be "the law of the land, and courts, do not have jurisdiction over DeFi debt". Because obviously they do.
> In meatspace, avoiding debt collectors and child support is still illegal, whether you're hoarding BTC or just putting cash under your mattress.
Yes, but like I said: judgement proof.
Today it sucks to be judgement proof (i.e. you pretty much have to be a bum). In a coin future it doesn't really affect you at all.
> Even so, can we agree that if I'm paying for a newsletter subscription online, that the multi-trillion dollar meatspace infrastructure of banks, credit cards, bankruptcy laws, FDIC, and court settlements is basically wasted?
Not sure what you mean, here. The multi-trillion dollar industry does more than allow you to pay for things online. It's the engine of the whole economy. A better comparison is to compare it to only paypal.
And paypal does have overhead, to be sure. And yes for any happy transaction between you and the newsletter that overhead is waste. But you're paying for when it's not a happy transaction. E.g. when the company goes bust, just plain doesn't give you the product or service, or when your card gets stolen (c.f. someone hacked your computer), and other mishaps.
And also for when actually the newslesser is a front, and "you" are actually just laundering money for them. Compare this to how in the 90s some people set up companios selling ringtones, and then went and bought SIM cards with cash, and used it all on their own ringtones.
You don't have to make it impossible, just too risky or expensive to be worth it. At least with real money. With coins making it risky doesn't help, because the money can't be clawed back, so you can just wait out your prison sentence.
You saying the whole industry is wasted is like me saying police, fire departments, and ambulance are a complete waste, because I have never neither either of them. Hell, I've never even needed my home or car insurance, or my life insurance.
Oh damn, that's a long comment, let me try to answer point by point.
> The core things that blockchain stuff tries to solve are not actually the hard problems.
What are the hard problems though? Depending on where you stand you might see different things, but to me the hard problems are that banks throughout the world have a hard time trusting and interoperating, things are slow (payments have to go through banks correspondences and central banks and the BIS and that route takes a long time even if some of the stages are RTGSs), errors are way too common (basically audits happen all the time, are manual, and consequences of errors are real issues that people have to deal with).
> The hard part of online commerce is not that customers can reverse credit card transactions. The hard part of contract law is not automatic payments. The hard part about property law is not atomic transactions of money and deed transfers.
What are the hard parts from your point of view? Is your point of view that the system is perfect and doesn't need the technical improvements proposed by blockchain? I'm not sure I follow.
> It's not trivial to track money, but the stated goals of cryptocurrencies is to make it hard or impossible to trace, and to compel.
I feel like that's too much of a strong statement considering that some cryptocurrencies, which I've worked on, were built specifically to follow regulations and make fraud hard.
> The explicit goals of cryptocurrencies is to get around AML & KYC laws. This is what Pintrest was talking about.
Again, there are many cryptocurrencies with very different goals and this statement can't apply to all. The statement is at least very wrong for some well-known cryptocurrencies.
> We as a society, as a people, don't even want people to be able to send money any way they want. E.g. we don't want people to be able to send money to ISIS. There's a "baby and bathwater" argument that can be made here, but since cryptocurrency people don't even WANT to prevent this use case, it's not what they're making, or selling.
So, ignoring what I said previously that different cryptocurrencies have different goal, and so that statement doesn't apply to the field in general, there's still something to be said about that. How much privacy do we deserve? Where is the line where privacy is too strong that it is damaging to society? There's a very similar argument with end-to-end encryption in messaging applications and governments trying to fight it. For example: https://www.gov.uk/government/publications/international-sta...
> Like airline security, it's not effective because it's perfect, but because there's too much risk that one of the layers will catch you.
BTW I don't think airline security is a good example. Adam ruins everything has a good episode on that: https://www.youtube.com/watch?v=-LDzOi1dyAA (tl;dw: it's security theater)
> Reversibility: People don't want this. One of the main reasons to use a credit card AT ALL is that people want reversibility. If that's all you wanted then you can probably just accept debit cards.
Credit cards are mostly a US thing btw, I never knew about them before moving here, and even in the US reversibility is not always a thing. For example, you can't reverse transactions done on venmo or zelle. But even then, cryptocurrencies don't preclude reversing transactions, there's nothing in the technology that would prevent that, especially if it used as a settlement layer for virtual assert service providers (exchanges, banks, etc.)
> And as for smart contracts: All smart contract systems need a way for a court to interpret the contract. The contract may not be legal, it may have been signed under duress, etc.. So all smart contract systems need this escape hatch.
I'm not sure I understand your point. A smart contract has its code published in clear so by using it you already choose to trust and obey the code.
> The most ridiculous one is "land ownership registry". You know who ultimately decides who own a piece of land? The government of the country it's in.
Agree, linking real objects to the blockchain is hard, and projects that tout that usecase are often scams.
> And note that all this is in addition to technical problems like PoW/PoS, electricity use, scalability, transaction speed, 51% attacks, etc... Even assuming all those are solved, the problem is the the very GOAL is a dystopia.
PoW/electricity use are things of the past for the technology. No new cryptocurrency rely on these. Scalability and transaction speed are things that are being solved (I believe Algorand is aiming for 20k transaction/s for the end of the year). There are other consensusless protocols that pretty much scale linearly based on the number of machines you throw on the problem (see fastpay or At2).
BTW if you have any question, happy to continue this conversation or clarify anything.
I mentioned this. E.g. "The hard part is codifying your intention into legalese, and conflict resolution".
But again, I would invite you to talk to some contract lawyers and see what the hard problems are in their space. And carefully listen to how they solve them, and if your cryptosolution maybe not only doesn't solve the problem, but actually makes it worse.
Especially internationally, where you maybe hire a service, but then one of the countries involved has export restrictions, or immigration requirements, or whatever else.
These blockchain things are explicitly made to "go around" all government regulations (that's why they can say it'll be cheaper and more efficient). But the companies still have to obey the law, or they'll go to jail. So no that's not the problem.
> Is your point of view that the system is perfect and doesn't need the technical improvements proposed by blockchain?
I have not seen a solution based on blockchain that solves a hard problem. Nor have I seen one that doesn't make a hard problem even harder.
E.g. when I bought a house I had to prove to the bank and various involved parties where the money came from. And then when transferring I had two people from the bank walk me through it, to make sure this 6 digit cash transfer was legit.
It was annoying, yes. But I understand why it's there. To say "oh if this had been bitcoin you could just have transferred and it would be there in an hour". Or "had this been a smart contract it would have triggered deed transfer". Ok, sure. But what if there were some legal dispute and the seller was about to lose the house? That I would essentially be buying stolen goods?
What if the house had known deficiencies that the seller provably knew about but lied about during selling? If this had been Bitcoin they could simply decline to pay me. They'd launder it in Monero, and sucks to be me.
It's easy to set yourself up to be judgement proof if your assets cannot be seized.
> Credit cards are mostly a US thing btw, I never knew about them before moving here, and even in the US reversibility is not always a thing
I've lived in two countries, neither of which are the US, and credit card extra protection is certainly not US-only.
But that was still not my point. I'm saying reversibility is a feature. That mainstream finance can deliver. And it's good, so cryptocurrencies should too. They mostly do the opposite on purpose, which shows that they are not actually making what people actually want in a currency.
> Again, there are many cryptocurrencies with very different goals and this statement can't apply to all. The statement is at least very wrong for some well-known cryptocurrencies.
zcash, I believe, makes lip service to AML/KYC, but to me as a non-ML-investigator it smells a bit loophole-y, and one that may close.
> BTW I don't think airline security is a good example.
Adam ruins everything (and I've seen it) is entertaining and informative and all, but while yes there are aspects that are security theatre, turns out many of them do add up. The hijackings of the 70s largely went away. But also, Adam's not even saying airline security is security theatre! He even enumerates four added security features that DO stop terrorists. He's talking about the TSA. And then Bruce Schneier says more relevant things.
So the sum of airline security is: good old fashioned police work, infiltration of organizations, wiretaps, anomaly detection, behavior checking (Israel does a lot of this, and the have a good track record despite the obvious targeting), TSA, passengers, air marshals, reinforced cockpit doors, etc..
So if you want to be successful, then you have to get past ALL that.
And while the TSA doesn't do much, any suicidal idiot could just get on a plane with a fullauto in his carryon. At least now he has to weigh the risk of being embarrassedly found in the security check.
So maybe he probably switches to a handgun instead of the AK47. So he's less dangerous.
> cryptocurrencies don't preclude reversing transactions, there's nothing in the technology that would prevent that
Sure. But every time someone tries to sell the benefits of cryptocurrencies they will list this as a feature. And again this is my core point: All of the features they list, are actually bugs. And if you invent a cryptocurrency without the bugs, then it doesn't actually solve anything for anyone.
> I'm not sure I understand your point. A smart contract has its code published in clear so by using it you already choose to trust and obey the code.
It's not your choice to obey an illegal contract. And it shouldn't be. That's the point of contract legality.
And the hard part of writing a contract is not the enforcement, but codifying your inner intent into a bugfree contract, signed in a legal manner.
If you hold a gun to my head and force me to sign a smart contract, and I can prove it, how can a court invalidate the contract if you refuse to sign the invalidation block?
> PoW/electricity use are things of the past for the technology
This is the most reasonable comment in this whole thread. It’s good to acknowledge the current mania and the type of unethical behavior it attracts, but it would be intellectually lazy to dismiss the whole field.
Who is "locked out" of the traditional system? The stock market seems easier to get into than ever. I always hear this as a dig of the existing structures but its starting to sound just like the other pro-crypto memes out there.
I am for one, living here in Iran, where in the last year millions lost money by "investing" in the regime's "stock market." I didn't, lucky me. Now the inflation has taken my money instead. Not to mention the taxes, which keep growing YoY, while basic government services such as electricity is regressing to being daily down for hours.
Consensus algorithms are inevitable. Either we use our current corrupt, politically-driven consensus system, which exploits workers, minorities, and generally anyone not rich and powerful, or we bother to engineer some consensus algorithms that has some bounds on the corruption possible within it.
I’m in the field and I would be careful with OP’s pov. I don’t trust the opinion of a bitcoin maximalist as much as I don’t trust the opinion of someone who has little clue about the field.
Someone saying that crypto will replace the USD = someone saying that crypto has no usecase and is only used for fraud.
Unfortunately it really takes a lot to have an opinion on the field imo. Money is very abstract and so you need an understanding of crypto, of economics, and of how payments work in the world today.
The twitter thread mostly uses the full term "cryptocurrency", which is not ambigous. Using the term "crypto" to refer to cryptocurrency is amigous and misleading.
> Using the term "crypto" to refer to cryptocurrency is amigous and misleading.
To whom? “Crypto” is the colloquial shorthand for “cryptocurrency”. And I believe those thinking otherwise are reacting to the new usage encroaching on the old. Petty hill to die on…
The "crypto" world, as in Cryptography has far more practitioners and far more hardware and software than cryptocurrency. And most of of the world's communications (among other things) rely on "crypto" as in Cryptography. The "old" usage (as you put it) remains orders of magnitude more instrumental to all of our lives than blockchain technologies (which is a far more accurate name). And will remain so, for the rest of all of our lives.
I have had banks stealing my funds for years -- be it financial providers eating up my first 401k contributions in excessive fees, be it the banks that charged me $2 every time I used an ATM, be it the random charges unauthorized charges that the bank pulled from my account...
Then there is the watching all my adult life as assets grow more expensive and further out of reach, a debt treadmill emerges to ensure the continued struggle of the middle class lest they try to escape their position.
This is in the west. I can't imagine the shenanigans banks play on folks in less regulated jurisdictions. Maciej, I'm sorry that you refuse to get it. We need hard money to prevent the value loss of the time-store fruits of our labor. We need an explicit spend model to prevent unauthorized charges. We need a way to prevent the custodian of funds from helping themselves to your pocket. Better yet, we need a digital store of value that does not require a trusted third party. And we need to make sure special interests can't dictate who is able to spend their money.
For this, it is the most valuable thing on the planet.
Depends on your background and experience, I guess. In many European countries ATMs are free, even outside your own country. It is considered an elementary part of the banking service that you don't have to pay to withdraw your own money.
Many European countries also charge negative interest rates. In Switzerland, where I live, bank balances above CHF 100K gets a flat -0.75% interest rate.
Since 1993, the Swiss inflation rate has been well below 2% in every year except 2008, so you'd still come out ahead compared to the US--assuming you weren't spending all your money on ATM fees.
Someone somewhere is paying for the fees. I imagine it’s the collective of all people paying for it rather than the people actually using the machines. A bit unfair.
From my experience this is true for bank clients in Belgium, the Netherlands, France, Austria and Spain (but the latter only at your own bank).
When I withdraw money with my Belgian debit card in the Eurozone at any ATM (including Berlin), I do not pay any fee. And this is true for all major Belgian banks.
Of course, if your account is not in the Eurozone (US?) or denominated in EUR, or through a basic credit card (visa) then usually a fee would apply.
This argument, that the existing financial markers and institutions are broken for the average person, is somewhat addressed in the linked twitter thread.
But that doesn't necessarily mean that the present alternatives (bitcoin, altcoin of your choice) are THE answer either. It's not a binary thing. Something may emerge that is valuable and useful and decentralised but I haven't seen anything that fits the bill yet.
For the vast majority of people Bitcoin is an investment because the price is going up. The price is going up because lots of people think it's a good investment. It's a self-fulfilling prophecy until it's not. Then it's every person for themselves and someone will be left holding the bag.
Yes, some people can use Bitcoin to buy goods and services. But if all the speculators were to decide they wanted to exit the market at approximately the same time do you really think the price is going to hold anywhere near where it presently sits? And are those people using Bitcoin for purchases going to hold, or are they going to exit their positions too?
Phrased more simplistically - can we all agree that the vast majority of xCoin holdings are speculative?
The issue of the "promise" of cryptos (and blockchain in general) is that it tries to solve problems that are not tech problems.
They are mostly political/governmental problems that are solved by a working democracy. In countries where there is no working democracy, the dictator won't give two shits if this NFT proves that you own this piece of land before taking it from you. Blockchain in itself is not something that brings political stability to a country.
That's a sizable assumption to begin with. Democracies are less and less, well, working because the Internet itself has eroded trust significantly and is moving the parameters of epistemology around. That is a problem caused by tech, so how is it not a tech problem ? The work done in the blockchain space on trust is IMO very important.
The blockchain has nothing to say about trust outside of its ledger, which is to say in the physical world. Even if you try and hook it up to physical sensors, the sensors themselves can be compromised just like anything else. Any people who are currently distrusted by other people could just as easily put lies into the blockchain, so it has nothing to say about that kind of trust either. The only thing the blockchain allows you to trust is “X was entered into the blockchain previously”.
Actually, my understanding is that cryptocurrencies are having impact in developing countries. They can address hyperinflation, access to financial services, general friction in exchanging money etc.
For example, Erdogan flat out banned businesses from accepting cryptocurrency when he saw that people were putting their money in cryptos because of the inflation of the Turkish Lira.
It's not like cryptos are a stable currency, either. Question: Wouldn't it make more sense for people in develping countries to buy more stable assets or currencies, or is it not possible to that because of a lack of access?
One of the most common arguments used against Bitcoin is "it's only good in black markets." That's essentially what OP said. Do black markets not operate when Bitcoin is banned by government? Is this not the essential function cryptocurrency exists to serve? The outcome in Turkey for Bitcoin will be indicative. I have a timeline of 5-6 more years before I count it out.
Venezuela was using Bitcoin a lot when they were experiencing hyper inflation. I just Googled this again for an update and I saw that they may have dropped their former currency altogether?
I think access is a major problem here, although I haven't dug into the issue enough to know for sure.
yes because it’s so easy to get stable internet access, electricity and, translate fiat to crypto (without an equivalent to coinbase and without a credit card) do you have any idea what’s it’s like to be in a developing country? do you know the literacy rates? do you think crypto things are in their languages? do you see all the exit scams?
With all due respect, people have been predicting that “$thing will (finally) be what leads to hyperinflation in the US” for decades and decades, but it has never happened. That’s not to say it can’t happen... but that predictions of imminent hyperinflation have historically been a poor bet and that extraordinary claims require extraordinary evidence.
They never transact with people in countries that have strict financial controls, so the problem does not exist for them. I pay people in Venezuela in cryptocurrency because nothing else is a viable option.
There's an assumption that people should think evading currency controls and taxes is somehow heroic. I'm happy that crypto allows people to violate US sanctions, but that's because I'm specifically against US sanctions, not the rule of law.
The people who have the capability to use and exchange cryptocurrencies in developing countries are those who already have local or foreign bank accounts denominated in USD or EUR.
These same people then mine coins in those countries, utilising cheap or subsidised electricity, resulting in power shortages.
As we have seen in Turkey, these exchanges can be easily shut down, or the founder can simply disappear with all the cash.
These are not really long term solutions, and the existence of cyrptocoins is probably making the individual lives of people in the 3rd world worse.
I think its more likely that if these grey-market coins didn't exist, the local tech bros in the 2nd/3rd world would actually be pushing Governments to improve general financial regulation and stability, and building a proper series of banking companies themselves.
The nice thing about Bitcoin is that it doesn't have a jurisdiction or location[1]; you can solve some problems in some places via a functioning government, but Bitcoin solves some problems in all places simultaneously.
[1]: this is not to claim, as some do, that it is unregulatable, although it may be.
Far as I can tell bitcoin boosters are either people that can't trust people for some reason, like they are doing something grossly illegal. Or they hate having to trust people.
Reasonably private online payments. It's the closest to cash on the internet in terms of privacy.
(HN is a very pro-privacy community, judging from Apple vs. Google discussions, so I take it for granted that a desire for privacy doesn't need further justification or elaboration.)
Not really. Your wallet address needs to be shared with others if you want to transfer money, and anyone that knows your wallet knows all of your transactions. If Google decided to build a crypto wallet into Chrome, I think you can agree it would trivial for them to see all of everyone's transactions.
I agree that BTC has terrible privacy. But this is a BTC problem, not a Bitcoin problem. A smart Bitcoin wallet would not reuse addresses across transactions, and would split your coins into many fragments, making them virtually impossible to trace. But to do this you need low fees and therefore big blocks - what BSV and BCH are doing. Several wallets on BSV already do this today, like HandCash (https://handcash.io), and the user experience is fantastic.
In case anyone reading this is as confused as I was: there is a schism in the cryptocurrency world where two forks of bitcoin, known as BCH and BSV, both still claiming to be bitcoin-but-not-that-other-bitcoin (BTC, the token meant by 99.9% of people who say "bitcoin"), have decided that their pope is the only authentic one.
Close. Bitcoin is a concept for a system - described in a whitepaper and in forum posts, and expressed in an initial release. BTC would prefer you think they alone are Bitcoin, but is the Catholic Church alone Christianity? Certainly not. BTC, BCH, and BSV are all implementations of that idea, each with various degrees of similarity to the original Bitcoin, and each of which share a history back to the genesis block. Interestingly, when you dive in, you'll see that BTC is the one that has diverged the furthest from the project's original goals and protocol, not the so-called "forks" BCH and BSV, which were both created from not wanting to change protocol rules. This is good reading if this viewpoint is new: https://thatsbtcnotbitcoin.com
Almost any online transaction today (in the US, at least) involves a credit card or PayPal, either of which divulges your name and maybe location to the merchant. Bitcoin doesn't.
I don't know what to make of your strawman about Google. This thread was asking about problems Bitcoin solves. Bitcoin allows payments without an intermediary automatically divulging your identity to the other party to the transaction. It doesn't also need to end the arms race of consumer privacy in tech in order to be a useful advance for privacy.
> The threat of unwarranted civil asset forfeiture.
That's exactly what I'm saying in my original comment, though. Do you think a government that wants to disown your assets cares if you have an entry in a database that proves that it's yours by law? THEY are the law, fuck your blockchain.
> The threat of arbitrary unbounded inflation.
Again. People who are affected by this usually don't have the means to just log into Coinbase and buy some crypto. Even if, it's not like it's a very stable place to put your money in to.
> Do you think a government that wants to disown your assets cares if you have an entry in a database that proves that it's yours by law? THEY are the law, fuck your blockchain.
If they cannot deprive you of the key, they cannot deprive you of use of the assets.
If everything is considered ‘owned’ based on NFTs, and other stuff relies on that to verify ownership and provide services, then the government talking the physical land only gives them the utility of the land itself, and not the other stuff (eg. The ability to sell the property) - plus, the government superseding a fictional blockchain-backed real estate market is likely to cause a market crash.
Blockchains and NFTs make sense only when the blockchain becomes the source of truth, and it does solve real problems - it just doesn’t work for cryptocurrency when someone’s $1 could be worth 30 cent or 6 dollars in just a year. Nobody wants that amount of uncertainty.
Claiming you have the ability to sell some property when all you actually have is an NFT that purports to represent ownership of the property, but the property itself is in the hands of a government that doesn’t recognize that NFT is going to have a significant impact on the sale price you can get for that NFT.
Property rights are always going to rest on the rule of law, and in places where the rule of law is strong, property title law is well established and doesn’t need a distributed ledger to disrupt it. Disrupting it would generally be bad.
I gotta give you credit, "NFTs are important because you can otherwise only have the actual use of the land, not the financially-speculative value of the land" is a bold take given that usually the cryptocurrency pitch (that CCs are a good store of value because they won't inflate relative to real assets) is exactly the opposite.
I've worked in both finance and technology. I think the technical people aren't seeing how amazing this is from a finance point of view. Payments are going to be completely transformed by this. All of fixed income will change to be oriented around crypto. It's just a matter of time.
All the main preconditions for crypto to take off are finally in place. If you are a professional money manager or CFO there is no way in hell you are going to risk managing your own keys, let alone keys on behalf of a customer or supplier. The largest impediment to all the good blockchain projects has been the lack of a cheap, affordable, insured custodian for key management.
It's taken years to get to this point because these issues aren't technical in nature; they're governmental. The SEC weighed in on what it takes to be a qualified custodian near the end of last year, so now finally some of the larger names in this space have said they'll offer services.
All the best, obvious use cases for crypto have been blocked by this issue: automatic payments, self-settling contracts and futures, escrow with almost 0 overhead, trade finance, etc.
No you can't. The protocols for buying and selling or making payments haven't changed in decades. The problem is communication authority and scaling, not the data format. Blockchain enables so-called triple entry accounting. Everyone sees everything everyone else is doing (if you want them to). There is never an argument about who did something or why. Just consider the audit and servicing cost savings.
Who's going to run that db? How much are they going to charge? Are they going to let anyone write apps on top of it? Do they have a plan for %99.999999999 uptime? Will people lose their data/businesses/livelihoods if this system stops being operated and what's the assurance for entrepreneurs?
There's a lot of details that go into running something like that and none of those questions are trivial.
Companies (and especially banks) have been running large scale databases for decades. The cost of IT infrastructure is absolutely negligible compared to salaries.
And yes they have been given assurances to entrepreneurs. I have been on this planet for 30+ years and my bank accounts have never gone to 0 because of a “database problem”
Your bank isn't doing anything very advanced. It's just keeping the equivalent of an excel spreadsheet in a database with some front end software to manage it. You can't write apps on your banking platform.
> How much are they going to charge? Are they going to let anyone write apps on top of it?
Banks don't currently do this and never will as the overhead is way too much work and far too expensive. The closest example we have is AWS which is extremely complex and can't actually be used for anything dealing with money.
It's easy to naively think about a big organization building a platform like Ethereum but once you start designing it out you realize the problem is far larger than it first appears and it would take years and an army of lawyers to make any headway.
What exactly is your point? That banks aren’t advanced enough?
Last time I checked there are already tons of apps for banking use cases. I use a third party budgeting app across multiple accounts. For my European bank account I use a third party tool to wire money. During my time as a freelancer I used tools that fetched my transactions, automatically categorized it and gave my accountant access to it to prepare my taxes.
What use case do you want to build that can’t be build on top of an API?
Very simple game theory answer to this question: tragedy of the commons. There is a reason popular culture stereotypes financiers as greedy sociopaths. If the system can be cracked then it will be cracked. No shortage of examples, Bernie Madoffs, subprime lending crises, endless financial crashes and crises.
Blockchains solve this problem, as in mathematically proves that certain classes of exploits requiring information asymmetry are impossible.
We could have all of this with open banking standards? You're looking at them!
That sounds like a typical blockchain enthusiast answer:
The banking industry is corrupt. Blockchain solves this. End of argument.
I have yet to see a specific, easy to explain answer on how blockchain solves any kind of fraud. Who is forcing any of these fraudsters to put any information on the blockchain? As soon as you need external safe guards you are back to square one.
I don’t have the solution to any of the problems of the banking industry but in my experience technical solutions don’t solve any of these societal problems.
Well my answer would be that there are many different types of exploits that we may consider fraud. As I said blockchains prevent _some_ of these exploits but not all. I don't think we can prevent laundering of illegal arms sales with cryptocurrency just as I don't think we can prevent the same laundering with actual paper bills.[a] However blockchains do prevent problems like double spending and information asymmetry from occurring.
My counter point to the lack of specific, easy answers on how blockchain solves any kind of fraud would be that there aren't any, in that there is a certain amount of financial and technical know how that is prerequisite to explaining _why_ these problems are provably non existent. We will need to wait for higher level abstractions to be invented before mainstream adoption is possible, and until that happens I will admit cryptocurrencies are almost hopelessly confusing in their mechanisms of action.
[a] China's new central bank currency may be able to solve this problem to some extent but I consider the forced adoption of such a currency in the Western world to be too draconian to be practical.
So blockchain solves some unspecified subset of fraud. But only people who know enough about finance and technology are able to understand how this fraud is prevented?
A lot of time has passed. Why has no one come up with these higher level abstractions?
All I can say is that it can't be built overnight. There were 32 years between ARPANET implementing TCP/IP and AOL mailing install floppies around the country. I cannot claim to know that crypto will have the same impact as the Web has, but I claim it will require a similar amount of time to develop.
ARPANET implemented TCP/IP in 1983. The first AOL floppy disks were sent out in 1993. So thank you for proving my point.
Even assuming your timeline is correct. And even ignoring that the top comment on this HN addresses this exact point pretty well: Are you telling me the goal post is now 32 years?
And while we’re picking arbitrary points in computer history. The iPhone was released in late 2007 and is around 2 years older than the Bitcoin blockchain. I hope I don’t have to make the argument that smartphones have had a bigger impact on society than any kind of crypto/blockchain solution.
Say instead of using a bank to store your money you store it on the blockchain. Suddenly you don't have to worry about Wells Fargo opening accounts in your name and charging you fees for those accounts.
Say something like a traditional bank emerged on the blockchain in the form of a smart contract and you stored money with them to have them invest it or something. There would be a public record of all charges the smart contract billed you for and tracking the history of it would be way easier than piecing together your Wells Fargo statements to figure out they've been charging you a couple dollars more every month. This also would be much easier for auditors and financial crime investigators to notice.
> Say instead of using a bank to store your money you store it on the blockchain. Suddenly you don't have to worry about Wells Fargo opening accounts in your name and charging you fees for those accounts.
Great you solved a very specific problem and replaced it with a myriad of other problems. Who is gonna take care of your private key? Are you really that confident in your tech skills that you can keep the private key to your money safe? I am not. If someone else issues and protects your private key, what’s stopping them from charging you fees for nothing (or spending all your money).
> There would be a public record of all charges the smart contract billed you for
I as a bank customer have exactly zero interest in my transactions being “public” (I know they would be pseudonym, still pretty risky). The risks I imagine coming with this outweigh the supposed advantages by a lot.
> tracking the history of it would be way easier than piecing together your Wells Fargo statements
I don’t know in which century you live but I have a history of all my transactions of all my bank accounts in the interface of my budgeting tool. I can immediately see if there is a suspicious charge. But maybe you have a recommendation for a blockchain based budgeting tool that lets me see details of every transaction, rather than public keys.
> This also would be much easier for auditors and financial crime investigators to notice.
If it was so easy to investigate shady things on the blockchain why aren’t all these pump and dump scammers and ransomware groups in prison?
Yyy. Once you've experienced 24x7x365 instant, no-human finance, there's no going back to mountains of random paperwork, random bank policies, 1pm wire transfer deadlines, etc etc etc
Where do I experience this though? Mostly it’s transfer coins on/off exchange to convert to fiat. Some stores take crypto but it turns out more expensive and there is less choice if I restrict my stores to ones that so
No one is going back to a Fed fund rate pegged savings account after parking stablecoins in a DAO governed yield farm aggregator.
Critics think we're in the Dotcom bubble of crypto right now, but we're still in the Usenet stages. You need technical expertise in finance and computer science to grok crypto. I would ask any naysayers to this point in particular to share their understanding of some protocol like Aave, Sushi or Yearn and how these fail to surpass similar products in the space of traditional finance.
How do you think your bank manages to make billions of dollars in profit every year? Do you think the money that millions of Americans lend to them for effectively 0% returns has anything to do with it? What do you imagine they do with that money, and how does it differ substantially from what DeFi calls yield farming?
Yield farming carries a similar or greater risk to investing in stocks and sector ETFs, and that is certainly not what retail banks do with customer funds (that was outlawed by the Volcker Rule in Dodd-Frank), nor is retail banking how investment banks make money. Nevermind that there obviously is no FDIC insurance for these crypto "savings accounts".
You're asking good questions, but be careful not to jump to easy answers -- you might lose your money!
My point is that a bank is essentially a commissioned matchmaker for lenders and borrowers, and that depositing your hard earned money in a traditional big bank savings account is effectively a free cash flow for them insured by the U.S. government. So while I agree with you that a Citibank savings account and a Yearn USDC deposit have frankly incomparable risk profiles, in the sense that if the bank ever needs to claim FDIC insurance then shit has truly hit the fan, I disagree that these two positions generate income (or lack thereof) in any fundamentally different way.
I would not recommend my grandmother uses Yearn, but I also wouldn't recommend that my little cousin who knows how to program saves her money in a Wells Fargo account either.
Regardless I appreciate your considerate comment. I always know something interesting is afoot when HN relentlessly downvotes both pro and con comments.
1. Promise a revolutionary technology ("self-driving cars are coming"!)
2. Use that promise as a pretext to ignore all regulation
3. Make a fortune
4. Drop the tech story
The author lost me here. Completely subjective take on what Uber has done. They've completely improved ride-sharing and cab hailing within the whole industry, including non uber users. Depending on what country I travel to, Ill be using a different app like Grab or Didi or a local taxi app that were all made possible by Uber's initial disruption.
Some of those financial regulations are unjust. People can send remittances in crypto to relatives in repressive countries, and you hear their stories from boosters. But people also want to move billions in untraceable crime money around. Guess which traffic predominates
IMO the former outweighs the latter. Perhaps remittance doesnt sound like a big deal to the author because they may not know immigrants who use these crappy services. The thought of punishing some darknet users buying pills online is more alluring than focusing more on fixing the flaws with remittances. I'm talking new residents who pay income taxes on their biweekly paycheck(fair) and then pay western union(bad deal, less fair) to send 50-200 bucks to family in far off places with spotty infrastructure and electricity, in remote places where there are no ATMs and the relative has to travel 2 hours into town to pick up their western union transfer. Millions of people go through that every day and I'm much more interested in crypto solutions and dont mind if it takes some uber style disruption to fix that later on.
I'm the author of the thread. For what it's worth, I grew up as a refugee whose mother had to find incredibly inventive ways to send USD to family back home, where it was illegal to possess.
What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency. My hunch is that a lot of the value of cryptocurrency in those countries comes from the fact that it's been astronomically increasing in value, not that it's a great way to move money around remittance barriers.
I don't know anything but it's not hard to see how this might work somewhere like Venezuela. Cryptocurrency seems most useful for black marketers to get funds out of the country, which will create a demand for it. If ordinary people get cryptocurrency from relatives, they can trade locally to get local currency, then use it to buy black market goods. The local money recirculates and the cryptocurrency funds sanctions-evading imports.
Whether this is a good thing or not probably depends on what you think of illegal markets in desperate situations.
If you look at that thread, people are relying on a company called Reserve, that essentially issues its own currency (a 'stablecoin'). This is the part that I don't get—how is it cryptocurrency when you are relying on trusted third parties?
I've been trying to find coverage of Reserve from non-Bitcoin/Cryptocurrency publications - basically because I don't trust any of those publications - and I've not been able to find anything convincing yet.
This is a general problem I have with crypto stories: every crypto coin has a built in incentive for people who hold it to hype it so it's really hard to tell if actual regular users are finding it useful yet.
> What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency.
The final goal is not to be able to convert crypto to fiat, the goal is to keep everything in crypto. Do you think all this infrastructure is being build just to convert it back to fiat, what cypherpunks want is to destroy fiat.
I understand the final goal, but if I want to send my relative in Venezuela half my paycheck this week, how does she spend it on groceries and at the pharmacy before the Crypto Revolution comes?
Inevitably the answer is "some trusted third party" that turns it into a vanilla remittance.
I live in Argentina, not Venezuela, but here there are 3 ways to go crypto -> fiat.
- If you have a bank account you can go through crypto exchanges. Centralized of course.
- There are p2p platforms that connect buyers with sellers. So in the platform, similar to Binance p2p, you can see how many transactions other people have and buy/sell crypto from them.
- There's a black market which has home-delivery. So you contact them through the internet (you can find links in reddit and other sites, most go through Discord) and they send you a person with your crypto/fiat and make the transaction in your home. You can also go to their location if you prefer.
Not sure if that really answers the question, but if I was receiving remittances from abroad doing options 2 or 3 would be simpler and cheaper than using any traditional finance tools, which all require you to have a bank account in the first place (a LOT of people don't have one here because of the requirements to open one) and have higher fees and bureaucracy.
Once you have enough liquidity of cryptocurrency in the country this isn’t an issue. And the incentives to own cryptocurrency in a place like Venezuela is high.
But how, you can't use Bitcoin for day to day transactions due to slow settling times and high transaction costs. You could use some of the alt-coins, but how do you coordinate which to use and why would you trust it?
These pieces[1][2] on the economy of soviet Poland say there was a black market of US Dollars:
> "the government, which controlled all official foreign trade, continued to maintain a highly artificial exchange rate with Western currencies. The exchange rate worsened distortions in the economy at all levels, resulting in a growing black market and the development of a shortage economy.[25] The only way for an individual to buy most Western goods was to use Western currencies, notably the U.S. dollar, which in effect became a parallel currency. However, it could not simply be exchanged at the official banks for Polish złotys, since the government exchange rate undervalued the dollar and placed heavy restrictions on the amount that could be exchanged, and so the only practical way to obtain it was from remittances or work outside the country. An entire illegal industry of street-corner money changers emerged as a result. The so-called Cinkciarze gave clients far better than official exchange rate and became wealthy from their opportunism albeit at the risk of punishment, usually diminished by the wide scale bribery of the Militia.[23]"
> "As Western currency came into the country from emigrant families and foreign workers, the government in turn attempted to gather it up by various means, most visibly by establishing a chain of state-run Pewex and Baltona stores in all Polish cities, where goods could only be bought with hard currency."
>> What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency.
For all the harsh words you posted without evidence, thankfully you've at least admitted you don't understand much.
Your premise is that cryptocurrency is not "spendable currency" which is simply false. I pay people in hyperinflationary environments in cryptocurrency variants with low transaction costs and fast speed, and they in turn directly spend it on physical goods like food.
I think NFTs will transform the concept of ownership, and take power away from major corporations in the process. This is just one aspect of crypto that I think more than justifies its value. But there is a ton of hype and a ton of bad stuff going on yes, but that will be pushed to the background as it goes more mainstream. All people inside the industry think this is just the beginning and there is a lot of value to be extracted. Is it overvalued for what it delivers on today? 100%. But I believe it will catch up and surpass it soon. There are multiple singular companies that are more valued than the entire crypto market right now. It’s a drop in the bucket.
I don't understand the belief that any of this takes power from corporations. If you look at NFTs right now, big participants include the NBA, Sotheby's, and a whole lot of venture capital. What's the dynamic that's going to shut them out as they become more lucrative?
Creators of content controlling that content without the need for big corp involvement, which can be corporations yes, but also the little people. This could be access/distribution, royalties, licensing, and more.
The big corporations have binders full of techniques to take control of content from the little creators and claim it for themselves. A popular one right now goes: A one-person operation making and selling designs could find their online work subject to pointless DMCA complaints or even threats. They'd crumble at even the threat of a big corporation actually suing for infringement. Now the big company copies the individual's designs, and collects rent on something it didn't create.
An NFT is ... a digital receipt that “money” flowed at one moment in time. The referenced digital artwork or something is only referenced by an URI. That is ownership? Seems a very transformed concept to me.
My supermarket gives me an NFT in paper form every-time I buy something.
I think NFTs will transform the concept of ownership
The current concept of ownership appears to be that if I own something, broadly speaking, that means people generally agree (and the state, and ultimately their monopoly on force, will back up) that I get to say what gets done with it and who gets to make use of it, and that it's not OK for someone else to take it away from me without my consent.
If NFTs are going to change that, I'm not sure I like it.
> They've completely improved ride-sharing and cab hailing within the whole industry, including non uber users.
They only did that in some places where there were poor Taxi markets (medallions etc). In places where you could hail a cab follow it and pay for it with your smartphone years before Uber, they did nothing. They didn't exactly invent that. They just said that because magic fairydust they could do that also in cities where the law said they couldn't. Which is kind of strange when you thinnk about it.
> Depending on what country I travel to, Ill be using a different app like Grab or Didi or a local taxi app that were all made possible by Uber's initial disruption.
Local Taxi hailing apps were first. Uber adopted this and their disruption of many local markets happened only after offering cheaper alternatives by burning money.
I worked on a short-lived idea for taxi hailing apps before the iPhone even existed. The target then was Palm Pilots and feature phones. Alas, before its time.
Yeah that Uber thing struck me as false too. It was obviously a ride-hailing app and provided a superior service to what existed before. The self-driving thing came up later and was always a sideshow. I suppose it helped them raise money but it was hardly their "pretext to ignore all regulation".
What is surprising is how large the number of techies who don’t get this. It’s not about crypto currencies as much as it is about the game theory that allows it to run a distributed self replicating state machine that is Byzantine tolerant - this is the true innovation
It's not a particularly interesting Byzantine mechanism. Like every other such mechanism (in the absence of trusted computing and similar tricks) it has a n = 3f+1 limit. See the selfish mining paper for why it's not n=2f+1.
It's just the Byzantine mechanism that happened to win. If anything, its innovation is that its n is based on hash power, not on number of users or nodes.
And the cost? Having to drag an immutable database around that can't be simplified; and, obviously, the opportunity cost of all the energy that's being used to support the consensus.
The game theory part is likely to be inexorably intertwined with the cryptocurrency part. The incentive to defect is blunted by people's investments, either in terms of hash power machines (for PoW) or in coin holdings (PoS). It would be very difficult to construct something that would be self-replicating/hype-incentivizing but not reward early comers the same way.
> It would be very difficult to construct something that would be self-replicating/hype-incentivizing but not reward early comers the same way.
Can you clarify what you mean by "the same way"? I wonder if you meant "reward the early-comers in _some_ way."
Yes, early miners of a cryptocurrency have an advantage, in the sense that there is less competition in computing resources. However, when you factor in risk (i.e. likely return on investment and opportunity cost), this "advantage" may not seem worth it. It depends on one's risk profile, awareness, opportunity, and skills.
Thinking along game theory lines, when designing a system that requires up-front work, it seems clear that early participants will look for risk-adjusted rewards downstream.
I don't know if I agree with the "very difficult" aspect of your comment. Many real-world systems exist that are not clearly explained by game theory; humans are more complex than their theories.
Just to give one example, family genealogists typically are more than happy to share their historical research and family trees with others without expectation of personal gain. They do it largely because they want their ancestors to be remembered in the context of history. Of course, there is also some incentive for the _ genealogist_ themself to be remembered and perhaps to be perceived as important. But my point stands -- family genealogists don't expect to be compensated at all, much less in a pyramid-scheme kind of way. They are happy to create something of value and share it. Of course, a big difference between these family trees and cryptocurrencies is that the former are non-rivalrous.
I suppose I was implicitly assuming "in an economic manner". You're very right that humans do things that narrow, economic game theory can't account for (e.g. the RAND secretaries playing Nash's "So Long Sucker").
To put my argument in context: consider IRC. An economically motivated BFT system would give the IRCops and channel ops some kind of quantified share of power that they stand to lose if they defect. But doing that, I think, would not just be a difficult programming exercise; it would also undermine the ops' intrinsic motivation and lead to a worse environment.
So the likes of Bitcoin work well if the protocol is designed for (game-theoretically) selfish participants whose interests lie mainly in the number going up. But that's a very narrow niche. Your genealogy site would probably suffer if it had a "number of family names added" counter and the users' status was measured entirely by such a number.
> Weighted users.To prevent Sybil attacks, Algorand assigns a weight to each user. BA⋆is designed to guarantee consensus as long as a weighted fraction (a constant greater than 2/3) of the users are honest. In Algorand, we weigh users based on the money in their account.
That 2/3 is your n=3f+1 right there. It's just that, as I said of PoS in general, the n is based on coin holdings.
This is not controversial, as the authors of Algorand are completely aware of the limitation:
> Most Byzantine consensus protocols require more than 2/3 of servers to be honest, and Algorand’s BA⋆ inherits this limitation (in the form of 2/3 of the money being held by honest users). BFT2F [35] shows that it is possible to achieve “fork∗-consensus” with just over half of the servers being honest, but fork∗-consensus would allow an adversary to double-spend on the two forked blockchains, which Algorand avoids.
If you read the whole paper you will see that it scales to more than the 3f+1 participants by randomly selecting a committee (of 3f+1 validators) at each round.
I think part of the problem is that mining was a very clever solution to a logical puzzle that seemed impossible to solve. Like bloom filters, it's tempting to find a use for it, because the algorithm is so cool.
However, the theory and practice turned out to be very different. Neat algorithm can't be used as an excuse for the whole ecosystem that emerged around it: insatiable electricity usage of PoW, pump and dump, ransomware, money laundering, etc.
Yes, this is the kind of discourse I would expect to see around blockchain technology from a group of smart nerds. I can't argue with that, the oldest blockchain kind of failed to prove itself valid in significant ways.
If you don’t believe that there is value in a distributed self replicating Byzantine tolerant state machine, that’s fair, everybody is entitled to their opinion.
Considering that it hasn't produced any value of note in 13 years, I'm gonna go out a limb here and say I don't think it's worth 2% of the entire world's wealth - and certainly not 3% of the world's energy.
In this comment, I'm assuming you are talking about Bitcoin.
> I don't think it's worth 2% of the entire world's wealth
Taken literally, if 2% of the world's wealth is in Bitcoin, so isn't that its value, by definition?
I'm not trying to nitpick. I'm trying to push back on what seems to be a glossing over of the fundamentals.
I wonder if what you mean is that you don't think it is _wise_ for people to put so much of their assets in the form of Bitcoin.
Now, if we want to have the discussion of "how has Bitcoin affected the economy?" it is not enough to only look at a snapshot of how wealth is allocated at one instant of time. We should be looking at a differential view; i.e. before and after.
In particular, an economist would ask questions such as...
1. How has Bitcoin changed transaction costs? Who bears these costs? Over what time frame?
2. To what degree does the structure of Bitcoin provide advantages relative to other assets?
3. How does the development of Bitcoin factor into a longer-term view of experimentation and innovation?
4. To what degree has wealth been reallocated due to Bitcoin? To what degree did it disrupt existing wealth patterns?
People paid a lot of money for Enron stock before it exploded. Did that mean it was worth $70B the day before it exploded and suddenly it was worth nothing when people found out it was actually all a fraud?
Enron wasn't actually producing any value. Neither are self-replicating Byzantine fault tolerant systems.
Anything they can do can be done hundreds of orders of magnitude more efficiently. And nothing they are doing /requires/ the inefficiencies.
I mean, obviously people at Enron were doing /something/ in the same way Bitcoin is. And obviously investors were paying a lot of money for that at one point and then stopped paying for it when it became clear that /something/ was mostly fraud.
There are some pitfalls in comparing a particular stock (e.g. Enron) against a class of cash-like assets (e.g. Bitcoin).
If you want to make the comparison, perhaps you could lay out your logic?
So far, I haven't found a clear, direct, fundamental argument in your comments. I see some loosely related examples and some rhetorical questions. I am interested in your justification and terminology.
Various pyramid-like enterprises sprung up in the new, underregulated markets. At their peak, the schemes were worth upwards of half Albania's GDP, were participated in by 1/3 to 1/2 of the population, and enjoyed support from the government.
For a time, all investors enjoyed good interest payments. But all the popular adoption and shared belief in value couldn't fix their underlying insolvency and the ensuing collapse once new deposits dried up.
Whatever quantifiable value, if any, Bitcoin produces for being a BFT ledger is not nearly enough to offset the constant, massive value drag require to pay for mining costs. That x% of the world's wealth is currently tied up in it is not proof against its fundamental insolvency.
From what I can tell, much of this discussion seems to be characterized by people miscommunicating.
> Considering that _it_ hasn't produced any value of note in 13 years...
What do you mean by "it"? Do you mean (a) Bitcoin in particular; (b) some/many/most/all cryptocurrencies; (c) a distributed self replicating Byzantine tolerant state machine? Or something else?
The comment by tzumby meant (c). Generally, the HN thread was about (b), best I can tell.
This is a blanket, unsupported statement. It isn't persuasive.
> ignores the tech ...
Not true. He doesn't ignore the technology of Bitcoin.
> because he doesn’t understand it
Please show evidence of this. You are not "in his/her/their head", nor is it likely that you've had a conversation where you can assess. It is more likely that Pinboard disagrees with you largely because of value differences.
If you genuinely want to understand something, you need to ask about it in a way that expresses that intent. A snarky putdown in the form of a question does the opposite.
this = blockchain + proof of work / proof of stake , in my comment. The crypto currencies are a requirement to fulfill the Byzantine tolerance. They need to have value in order for the incentives to make sense
Sorry, you have a point. I re-read my comment and it's not very clear. We need two things to achieve the Byzantine fault tolerance:
- a way to ensure that users of the system can't cheat by creating a vast number of nodes and inflate their "voting power" (think of a poll where you can get behind a proxy to vote multiple times because the only security is weather or not the IP voted): this is the hash-cash, proof of work computation that ensures you have real hardware behind your "vote"
- an incentive to mine and secure the network: the cryptocurrency. The amount of cryptocurrency you mined is just a translation of the energy and work you did to secure the network the same way as a banknote is a conversion of X number of hours you worked for someone.
The question, like I stated in another comment, is whether or not this distributed ledger is useful. Let's say we haven't discovered the killer use case for this yet (putting my skeptic hat). Is it fair to dismiss it just because of all the scams related to its current use ? Do we do the same for email just because there's so many phishing attacks that happen on the protocol ?
I think this actually overstates the value of cryptocurrencies. The value of say, Bitcoin, isn't even connected to its value as a method of money laundering or extortion through ransomware. However morally objectionable these are, they do have economic value - it's just that value is not connected to the price of any cryptocurrency.
Rather, the whole thing is an extended, worldwide pump-and-dump; speculation is driving all movement.
To me, it's really sad, because Bitcoin (and some of its descendants) are intellectually fascinating. With simple building blocks that had been around for decades (hashing + public keys) someone made something profoundly new. It's in some ways inspiring, since it makes me feel there must be so much more out there to discover and build. It's also sad, because it shows how things you build can 'grow up' and become a little unrecognizable.
It’s the combination of strong network effects and artificial scarcity driving the price action. You buy Bitcoin cause something about it really resonated with you. Price goes up and you feel validated. You go and naturally — out of benevolent intentions — tell your closes people so they don’t miss out.
The mistake of cryptocurrency is discounting the potential for price manipulation. Earl adopters understood cornered these markets immediately. Now we are in never ending cycles of hype, markup, dump, accumulate, hype, markup, distribute, and accumulate over years. These cycles are continuously producing winners and losers and the losers are generally those who have more to lose and are thus enable to withstand the intense pressure of bear markets.
I love Bitcoin and Ethereum and all the potential freedom that they represent. At the same time - enough. These markets need regulation. We need to know who owns these coins. We need to see their selling patterns so we can see their manipulation.
Unfortunately, the cynic in me knows that too many people are making too much money and are probably going to block regulation for a very long time.
> These cycles are continuously producing winners and losers and the losers are generally those who have more to lose and are thus enable to withstand the intense pressure of bear markets.
This is the opposite of what I think is true so I'd love to see a citation for this claim.
There is no citation but isn’t it obvious what is happening in this unregulated market? What do you think is happening when the price of Bitcoin is driven down 70% plus every so often? Then what do you think happens as it goes sideways for so long?
Maybe I’ve just seen this cycle a few times and this is my cynical take. But I think it just makes sense.
I feel so similarly to you. I got into Bitcoin in 2012 and really believed it had to potential to change the world. I thought titles and title insurance would become a thing of the past; international banking would be revolutionized. Instead we got infighting, forking, crazy high fees, and a speculative asset driven only by new money coming in. The biggest distributed Ponzi scheme ever. And now with the clarity of a decade behind us, I have yet to see any compelling use case for crypto that isn't better served by trusting a central authority or open standards. Even titles need a court system to abitrate conflict, which you can't do with irrevocable transactions. When ETH had a bug in the DAO the community forked the chain to undo the bug, so now we have ETH and ETC, just hilarious.
I saw so much potential, and it's just a shame to see what happened to the community and direction of the technology. The Ponzi Casino is a sad outcome for crypto.
Wow, thank you. Totally agree. So glad you have been able to put this into words what I have been struggling to explain. "Fear of missing out" is a powerful drug.
> Cryptocurrency is sustained by a mix of money laundering, vaporware, fraud, ransomware, gambling, and delusion. It has no social benefit except helping end first dates fast
> What we especially need to stress to regulators is that there's no relationship between the technical claims of cryptocurrency and our now over 13 years of experience. It's not decentralized, it's not a currency, it's not a store of value, and it's not a promising technology
> Cryptocurrency solves no problems that it didn't first create, and most of those it doesn't solve. Smart contracts are neither of those things—at worst they're an API for fraud, or as @qrs put it, self-funding bug bounties at best
Those are a lot of hasty statements made without indisputable evidence.
Edit: I'll take any evidence if indisputable evidence is too high a bar.
> Those are a lot of hasty statements made without indisputable evidence.
That reminds me of that guy who didn't receive his package and filed a complaint to the store he bought it from. They asked for a proof that the package didn't arrive, and he replied with the photo of his empty hands.
Ironically enough the Pinboard account is engaging in the same nonsense and rhetoric it accuses cryptocurrency supporters of, hoping no one will notice.
My position is that both sides have a burden of proof. It is incorrect to place that burden on only one side. There is no consensus on the validity of the claims of crypto proponents. I don't see either side meeting a burden of proof.
Sorry, I'm a bit lost here. I'm talking about the claims of the OP here. Their claims in the Twitter thread are specific and they haven't provided any proof for them.
I'm unsure what claims you're alluding to. But I'd love to help out as much as I can.
Just so others are aware, me and this guy have been 'friends' since 2015. He sent me a screenshot of this comment on Signal before he posted it. Its just his way to not address what I said.
I think it's time for us in the tech world to speak out and make it clear the emperor has no clothes here. _Gold_ is sustained by a mix of money laundering, human slavery, fraud, ransom, gambling, and delusion. It has no social benefit except helping end first dates fast.
What we especially need to stress to regulators is that there's no relationship between the claims of _gold_ and our now thousands of years of experience. It's not decentralized, it's not a currency, it's not a store of value, and it's not a promising element.
_Gold_ solves no problems that it didn't first create, and most of those it doesn't solve. Banks are neither of those things—at worst they're an API for fraud, or as I put it, self-funding institutional greed.
I think most of us in the industry gave gold a long leash because it's full of cleverness and seemed innovative just on those terms. But it's time we recognize that cleverness is being used as bait to defraud more people and perpetuate a con. Enough is enough.
The two things people need to know about gold are completely non-technical:
1. If it isn't backed by self-perpetuating value, it isn't worth anything outside of industry process (electronics, etc.)
2. If it works, it creates an end run around all financial regulation, and will be dominated by uses those regulations try to stop
And the list goes on. I am not equating cryptocurrency to gold, I am just trying to point out the absurdity of the authors statements.
But that doesn't really work because those statements aren't all true of gold. Gold has functioned as a store of value for thousands of years. The price of gold changes over time, but it doesn't fluctuate nearly as much as bitcoin - which is a handy property for a "store of value".
Some gold obsessed people probably have hyperbolic claims about what gold can do, but my impression of it is that it is generally understood as a hedge against inflation or a store of value. Relatively few people think they are going to hodl gold until they 1,000x their way into being gold-millionaires and most of those that do probably aren't expecting real gains from gold.
Gold doesn't promise to be decentralized currency. Cryptocurrency does try to make that promise. Gold does solve problems it didn't create - e.g. use in electronics or in jewelry.
I think most of this parody just substitutes the word "Gold" for "Bitcoin" but misses that gold actually isn't making the same claims.
Clever analogy. Let me quickly give some background on actual the use of gold as a store of value, besides the obvious point that gold does not rust (decay) and that it is somewhat rare.
As you know, gold is also shiny and has been used for jewelry for thousands of years in many cultures. Some anthropologists have reversed the causality of value and jewelry, arguing that gold is precious _because_ it is used as jewelry. Indeed, in many cultures different types of jewelry [1] were used as a basis for currency (as in unit of accounting).
Therefore, one of the most basic human features, dressing up within a social hierarchy might be at the basis of gold and currency.
I don't see any such use case for cryptocurrencies (yet).
[1] besides pearls, beads, necklaces, it could also be rare make-up material or even feathers. I recommend the work of anthropologist David Graeber in his book Debt: the First 5000 years.
Also from the book you’ve mentioned: gold was useful as a currency because soldiers often plundered them when raiding villages, and soldiers wanted to sell them in exchange of other things, so gold began to circulate around the regions they’ve conquered.
This is exactly right. Cryptocurrencies are digital gold. That's what makes crypto so scary. When gold was made too central a part of the monetary/financial system in the 1920s and 1930s, it caused the Great Depression and quite possibly WWII.
Deflationary tokens, if they get too enmeshed with the financial system, tend to be hoarded to a point where they displace productive investment on an economy wide scale, putting a huge gridlock in the economy.
Gold is valuable because it is difficult to dig out of the ground, and it can be made into electronics. Neither is true of Bitcoin. Thus, you've built a false equivalence and are trying to equivocate.
I think it's time for us in the tech world to speak out and make it clear the emperor has no clothes here. _USD_ is sustained by a mix of money laundering, human slavery, fraud, ransom, gambling, and delusion. It has no social benefit except helping end first dates fast.
What we especially need to stress to regulators is that there's no relationship between the claims of _USD_ and our now hundreds of years of experience. It's not decentralized, it's not a good store of value, and it's not a promising piece of presidential portraiture.
_USD_ solves no problems that it didn't first create, and most of those it doesn't solve. Banks are neither of those things—at worst they're an API for fraud, or as I put it, self-funding institutional greed.
I think most of us in the industry gave USD a long leash because it's full of cleverness and seemed innovative just on those terms. But it's time we recognize that cleverness is being used as bait to defraud more people and perpetuate a con. Enough is enough.
The two things people need to know about gold are completely non-technical:
1. If it isn't backed by self-perpetuating value, it isn't worth anything outside of what people believe it is worth
2. If it works, it is only due to financial regulation
I'm not anti USD nor am I equating USD to gold or crypto. Just showing that these are mostly lazy arguments that can be applied to pretty much anything tradable on any market.
I read a Blockchain book from O'Reilly in 2015, when it came out and it left me with the distinct impression that this "technology" is vaporous. It could do anything, yet, almost no examples to try out, let alone real-world successes.
Over time I witnessed many "new" things, and the ones which stick typically have a specific aura to them, like a 10x simplification, or speedup or reduction in "noise". These things are really rare; most things are incremental and that's good, too.
Blockchain did not seemed to have any of that.
PS. Merkle trees are super interesting and I use them daily (in git) - so all the tech ideas are certainly worth considering, it's just that they are not fit for the advertised purpose plus it has gotten an enormous drag on resources, for nothing.
PPS. I typically have an "tech instinct" to see new things, but I currently cannot really see anything that looks like a major tech shifts from the past. ML is incremental and despite its grande successes is mostly applied by the surveillance industry, which makes it much less attractive. Cloud seems much more profound and the whole apification of the world transformation - although I do not like the centralization, even if it is more economical. In general, the real revolutionary tool or technology does not need to sell itself, it is picked up by the weird and intelligent first, then trickles down to the masses (also: tech can be great w/o mainstream adoption, too - it just not a revolution then).
PPPS: Wild speculation: With 5G, everyone with a phone could host their business directly on their device, instead on other peoples servers. When phones hit a TB in storage, you can run your socnet with your friends - and you probably will, because mainstream money will have moved to something much more immersive, addictive, profitable like glasses, vr, ar.
> PPPS: Wild speculation: With 5G, everyone with a phone could host their business directly on their device, instead on other peoples servers. When phones hit a TB in storage, you can run your socnet with your friends - and you probably will, because mainstream money will have moved to something much more immersive, addictive, profitable like glasses, vr, ar.
I've been thinking about this a lot lately. The decrease in the cost in high performance phones, more storage, and high speed connectivity will make for some interesting social network opportunities where your device is the server and there's no/minimal intermediaries. You could bring back the Google Circle concept and cache things from your inner circle while accept that things in outer circles are ephemeral if the friends' device is off.
You should actually talk to people from those countries. The minority of them are doing anything substantial in crypto. Only those fortunate enough to transact with a foreign entity. The others use the much more robust system of bartering.
Because it's used to launder money for crime, destroy the environment, and supports the cringiest, most juvenile libertarian derp (thanks Krugman!) about freedom from the tyranny of money banking government taxes or whatever.
I don't see any technical criticisms in the thread, which means "us in the tech world" is just an appeal to meaningless authority.
It's also a bogus attempt to imply a broad consensus where there is none. As someone in tech myself, my personal opinion is that most of the twitter thread is nonsense.
Tweets like those are why Pinboard is one of the few Twitter accounts I've blocked. On certain issues, the author loves to righteously sneer. It annoys the hell out of me because when he's not sneering, he can be a knowledgeable and clear thinker. He's like a glass of wine with a single fly in it.
This behavior isn't just annoying to others; it's harmful to his own goals. If Maciej had hedged his bets and accepted Bitcoin payments for Pinboard in 2013[1], it would most have been the most cost-effective action of his entire life. He would be worth millions more today. He could have used that money to further causes he cares about, such as climate change and social issues.
Instead, he's trying to ban cryptocurrency. We had this same debate with cryptography in the 1990s and DRM removal software in the 2000s. Back then, technically-inclined people agreed that you can't ban math. But now many are trying to do just that. What exactly would a cryptocurrency ban look like? Would calculating lots of SHA-256 hashes cause men with guns to come to your home and put you in a cage? It sounds more absurd than what happened to DVD Jon.[2]
> If Maciej had hedged his bets and accepted Bitcoin payments for Pinboard in 2013[1], it would most have been the most cost-effective action of his entire life. He would be worth millions more today.
This argument makes me hate cryptobros even more - people who have an interest in cryptocurrencies have direct financial benefit from talking about how good they are.
> He could have used that money to further causes he cares about, such as climate change and social issues.
Financial benefit from something doesn't make it right or morally acceptable, it only makes you rich.
Let's be clear that if I had accepted Bitcoin payments in 2013, I would have then lost them all a year or two later when my exchange got hacked. That would make me an even more bitter person now.
I can't remember ever calling for a ban on cryptocurrency. If you're remembering something I'm not, then please correct me.
You want the tech world to tell regulators that, "Cryptocurrency is sustained by a mix of money laundering, vaporware, fraud, ransomware, gambling, and delusion. It has no social benefit except helping end first dates fast.", and that cryptocurrency solves no problems and creates new ones.
If regulators agreed with these statements, what do you think they would do? And if you don't want cryptocurrencies banned, how do you want them treated differently from today?
You seem like a very smart and highly technical person so I find it incredibly hard to believe you would have left vast sums of crypto on an unregulated exchange.
You're either being dishonest here or you consider yourself extremely naive.
I seriously considered acceptiong bitcoin payments (it was a fad, why not) but did not want to connect something like Mt. Gox to my bank account. That was the stumbling block for me.
It did not occur to me at the time that I should hoard these payments until they were worth millions in 2021; back then we were still thinking of cryptocurrency in terms of something you'd get paid in and convert to a bank balance.
If you were cashing out as the money was coming in, then you wouldn't have lost all of it in a "hack", would you?
So, which is it? Would you have lost all of it in a hack or would you be withdrawing straight to a bank balance because you abhor "hoarding"? It can't be both.
I like the way you scarequote 'hack' as if the MtGox hack was made up FUD[1]. And the way you change "I didn't think of keeping it" to "you abhor hoarding". If he didn't lose it all in said hack because he was selling it back for US dollars as it came in, then he wouldn't have got fabulously wealthy from holding it; in that case why should he have accepted Bitcoin if it was only a less convenient, more effortful, more risky way to get ordinary amounts of money?
It can't be that the only reason for Pinboard to accept Bitcoin in 2013 was to get rich quick, and it's not a get rich quick scam, it can't be both at the same time?
It's like the problem where every time travel dicussion has turned from Morks and Eloi, becoming your own grandpa, treading on a butterfly in the Jurassic period and altering all history to "I'd buy Apple shares" "I'd buy Bitcoin" "I'd tell my parents to buy Apple shares" "I'd buy crypto" "I'd buy crypto" "I'd buy crypto".
It would have been up to the grand wizards at the Magic the Gathering Online Exchange. I don't remember what the process was back then for converting bitcoin into real money, and if they offered ACH transfers or what.
One thing that I find so confusing in the crypto maximalist sphere is the obsession with decentralization of everything but also with mainstream adoption.
Coinbase is centralization, bank adoption is centralization, etc...
Also if “fear of regulation” causes massive sell-offs, doesn’t it totally fail at being the “anti-government” centralized currency?
I’m also just not convinced total decentralization is good? I mean sure markets are a decentralized way of pricing things and allow distributed decision making blah blah blah, but they have limits. I feel like far too many people are drawn in by the answer to the wrong question “what does crypto solve?” Instead of the more interesting one “what problems does it create”
Decentralization is a spectrum. Bitcoin cannot be shutdown because it is decentralized. There can be centralized actors within a decentralized system. The major benefit is you can choose between various service providers and switch when you please. With government monopolies you use their service at gunpoint.
> With government monopolies you use their services at gunpoint
I mean sure, in an authoritarian state that’s what happens. I’m just not convinced crypto is the solution? In order to evade being at gunpoint you’d essentially need all your crypto transactions to be undiscoverable to an all powerful entity, which is probably mostly possible and that’s great. The downside is you now open yourself to people being able to take all your money from you with close to no discoverability. In order to keep that privacy you’d have to avoid all centralized exchanges and manage most of this yourself and i’m just not convinced 99% of people need or want that?
I’m not saying the tech isn’t impressive or the idea in its purest form compelling and interesting, but there’s a lot of fantasy I think.
Isn't >50% of mining happening in China? So I can go from being at the mercy of a government I can at least vote for to being a the mercy of a dictatorial government I can't have any influence on at all. Doesn't seem like an improvement to me.
Most Bitcoin enthusiast that yell at me "HAVE YOU READ THE WHITE-PAPER??!" and "DO YOU UNDERSTAND THE TECHNOLOGY??!" have never actually downloaded the source code and ran the damn thing! At least back in 2011 I was mining on my computer to see what this thing is!
Everyone is using some sort of hosted wallet that defeats the entire propose of it!
I am not sure why this is flagged - it seems a reasonable and timely opinion piece.
Cryptocurrency is a subject that has to have a deep and public debate. What the OP is saying (which I take to be "the tech world has a duty to point out the flaws in cryptocurrency to avoid giving an impression of a clean bill of health to every ICO out there") - that is a valid socially useful debate.
There are valid real world uses of bitcoin (see Turkey shutting down payment apps recently). but yeah it is also a volatile wild west that is miles away from anyone's expectation of normal regulated currency behaviour.
Yes there is a crying need for an "internet native" currency. What will that be - I don't know. But it is not here yet, and it is reasonable to make that clear and loud.
Edit: oh, the much simpler answer is that it was posted twice and both posts were on the front page. People flagged the dupe. That's fair. https://news.ycombinator.com/item?id=27336405.
---
I think the submitted title probably had something to do with it; As a title, "the emperor has no clothes" is generic and baity. It's also false in the sense that there's no consensus view, so to the extent that the analogy is meaningful, it doesn't apply. I've attempted to replace that with a more neutral and representative title now, drawn from the author's own words. Suggestions for a better title are welcome.
Beyond that, HN has had so many threads arguing the same points about cryptocurrency over and over, that it's not clear there can ever again be a new discussion about it. Repetition is a curiosity killer, and usually indignation takes its place as people resort to hammering each other over the head with the same dumbed-down clubs, back and forth.
However, I think we can try turning the flags off on this one because Macjiej is at least trying to take a different and more specific angle on cryptocurrency critique.
>>> Beyond that, HN has had so many threads arguing the same points about cryptocurrency over and over, that it's not clear there can ever again be a new discussion about it.
It's certainly not a 100% tech topic? there aren't any (or hardly any) of those anyhow, no? but the main thing I want to say is thanks for that "putatively". Post HN I want to work on a society for endangered words.
Edit: well, one thought...IMO the dynamic that the explicitly-political threads and this sort of thread have in common is that people's identities are strongly vested in their position. The more we do that the more it feels like our existence is being threatened, rather than just our view. Then it's a fight to the rhetorical death.
That happens with emotional tech themes too, for example when people (god help us) identify strongly for or against some $BigCo or $celebrity.
Large sums of money being involved are a big multiplier of all this.
It's flagged because it's flame baiting. It's posting opinions and acting like it's representing the "tech world". This is just some unknown twitter account
Here for example is The Economist on his bookmarking site:
>>> Mr Cegłowski runs Pinboard, a paid social-bookmarking service which allows subscribers to store web links with annotations and share them with others. In broad terms, it is similar to Delicious, which Yahoo! acquired in 2005.
But yes, this is a controversial subject. It shouldn't be. It should be an easy yes / no. But something is wrong. We should not be afraid of the discussion about what is wrong.
Why is it a pyramid scheme? I’ll give you my opinion.
I think bitcoin was a research project - it wasn’t designed to succeed as a real currency. Consider:
1) It has a fixed money supply. There will only ever be a fixed amount of bitcoin once it is all mined (or technically, the amount will grow more and more slowly forever— effectively, it’s a fixed amount). We’ve known for a long time what effect this has on a currency. A fixed supply will be deflationary, i.e. the value of 1 btc will only grow. To be stable, the total amount of currency in circulation must equal the economic value that it represents. This is why the Federal Reserve must continually expand the money supply - it’s because the US economy grows. (They actually expand it slightly faster than the economy grows, causing a small amount of inflation, on purpose. This is preferable to undershooting and creating a deflationary currency). Deflation makes for a terrible currency, because it inhibits spending. If you think your dollar will be worth more tomorrow, you’ll wait to spend it. That waiting cascades into the broader economy, causing a recession. Bitcoin can therefore never, ever be a true currency. Its deflationary design prevents it.
2) Transactions are public. Far from being a cash replacement, which is both anonymous and private, Bitcoin transactions are publicly recorded on the blockchain. There are elaborate work-arounds to improve privacy, but fundamentally the ledger is public. This is not a good feature for a cash replacement.
3) There is no one in charge. Would you trust the US dollar if a loose collection of volunteers struggled for control over key monetary decisions? Despite best efforts, governance of bitcoin is a disaster — because it wasn’t designed for governance.
4) It’s extremely expensive. Search recent news for the estimated electricity usage of bitcoin mining. It’s so large that a hedge fund recently restarted a decommissioned fossil fuel power plant just to mine bitcoin. Do you think this is a good design?
5) It’s inconvenient. Have you tried to make a bitcoin transaction? Were you surprised that you could pay extra in order for the transaction to settle faster? Did you think that was ridiculous? You’d be right!
I’m glad more people are speaking up about bitcoin. The emperor indeed has no clothes. Bitcoin is getting out of hand.
To compare, you need to measure the attributes of the this and the compared entity.
The alternative entity compared in this case is the Existing Financial System that is handled by the Fed, Wall Street and the Bankers.
Now, there are innumerable number of comparisons and metrics that have already done this job for their preferred metrics and statistics. They all unequivocally side on the side of Bitcoin. (one example: https://wtfhappenedin1971.com/)
You are free to ignore these comparisons; but you have to compare and contrast that how cryptocurrencies, if ponzi compare to the modern financial system of all it's warts and what is the net effect of Cryptocurrencies and the Financial system as it exists today; rather than simply stating Cryptocurrencies are in and of themselves Ponzi.
Fully agree. The current/legacy financial infrastructure is actually 10 times more decentralized than any DLT: DLT is the same software run on multiple nodes.
SWIFT in contrast is a protocol, that anyone can implement. So its hundreds of software teams, building and operating their part of the infrastructure and integrating with each other. The SWIFT protocol itself is maintained by the member organizations, anyone can bring in proposals.
The complexity of it does not come from technology, but the regulatory requirements which differ vastly across the world.
Bitcoin is also a protocol and there are several implementations. The same applies to the lightening protocol which has about 7 different client implementations and growing.
I see more and more tweets and articles like this posted here on hackernews that echo the sentiments of the world economic forum on how they feel about cryptocurrency. Remember they are the very people that say you should:"Own nothing and be happy".
If you think cryptocurrency is a scam then you havnt looked into the technology behind it and the economies that have been built using these technologies.
The thing people also overlook on point 2 is that if cryptocurrencies and blockchain tech take over the traditional financial system, that doesn't mean bitcoin, or even etherium, did. In no way is bitcoin a bet on blockchain tech; people just tell themselves that story because it feels better than gambling on crypto trading cards. Nothing wrong with gambling on them, either; just don't say you're "investing."
I don't agree with this. It's fine to have an opinion, but I don't think it should be represented as a consensus when it's not.
(edited to add) There is an important difference between having downsides and being a scam. Downsides of the U.S. dollar or "petrodollar" system include global warming, international wars, and regulatory capture. The U.S. financial system has all the kinds of fraud, blackmail, and crime mentioned here and more. Doesn't mean the dollar is a scam.
Well, crypto is either going to be a huge success or a big flop. Whichever it is, whoever was espousing that side of the story will feel vindicated and talk about how it was obvious all along. Sadly(?) I belong to neither camp. I definitely see how clever the underlying technical/mathematical ideas are, but I also have a feeling in my gut that this is just smoke and mirrors (although, I have similar feelings for other assets like the USD and gold).
Are there others out there who are also not sure? It seems like every time I see this debate, I just see hardcore people on one side yelling at the hardcore people on the other side telling them how stupid they are (in very eloquent ways, of course).
Is it really that obvious that this is a good/bad idea?
I’m in the not sure camp. I’ve had more positive gut feeling about some projects over others. I can’t stand tech bro culture in general so most of it turns me off pretty easily.
I think there may be something there, but that the current state of “crypto” isn’t it.
I’m encouraged to see discussions happening around banking and other open financial processes there. People who just can’t gain access to market where money they make can actually accumulate and help them are usually invisible. I want to see something come of that.
These are expensive lessons, though—financially, ecologically, and socially.
People always talk about the simple monetary aspect and I don't see much benefit in just bitcoin without a well working lightning network either.
I'm still semi young and not a senior developer yet, so can someone explain to me how the following blockchain projects "have no clothes" as in "would be much easier without blockchain"
- Helium
Is building wifi coverage, incentivized by rewards based on coverage provided (that the users don't have to pay)
- Several projects providing decentralized cloud storage.
- SingularityNET is an AI marketplace that allows easy access to different ML apps with the goal of making those work with each other.
I also find the ethereum infrastructure really cool (except the huge fee problem right now which is getting fixed with proof of staking/2.0 soon).
You have a whole "new" internet that you can access via ether nodes and you can just consume other smart contracts on the network with no hassle. No need to create an account for a service or purchase some monthly traffic etc. You just interact with other apps because payment is decentralized and everything is public.
I've made a small demo project for myself in .NET to see how it works and it really isn't too difficult.
It seems to me that people who say that all "cryptocurrency" is a scam barely investigated more than bitcoin.
Isn't all currency more or less a "pyramid scheme" in the sense that Bitcoin is?
I wish we had more subtlety in our discourse. It feels like it's all either blind admiration or blind condemnation.
Bitcoin is trying to be a new currency. Currencies more or less operate on "collective delusion". I think many people scratching their heads at why Bitcoin is worth anything _are_ missing something, which is why any currency has any value at all, which is itself kind of surprising and unintuitive.
At the same time, I think it's fair to be a little more skeptical about what the value of a currency like Bitcoin is, precisely, and how much effort ought to be put into building it.
When I say pyramid scheme, I don't mean it in the sort of philosophical way that you could apply to all fiat currency, but in the "OMG look at Tether" way.
A not so insignificant part of me wishes Tether would crash already so it'd kill that argument dead for crypto detractors. It'd be interesting to see how Bitcoin's value would look after. I really doubt it'd be zero.
Tether, which is the most used so-called "stablecoin" (As its value is pegged to the USD) is extremely seedy at best and has had brushes with the law already [0] or is outright a Ponzi scheme [1] and plenty of people arguing for/against crypto know and have said so already.
Personally, even though I'm a proponent of cryptocurrency in general, I wish it'd disappear in spite of any short and middle-term calamitous consequences on perceived value if that means one less "dumbed-down club" (Using dang's words) when it comes to discussing crypto.
Fiat currency is backed by courts and regulation, which is backed by a literal army, and the threats of violence that army brings. If someone steals your fiat USD, there will eventually be someone with guns removing you from society if you don't return them.
> If someone steals your fiat USD, there will eventually be someone with guns removing you from society if you don't return them.
That's true for any type of property, including cryptocurrency. US police have returned stolen cryptocurrency to its rightful owner.[1]
The wrinkle is that police can only recover property if they know where it went. Cryptocurrency makes that harder in some ways (pseudonymity/anonymity, mixers) and easier in others (transaction history on the blockchain, lots of electronic records in exchanges).
Over my life, I've had a half-dozen things stolen from me that were worth more than $1,000. Only in one case did the police recover my property (a motorcycle) and only because the thief committed other crimes while riding it. I had to pay $200 to get it out of San Francisco's impound lot. (It would have been $400, but the city gave me a 50% discount because I was a resident.) It was only after paying the money that I could see the bike. It was totaled.
USD is fungible. They don't have to recover your stolen dollars. They just have to get you an equal amount. And that's why it's far more useful than cryptocurrency. The government has lots of ways of giving you equal amounts, including simply creating it out of thin air.
Cryptocurrency is by definition non-fungible, and as you rightly pointed out, harder to recover.
But more importantly, if you are a US citizen you can use the services of the US government to recover your stolen cryptocurrency, but if you aren't a US citizen, you can't.
But no matter what country you are a citizen of, you can use the US government to recover your USD.
> Cryptocurrency is by definition non-fungible, and as you rightly pointed out, harder to recover.
Cryptocurrency is very fungible. When I withdraw BTC from Coinbase, it's the same as any other BTC. There are blacklists of BTC addresses (for scams, ransomware, blackmail, etc) but there are also blacklists of USD serial numbers (from robberies, ransom payments, etc). Also there's the issue of counterfeit bills.
> But no matter what country you are a citizen of, you can use the US government to recover your USD.
Where did you hear that from? There are plenty of nations that the US has shunned from banking infrastructure: Iran, North Korea, Cuba, etc. People in those countries will have no help from the US in recovering their stolen money. Also the US government isn't required to help anyone recover USD. They usually don't do squat when there's theft overseas. And by using the banking system, you open yourself to the whims of US authorities.
If anything it's closer to the opposite of your claim: For citizens of most countries, the US government can freeze your accounts and take your money.
Unless someone steals your private key, I don't think it's very feasible for someone to steal _your cryptocurrency_ without going against the whole network
This is and is not true. The implicit value of a currency is backed by being able to tax the citizens. This is why there are federal but not state / province level currencies as the friction of conversion is a dead weight loss.
> The implicit value of a currency is backed by being able to tax the citizens.
Elaborate? Not sure why this would be true.
I'm pretty sure there are plenty of "commodity currencies" (shells, salt, even gold) that achieved value without some central agency controlling the currency that could also levy taxes.
No. Currency is guaranteed to be accepted for the payment of taxes in a particular jurisdiction, and that jurisdiction's courts will enforce judgments in that currency. These are material differences.
That's true but I'm very skeptical that a notable portion of the worth of a currency rests on that. Like I said in another comment, I think there have been plenty of "commodity currencies" (salt, shells, gold) that have attained value as currencies in spite of lacking these things.
I can understand peoples' frustration with the artificial scarcity, but would like to see this same energy over the artificial scarcity of housing and free time. The oligopoly of national money systems is currently failing to provide people with basic access to capital. There's nothing intrinsic about cryptocurrency that will necessarily help this or exacerbate it, but the fact that I can get better interest on US dollars by depositing stablecoins on some defi platform, with no gatekeeping, is an indictment of conventional financial institutions more than it is of blockchain tech.
"the fact that I can get better interest on US dollars by depositing stablecoins on some defi platform"..
There was this guy called Madoff. He was able to get better interest than the markets for quite a while too. Those stablecoins are not contributing to the productive economy. They're not being invested in machines that make new cars, clear carbon from the air, produce cheaper food. Nothing about cryptocurrency will solve housing or free time, because those are political problems which require humans to come together with a common aim - not, in the complete opposite example, people just wanting more for themselves by "depositing stablecoins on some defi platform".
If i’m correct you can get upwards of like 5-10% interest on those platforms?
Can you simply explain to me where that money comes from? That just seems like an absurd amount of interest. Considering the crypto/inflation hawk intersection, i’d presume people would be skeptical of all this “free” money?
If I'm not wrong, the average yearly ROI of something like S&P 500 has been around 7-8% over the last 70 years.
Since you're French as well, I can tell you that here it gives about 4-5% in yearly returns.
So it's not unheard of returns with traditional asset classes. As far as I'm aware, the money in that specific case comes from interests paid by those taking loans (from the funds that's you're putting out) or from staking rewards (in the case of staking cryptocurrencies using proof of stake).
That's just an overly simplistic summary of the whole thread. Pinboard isn't angry about artificial scarcity, but how cryptocurrency fails to fulfill its promises: it fails to decentralize, it fails to reach performance levels of existing financial institutions, it wastes huge amounts of energy, and it provides zero value other than being a ransomware enabler. (Disclaimer: I own cryptocurrency)
It’s not artificial scarcity, it’s outright fake scarcity.
The total supply of Bitcoin is 21,000,000 coins. However, every single coin is 100,000,000 individual assets.
21,000,000 sounds pretty finite. But 21,000,000,000,000,000 sounds a tad less finite. The price of Bitcoin relies on the fundamental false premise that it’s scarce.
"stacking sats" is a common phrase so it's not really a secret that a bitcoin can be subdivided. In fact, a lot of bitcoin supports would support people learning this fact.
There is nothing special or important about a single entire Bitcoin. It’s completely arbitrary. The question is whether Bitcoin is scarce. If there are millions of trillions of tradeable assets, it’s not scarce.
If most of it is locked in someone else’s account and they won’t sell it to you: it is scarce. If nobody wants to buy it: it’s not scarce. Scarcity is based on supply and demand, not on a single number.
That's like saying pizza isnt scarce because you can cut one into 1000 tiny slices. Or gold isnt scarce because you can cut 1 bar into 1 tiny million pieces. Pretty hilarious misconception
Except pizza and gold both have fundemental value as you decrease the size. Bitcoin has exactly the same techinical functionality regardless of the size.
I can use cryptocurrencies from anywhere in the world, I can't use M-Pesa unless I'm in one of the few countries it operates, and even then I'd be at Vodafone's whims. Truly it may serve similar needs (money for the under/unbanked) but the scope is not nearly the same.
What fraction of all commerce is worldwide as opposed to local?
What degree of that difference, if any, is a consequence of payment frictions rather than other factors (say: most activity and interactions are local).
What preferences are exhibited by major international buyers and sellers for payment or credit systems?
Yes. Bad actors ask these sorts of questions in order to stofle conversation. You basically asked this person to do a research papers worth of research in order to prove his argument while you put basically zero effort into your comment. If you think the stats dobt align with what he said look it ul yourself and tell us. Asking questions like the parent did is lazy and often badly intentioned
I don’t really give a crap about any crypto, and I agree that much of it is a pyramid scheme.
However, I think people don’t understand that Bitcoin is first and foremost a brand. A brand doesn’t have to be “useful” to have value, it just has to be recognizable to enough people. A lot of altcoins have appeared, but not a single one of them has the brand strength of Bitcoin - not even the “tech fave” ethereum.
On the flip side, one doesn’t have to participate in any kind of crypto, including Bitcoin, to leverage the brand - since the brand doesn’t rest on the value of the currency itself.
When I first heard of cryptocurrency I was reminded of when people started idling in Team Fortress 2 to get content drops. It was such a daft cart before the horse approach, but of course those dropped items could be sold for fractions of a penny and people can be dumb.
It also reminded me of Folding at Home. Here people completed by virtue of their personal compute resources.
Of course crypto serves as neither a form of entertainment or scientific discovery and is just a massive waste of resources to create artificial wealth. If only all that computation did something useful.
I’ve come to the conclusion that Bitcoin was a perfect “isolated” P2P currency system. If it was just considered Monopoly money, that is. The moment you try to find its worth by buying/selling it against Fiat - you get the exact same thing you get when you allow real world trading on any game currency - scams.
No, there's not. It's a fundamental principle among PoS cryptocurrencies that the work needs to have no additional utility or else it will help the attacker "subsidize" 51% attacks against the cryptocurrency you've built, because now they can both launch 51% attacks which cost $X abut subsidize it by selling the useful compute for $Y they've gotten by launching the attack, which ends up costing $X - $Y.
Compared with a PoS cryptocurrency yielding no useful compute as a side effect, it costs $Y cheaper for someone to 51% attack.
Oddly enough I’m the diametric opposite: skeptical of crypto’s long term value up until recently (but before the last big run up) - I now see it is a a fundamental hedge against totalitarianism among other things. Westerners can fail to grasp the potential benefits due to the privilege of the time and place they were born. At least for now.
and you think a totalitarian government is going to let you buy crypto?
if they just shut down coinbase and robinhood and square then 99% of people will lose access.
chinas great wall blocks a lot of the internet itself. it’s delusional to think governments can’t stop crypto easily. they can even just block internet completely
The fact crypto is facilitating large numbers of illegal transactions is evident enough it has value in doing so. I’m not assuming crypto is a silver bullet, but merely that it will be a force for good in scenarios where what it can more readily enable compared to alternatives are just things to do.
If you like analogies, totalitarian governments ban all sorts of things that check their power like guns and books, but overcoming them still has happened historically in part by people finding ways to disobey those things without getting caught (and often with fatal consequences when they are caught)
Regardless of how you want to measure this my point was not about anyone in particular but the general sentiment I see from people who are not experiencing a wide variety of the problems crypto could possibly help ameliorate if things were different for them, be it their economic status, the government they live under, or the cultural norms they live within.
Hacker news is holistically anti cryptocurrency. Which disappoints me.
It has virtues.
As someone who works in applied Cryptography and has also worked for the European Central Bank, we need “crypto”.
1) seigniorage is an abused privilege. Source: US debt ceiling at 27TRN.
2) permissionless money has value, I cannot send more than 5k a day using my bank. I can send any amount using crypto. I also don’t need two utility bills and an address to open an “account”
3) it’s censorship resistant. Govt’s can’t just stop payments or shutdown the network.
Use Monero.
EDIT: downvoted again. I’m not contributing here anymore.
> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
I'll offer my two cents in case it gives another perspective you haven't considered. The meaning of voting on HN is far from obvious. Various people downvote for different reasons.
Maybe they are unimpressed by your comment, maybe they disagree with it, maybe they think it is inappropriate somehow, maybe they don't like that you plugged a particular cryptocurrency, or something else.
In any case, I recommend not worry about the votes, up or down. At times, it can be helpful to see if what you are writing is perceived as useful, if you can take the feedback in that manner without taking it personally.
Graffur, yes, I've read them. But I'd bet you know that; I think probably you are making another point. I'll write it out, and you can tell me if you agree. You are pointing out an inconsistency in what I wrote: you think it is unfair of me to suggest that someone else read the guidelines while at the same time not following them.
> Hacker news is holistically anti cryptocurrency.
First, your use of "holistically" doesn't make sense to me.
> ho·lis·ti·cal·ly | ˌhōˈlistik(ə)lē/ |
> adverb
> mainly Philosophy in a way that is characterized by comprehension of the parts of something as intimately interconnected and explicable only by reference to the whole: the damage caused by unethical behavior needs to be examined holistically.
> • Medicine in a way that treats the whole person, taking into account mental and social factors, rather than just the symptoms of a disease: he has been treated holistically for a heart murmur.
Second, are you characterizing the people on HN as being mostly or completely against cryptocurrency? This sounds like anecdotage. Remember, not everyone with an opinion broadcasts it.
You're not wrong, and you have some good points here, especially about the banking limits. I'm not sure where the cynicism comes from, but HN seems very hostile to this space.
I have sent large amounts all over the place. As for pretending to be anonymous and outside of society, I have no use for that. The issue of crypto currency, besides the resource impact, is the evil that comes from trying to destroy democratic government.
>The issue of crypto currency, besides the resource impact, is the evil that comes from trying to destroy democratic government.
The evil of democratic government (as opposed to a strong republic) is that that 51% can vote to rob the 49% of everything they own. Crypto prevents this.
> Yeah. I think these HN threads are either manipulated, or HN is full of idiots. Not sure which is more likely.
Or perhaps neither.
Some other simple explanations include:
1. People see it differently than you do.
2. People are not engaging in conversation as a way to learn from each other; rather they are talking past each other.
I'm inclined to think it is a mix of both.
Like I mentioned in a comment nearby, people on HN seem to vote based on different criteria. The lack of clarity can make it hard to extract clear meaning from votes.
Cryptocurrency is maybe the most important innovation is human history
Electricity? The wheel? Money? Sulfa drugs? Spoken language? Counting? Agriculture? Written language? There's a long, long list and to put cryptocurrency on it seems awfully hubristic.
Money that can't be monopolized is more important than those. The whole human history is about money and how someone monopolized it and started extracting value from it, to get more powerful, to fund wars and destruction. Bitcoin can't be monopolized and enables humanity to rise on a completely new level.
Unconvinced. Electricity definitely seems like a much bigger deal. Bitcoin is going to take humanity to a new stage of existence? Here comes peak hype, I guess.
In fact, you're so breathlessly ecstatic about the cult of bitcoin that I have to wonder if I'm being spoofed...
Individual freedom and sovereignty are more important to society than electricity. I'm pretty sure you haven't thought of Bitcoin in that way, or how Bitcoin might enable this. Importance is subjective, but I think most people would choose freedom over electricity. After that, we might argue whether Bitcoin would actually be helpful in enabling this.
It's not a simple concept to explain so here's a couple of videos which might help you to understand it better.
Economic bubbles are self-feeding. They have the social mechanisms of a cult where the members shut off communication with the external culture and only seek reinforcement for their belief system.
If the tech world speaks out it will be like doctors recommending masks and quarantine in the early days of Covid or climate experts explaining global warming: the "true believers" will just reinforce their belief.
Let them drink the Kool-Aid, there's nothing we can do anymore.
I really don't understand the mindless bashing of cryptocurrency by Hacker News. Normally discussion here is quite rational and level headed, but there is something regarding crypto that makes people get very polarized.
First of all, I am not a Bitcoin maximalist, nor I am "brainwashed by a multi-level marketing sale pitch".
Bitcoin is just a prototype for a P2P consensus algorithm that has stood the test of time. It has MANY flaws, and it failed its original goal of becoming electronic cash, and instead it became kind of a digital store of value. Is it worth more than it should? Sure, but you could argue the same of a lot of tech companies.
The problem is most people think they understand blockchain, but they don't. They just think its for creating a meme currency that is a speculative bubble.
What blockchain enables us to do, is to create a trustless P2P state machine, on top of which you can build any Turing complete project you can dream of.
Instead of focusing on Bitcoin and Dogecoin go and check out Ethereum and projects like Aave and Compound. Blockchain will completely change the way we do finance, from how stock are traded, to how we transfer money. I am sure that it will happen in our lifetimes.
I'm not at all sure blockchain tech will change how we do finance. Literally every finance or finance-adjacent company has been trying to figure this out for the better part of the decade, and it just doesn't add up.
Ethereum is very cool. Aave and Compound are very cool. But today, the whole ecosystem is super insular. Crypto loans and derivatives have to be overcollateralized with cryptoassets, and so the only use case for them is levering up cryptoasset exposure. Flash loans are a unique aspect of DeFi, but they're only really useful for arbitrage of cryptoassets.
There remains a huge disconnect between cryptoassets and the real world. Things like NFT attempt to bridge, but it's basically just pretend. Owning an NFT generally provides no actual control or rights over the asset it refers to.
Until institutions start creating assets natively on the blockchain, none of this stuff has any impact on the outside world. And it's not at all clear to me that this is going to happen, because there are potentially insurmountable hurdles in figuring out how to harmonize law and the blockchain. This entire ecosystem may turn out to be a dead end, outside of the clearly demonstrated use cases of speculation and crime.
Thanks for the thoughtful comment. I agree with you that we are not there yet, but that disconnect will eventually be bridged.
What we are lacking is a bridge between traditional finance and crypto that goes beyond what crypto exchanges offer.
I think it will take time before we get there because we need for institutions and businesses to start adopting it, but this has not been happening for a decade.
Ethereum is just 7 years old, and its in its infancy. I think we will need a couple of more speculative cycles before we end up with something useful.
But what I mean to say is that the legal system and the blockchain may simply be irreconcilable, without losing the benefits of each, as a mechanism for consensus. If the regulatory system requires an override, then what's the point of extremely complex, expensive, and slow distributed permissionless consensus? It may well turn out that permissionless blockchains are only really appropriate for markets beyond the purview of regulators.
As a thought experiment, I imagined a Government/Central bank auctioning (for $) bitcoin denominated bonds. These bonds would be repayable (in bitcoin) on demand.
Presumably each bond would fetch a value (in $) corresponding approximately to the current exchange rate. While the bond holder could cash them in at any point, why would they? Wouldn't many investors consider a bond backed by a major government at least as secure as a crypto coin?
In this way, the government could effectively increase the supply of bitcoins (and presumably thereby reduce their cost/value).
Of course, the Government runs the risk of bitcoin appreciating and then having all the bond holders cashing in, but with exceptionally deep pockets the only real reason to cash in would be if they feared a Government default.
By selling enough bonds, presumably the price could be driven arbitrarily low, extinguishing the risk entirely.
Cryptocurrency will never go away. The more time passes, the more conviction people have.
As someone who is a loser in both the fiat ecosystem and crypto ecosystem and having experienced some horrors both ecosystems, I prefer crypto ecosystem hands down because it's the most honest and transparent system.
Once you understand how both systems work, it's impossible to pick the fiat system. The fiat system is a pyramid scheme of epic proportions. It's not possible for an ethical person to want to participate in the fiat system once they understand how it works. It is really that bad.
I realize that people will downvote this now, but when crypto prices start doubling every week, they will finally understand what's going on.
When you understand how the monetary system works, this claim is not far fetched at all. It's a certainty.
Since when has tech culture been about trusting big companies and governments to do the right thing? Sure you can achieve all the same objectives as the currency-side of the blockchain with traditional means, but, fuck the traditional means. Banks are trash, Wells Fargo literally opened fake accounts on behalf of their customers and those customers didn't know. The list of ways that banks have failed people goes on and on: racist loan denials, ATM fees, overdrafting, arbitrary transaction fees for payment processors, and I'm sure there's more that isn't coming to mind. Surprise, replacing the world financial systems is a long road. Personally I hope that we can keep walking on it.
Probably because it mostly contains rehashed opinion and conjecture and almost nothing of substance.
I don't know why people would bother flagging something like this though, threads as content-less generally die on their own without much fanfare. OP and his friends get an ego boost from making front page and then it fades. NBD, no need to be contentious about it.
I don't understand how tech people can't be excited about decentralized programmable money. Bitcoin, maybe, it's so limited, but the sky's the limit on programmable money on Ethereum and chains like it.
Beyond cryptocurrency, how many other applications have either been built around or shifted to primarily function off of blockchain? This isn't meant as a gotcha question, but it is something that I can honestly say I can't think of any.
In terms of cryptocurrency, from my perspective the problem for mass adoption comes down to stability of value and oversight. Why would anyone want their paycheque to come to them in crypto when a few tweets by Elon Musk, lord of crypto market manipulation can turn your 2k paycheque into a 1.1k paycheque?
On top of that, for good or for ill the big banks and credit card companies have decades of built up trust in that there is a centralised authority who can ensure that your money is safe. Irregardless of what the reality of crypto and the safety of your money in crypto, the wider public will not trust that their money is safe when there is no one to be held accountable if something happens.
Finally, the fact that crypto has, to the wider public at least, been shown to have significant benefits for criminal activity and speculators actively trying to manipulate the markets has painted the entire crypto space as something that the average person should generally avoid at all costs.
In theory, I liked the original idea of crypto. But the truth is that crypto was good-intentioned idealism corrupted by selfishness and greed.
I think ppl who dismiss crypto as having no social benefit don’t really get the decentralization benefit w.r.t. trust. Crypto is objectively inefficient and full of scam right now, but the fact that you can exchange value over the Internet, don’t have to trust any third-party and it’s really difficult for anyone to censor the exchange, is huge. If the inefficiencies are solved, then I don’t see how it is possible for fiat to keep up.
This is clearly a chicken and an egg problem. You can’t have stability until crypto is used in the mainstream and has a much greater mass overall, so that short-term speculations don’t result in massive volatility.
That's not true at all. Most currencies are controlled by central banks who actively maintain them to reduce volatility and risk. It's not because of mass or momentum or some other physics term.
Cryptocurrency by design doesn't have this and will always be open to speculators or other rational bad actors manipulating their asset markets.
Why does some (pseudonymous, or even anonymous?) Twitter account claim to speak for some "silent majority"? Even using the term "we".
Who is "we"? And why they think they are a majority? Was there a poll or so? Did I miss out something?
Such kind of framing makes me angry — no matter I agree or not on the actual point! Who the fuck thinks they can speak on my behalf without even trying to ask me about my opinions?
No one said you have to use the technology for illegal things, or even as money. Even Bitcoin-the-blockchain is only a timestamping system (seriously, even the Bitcoin whitepaper explicitly states that this is the purpose of the blockchain -- a peer-to-peer timestamper), which uses a token to prioritize transactions for consideration when the network is congested. I can think of non-financial uses for that!
It's very interesting. But it's also noteworthy that there are very few gamechanging use cases for the consumer or business worlds, despite an enormous amount of attention and investment.
The problem is that most of the money (and developer interest) flowing into this space is driven by speculation on the rate-limiting token. This is clearly unfortunate.
If you look past that, what you have is a highly resilient, replicated, totally-ordered log of data you can use to build other p2p services. For example, you could use Bitcoin transactions to implement an open registry of all Mastodon servers by binding their IPs and public keys to server names in a first-come first-serve basis. This would provide a one-stop-shop for discovering all Mastodon nodes and their public keys.
As another example, you could build a p2p Docker image deployment system by binding a public key to a sequence of transactions that contain the hashes of fixed-sized chunks of the image, as well as a seed IP address. From there, peers with the public key could scan the hash sequence and seed IP address, discover one another, and self-organize into a random flood network to replicate the chunks and reassemble the image. The image author would publish a new series of hashes (or perhaps the Merkle root of a series of hashes if space is a concern) when a new image is published.
Point is, you can do so much more with the tech than what is being hyped.
"Bitcoin has emerged as a "shadow" monetary tool, a
type of liquidity overflow to prevent even bigger asset
bubbles in conventional assets such as commodities,
stocks, and housing. It represents some $2 trillion in
excess liquidity that would otherwise be invested in
housing or stocks - making both of these respective
asset bubbles that much more prone to bursting and
bringing the entire asset-bubble dependent socio-
economic and financial system closer to collapse. ...
This benign side effect of bitcoin which paradoxically
allows the Fed to perpetuate its ultra-easy monetary
policy for much longer, "explains lack of regulation".
Although if we hit hyperinflation and bitcoin goes offer-less, regulation will come for one simple reason: it
will be tantamount to deleveraging the system by
trillions in a heartbeat.
Regulation of crypto is a structural risk to investors/
speculators. Regulation of crypto can be seen as 2nd
order monetary tightening tool by Gov to tame inflation.
It’s hyperbole to say Bitcoin has no social benefit. It, at least, allows individuals to exchange payments between each other online without needing the consent of any private corporation or monopoly. Maybe it’s not the most efficient way of doing it but decentralization has a cost. I think we are all patiently waiting for better alternatives.
Those individuals need the consent of at least two private corporations (whatever entity converts spendable money to Bitcoin and back on either end). Compare that to sending an envelope full of dollars.
> Those individuals need the consent of at least two private corporations
Not true, you can exchange Bitcoin locally with other individuals. Mailing paper money or checks over postal service is not comparable to making payments using Bitcoin online. Especially when considering international payments.
Yeah, but ultimately you want to spend that bitcoin on something, otherwise you're just trading rare baseball cards with your friend. At that point (and at the point where someone bought bitcoin to send you) you need contact with the real money system.
Yeah that’s what I’m saying. People meet up in real life and exchange Bitcoin for cash locally. Various forums, web systems, and message boards exist to facilitate this.
>> without needing the consent of any private corporation or monopoly
I'd say we all subsidize bitcoin and the likes indirectly and unwillingly through the price hikes in HW directly or indirectly attributed to something of dubious (to put it mildly) tangible value.
The Bitcoin whitepaper brought together a few existing technologies into something that had never before existed in the world - decentralised digital scarcity. This lead to a Cambrian explosion of new developments, most of which are pyramid schemes. But at its core, the invention is world-changing.
> Cryptocurrency is sustained by a mix of money laundering, vaporware, fraud, ransomware, gambling, and delusion.
Correction: ignoring speculation, the base asset-value of bog-standard crypto securities (i.e. the ones that don't "do" anything other than get traded around) is sustained by a mix of:
• capital flight (in countries where the routes for regular ForEx conversions have been restricted)
• financial "regulatory sandbox" instruments development, i.e. the ecosystem built on "security tokens." (This, as it turns out, is mostly being built out by the existing financial sector.)
• grey- or black-market purchases — i.e. purchases illegal for either the buyer or seller according to their local jurisdiction. (Which doesn't usually mean criminal activity as you'd think of it, but rather is most often a routing-around of brain-damaged legal codes, e.g. FDA bans of non-dangerous drugs. I have a friend who's trans, who found it impossible to get prescribed hormones where they live — but got them easily on the dark web! Another friend, who had gone through every step in the workflow to solving their chronic illness and come up short, used crypto to buy a Russian medication that doesn't exist domestically, and it solved everything for them. Etc.)
• facilitation of trade in environments with untrustworthy civic financial infrastructure, e.g. Venezuela
• facilitation of trade between private citizens of countries that actively attempt to prevent trade with one-another, e.g. countries who have trade embargoes, or even countries who are at war
Note the common theme: cryptocurrencies enable people to enter into trade with one-another when one or more governments don't want to enable that trade, or even want to actively prevent that trade. That's the "base value" that speculation on cryptocurrency is a multiplier on top of. Cryptocurrencies route around embargoes/tarrifs/etc. in the same way that the Internet routes around downed links.
I have a question: are there any "crypto-like" currencies?
I do see value in being able to instantly exchange tokens which are generally liquid and convertible to local currency, with low fees, internationally, and in denominations that make sense to, e.g., tip a blogger for a post you like. The US could regulate the heck out of it, and the Venezuelan or Tanzanian farmer could use it more laissez faire.
But none of that comes from the crypto aspect and PoW and untrusted decentralization. It could just be a non-profit with a DB and a public API.
People keep being blindsided by the financial aspects of the space, whether it is those who love it or those who hate it. It just rings off-beat and it's frankly a bit vacuous.
"the tech world" is huge and not some homogenous mix of singular though. It's as varied as society itself, if only a tiny bit more egotistical about its (self) importance.
What else does it do, intentionally or unintentionally?
Who benefits from it, and who pays the costs?
Is this exchange worth it for those paying?
These are basic questions we should ask, not just about cryptocurrencies, but about the finance sector in general. When investment firms cause recessions or famines as a side-effect of enriching themselves, we have to ask if they're worth tolerating or if governments should drastically tighten regulations.
Cryptocurrencies are just the low-hanging fruit. The whole tree is worth shaking.
What most people do not understand, cryptocurrencies do only define the technology itself.
It does (and can) not define how it is used and also abused.
It is, eg. obvious that Bitcoin was made with the idea of representing a coin, a mean of payment. However, it is clear by now, that Bitcoin will never be a mean of payment. In contrast, it is mostly used as investment.
Also, you can not simply ban any cryptocurrency. The technology can not be 'stopped'. The lawmaker could only disallow it for this and that use.
It’s “not decentralized” and also it’s used to move “billions in crime money around.”
Hmm.
It’s a fraudulent “con” and also very dangerous because it subverts regulations.
Hmm.
Seems pretty contradictory, no?
You can either criticize bitcoin for not working or for working too well but Maciej seems to be trying to do both at once.
I’m not a Bitcoin user or particularly a fan but these self contradicting attack lines don’t seem likely to be politically effective. Just choose one. I’d go with “mostly used for crime.” And then add “environmentally ruinous” for good measure.
Here's how you defeat Bitcoin: code a client that a majority of the network uses that changes the consensus protocol to what you think is a good idea.
If you don't want to do that, and you want to wax poetic about shitcoins being evil, ffs, please keep in in the drafts, salty nocoiner. Especially during a bull cycle where people who already don't trust "tech nerds" are going to read this and want to buy the shittiest of shitcoins.
Just gonna sound like a hater, folks worship success. They will listen to anyone who made millions betting on cryptocurrency over any smart person who didn't and is "jealous" for missing out.
One mistake us "smart" folks make is thinking that investing is about understanding a system that's complete and smart. Most investments are not like black jack but more like poker where it all comes down to behavioral economics and psychology. Doesn't matter how stupid the actually game is, it's about the meta game with the crowd.
Plenty of tech folks making money in crypto know this, wallstreet going into crypto knows this. Most of us in tech are too autistic to play on that level. So focused on the correctness of the tech.
For the players it's a big casino and they know it. The lucky winners will be rewarded for having heart and playing
FOMO is real when I hear people talking about crypto. I feel the hype and I notice it in others too. Cool names flying around, there's a new type of coin for every coffee break we're having, the graphs go high, memes churned out every second. Colleague makes tenth of his salary with his GPU. Hard to remain neutral.
Brilliant point. I agree. Cryptocurrencies are fueled almost exclusively by FOMO. Tether is a joke and probably a scam, yet somehow has a $60B market value. SMH.
this used to be called the "greater fool theory" of investing. i think the funniest thing about crypto is that its touted as the ultra complex, high tech mathy panacea, but in its actual function and utility to people, its most similar to beanie babies or baseball cards.
This is similar to my recent realization - as much as I believe it's a complete ponzi scheme, a near complete scam, as long as there's enough people who don't know better who can be conned to buy into it, it will keep getting propped up. In this age of mass media and the internet where everyone is so infinitely, immediately connected, there's no shortage of more suckers to buy in, there's no shortage of propaganda techniques to sucker more people in. As long as there's more suckers, it can keep getting propped up, no matter how unsound it actually is, no matter how much of a scam it actually is. It reminds me of the quote "the markets can remain irrational longer than you can remain solvent".
A good start would be pointing out this obvious fact that all crypto is a speculative investment — it derives value from (hopefully) being worth more to someone else later than you paid to acquire it. The coins have little or no intrinsic value.
A lot of people underestimate the value provided by a payment system that makes chargebacks impossible. Yes, it's a double-edged sword that needs to be used carefully. But it makes perfect sense for markets where one side has an established reputation, while the other doesn't.
It's majority tech people that are into crypto at the moment, and tech people that have bought crypto. This is because it's still early days in the adoption timeline.
It's a not ponzi scheme, Elon Musk isn't 'in on it', and Bitcoin is too free to fail.
This post and the comments has convinced me that all the weirdoes and revolutionaries have left HN. It is now dominated by statist near-boomers concerned about the youngsters trampling the lawn.
Sure Bitcoin is boring but so is gold. If you weren't interested in gold in the first place you likely aren't interested in Bitcoin either.
The proof-of-stake, smart contract platforms are truly exciting. Stable coins and Uniswap are real innovations w/ more to come.
The difference between Bitcoin and a pyramid scheme is that most pyramids are basically zero sum games... for every dollar one player makes, another player loses a dollar.
Bitcoin, due to its mining costs, is a massively negative sum game. So much worse.
I am a PhD student at a university in Roma3.
Tomorrow I'll have to explain a student that, no, I won't give access to AI lab's Teslas to let them research a Deep Learning algorithm to forecast bitcoin price.
Groan.
In the same 7-day span a couple of weeks ago, I saw headlines about crypto's legitimization in the market, and a $1 BILLION crypto donation to COVID efforts in India. I can't believe both simultaneously.
Morr importantly, what many of you need to ask yourself, and what very few are focusing on is: 1) Who the fuck is Satoshi?
2) Why would the entire western world classify BTC as curency and remove VAT on it only after couple of years in existence, whilst at the same time silver legal tender coins are in most countried taxed with VAT.
3) Why have the regulators turned a blind eye to Tether? It was obvious to anybody already in 2016 they were responsbile for the run up in BTC prices. And know when everybody knows that they are a scam, they still continue to pump and distort the entire crypto market.
4) Why is Coinbase, a regulated exchange allowed to faciliate major scams lile Tether on its platform?
And only crickets from regulators. Thats where the real story/dog is burried.
I'm tired of HN submissions that link to tweets. If the tweet is very interesting that's one thing, but in this case the submission should have linked straight to the Politico article.
Could people just stop assuming cryptocurrencies == bitcoin.
Also DLT tech doesn't require a token with "value". There is no need to create an "alternative money" It can be just a DL (Distributed ledger).
reducing everything to bitcoin and its forks is like reducing the whole internet tech stack to http and ignore everything else we can do with it.
DLT tech isnt going away an no one who seriously understand it would say so. THis is just another useless twitter BTC hate thread. People who actually understand the tech dont care about bitcoin. Its the dinosaur tech and its deprecated since like 2013 or so when the first alternatives appeared (XRPL) which dont need the whole energy wasting block lottery.
There are folks in crypto who both consider most of the industry to be a scam while at the same time are working to fix it because there's something good here. We get hated on by almost everyone - both those in crypto for criticizing (BTC is a ponzi, ETH cannot scale, etc.) and those outside for being a part of it. It's easy to get bitter about this, but recently I spoke to a financial advisor who runs an investment fund that only invests in businesses that share certain values. He felt exactly the same about the financial industry and he's doing fine. If you resonate with this comment, realize you don't need to please everyone.
I think any tools/means/platforms, no matter how well intentioned the designers are, if left ungoverned/anarchical, will be eventually taken over by malign actors.
Bitcoin is terrible technology and stupidly wasteful, but there are new blockchain networks coming along that are about a million times more efficient, so use those instead.
If you are referring to PoS (both stake and space), they make fundamentally different tradeoffs as opposed to PoW. It's intellectually dishonest to claim either is "more efficient".
While it’s perhaps true that many promises of cryptocurrency have yet to come to fruition, it is also true that programmable money has the potential to reduce the need for the use of coercive force and violence by the state, as well as reducing socioeconomic violence in general. Now is the tool being used to these ends? Yes, by small projects compared to Bitcoin, but yes. Crypto can create stable stores of value and currencies ( these are already in common use) and can add features like automatic taxation, demurrage, and ubi for users.
Just because few people are using a tool correctly yet does not mean the tool is without value.
people are using crypto to bypass country based currency controls. The original big bump I think was related to chinese getting their money out of china.
everyone knows it’s an open ponzi scheme. but you’d also be rich if you invested in it early. and you can’t convince someone whose bought into the ponzi that it’s a scam. you just have to wait for them to get burnt
and it mostly takes advantage of poor people trying to get rich to the advantage of early adopters.
So I haven’t really looked at it too much but I’ve heard about solutions (like incognito.org) to transfer shielded bitcoin (basically adding privacy to bitcoin).
Don't fall into the trap of thinking people disagree with you because they are ignorant. That never works, usually because it's wrong. Consider the possibility that most people who are into cryptocurrency are as aware of the many down sides as they would need to be, but have come to a different conclusion than you about them.
I think the only point of value for crypto currencies is enabling the purchase of drugs online, and don't get me wrong, being able to escape the terrible effects of prohibition is a very useful thing. Anyone who has tried will tell you how much better ( by any metric ) buying digitally is to the alternatives.
This is not even touching the fact that bitcoin and similar currencies are a danger for the environment. They spend huge amounts of energy that are helping destroy the planet. The longer this scam goes on, the more damage will happen to the world.
>They spend huge amounts of energy that are helping destroy the planet
This sounds extremely ignorant, Bitcoin essentially has accomplished a _trustless_ transfer of value, globally and at very low costs (even considering the extraordinary fees right now). This is just the cost of that...
I still find the moralising about cryptocurrency curious and difficult to understand. It always takes the tone of 'We the nerds should...'. Never seen it applied to any other (dramatically more important) issues.
not technical here, but you could have posted this thread when the price was at it its all time high ? I wonder what would the response have been then ? ;/
I know I’m coming late, but if anyone want to understand more about the technology behind cryptocurrencies I’m happy to answer any question. Obviously I don’t agree with the post, but I think education is more important.
I'm OK to ban crypto if we also ban all big tech corporations because they're all part of the same fiat pyramid scheme. Why don't we just end capitalism and switch to communism... Then at least we will be able to communicate honestly about what's going on in the economy.
To say that one scheme is a scam but the other is not is extremely subjective.
A corporation like Facebook probably does more harm to society than Bitcoin. Why ban Bitcoin but not ban Facebook? Why not ban Snapchat or Twitter? Ban Uber, they burn a lot of fossil fuels! This kind of thinking necessarily leads to communism. You can't ban crypto and keep capitalism... What's left of it.
Cryotocurrency is like a microcosm of libertarianism in general: it promises to give everybody more freedom, but it really only benefits the rich by turning the economy based on it into an unregulated winner-take-all battle royale. And it fucks over the environment in the process.
> Cryptocurrency is sustained by a mix of money laundering, vaporware, fraud, ransomware, gambling, and delusion.
The thing is none of that matters. Cryptocurrency is a currency and anyone treating it otherwise and getting burned can't blame the currency for it.
The thing is the *sole criterion* for the viability of a currency is acceptance.
Some examples:
* 90% of USD doesn't physically exist and has no intrinsic value whatsoever. The fact that everyone the world over will accept it in trade defines its viability.
* Stones of Jordan (SOJs) in Diablo II. Terrible, currency because most of the games in the item were worth less. But that didn't matter. They were all anyone would accept. The fact that it was within a game didn't matter. Within the scope of the game they were about all that was accepted.
* chipped gems in Diablo II. They had value in modifying other items and were more granular than SOJs. Some people would even accept a large number for an SOJ.
* (D2jsp) Forum gold (Diablo II). You can buy it with USD (or other currencies I suppose, probably BTC too), and use it to buy items in the game.
* Credit cards - almost every place in the world accepts them, and in theory it's because they're moving a government backed currency... but wait.
* Icelandic Kroner - perfectly viable...but only in Iceland. At least for the most part. Like nobody in the US is going to let you buy gas with 1 ISK.
* Yuan - perfectly viable...but only in Japan. Same as ISK, but japan.
Some negative examples:
* Again, Credit cards - If you were to try to start your own payment processing company that works exactly the same as say, Visa, but nobody has heard of your company it doesn't matter, no one will take it.
* Zimbabwe dollars - hyperinflated to the point of 100 trillion dollar bills. Which people would accept a wheelbarrow of for a roll of toilet paper. Not accepted, so no value.
> It has no social benefit except helping end first dates fast.
* This just isn't true. I've used it to buy weed in a state where it was legal and it worked great. Meaning that you can buy things the government thinks shouldn't be allowed to.
* It allows money laundering. Whether or not you agree with it, it's something it provides.
* Banks and the government can't control you via seizing or freezing it. This one is incredible. The internet has a history of payment processors unilaterally destroying businesses - for example Wikileaks, and many types of porn or sex related services, many of which aren't illegal.
Crypto provides freedom from authoritarianism and that's wonderful.
The overarching axiom is, acceptance is the only thing that matters. Stupid, crazy, nonsensical, non-divisible, non-government backed, all don't matter if people just accept it in trade. And even the best well designed, feature rich, secure, safe, environmentally friendly currency isn't worth a damn thing if no one accepts it. The dumbest, most authoritarian controlled, slow processing, high fee currency with a massive carbon footprint to create more of can still be viable if it has widespread acceptance.
The key is nothing matters except acceptance. And people accept crypto, especially BTC and the other early coins. So they have value.
So no, it's not for us in tech to speak out, because it's not our decision. If people accept crypto, it's a real currency. If people don't, it isn't.
Another way to look at it...what if I told you there was a new scam coin that had 27 trillion in circulation, an unlimited supply, and 1% of people own 30% of it. Oh wait, that's USD.
The problem I see is that everyone in tech seems to think they're an expert on cryptocurrencies while simultaneously being at the ignorant end of the Dunning–Kruger effect (and failing basic statistics.)
Cryptocurrency makes it easy to enhance ones own confirmation bias because the industry has had such a bumpy ride towards progress. If you want to take an overly harsh perspective about the technology then by all means just Google 'a list of hacks and scams.' You'll be entertained for days with what you find, and at the end of your research you will have more than enough material to make yourself look smart on twitter.
That's also another point. If you can talk about basic flaws in a technology by playing 'Dr Doom' then you can score free points from the audience without having to know much about the subject. It's an easy way to look credible because most people are followers on social media and won't have the time or interest to look more deeply.
So lets look at the claim that cryptocurrency 'has no use and only causes problems.' To disprove this we only need to find a few examples of use-cases that are very hard if not impossible to do under traditional finance.
1. Trusts -- escrow -- jointly controlled accounts with arbitrary leverage over assets. You can't do this under the traditional financial system because the legal system can be used to dispute ownership which commonly happens when a will is attested.
2. Confidential transactions. Anonymous money and accounts. Traditional finance views this as a disadvantage, whereas FinTech views privacy as a right.
3. Flash loans. Flash loans are a way to finance a smart contract that borrows money and repays it atomically in a single transaction. Flash loans have radically changed capital markets but their power is still being understood. Potentially this is a new form of funding for automated companies.
4. Price stability. It's possible to design cryptocurrencies in such a way that their price trends towards some function. This property is highly desirable when people are going to be storing their wealth long-term. If we can build more stable currencies we can protect against flash crashes and even economic depression.
5. Smart contracts. Programmable agreements for wealth exchange make it possible to provide unique financial instruments that are engineered to be less risky than anything traditional markets can accomplish. This is due to increased transparency, collateral requirements, and protocols that help enforce fairness.
There are too many examples to list in how cryptocurrencies are shaking up not just finance but many other industries. To claim that it all amounts to fraud, gambling, and ponzi schemes just tells me the author has no understanding of the transformations taking place right in front of them. They'll probably be left crying 'its a scam' long after society has silently replaced most aging FinTech with platforms that provide enforceable safe-guards... because in the end it is more transparent, flexible, and when done right -- safer than alternatives.
Would love to get a real time look at the dopamine rush the author got when writing this long winded diatribe. I can smell the self righteousness through my speakers.
Cryptocurrency is like some sort of economic viral weapon.
It presents itself as a techno-utopian vision of freedom, takes advantage of greed to replicate itself throughout the financial system, and mutates to use as much energy and as many resources as possible.
If it were designed for that purpose, it would be the most cynical indictment of capitalism conceived.
Seems lobsided. Sure Bitcoin suffers from high fees, but it serves well as a savings account. We've also started accepting litecoin payments on our site: I set it up once, and forgot about it. With Paypal it's a never-ending rigamarole.
I've recently closed my bank account, and started using something a bit more up-to-date (Revolut). I believe Bitcoin is the single biggest innovation driver in the tech sector right now.. but sure.. it's a scam.
That makes it a commodity, not a security. Securities are very specific things described by the SEC Act and the Howey test.
But if you don't like Bitcoin you can use USD based cryptos like DAI or USDC to transact and conduct peer-to-peer lending, purchase art work, save with higher yield, provide liquidity in a peer to peer marketplace, etc. By no means do you have to choose Bitcoin.
A friend of mine paid another friend of mine $80 in BTC for a trip we did about 5 years ago. That BTC, never touched, is now worth $5000. At any rate, it's definitely volatile, because the asset class is still a small (but growing) potato in the grand scheme of commodities markets. One thing we can be sure of, it will never go negative in price, unlike oil.
When you save money, do you save for the long term or for 1.5 months from now? If you save for the long term, and you're earning 0.5% interest on your $10K, how much less can you buy with it now, in terms of real estate, rent, stocks, commodities, etc?
Also, note it is entirely possible to invest on what's called a risk curve. You can allocate some portion of your savings, maybe 5-10% as a hedge. No need to go all in. Maybe 0.5%. at any rate, your savings account has cost you 50% or more in purchasing power for meaningful assets in the past 5 years. While you've gained a great deal of purchasing power if you held crypto.
Can you please make your substantive points without swipes? It's hard for conversations like this to stay interesting and this sort of exchange tends to push them over a cliff.
Ah, that statement makes much more sense when you correct it to fintech.
I think I’d be inclined to point towards “neo-banks” as being more innovative in that specific sector, but that’s within “reasonable to disagree” range.
I took this to mean that bitcoin's issuance rate is more predictable than the rate that physical gold is discovered and mined at. There are unknown unmined gold deposits out there, both on-planet and off-planet. There are no unknown unmined bitcoin deposits.
From my experience living in a 2nd world country, the people involved with buying Cryptocurrencies are typically young males working in IT, who proceed to waste their time, money and energy.
We have iOS and Android. We have Windows and Linux. We have Ford and Toyota. All with its own pros and cons. Why can't we have fiat and cryptocurrency?
Cryptocurrencies do not add anything to either beyond what was already done by cryptography.
> “bank accounts”
We already have bank accounts. In banks, hence the name. What’s the average transaction fee for the most popular cryptocurrency? By one of many metrics by which cryptocurrency fails even against the status quo.
“Not everyone” has a computer of any kind, not even a cellphone, not even of the not-smartphone variety.
Underbanked people more so than the general population.
And this group is also the most harmed by current cryptocurrency transaction fees — I’ve met someone (friend of a friend in Nairobi) for whom, assuming rent is paid monthly, current fees would raise their rental cost by 10%, and they’re already struggling.
The author clearly doesn't understand Bitcoin at all and Bitcoin has been already discussed for ten years by everyone in the tech world. His opinion is his own, not 'us in the tech world'.
One of the most tiring retorts is that if someone is negative about cryptocurrency then that means they don't understand cryptocurrency. I assure you many of us do understand it and still think it's an absolute scam and pure wealth distribution from the naive, to the slightly less naive, to the scammers.
> The author clearly doesn't understand Bitcoin at all
Putting aside softer claims, writing "at all" is an exaggeration. Would you care to moderate your opinion or at least elaborate? Please point out area(s) where you think the author is mistaken?
Bitcoin has more social benefit than any other technology. Money is technology that runs our society by allowing us to trade our time between each other. Sound money that can't be diluted or stolen away by a few benefits everyone. It's not only more fair money, but it also allows perfectly efficient markets and saves the environment by not incentivizing overconsuming.
Bitcoin is not used for money laundering, gambling, vaporware etc. and is not particularly well suited for those. His claims are not based on actual data.
Bitcoin is decentralized. Bitcoin nodes which protect the monetary policy are run by users. It's not possible for anyone to weaken the currency by forcing users to run a weaker version of the software.
Bitcoin actually solves the problem of central bank monopolies. It is money, it is a currency, it is a store of value. His claims are simply false.
He just doesn't understand that it takes time for Bitcoin to stabilize at a certain value. It takes time for people to switch to a better money.
> Bitcoin has more social benefit than any other technology.
This is highly subjective. What about plumbing, electricity, or antibiotics?
Rank ordering technologies by their social benefits has major methodological problems. First, you can't consider any one technology in isolation; they exist in a network. Second, the value of a technology is relative to alternatives.
I see many of you didn't get the train. Maybe you work on a big tech but you are not a hacker anymore. Real hackers are in crypto since its inception. And they will be your bosses. Just wait for it.
Git is the most wildly successful and broadly useful application of the ~blockchain~ merkle tree data structure. It’s fantastic and here to stay.
The digital money angle? Eh it’s okay. Everyone loves a gullible population that prefers to be paid in not-money.
Eventually crypto will have to invent all the overhead and governance it was trying to escape. You know, so things like Musk’s little pump-and-dump the other week stop being possible.
For the downvoters: The original bitcoin paper explicitly says it’s using a merkle tree data structure under the hood. Same as that used by git.
It’s the same data structure. Bitcoin just added the proof-of-work idea to extending the chain and attached the concept of “value” as a social construct.
Multiple peer reviewers look at a pull request and when it passes muster, it gets merged to the longest chain. You can always make a fork and keep going with a new chain.
Same as bitcoin. You can always split off a new chain. You might not convince everyone that your new chain is the chain, but you’re welcome to try.
a) Where is there a requirement for "multiple peer reviews" on git?
b) What is the longest chain? How do I determine if the longest chain is in Gitlab, on my computer or my coworker's computer? Where does the pull request go?
c) How do I indicate that I have approved a pull request in git?
I don’t have these answers for you, it depends on the project.
How do you know that the exchange you’re using buys bitcoin on the same blockchain as the exchange I use? Because they said so?
When’s the last time you downloaded the whole blockchain for any coin and verified the whole sequence of blocks from the very first one? I certainly never have. But I regularly have the whole chain for git projects on my machine.
Point is it’s the same data structure. Bitcoin’s innovation is in how blocks get added, but it’s not as revolutionary as it looks from the hype. Read the original paper if you don’t believe me, it’s very well written and incredibly approachable
This doesn't read as a particularly intelligent thread. There are no interesting insights here, at least not anything that's new and hasn't already been debated/debunked/pushed back on, before.
Seems like one of those tweetstorms where people perceive it to be saying something worthwhile because it's long and is said with adamancy.
Cryptocurrency allows people to exchange money without dealing with financial institutions or governments. I don't own any as an investment, I use it for playing poker online. That's it.
We give too much voice to all these people suffering from hysteria. I suspect the only reason these people are given a voice is because they usually call for more laws to "fix" more things which benefits those in power.
edit: Also speaking of things we should ban, I think if we are talking about things that are actually harmful to society (not that I actually give a damn), we should start with banning twitter so that we can stop hearing these "moral" rants
That's not really accurate. For most people, they deal with financial institutions directly via the fiat onroads and offroads fror the exchanges.
The fact that you can formally buy, exchange, and cash out of crypto with full banking support gives cryptocoins a veneer of Government support and legitimacy.
The USA bans online gambling and ponzi schemes. Cyrptocoins are worse, because they include a side order of immense waste of electricity and advanced manufactured computer chips, and enable ransomware.
I think this article is completely correct. We, as members of the tech community, have a duty to communicate with the public and democratic representatives that cryptocurrencies are a harmful technology, and the formal exchange of them for fiat should be banned.
Can you (and your representative) please just leave me alone so I can harm myself with this "harmful technology"? Whatever the outcome, I'll take my chances. Please leave me alone.
Yeah, all the problems of the world are due to bitcoin and cryptocurrencies. Embarrassingly, more than a decade in, HN is still struggling with it. I don't consider harmful, I consider it a godsend. Ten years ago, I knew HN was wrong, it will still be wrong in a decade.
> The environmental harms of cryptocurrencies hurt everyone. It's a classic externality.
A rational solution would be a carbon tax, so pollution is no longer an externality. Focusing only on Bitcoin only makes sense if one's agenda is just to hurt Bitcoin.
I want to see those things go away too, but we're going to need to significantly increase the energy efficiency of our entire society to be able to achieve that. Cryptocurrency mining is anti-efficient, by design. How much coal generation could we retire just by eliminating the energy demand from cryptocurrency mining? I suspect the answer to that question is more than zero.
Does that make it right? Ignoring that, many private institutions go out of their way to ban transactions in things that the government doesn't even ban. Marijuana in states where it is legalized for example. All forms of sex work on the misguided belief that it somehow benefits the sex worker. Etc.
Also I don't have a duty to follow your misguided morals.
You have so called ‘whales’ controlling and manipulating the coins, only those who got in early and the institutions can control the price of Bitcoin and Ethereum.
The whole thing is so volatile a single billionaire can say anything causing the entire crypto market to crash, leaving those who got in extremely late holding a huge bag.
Bitcoin is useless and has no usecase at all and Ethereum spurred on the useless energy inefficient and vapid NFT craze which is yet another money laundering scheme. Don’t get me started on ransomware as that is for another story.
This experiment should not have been allowed to run it’s course at all and all of it needs to be shutdown.
> What we especially need to stress to regulators...
Lol. Talking like that obviously shows that cryptocurrencies are not for you. This tech has cypherpunk and crypto-anarchy roots, regulators/governments are not the intended users for this tech, even if you like it or not. If you do not view cryptocurrencies from an cypherpunk perspective you will not see their social benefits, it is an entire way of life an alternative view from the centralized shit show we have now. Yes the tech has flaws, just like how digicash, hashcash, b-money etc had flaws, this is an evolutionary process and nothing you or your government says can stop it.
I think that cyberpunk dream died when billionaires and VC got involved and Bitcoin (and other) currencies skyrocketed in price from millions of people playing crypto-lottery.
Strikes against it:
- It's burning a massive amount of resources and that is just increasing
- I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
- A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
- Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
> It's burning a massive amount of resources and that is just increasing
Do you own a car? Have you ever used plastic? How much resources are burned by banks?
> I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
Yea lets also ban computers because they allow cryptocurrencies.
> A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
Ever heard about Zcash or Monero
> Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
Yes the tech is not perfect but tons of research (Proof of Stake etc) is happening to make it perfect.
Really surprised you brought up Proof of Stake for decentralization and not the environmental aspect. It could actually solve the environment issue!
But decentralization? How will the ease of entry not allow allow rich people to dump money into it and be the main players/money makers in that system. Perhaps they wont all be in one country but they'll certainly (by stake owned) be one predominantly one demographic.
> They don't see the huge silent majority of tech people who know it's a scam. That's on us
Serious question: What does "not silence" looks like?
Anyone who asks me gets my viewpoint on cryptocurrency and blockchains generally (which is more or less the same as Maciej's). My relatives all know it, but they also know another relative (who also thinks it is a scam!) made a couple K back in the first bubble because he was just playing around with the software. My coworkers all know it. Repeating it only causes strife, not education. People don't want to hear they've made bad financial decisions no matter the time, place, or tone. They instantly get defensive. I mentioned it in passing to a new hire in their trial period recently and got a really nervous look like "is this guy going to not give me a permanent contract because I liked bitcoin?"
There's no forum in our society for us to say "this is a scam" that isn't run by people with millions or billions of dollars invested in that scam - unless you're famous enough to get on cable news as a minor tech entrepreneur - and no social maneuvering that makes it effective on a personal level.
That's a chart showing the M1 money supply increase by the Fed. It has more than quintupled in the past two years. That chart looks like a true scam to me. And it shows in the US household net worth data: https://mobile.twitter.com/RaoulGMI/status/13987339019132641...
See! Look! This is exactly my point! Nobody is ever going to convince the guy who sealioned into a random subthread with some random charts to make an unclear point. Nothing a human can say will stop this army of even-more-nerdy Ross Perots.
The only thing that speaking up ever does is generate more noise, which frustratingly then generates more interest. This probably even applies to Pinboard's appearances - anything, pro or con, to keep cryptocurrency on the air.
Why would I trust a source whose own outdated site looks terrible on mobile and is not even on a secure connection? "A bookmarking site for introverts" -- what amazing innovation! It sounds more like Pinboard is looking for engagement by shitposting on Twitter.
As a software engineer I was curious about bitcoin in 2017, when price was around $15,000, so I bought $500 bitcoin through coinbase. I created a personal wallet and transferred half of the bitcoin to it.
Two big issues immediately stands out that made me believe that bitcoin has no future:
1. Long latency of transactions. I remember it took about 10 minutes for the purchase on coinbase to finish, and another 10 minutes to transfer half of the bitcoin to my personal wallet. This makes it impossible to use bitcoin as a currency. Imagine I go to a store and at check out, I need to wait for 10 minutes for the payment to go through.
2. High transaction cost. The transaction fee to transfer the bitcoin to my personal wallet cost around $15 (if I remember correctly), an astonishingly high fee.
I kept the bitcoin as a souvenir, and when this year price go crazy, I sold half of my bitcoins on coinbase when price was at $50K, to recoup what I spent on it in 2017; and still kept the half in my wallet, as a souvenir of what I believe to be the biggest ponzy scheme in human history.
If you're in rural India and don't have access to a bank account, but you do have internet access via a smartphone, then I could definitely see cryptocurrency being valuable to you. And that doesn't even take into account countries like Venezuela that are experiencing hyperinflation, where cryptocurrency would be much more useful. There are cryptocurrencies that are energy efficient and have low (or even zero) transaction fees. I doubt the author has looked into these coins.
Beyond just currency uses, smart contracts open the door to phasing out escrow middlemen for purely digital transactions (like buying/selling domain names, etc.) Decentralized lending and borrowing is another major use of smart contract coins.
How exactly do you imagine that an unbanked person living in rural India would be able use cryptocurrency? It isn't like they can just enter their credit card into a website and buy some. Not to mention that even if they someone managed to acquire some, the $5+/transaction fees are going to make something like bitcoin or ethereum completely impractical.
Nano has free transactions. Other cryptos like Stellar and Solana have low cost transactions. People can use sites like localbitcoins to exchange cash for crypto.
I can see how people in their twenties would fall for this argument because they can’t remember. The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access. Email and ftp alone were killer apps. A bit later came Usenet and IRC and MUD gaming. There were things to download, people to meet, flame wars to participate in. People would stay up until 4am to get a chance to go online in university shared facilities.
With cryptocurrency there’s nothing to do. You could pay $100 to buy a “cryptokitten” or whatever, but then you’d be stuck shilling it on somebody else somehow. The community is a mix of Scientology-like groupthink and multi-level marketing sales pitches. The early Internet was infinite times more fun.