“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?”
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.
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).
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.
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 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”.
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?
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?
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".
> 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.
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.
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.
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.
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.
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.
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 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...
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.
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)
> 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.
> 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.
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.
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).
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).
"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.
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.
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.
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.
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.
> 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".
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 :/
>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.
> 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.
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.
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.
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.
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.
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?
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?
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.
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.
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!
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.
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.
> 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.
>> 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.
> 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 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.
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
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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.
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.
“Why did it regress” is much less interesting than “why did anyone ever fall for this?”
Complaining about nothing to do on Bitcoin feels like complaining how empty the gopher server are after everyone’s moved onto the web.
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.
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.
Which is, y'know, also the story of the Internet.
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.
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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):
https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-...
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:
https://www.gfmag.com/global-data/economic-data/worlds-most-...
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%.
https://archive.fo/ZRXzS
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:
https://btc.com/0000000000000000000778ef382c1697706e34634696...
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:
https://btc.com/00000000000000000000476ab57eea9be8ada36e2680...
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.
(I posted an earlier version of this a couple of months ago at https://news.ycombinator.com/item?id=26654767.)
____
† 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”.
‡ Family remittances are specifically exempted from the US sanctions on Iran, but good luck finding a US bank that’s willing and able to take that risk: https://www.wiggin.com/wp-content/uploads/2019/09/26580_advi...
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 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 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.
"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?
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".
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.
- 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.
https://www.sandbox.game/en/https://decentraland.org/
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.
You can also explore decentralized finance, act as a peer-to-peer lender, provide liquidity in a marketplace, fund an idea you're interested in, whether that's a game (https://illuvium.io) or a commission for a comic book series (https://www.one37pm.com/nft/art/punks-comic-pixel-vault-cryp...) or start a DAO and raise money for charity or open source software (https://gitcoin.co/).
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.
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.
This all happens in Second Life and doesn't need to burn the planet to do it.
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.
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.
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.
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)
Internet and Ethernet were useful immediately.
https://www.hpe.com/us/en/insights/articles/the-birth-and-ri...
You couldn't Google that. Because there was no Google, and you were stuck in a basement.
Fun and exciting times :)
Living on the edge !
My parents still have fond memory of seing skinny teenager bringing computers on well barrel in their basement to play video game.
They were suspicious at first. But then they concluded they we were indeed playing video game.
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.
Phones were out, too?
("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.)
Edit: first thing bought on the internet apparently was weed https://www.smithsonianmag.com/smart-news/what-was-first-thi...
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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.
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.
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'd argue you just haven't explored enough around its possibilities. I just read this today. https://twitter.com/mcuban/status/1400459822080819204
I think we're just beginning to get to the good stuff.
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.
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.
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...
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i remember i believed in it in 2013 before becoming disillusioned. but there’s people who first bought it in 2020 who tell me i don’t understand ot
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.
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.
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> 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.
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.
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)
Counterpoint: most "tech people" I know — including people who have worked in crypto — both know about it and also think it's a scam.
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.
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.
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).
https://iota.stackexchange.com/questions/8/why-does-iota-use...
Tether smells extremely fishy and seems to be used for a huge amount of trade volume on BTC and other cryptocurrencies.
Hi there. I've published a few papers in top conferences on BTC and ETH. I don't own a cent of crypto and believe that a lot of it is a very bad idea.
I find it endlessly frustrating when people insist that the only way to disagree with enthusiasts is to be ignorant.
No, the scam part is the idea that crypto is going replace fiat and as such will be worth many times more in the future than it is now.
I'd also be very, very surprised if there wasn't price manipulation going on with crypto trading.
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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.
This is embarrasing. I will give you more info in case you are geniunely wrong and not playing dumb.
This is the last mined BTC block: https://www.blockchain.com/btc/block/00000000000000000001d85...
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.
Judging by how quickly Tesla stopped accepting Bitcoin, I would say he definitely knows.
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.
Doubt it. He's another Libertarian and certainly hates the existing system.
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Additionally, there is no "silent majority" in tech that think it is a scam; the author has invented this.
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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.
Because they don't know crypto. At all.
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.
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.
I'd reckon that the average HN cryptocurrency skeptic would do better than the average person who's actually invested in crypto.
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.
Because they don't know Sciento-resonant-homepathics. At all.
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.
It's easier when there's a bear market.
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".
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.
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.
[1][https://news.ycombinator.com/item?id=1251519]
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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.
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.
Is this a bit?
I've talked religion with more free thinking open minded Jehovah's witnesses.
It's a cliche at this point.
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.
I'm not here to explain you crypto.
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.
https://www.gemini.com/cryptopedia/amm-what-are-automated-ma...
https://www.investopedia.com/terms/a/atomic-swaps.asp
https://www.ibm.com/blogs/blockchain/2020/11/blockchain-for-...
Arguing with someone who is bearish on cryptocurrency is pissing in the wind, which is why people would rather leave for "unrelated reasons".
The most sensationalist tweets get posted here all the time. It's not worth anybody's time taking them seriously.
Edit: No refutation? Just downvotes? Ok then.
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.
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.
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.
(And cryptocurrency charges even more.)
Better go transfer my life savings into Bitcoin, I suppose.
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?
These things happen every day. I will happily pay a sub .1% fee for a centeralized bank account that's protected by regulations and federally insured.
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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.
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?
these tech people are in such a myopic bubble
Which country specifically would be a good example of this? If there are in fact any examples of this.
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.
[1]: this is not to claim, as some do, that it is unregulatable, although it may be.
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.
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.
"only"?
I'd say the "utility of the land" IS the only value of "having" land.
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.
You could have all of this with open banking standards.
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!
Can you provide one or two technical reasons why this is the case?
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.
There’s no free lunch.
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.
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.
Whether this is a good thing or not probably depends on what you think of illegal markets in desperate situations.
Otherwise I don’t know what else to say
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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.
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.
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.
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.
It's a side point to the thread though.
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.
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.
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.
> What is surprising is how large the number of techies who don’t get this.
What do you mean by "this"? Do you mean all of the points made by the author in the tweets?
Or do you mean "the following" instead of "this", referring to what you think is most innovative about Bitcoin?
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