The thing people also overlook on point 2 is that if cryptocurrencies and blockchain tech take over the traditional financial system, that doesn't mean bitcoin, or even etherium, did. In no way is bitcoin a bet on blockchain tech; people just tell themselves that story because it feels better than gambling on crypto trading cards. Nothing wrong with gambling on them, either; just don't say you're "investing."
Would love to get a real time look at the dopamine rush the author got when writing this long winded diatribe. I can smell the self righteousness through my speakers.
It’s “not decentralized” and also it’s used to move “billions in crime money around.”
Hmm.
It’s a fraudulent “con” and also very dangerous because it subverts regulations.
Hmm.
Seems pretty contradictory, no?
You can either criticize bitcoin for not working or for working too well but Maciej seems to be trying to do both at once.
I’m not a Bitcoin user or particularly a fan but these self contradicting attack lines don’t seem likely to be politically effective. Just choose one. I’d go with “mostly used for crime.” And then add “environmentally ruinous” for good measure.
It’s hyperbole to say Bitcoin has no social benefit. It, at least, allows individuals to exchange payments between each other online without needing the consent of any private corporation or monopoly. Maybe it’s not the most efficient way of doing it but decentralization has a cost. I think we are all patiently waiting for better alternatives.
>> without needing the consent of any private corporation or monopoly
I'd say we all subsidize bitcoin and the likes indirectly and unwillingly through the price hikes in HW directly or indirectly attributed to something of dubious (to put it mildly) tangible value.
Those individuals need the consent of at least two private corporations (whatever entity converts spendable money to Bitcoin and back on either end). Compare that to sending an envelope full of dollars.
> Those individuals need the consent of at least two private corporations
Not true, you can exchange Bitcoin locally with other individuals. Mailing paper money or checks over postal service is not comparable to making payments using Bitcoin online. Especially when considering international payments.
Yeah, but ultimately you want to spend that bitcoin on something, otherwise you're just trading rare baseball cards with your friend. At that point (and at the point where someone bought bitcoin to send you) you need contact with the real money system.
Yeah that’s what I’m saying. People meet up in real life and exchange Bitcoin for cash locally. Various forums, web systems, and message boards exist to facilitate this.
> Cryptocurrency is sustained by a mix of money laundering, vaporware, fraud, ransomware, gambling, and delusion. It has no social benefit except helping end first dates fast
> What we especially need to stress to regulators is that there's no relationship between the technical claims of cryptocurrency and our now over 13 years of experience. It's not decentralized, it's not a currency, it's not a store of value, and it's not a promising technology
> Cryptocurrency solves no problems that it didn't first create, and most of those it doesn't solve. Smart contracts are neither of those things—at worst they're an API for fraud, or as @qrs put it, self-funding bug bounties at best
Those are a lot of hasty statements made without indisputable evidence.
Edit: I'll take any evidence if indisputable evidence is too high a bar.
> Those are a lot of hasty statements made without indisputable evidence.
That reminds me of that guy who didn't receive his package and filed a complaint to the store he bought it from. They asked for a proof that the package didn't arrive, and he replied with the photo of his empty hands.
Ironically enough the Pinboard account is engaging in the same nonsense and rhetoric it accuses cryptocurrency supporters of, hoping no one will notice.
My position is that both sides have a burden of proof. It is incorrect to place that burden on only one side. There is no consensus on the validity of the claims of crypto proponents. I don't see either side meeting a burden of proof.
Sorry, I'm a bit lost here. I'm talking about the claims of the OP here. Their claims in the Twitter thread are specific and they haven't provided any proof for them.
I'm unsure what claims you're alluding to. But I'd love to help out as much as I can.
Just so others are aware, me and this guy have been 'friends' since 2015. He sent me a screenshot of this comment on Signal before he posted it. Its just his way to not address what I said.
What fraction of all commerce is worldwide as opposed to local?
What degree of that difference, if any, is a consequence of payment frictions rather than other factors (say: most activity and interactions are local).
What preferences are exhibited by major international buyers and sellers for payment or credit systems?
Yes. Bad actors ask these sorts of questions in order to stofle conversation. You basically asked this person to do a research papers worth of research in order to prove his argument while you put basically zero effort into your comment. If you think the stats dobt align with what he said look it ul yourself and tell us. Asking questions like the parent did is lazy and often badly intentioned
I can use cryptocurrencies from anywhere in the world, I can't use M-Pesa unless I'm in one of the few countries it operates, and even then I'd be at Vodafone's whims. Truly it may serve similar needs (money for the under/unbanked) but the scope is not nearly the same.
Hacker news is holistically anti cryptocurrency. Which disappoints me.
It has virtues.
As someone who works in applied Cryptography and has also worked for the European Central Bank, we need “crypto”.
1) seigniorage is an abused privilege. Source: US debt ceiling at 27TRN.
2) permissionless money has value, I cannot send more than 5k a day using my bank. I can send any amount using crypto. I also don’t need two utility bills and an address to open an “account”
3) it’s censorship resistant. Govt’s can’t just stop payments or shutdown the network.
Use Monero.
EDIT: downvoted again. I’m not contributing here anymore.
I have sent large amounts all over the place. As for pretending to be anonymous and outside of society, I have no use for that. The issue of crypto currency, besides the resource impact, is the evil that comes from trying to destroy democratic government.
>The issue of crypto currency, besides the resource impact, is the evil that comes from trying to destroy democratic government.
The evil of democratic government (as opposed to a strong republic) is that that 51% can vote to rob the 49% of everything they own. Crypto prevents this.
> Hacker news is holistically anti cryptocurrency.
First, your use of "holistically" doesn't make sense to me.
> ho·lis·ti·cal·ly | ˌhōˈlistik(ə)lē/ |
> adverb
> mainly Philosophy in a way that is characterized by comprehension of the parts of something as intimately interconnected and explicable only by reference to the whole: the damage caused by unethical behavior needs to be examined holistically.
> • Medicine in a way that treats the whole person, taking into account mental and social factors, rather than just the symptoms of a disease: he has been treated holistically for a heart murmur.
Second, are you characterizing the people on HN as being mostly or completely against cryptocurrency? This sounds like anecdotage. Remember, not everyone with an opinion broadcasts it.
> Yeah. I think these HN threads are either manipulated, or HN is full of idiots. Not sure which is more likely.
Or perhaps neither.
Some other simple explanations include:
1. People see it differently than you do.
2. People are not engaging in conversation as a way to learn from each other; rather they are talking past each other.
I'm inclined to think it is a mix of both.
Like I mentioned in a comment nearby, people on HN seem to vote based on different criteria. The lack of clarity can make it hard to extract clear meaning from votes.
Cryptocurrency is maybe the most important innovation is human history
Electricity? The wheel? Money? Sulfa drugs? Spoken language? Counting? Agriculture? Written language? There's a long, long list and to put cryptocurrency on it seems awfully hubristic.
Money that can't be monopolized is more important than those. The whole human history is about money and how someone monopolized it and started extracting value from it, to get more powerful, to fund wars and destruction. Bitcoin can't be monopolized and enables humanity to rise on a completely new level.
Unconvinced. Electricity definitely seems like a much bigger deal. Bitcoin is going to take humanity to a new stage of existence? Here comes peak hype, I guess.
In fact, you're so breathlessly ecstatic about the cult of bitcoin that I have to wonder if I'm being spoofed...
Individual freedom and sovereignty are more important to society than electricity. I'm pretty sure you haven't thought of Bitcoin in that way, or how Bitcoin might enable this. Importance is subjective, but I think most people would choose freedom over electricity. After that, we might argue whether Bitcoin would actually be helpful in enabling this.
It's not a simple concept to explain so here's a couple of videos which might help you to understand it better.
> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
I'll offer my two cents in case it gives another perspective you haven't considered. The meaning of voting on HN is far from obvious. Various people downvote for different reasons.
Maybe they are unimpressed by your comment, maybe they disagree with it, maybe they think it is inappropriate somehow, maybe they don't like that you plugged a particular cryptocurrency, or something else.
In any case, I recommend not worry about the votes, up or down. At times, it can be helpful to see if what you are writing is perceived as useful, if you can take the feedback in that manner without taking it personally.
Graffur, yes, I've read them. But I'd bet you know that; I think probably you are making another point. I'll write it out, and you can tell me if you agree. You are pointing out an inconsistency in what I wrote: you think it is unfair of me to suggest that someone else read the guidelines while at the same time not following them.
You're not wrong, and you have some good points here, especially about the banking limits. I'm not sure where the cynicism comes from, but HN seems very hostile to this space.
“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.
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 can't agree with your point hard enough. Really useful nascent technologies all have this pattern—they grow incrementally more interesting and constantly gain applications.
Bitcoin followed this pattern for a while. But then at some point it started to regress on that axis. You could no longer buy a pizza with it, you could no longer mine it, and it got too flooded by scammers to use safely. There's nothing to really DO with blockchain unless you buy into the subculture. That's very different from early internet, early web, early radio, you name it.
Bitcoin didn’t regress, what actually happened is that its fundamental flaws ended up eventually dominating whatever early enthusiasm allowed them to be ignored. It was never going to work, for a variety of reasons that were incredibly apparent at the time.
“Why did it regress” is much less interesting than “why did anyone ever fall for this?”
Sure, but a lot of early technologies move laterally in some unexpected direction, and it was reasonable to expect blockchain stuff to do the same. Maybe the original idea could never fly (even in 2008 you didn't have to be a genius to see that evading financial controls would be the chief use of a working cryptocurrency). But likely someone would find a really neat twist on it and find the blockchain equivalent of VisiCalc, and that would happen again and so on.
What's interesting to me is that the original idea was clearly brilliant, but never found any of those lateral steps. It's kind of a string theory for programmers now.
There was no reason to believe it would move laterally, for both technical and social reasons.
First, the underpinnings of Bitcoin are ideological, namely in Austrian economics. This means that any change that caused any inflation would be socially resisted.
Second, most of the issues with Bitcoin stem from the lack of a central authority to do things like chargebacks and handle conflict resolution. It is not possible to solve many of the issues of Bitcoin without a central authority, and that was not going to happen for obvious reasons.
Yeah, but when you took away the money part and just looked at the technical idea of a distributed chained ledger with no central point of trust, that was cool. At least, it was cool to me. It seemed like it might go in some interesting other direction.
Bitcoin was a fascinating technical trick, but it's also been a worked example of the difference between "interesting", versus "feasible" or even "a good idea".
As soon as it claimed to be money, then it was all about the money. If you look at early BitcoinTalk, you'll see a pile of scams that are extremely similar to the jargon still used in crypto to this day - the scammers got in very early indeed.
I never quite understood how that might happen. I kept hearing how it was distributed when it isn't. How the blockchain was going to change the world, when not a single example beyond Bitcoin itself could be given. Healthcare was mentioned, but no application... It's right up there with all the other crazy ideas of the last decade or two (Mongo, agile, Google Glass...)
There's one application that I always wondered why it didn't take off as a blockchain based element, a DNS replacement. It's one of the cornerstones of the internet and the web (which to many people is the internet) and the centralized control over it is definitely a drawback and a shortcoming.
ENS has largely replaced DNS in crypto. Most dapps integrate ENS to display human readable names for addresses and it supports arbitrary TXT records so some apps are using it as a shared profile of yourself that you own.
It’s because DNS already has a centralized authority, which is necessary to create gTLDs and manage the sale of brand new domains. Once you have an inherent central authority, a lot of the benefits of a blockchain goes away.
I could write a bunch of words to explain why a non-financial pivot isn’t technically possible, but instead I’ll just ask this: “if the blockchain is so useful, why hasn’t anyone done anything with it beyond Ponzi schemes and fraud?”
Technically your git repo is a blockchain. Those are pretty useful.
I hear that darknet markets tend to use cryptocoins. Which while probably mostly illegal, isn't a Ponzi scheme and isn't (necessarily, depending on what's being sold) fraud.
A merkle tree is distinguished from a blockchain (as the distributed part is effectively removed).
Amusingly enough the darknet use of crypto may only be possible because of the Ponzi-beginnings. Criminals are unlikely to accept Pokémons as currency until after they see others doing it.
Git is called a distributed VCS for a reason. And a blockchain is of course a Merkle tree. This part of the basic ideas behind crypto-coins is useful without doubt. But that's not the point.
The actual interesting and novel thing about crypto-coins was solving the "trust problem" of a distributed ledger. But this solution, to be honest, is quite clumsy: PoW. But nobody ever found a better solution until now. Any other proposal is kind of centralized somewhere.
The question that needs to be asked is now "Do we really want, or even need, a fully decentralized 'value moving system'"?
In a world where you could ultimately trust someone else the answer would be clearly "no".
But when there is on thing to learn about humans than it's "never ever trust someone ultimately as you're going to be scammed by those people eventually". Just look at what government do around the globe…
As long as this fact doesn't change (and it won't change until we create a new species of intelligent beings, better than us) there will be room for something like BitCoin. And as those are distributed systems there even doesn't need to be any agreement on that point.
The Bitcoin is the scam. Its "price" grows only due to Ponzi con men involved. By design it is not suited to be used for anything on scale but the Ponzi schemes. It can't be a substitution for money even if it claims to be. Its number of transactions per time unit is very limited. It's not a solution for fast "double spending" resolution as one doesn't know when the consensus can be final. The technology is on another side unsuited for small scale deployment because then the "proof of work" is small enough that it whoever wants can indeed overpower more than 50% of the rest but using more computers, even from the cloud.
And then there is what we do know about what happens in practice:
"We found a proliferation of press releases, white papers, and persuasively written articles," Burg et al wrote on Thursday. "However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development."
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> Technically your git repo is a blockchain. Those are pretty useful.
Only if you have a wildly incorrect view of what a blockchain is.
Merkle trees are part of a blockchain, but they are not blockchains on their own. What you’re missing here is that blockchains also include something to determine which branch is the correct one, to protect against double spend attacks. This is why “blockchain” gets a different name rather than just being called Merkle trees.
This is being downvoted, but it hits the point on the head. The differentiating feature of blockchains is removing the reliance on social capital from a technical system. While interesting from a theoretical PoV, it's mostly an answer begging for a question when you consider that social capital is still the driving force in each level of the stack except the technical level.
I saw a guy brag about swinging from altcoin to altcoin making a profit but then talks down Monero because "hard criminals" use it.
I thought that Monero at least served some purpose as a currency even if it goes against the wishes of some countries' governments. The fact that there are people that talk down cryptocurrencies that are actually being used as a currency really put things into perspective.
It's just multi level marketing schemes all the way down.
When it was actually spendable without huge fees, and before any sane person thought of it as an investment vehicle, Bitcoin had a killer app: Poker and probably fair online gambling. That, however, did not fly with certain governments who didn't want to declare crypto a "thing of value," let alone a currency, but needed to in order to control and tax offshore and onshore gaming. Once you can't spend it on entertainment and it lost its function as a medium of quick exchange, it lost most of its reason for existing. That just happened to coincide with the deluge of suckers who wanted to hodl it. Source: I built a startup Bitcoin gaming site in 2011.
"Blockchains are typically public, their contents transparent to anyone with an internet connection, but the one behind Excelsior Pass will be private, meaning only parties sanctioned by IBM will be able to check the contents."
But the blockchain is the protocol for updating the information where other players aren't trusted. As soon as any "party" can be "sanctioned to be able" there's just no need for blockchain at all. It's just selling of snake oil, and yes, IBM is indeed doing it.
Now who'd expect that? The technology company uses the hyped technologies to sell their services and products, even if the said technologies don't make the products any better?
I've read somewhere that banks use blockchain internally. I mean levels of trust can be different within a company. Maybe you don't want anybody to be able to modify the ledger's history.
The usual use case isn't intra-company controls but replacing the clearinghouse / inter-bank settlement layer. This still does seem like a potential actual use for a blockchain, but "we can replace ACH" gets you maybe a couple hundred million at most, and for a lot of work. Easier to just scam people.
If you were a bank or a set of banks and just "don't want anybody to be able to modify the ledger's history" and you know what you are doing, you actually don't want to use blockchain. Because blockchain doesn't mean "nobody can modify the the ledger's history". It means "for it we have to use "proof of work"". But the "proof of work" means "whoever has 51% of the computing power can take over all".
Of course, blockchain promoters would tell you that "there will be something else, comes Really Soon (tm) which won't use "proof of work"."
One can more efficiently use public key cryptography, hashing and signing without the blockchain for any other problem than "implementing bitcoin."
Taking away the money part you'll probably want to replace "distributed chained ledger" with "distributed database" or "state-machine replication". There's actually a nice academic literature on this topic of having distributed databases that have strong notions of "commit". This is never the case with stuff that gets called "blockchain". I've yet to encounter something that isn't a variation on "rate-limit the ingest so we have time to replicate operations world-wide" or "create internal monkey-money incentives for agents not to diverge from corretness", both of which are trivial hacks that don't advance anything from a scientific point of view. Not my field tho, so here's the few refs i know.
ps: actually i remove "chained" from the idea. If you want to keep the whole authenticated linked-list thing and do it right you'll end up somewhere near https://irmin.org/ (a generalization of git), which is very useful, but doesn't tackle the "strong decentralized commit". You'll probably want to either centrally manage the "lastest-hash(s)" (like git is usually done), or pair it with a state-machine replication protocol. In that last case it may seem useless to use the chained thing if you already have a real replication protocol, but it is much like using public-key crypto for encrypting small ephemeral symmetric keys and encrypting actual data with symmetric crypto: it's an optimization.
There’s a reason why the blockchain algorithms are quite different from Raft et. al.; blockchain systems need to deal with the existence of hostile actors, while most consensus algorithms need to deal only with unreliable actors. The existence of hostile actors changes the requirements a lot, and goes to explain why cryptocurrencies went a different way.
Respectful disagree, i believe you are factually wrong. Wikipedia already lists 2 paxos variants that have byzantine security. Not sure about their implementation, but in production there is also SCP, which is used for real-money transactions by the stellar network. All these actually have proofs of some security and liveliness properties under some byzantine faults. Additionaly, blockchains themselves don't solve this problem properly: they don't even have a notion of "commit", any transaction could be reverted, it is just more and more intractable to do so, thus every property is much weaker and only probabilistic.
>Wikipedia already lists 2 paxos variants that have byzantine security
One of those mentioned is Fast byzantine consensus (FBC) [1]. FBC provides an optimal algorithm for a 2 phase commit system w/ byzantine agents. But FBC requires that each correct process sends a message to each other. This is O(n^2) and does not scale. Bitcoin (specifically, others differ) maintain some of the invariants with extremely high probability over time. High enough to be useful. In exchange, bitcoin's network scales much better. Really, it just needs O(n) messages to confirm a transaction.
Of course, PoS like Ethereum's takes much inspiration from byzantine paxos. But I wouldn't call this a solve problem, and crypto has innovated in this space. We can just debate whether or not the innovation has been worthwhile ;).
Please dont mix Austrian economics into the picture. The few "austrians" that took the bait for BTC are either stupid or scammers at heart. I consider myself the student of Austrian economics, i work as a gold dealer, and both me and hundreds of my clients (whom many likewise are "austrians" or libertarians) believe BTC and cryptos are a scam.
String theory for programmers is close to my take. I always think of the STTNG episode where the Federation comes up with a weapon to kill the Borg by giving them an impossible but deeply fascinating problem to ponder forever.
Cryptocurrency seems like that for endless numbers of tech nerds. It’s even worse than the impossible shape they were going to use on the Borg since it plugs right into humanity’s biggest cognitive vulnerability: gambling.
Maybe it’s a weapon sent by aliens to make halt our technological progress. 25 years from now cryptocurrency will have soaked up all surplus capital and locked it into a Ponzi and all our best minds will be churning out increasingly Byzantine coin hacks. Then the hypervelocity impactors start arriving…
Fees high, world too stable, heavy speculation. Cryptos forced to trade on centralized exchanges to avoid fees, making it a much crappier version of something like PayPal. Doesn't help that there's an unending supply of people more than willing to participate in ponzi schemes creating massive volatility and turning the "currency" into the commodity.
By the time the dotcom bubble burst, email had completely changed the workplace, search engines had completely changed the way people found information, chat rooms had produced an entire online culture, and more. Just think about all of the people on HN who claim that the internet was the best it ever was in the 90s.
Trading on a DEX is free trading on an exchange costs you fees.
People are just lazy and use exchanges because they provide easy to use apps and stuff and cash out to fiat etc. but this changes because exchanges are horrible at staying up when the market moves fast and everyone wants to trade.
Sologenic DEX [1] is an modern UI for a DEX to trade.
Cutting out the middlemen was once a key point of p2p and decentral systems. It was kinda lost with all the non tech savvy people storming the crypto space.
Except that transactions are not final, your scenario is exactly what crypto is great at, there are many ways you can set up an escrow for any transaction to protect multiple parties, for example by using a multisig wallet (1).
You can build a system of reversible transactions on bitcoin or any other currency (people already have). It’s impossible to do the inverse in a non reversible system.
We have non reversible payments already. It's called wiring money. People generally avoid using it unless absolutely necessary, because it's expensive (much like bitcoin) and most of the time, it's not what you want.
The depository institutions themselves don't actually pay much at all - FedWires are about $0.033 to the DI. Some DIs offer domestic wires free of charge like my bank does.
SWIFT international wires do cost the DI more, but not several orders of magnitude more. I don't happen to know that number off hand.
Some retail banks charge a lot for wires because they can - people don't use them frequently (as to your point its not what people want most of the time) and usually only for bigger purchases so the fee matters less.
However, if this is something you do more often, banks offer steep, steep discounts over sticker.
Wiring money isn’t a great analogy. In the US it’s expensive for consumers just because banks can charge a lot for it, but ACH isn’t really more or less reversible (I.e., both are, to a degree) and is free. Conversely, in SEPA, wire transfers are free/inexpensive and in my experience people routinely use them for consumer payments.
I get the feeling that the underpinnings of your argument points are based on not being very familiar or well read with the technology around Bitcoin and other cryptocurrencies, especially Ethereum. Your coming at it from an end user or armchair quarterback point of view, not someone who actually does development in that space; if you did, you'd know that one of the reasons Ethereum was created was to provide a digital escrow mechanism, and has been around for over 5 years. So no, your example isn't based on reality.
I observe the exact opposite: people do not like accepting the risk of payments that can be reversed because the buyer does a chargeback scam, or used a hacked paypal account.
Multisig escrow is also better in every way if people want to involve a third party in case of a dispute
Right, the thing is if I want to involve a third party (and I definitely want that), I wouldn't use a decentralised system to begin with, because decentralised means inherently inefficient and therefore expensive.
Correct, you have to trust the extra signer to make a good faith representation of what happened in reality. That makes the transaction inherently trustful.
Eventually it should be a sensible choice. The goal is for crypto (not bitcoin) to be more economically sensible to run credit card style infrastructure. Clearly, this is not currently true but I expect it will improve to the point where most services use some aspect of crypto because it makes sense economically.
I think you're mistaken. Cryptocurrencies are anarcho-capitalist money. They're not economical or user friendly because that would mean they cannot be decentralised. Anarcho-capitalists are okay with that because for them their ideology is more important than practicality but the general public will never adopt a payments system that is more expensive and less practical than the alternatives.
I'm not expecting the average person to adopt a crypto payments system any time soon. Currency is only one aspect. B2B will come first.
There are already a large number of crypto projects partnering with existing businesses to address real problems. I don't see a minority ideology standing in the way of this.
They have been trying to sell blockchain technology to businesses for a long time. Nothing has come out of it despite millions spent in r&d and marketing.
Visa is a business and they used the Ethereum chain to settle a payment in the form of the USDC ERC20 token. Now, they're just getting started. But from my perspective, I've seen virtually every function that I enjoy from my bank replaced by smart contracts in the past year. And the only thing that's really holding me back from closing my bank account altogether is the legacy integrations that exist. And that will fade with time.
Sure, but they aren't using a blockchain themselves, they're simply letting their clients settle some transactions on the ethereum blockchain. It's not really an example of a business using blockchain technology to its advantage. If they had deployed a blockchain and used that to process transactions, that would be more convincing, but so far I don't think they've done that.
No, they are literally using it, providing resources for it (in the case of Deutsch Telecom), and settling transactions on it. Why would you deploy your own blockchain when you can use a public blockchain like Ethereum and plug into the rich ecosystem that already exists?
They are not. They're offering a pre-paid card that users can top up with their crypto.com wallets. [1]
The Crypto.com Visa Card is a prepaid card. Broadly speaking, prepaid cards are the same as debit cards. The difference is that debit cards are linked to your bank account, but prepaid cards need to be topped up. In our case, you can top up using bank account transfers, other credit/debit cards, or cryptocurrency.
And Deutsch Telecom isn't using a blockchain either. They're selling data to a company that then puts the data on a blockchain. That's not using a blockchain.
Deutsch Telecom operates Chainlink nodes, which are a decentralized method of writing data to the chain. They are paid in LINK for providing this service.
And Visa clearly said: that Anchorage will be its “digital asset settlement agent” and that it will “integrate [its] treasury systems with Anchorage.”
“After further testing and additional conversations with clients, partners and members of the regulatory community, we hope to launch this capability for other partners in the year ahead,” Visa said in a blog post about the news.
Sorry, man, nowhere in this press release it says Visa is settling transactions on the ethereum blockchain. It says it "plans to offer USDC settlement capability" in the future. And in the footnote they specifically say that this "does not refer to the movement of funds from individual consumer accounts". Deutsch Telecom hasn't even done a press release, so we don't know what their alleged involvement with Chainlink entails other than presumably selling them some data. If this is the best evidence of a supposed trend of blockchain technology adoption in the business world, it strongly suggests that such a trend does not exist at all.
No, it will not be a sensible choice. There are some pretty deep, social problems in the crypto space that make this an extremely unlikely outcome.
The fundamental issue is that creating scalable, cheap credit infrastructure for mass economic activity is fundamentally in opposition with creating an investment that will continually gain in value. You see this really clearly in Ethereum, where’s gas fees can be exceptionally high compared to traditional financial institutions.
Ethereum's gas fees have nothing to do with the price of the base asset: it has to do with limited block size availability. When the network is congested, block size is limited and this causes transactions to be bid up in an auction format to get in first.
This is one of the costs of decentralization. However, recent advances in Zero Knowledge Proof cryptography has paved a path for Ethereum to take to get to VISA scale and beyond and be able to process 200K transactions per second (at pennies or less per tx): see https://zksync.io/ and https://starkware.co/.
| It's bad now, but in the future it might be great?
Not be able to reverse transaction is not a feature, it's a fundamental flaw. There is absolutely no advantage to the consumer or the producer to have all transactions immediately permanent.
The rest of your comment reveals your bias: You don't really care about it working technologically, you just wish you had made money on it.
Its called "settlement" when its final. You probably dont need that ever or dont even know there is a difference between a payment and settlement but financial systems do know the difference very well. They just hide it from the end user. Settlement is the actually difficult part the rest is just moving numbers around. After all fiat is mostly digital.
And BTW no we dont need bitcoin for this at all its depreciated tech. But other DLT can be very usefully.
There is a reason CBDCs are a huge topic in global finance.
That is how cash still works to this day. It's not about fraud or not fraud: it's about settlement finality. If you hand over cash to someone for a transaction, you have no guarantees you'll ever get that cash back in the event of a dispute. This is how crypto works.
Which is why consumers enthusiastically abandoned them for credit the moment they could. Purposefully going backwards is both silly, and something you’ll never convince the average consumer to do.
Folks didn't 'enthusiastically abandon' sound money for credit (or even the early IOUs which were a sort of primitive cash) the moment they could. You're retconning a bit there. Folks were extremely reluctant for a long time on account of all the schemes and fraud. Sound familiar?
That's just what humans do to each other. New tech is always like this when there are gains to be made.
Some folks look at the trend that central banks have been on and the creep of financial surveillance and think purposefully going backward in some areas isn't silly at all.
In the end, it's software you don't have to use. Nobody is forcing anyone to opt in, right (you know, like the credit bureaus who in America force you to opt in if you intend to... I dunno, participate in the economy in a meaningful way)?
Humans have been using credit systems for millennia. The implication that in the olden days people only walked around with bits of gold in their pockets is a bit of “retconning.”
Credit cards didn't exist 1000 years ago. We aren't debating about credit systems. And yes, people walked around with shiny pieces of metal in their pocket that they used for transactions for thousands of years. At some point after the printing press was invented, the move to paper currency occurred.
Well, the parent post was saying that people were initially hesitant to move to credit systems, so I'm confused. :)
If we're talking specifically about credit cards, the credit card went from new invention to ubiquity in a couple of decades. But I think that's too narrow a scope to look at, to be honest.
Early credit systems did not depend upon the printing press; think of the widespread use of tally sticks in medieval Europe to enable illiterate low-technology credit systems.
It's really hard to approach this anthropologically, IMO, because so many other variables change. Less complex economies do fine with "local communism" and person-to-person debt, but it's hard to imagine using such a thing to order from Amazon. Conversely, coinage historically was useful if you had to exchange with someone with whom you didn't have a personal relationship (say, you're traveling to a faraway land and you can't just provide an IOU), but that's somewhat obsolete now.
I guess my conclusion would be that these historical analogies don't shed a lot of light.
I think my use of the word 'credit' was a distraction here and that's my bad, but folks absolutely walked around with valuable metals to use as a medium of exchange when moving other valuables was very difficult or impossible. And there were scams then, same as there are scams now. I don't want to type out of the whole history of money as I understand it (Jack Weatherford's book was pretty good), but suffice it to say that history repeats because humans-as-behavior-machines are repetitive.
I'm actually really interested in learning more about historic transitions between different system of currency. I've found lots of information on Wikipedia about the steady states, but less on the transitions. Any sources you can recommend?
Jack Weatherford's book on the history of money was pretty good. Lots of tracing the transitional periods as valuables give way to abstractions give way to further abstractions on the abstraction-- and documenting where they chafe (reliably, they do).
Consumers adopt the currency that is most convenient to them. The lack of adoption of bitcoin after 12 years of existence shows quite clearly that bitcoin doesn't have the properties that consumers want in a payments system. Until that changes, bitcoin stands no chance of becoming a medium of exchange. It might continue to be mildly popular as a get-rich-quick-for-free scheme for some time though.
Bitcoin is just one crypto. But the fact that Paypal accepts crypto as of a couple months ago isn't enough to show you adoption is happening? Or that Visa is settling USDC payments on Ethereum? https://finance.yahoo.com/news/visa-settles-usdc-transaction...
You're still kinda waving that broad brush. For one, not every consumer is most concerned with primarily with convenience (lots of scams are convenient as hell), especially tech-savvy folks in 2021 who have begun to internalize the fact that conveniences always come at a cost. There are lots of super convenient services that I could use to move money around but which I don't use because I am not comfortable with the trade-offs (primarily financial surveillance and security concerns).
Second, adoption is way up and btc is only one cryptocurrency. It gets first-mover advantage in this market (unfairly, probably) and so continues to be a bellwether despite the fact that it is a relative dinosaur, technology wise. I'm fine with that, personally, despite the problems with the technology.
That you haven't adopted the tech doesn't mean that adoption is failing, you know. There are more users every year (this is difficult to pin down for obvious & good reasons, but the indicators are solid) and no technology with millions of users globally, including institutional adopters, can be said to be failing.
Further, to call any payments technology 'mildly popular' which safeguards USD 1.5-2.5 trillion (total cryptocurrency market cap, BTC accounting for over 760 billion alone, despite the recent corrections) in deflationary wealth undermines your argument to the point of bad faith. Is the cryptocurrency market overheated and full of nonsense? Of course. But let's do the analyses with level heads at least.
I don't know where you're sitting right now. I'm sitting in Europe, and credit card transactions are quite common where I live. Europe is a big place. Even within the EU there is plenty of room for difference.
A generalisation like this is no better than the frequent occurrence of HNers posting articles headlined with "the nation" which mean "the USA".
Consumers didn't enthusiastically abandon cash. Credit cards were introduced in the 60s, it took several decades for credit cards to overtake cash and it only happened because of the convenience factor for credit vs carrying cash as well as alternative debit cards that work just like credit cards. Credit was regularly rejected by stores and businesses as recently as one decade ago.
I don't use dispute resolution unless someone actually stole my credit card number like when my card info was jacked at a gas pump one time. Credit cards are quite insecure and we still have to type in all our personal info online every single transaction which is dangerous and dumb and makes the whole system vulnerable to credit card fraud in a way that crypto isn't. When you use crypto you simply sign a transaction message, you don't have to give away your private keys to make the transaction occur.
Oracle problem; the ETH blockchain can only speak authoritatively to things on its own chain, for anything else you need to trust a central authority to feed in information about the outside world, ruining the point. This is why a lot of what happens on that chain is just creating ICO tokens and placing bets on various on-chain things, rather than any meaningful off chain financial transactions.
I'm confused about why Bitcoin is being discussed in the past tense when both usage and price have both grown significantly over the last year. Is it already dead? Could have fooled me.
Sure. They'll sell at the peak and buy at the bottom because it's a well known 4 year cycle programmed into the protocol. If the price is expected to appreciate 5-10x from any other asset in the market every 4 years that's a bet you should make, even if the timing of the peak and trough is hard to see. But the price floor increases over time as the trade becomes better known globally and the lottery odds expand. Eventually there is so much noise it all evens out and becomes a generally smooth slide into a stable store of value. It's network science and game theory that I personally consider much smarter than anything I could create (having deployed technology built on network science in exchange for money in the financial sector). And much more democratic than is possible in the traditional financial world. Frankly, the longer I study this the more impressed I am.
Usage as in number of network participants. People investing time, energy, risk into the system. Miners, traders, validators, second layer operators. Similar to members of facebook, servers in the internet. Price as in market price. And I'm only talking Bitcoin here.
Right, but supply inflation moving from 1.76% per annum to 0.88% per annum is roughly speaking utterly meaningless. People just latched onto this idea because they're using too few data points.
And the idea that miners have a god-given right to make $100 per transaction, $40m per day, and therefore if the mining reward halves, the price of BTC must inevitably double, is obviously preposterous.
Right, there's lots of interest in Bitcoin as a speculative investment, but no longer as a payment network. That's the part that people are talking about in the past tense. The idea that bitcoins themselves have utility beyond being something valuable that can be owned.
It'd be like if the number of Facebook accounts kept rising, but hardly anyone posts content anymore. If I were a Facebook investor, that would worry me.
This common retort is so tired, can we just stop with it once and for all. The price history of Bitcoin is irrelevant to the arguments given here against it.
Not to mention the opposite ill-intended argument can trivially follow: "this thread is full of people disregarding the arguments against bitcoin because they are invested in it"
I agree with you. Both versions of this argument have to stop in favor of actual discussion (which, it seems, there is a good amount of in this thread)
Has non-speculative use actually grown? The ability to actually buy stuff with bitcoin looks to be on a downward trend, and the fact that the price has changed significantly over the last year feels like a negative for actual use of bitcoin.
Identity theft and ransomware are different classes of financial fraud, saying that one helps the other is like saying that petty crime helps murder; it doesn’t make much sense.
The argument is let's ban cryptocurrency that'll stop ransomware, which doesn't hold true. All you need is a fake identity or corrupt banking system to siphon off the funds you stole with your ransomware.
The extremely messed up incentives make it impossible to even have an honest conversation about it’s merits or issues. If there are any legitimate uses for blockchain (and that’s an if) they’re lost in the noise of 10,000 get rich quick schemes, outright frauds, and bad actors.
100% this. It's the world's greatest machine for generating motivated reasoning. People buy in during the pump and get incredibly motivated to join the immune system for their chosen coin.
I spent a long time giving NFTs the benefit of the doubt because I didn’t really get it and I couldn’t get anyone to explain it to me who wasn’t also VERY invested in their outcome and unable to concede the possibility of any downsides.
What are your thoughts on NFT's after giving it the benefit of the doubt? I, too, wanted to give the NFT space a chance because admittedly I wanted to cash in while the gettin was good. But after digging into things before I dipped my toes, the whole thing smelled foul, even if people I know and respect are making good money in that space. It's just off to me, the motivations, moreso than the tech & function & problems it purports to address/ solve. A big ole hype machine that doesn't seem like it has real depth, integrity or soul, to use a bit more flowery language.
Well, if your question is just can you make a buck off them, I'd guess you probably could. But I don't like gambling and I'm more interested in whether there's anything of lasting value here. Tl;dr I don't own any NFTs and have no plans to buy any.
The NFTs that just point to a painting or a youtube video, I don't think so. They don't do anything and I don't think owning them will be valuable.
The NFTs of, like, NBA clips I can sort of understand as digital trading cards. Being purely digital I think they're inferior to the baseball cards I collected as a kid, but I can kinda see it. But 1) they don't need a blockchain; a public database would probably work better for everyone and 2) I don't think sports trading cards are generally a good investment.
There's something maybe interesting in the "creator economy" angle where like a new podcaster auctions off NFTs of the episodes to early fans, who then become invested in its success. If the show takes off, newly minted NFTs will go for more and more money benefitting the creator and the secondary market will appreciate for early supporters. To be clear, I don't think this is actually a good idea for a lot of reasons... but it's interesting.
All the games and pets and racehorses seem like junk.
I think the idea of digital collectibles is a novelty. Just like real world collectibles. People talk about it like it's a world changing thing, and it's a lot of bullshit. There's not a whole lot about it that truly requires decentralization.
Like, sure, NFTs hypothetically make it so that ownership of Top Shots can persist regardless of whether the company that operates it survives. But would the actual Flow blockchain survive the demise of Dapper Labs? I kind of doubt it. And where would the Top Shots I supposedly own continue to be hosted? It's effectively just a centralized marketplace.
I've tried to think about what would truly be unique and interesting about decentralized NFTs, and to me, they make sense if they hold credibility independent of any producer. So, something like a tradable auth role that is respected in many spaces. Kind of like an identity, except that I think the concept of a role makes a bit more sense as something that people can trade. Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
To me, that's where it starts to enable something that's unlike what's existed before, but it's still hard for me to imagine a real use case. And that's core of the problem of the crypto world: the technology solves problems that don't map on to existing B2B or B2C services. It's literally a solution in search of a problem.
> Like, sure, NFTs hypothetically make it so that ownership of Top Shots can persist regardless of whether the company that operates it survives.
They don't confer copyright or licensing or anything at all other than a URL. This means it would be illegal to build a site that displays such content, and it would get instantly DMCA'd into oblivion.
My issuing an NFT of the Mona Lisa is basically me grabbing a museum map from the Louvre, circling the Mona Lisa on it, signing my name, then selling that map to you for big money. The map doesn't given you a license to display the Mona Lisa. It's just a set of instructions re: how to find it alongside my signature. If they move the painting to a new location, it gets stolen, destroyed, or the Louvre is shut down - well, tough. And anyone can do it, with any map of the Louvre.
> Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
Event tickets have one issuer and one point of redemption. Generally, Ticketmaster is on both sides (they own the issuance via Ticketmaster and they own the redemption side - the venues - via Live Nation). It's not in their interest as a business to relinquish even the tinies bit of control.
It's true that copyright is not transferred but courts may well recognize the buyers right to display those images on a website as implicitly given. If you are minting an NFT today, putting the file on IPFS, accepting the fact that it will be freely available across the internet, and selling to someone "digital ownership", you will I think fins it hard to convince a judge that you did not intend to grant such a license.
Also, consider that in NFTs, the only one selling an NFT to the Mona Lisa is Leonardo.
No one is talking about assigning copyright. The question is about a license to display the content on a website. I am fairly certain you have heard of non-verbal contracts before. For example, here is what the UK government has to say about an implied copyright license:
Anyone can also sell a signature of Clooney. And yet no one does, nor would anyone buy it. This is not something that plays into a serious analysis of the NFT space, and so I am not sure why you would want to find it interesting to talk about.
Right, an NFT of off-chain property represents ownership of...the NFT. Its value is reliant on a community ascribing value to it. There are real world analogs to this type of ownership, but it's not as revolutionary as breathless NFT fans are making it out to be.
Agreed on the unlikelihood of NFTs supplanting event tickets. I'm just speculating on the type of novel product/ecosystem the technology enables. But building a compelling experience around this concept is a whole other challenge. It remains to be seen whether someone eventually does. Even if that happens, it doesn't mean we're talking about an entire new market of significance.
I'm just using tickets as an anchor to something that already exists. My point is that if the credential of owning the NFT were recognized throughout an ecosystem of unrelated organizations, that might merit building it on a permissionless blockchain. Few people are bothering to explore such ideas. I think you're right about it being hard to monetize, but people once thought Facebook was hard to monetize.
I guess I'd just say absence of evidence isn't evidence of absence, when it comes to the utility, but a level of outside-the-box thinking is required that no one's motivated to do when you can simply mint NFTs of URLs and sell them for absurd sums of money.
They even recognize the entire point of NFT is artificial scarcity. How could something fly which has the word "artificial" in the name??? On the other hand, artists/creators could sell copyright along the digital artifact. Then it could be for real - as soon as you can hold a future-proof proof of that copyright, and not a mere URI to some random server storage.
You won't find an uninterested party anywhere near crypto, but this is a discussion between an NFT issuing artist and an anti-crypto gentleman about NFTs. They're friends so they get into a back and forth, and the artist I think does a good job of explaining what they like about them. [1]
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
necess...
Reminds me of the old adage about technical solutions to social problems. Cryptocurrency isn't going to un-fail these states, all it does is enable the wealthy to evade currency controls and reinforce the downward spiral. If someone lives in an oppressive regime it's governmental change they need, not worldwide abandonment of financial regulation just so the lucky few can escape.
The wealthy can already evade currency controls; that's what it means to be wealthy, at least in a place that has them. Bitcoin and similar systems enable the poor to evade currency controls, as well as frankly confiscatory regulation like the bank-deposit-conversion episode I mentioned, precisely because it's accessible to everyone, not just the lucky few.
I've already addressed your point about governmental change.
In Argentina? Some of them use LocalBitcoins, while others walk into a storefront that advertises Bitcoin or remittances to Venezuela, and hand over their pesos to the guy behind the counter. There are also groups on WhatsApp and Facebook to find counterparties. That's the reality: Venezuelan refugees, who I guess are "criminals" to Maduro's regime and people like you, and illegal aliens like me, who I guess are "wealthy".
In reality what's probably happening is the person in Argentina is taking Pesos and transferring the money in some manner to a US account that supports Zelle, which has become the payment method of choice in Venezuela. The remittance is then sent to someone's friend's account using Zelle, and then used for payments. Bitcoin transaction fees have just been too high to make it viable for remittances.
Maybe in some cases, and maybe sometimes the settlement method changes behind the scenes without the customers being aware of it, but keep in mind that opening US accounts is pretty difficult for Venezuelans in either Venezuela or Argentina. And Bitcoin transaction fees have never been so high as to make them unusable or even uncompetitive for weekly or monthly B2B settlement, and, as I pointed out above, today Bitcoin transaction fees were around US$0.25, which is low enough to be viable even for a pack of cigarettes, though I think US$10 is more normal.
Over the counter? People still trade and meet in person, you know? The reality is the US petrodollar is the preferred currency of choice for criminals.
The poor can’t afford btc. If it were to become the normal method of transacting, people would get on average one transaction each per decade or so. That means that transaction fees will be obviously way too high for the global poor to possibly use.
The majority of the Venezuelan economy exists outside its borders, because that's the only place where it can exist.
Currency controls are actually preventing the recovery of the country. They are a short term fix for a short term problem but they create long term problems in the process and those long term problems are definitively the worse poison.
What is unclear to me, is how these remittances work in practice. I get that in the US you can exchange USD to Bitcoin with a credit card and then send that to a person in, say, Venezuela (or share the wallet password). But how is it converted back to Venezuelan Bolivar? I can't imagine you buying a pizza with bitcoin in Caracas.
Side question, why do you write your years with a leading zero? I've never seen that before and it has quite a cognitive strain for me.
> why do you write your years with a leading zero? I've never seen that before and it has quite a cognitive strain for me.
Not OP, but I had the same question and did a few seconds of cursory searching to no avail. But rather than cognitive strain, I found it opened up a much larger vista on the perception of time and our seeming place in it. While I am unlikely to adopt it, perhaps the experience would be even broader with a few more zeros tacked on! ;-)
Relatedly, I like the Human Era notation for expanding the idea of years, where 1 AD is equal to 10,001 HE to denote approximately ten millennia since the start of human cities and agriculture, i.e. civilization. We're living in 12021 HE now.
I haven't been in Venezuela since 02006 so I don't know how people there cash out of Bitcoin. I'm guessing nobody has a clear view of the whole system, since being transparent to Maduro's thugs is not in the interest of any of the participants. If I had to guess, I'd guess that Venezuelans who are fleeing the country sell their dollars for Bitcoin, and Venezuelans whose family is abroad buy them.
One thing I do know is that a lot of overseas Venezuelans whose remittances are via Bitcoin don't know Bitcoin is involved. They know a storefront where people transmit money to Venezuela, and the guy there tells them where to instruct their family members in Venezuela to pick up the money. How the agent in Venezuela gets paid is no concern of the customers; they only care that the money they give the guy arrives safe and sound.
Are you in Venezuela? I notice that that article is about something that was expected to happen, not a report on things that actually have happened... what's the story on the ground?
> I've been using Bitcoin to get paid for a couple of years at this point
How do you turn your Bitcoin into food, housing, utilities, and other necessities?
> And, yeah, 13 years after the internet's invention was 01982
The Internet was not available to virtually anyone in 1982 much less 1969. Nor was the ARPANET of 1969 even remotely similar to the Internet. TCP came about in 1974. IPv4 in 1982.
> So why does Bitcoin have tens of millions of users
It doesn't. It has a lot of speculators, and a handful of users. And no one knows or could possibly know how many there are.
> How do you turn your Bitcoin into food, housing, utilities, and other necessities?
I sell it for dollars to people in person; some of the dollars I have to change into Argentine pesos before I can spend them. Isn't that how everybody does it?
> The Internet was not available to virtually anyone in 1982 much less 1969
It was available to almost anyone who knew someone who had access, which is the same situation as Bitcoin. Precisely what Maciej is complaining about is that so little of the economy is hooked up to Bitcoin is that most of us can't buy a pizza with it without going through intermediaries.
> Nor was the ARPANET of 1969 even remotely similar to the Internet
It was remotely similar; it provided telnet over a packet-switched network, with routing. You could argue that substantial technical changes happened in Bitcoin over the last 13 years, too. Maciej did, in fact, make that argument: he pointed out in particular the dramatic shift to centralized intermediaries like Coinbase (the ANS.NET of Bitcoin?) and from CPU mining to GPU, FPGA, and then ASIC mining, as well as the proliferation of alternative cryptocurrencies. We could also mention segwit, the BCH schism, Lightning, BIP39 and Electrum seed phrases, and lightweight clients like Electrum. Those changes are not over yet. So the situations are in fact quite closely parallel.
> I sell it for dollars to people in person; some of the dollars I have to change into Argentine pesos before I can spend them. Isn't that how everybody does it?
No, most people just spend their currency directly on the things they need to purchase, actually.
> It was available to almost anyone who knew someone who had access
That's not even remotely true, and is also a tiny number of people.
> It was remotely similar
But... it wasn't. As I already have shown.
The ARPANET, then the Internet, have all gone through steady evolution. It has not spent 13 years stagnant or regressing in terms of either design or use.
Just because you read somewhere that "ARPANET was the predecessor of the Internet" does not mean that ARPANET was the Internet.
This is willfully ignorant and motivated reasoning. Crypto has more uses than I care to even list, in fact it’s quite easy to come up with many of them, but it’s weird that people who’ve set in their ideology against it won’t ever budge. In another thread I listed out a handful, and it was so interesting to see people do what always happens in political fights: they take a small subset of the idea or just one of the things that they feel they can best counter, and counter that, conveniently ignoring that they aren’t really engaging with the point at all but rather very small branches of the argument.
If you care to see, it’s in my comment history not long ago. And the thread is fascinating because at best the replies just cherry pick and do semantic tricks like this.
Crypto has a wealth of interesting uses. Tech company co-ops, incentivizing content curation, new and organic stock distribution mechanisms for open source projects, and of course the giant one of providing a far better investment and transfer vehicle to the non-first world countries.
I mean, I can totally see the arguments that it is wasteful, or a bubble, overhyped, and not reaching its potential. But the ones who say it has no or next to no uses are in my opinion on the same plane as Krugmans “the internet will be less useful than the fax machine” or the classic Slashdot iPod “less space than a nomad” comment. It may take even 20 years to prove it, IMO that’s not unreasonable, but it will be claim chowder I’ll be happy to revisit.
If proof of stake works out, there’s no doubt the next Google will be a crypto company that gives revenue back to the user base to incentive good contribution. Content sites absolutely will be totally disrupted. Well look back at writing reviews for the Yelps and Googles as being anachronistic, “why did we used to give all this content to the largest company in the world for free”. Instead, a crypto-based Yelp or Reddit that used a coin and distributed it fairly in relation to contribution would absolutely blow up.
I think VC is also better done with coins in general. Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock. That’s a 10x more incentivized early adopter because they actually could make something more than lunch money.
The reason crypto is blowing up isn’t because it’s a ponzo scheme. It’s because laws around accredited investing are truly the most egregiously disgusting instantiation of class warfare ever to exist, and finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it. All the “pure” crypto companies are total bullshit, minus many BTC and ETH, because they have no product. That I agree with. But in time you’ll see a huge growth in companies that are simply normal tech companies with novel tech/uses, but who build in community ownership, rewards and incentives that actually share profit with their user base.
Again: why do people not get paid for contributions to Pinterest, Yelp, Reddit? These are companies paying millions of dollars to employees, and 100% of their content is given to them by users. In a better world they are actually run by the community, owned by the community, and developed in the open.
> If proof of stake works out, there’s no doubt the next Google will be a crypto company that gives revenue back to the user base to incentive good contribution.
Any company could do this with fiat currency today. "Crypto" has nothing to do with it.
> Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock.
Likewise, there is nothing stopping a company doing this today without "crypto".
> finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it
You're ignoring the existence of the stock market, index funds, exchange-traded funds, fractional share purchasing, Robinhood no-fee trading, etc.
Crypto gives the ability for the community to actually control and be confident they won’t get slowly squeezed out, because you can actually codify control. So no, you can’t do that with a traditional company. And I’m somewhat sure it’s not legal to pay users in micro shares of common stock, but even if it was, you have the same issue of the stock having almost no value as it could at anytime be devalued as the company has total control. Again, it may be possible, but crypto makes it obvious and easy and strongly enforced, whereas some sort of legal paperwork setup will never achieve the same confidence.
And your final response is an absolutely perfect example of cherry picking. I said VC, you reply with index funds. Laughable.
> Crypto gives the ability for the community to actually control and be confident they won’t get slowly squeezed out, because you can actually codify control.
This is nonsense. Sure, on a technical level, you can ensure that Google2 will only have 10,000 crypto-shares, and will never issue any more. Regular Google can issue new stock and there's not much that can be done.
But the volume at which public companies or even private companies trade stock is so huge that there's no use case you can imagine that would tank the stock. You're talking about micro-payments -- Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google). Google1 could issue a million new shares of the stock to pay its moderators, and all they'd do is tank the stock price. But all their most valuable employees are paid heavily in stock. They wouldn't be happy and would quit or riot. It's a soft-regulation on that kind of silly behavior.
Despite 20+ years of "pay users to use the site" being an obvious conclusion, almost no site has done this in a meaningful way. There are hardly any even paying people in funny money / company scrip. All I can think of are Eve Online and Steam. You can't convert money OUT (regulations) but you can use their chuck-e-cheese tokens to buy stuff within their business. On Steam, the money you get per value the user puts in is a pittance. Valve takes a 30ish % cut on almost everything you do, even "secondhand" trading card transactions.
You can speculate that financial regulations are preventing it, but I think it's more likely that the owners of Google2 would much prefer to keep as much capital for themselves and not let its users/"staffers" get a slice. Similarly, Google1 pays its low-level moderator staff very little (compared to an engineer or upper level manager). Most corporations turn a profit. That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin. If you can't fork the coin, then it sounds like regular stock or company scrip.
The argument of traditional stock being worthless isn’t just that they could dilute, which they could in any number of ways, but they could end sharing anytime, change the % share, or do any number of the squeezes for-profit VC companies end up doing like ”introducing” prioritized white-labeled content. Again, the trust is what matters.
> Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google)
Google pays tons of content people, they also have 130 billion in cash.
Google2 may make the mistake of being greedy, but GoogleN may not because they have a team that realizes less greed = users paid more = more incentive. Forking is a feature not a bug.
Success being correlated with fairness in equity distribution, users having stake and say in the platforms they use, creators having contracts with how they earn their living that can’t be changed on a whim, and if they ever do change, it’s by a democratic process, and creators then being able to vote with their feet to fork.
Seems like a good thing.
> even they have ad dollars siphoned off by Google
> That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
To be clear, I think these companies need to be non-profit but still pay their team well (a fixed rate to some sort of inflation basket that tracks competitive engineer salaries, for example).
You give convincing arguments in favor of BTC for folks living abroad in less-than-stable states. But these very arguments for which it is acclaimed have clear flip-sides that should be worrisome for those very same folks you claim it's suited for.
Safeguarding hard physical cash is something most everyone, old and young, technically literate or technically illiterate, poor or rich, intrinsically knows how to do. And when it is stolen or lost, there are viable approaches to pursue with favorable probabilities of a happy resolution: tell a police cop to see if they can catch the thief using detective work, you could try looking around if you think you might have misplaced it, etc.
With BTC on the other hand, ensuring your wallet isn't had by committed and technically proficient bad-actors or that your wealth isn't all erased in the blink of an eye with a hdd crash or a distressed acquaintance wiping your data away, you can't expect normal people to be up to the task of combatting all of this. And retrieving stolen BTCs from bad-actors living a continent away is a task that police cops are not up to doing or even the slightest bit capable of. You are a really smart guy kragen, I'm sure you won't forget your computer's password one day or have your wallet compromised, but someone like my mom or grandma would, and the thought that simple mistakes and viruses and computer illiteracy could and probably would be the thing that leaves someone's wealth irretrievably erased without much avenue of recourse saddens me, and makes me wish that people in our profession who understand this would stop encouraging its usage.
I come from a nation that ranks lower than Argentina in stability. My family went through this very dance of receiving money from abroad and having to go to WU to get it. The risk of a bad accident happening is infinitesimally small in that than with BTC.
I agree, Bitcoin isn't zero risk. But compared to my experiences with banks and WU the risk is manageably low. I have to give someone my passport and home address in order to receive money via WU, so I'm exposed to the risk that buddies of the WU employees will rob my house later. I've had to pay a collection agency thousands for fees charged on a bank account that was empty and that I thought was closed. I've had my bank ATM card cloned by a skimmer on an ATM while I was traveling overseas, and I've had my bank credit card stolen out of my pocket on the bus. I've had WU give me ridiculously unfavorable exchange rates, and there was nothing I could do about it. In none of these cases are the police of any help; they exist to help the rich, not normal people.
With either banks or Bitcoin, you can hedge your risks by converting to fiat currencies. But with fiat currencies, you can hedge your risk by converting (partly) to Bitcoin.
So maybe you should buy your grandma a Trezor. What country does she live in?
> I'm exposed to the risk that buddies of the WU employees will rob my house later
In comparison to getting your wallet compromised by viruses searching for it (and they will probably become more aggressive and adept as BTC usage increases), the chance of this happening I feel is exceedingly low. And avenues of recourse exist: there are clear leads to follow on for an investigative team.
> I've had my bank ATM card cloned by a skimmer on an ATM while I was traveling overseas
I know that my credit card covers me for this and I would get my money back if such a thing were to happen to me.
> I've had WU give me ridiculously unfavorable exchange rates, and there was nothing I could do about it
And BTC transaction fees are ever-increasing. And so is its environmental cost.
My grandma lives in .pk. I fear she would not be capable of understanding the concept of BTC or Trezor as she can barely understand how a TV remote works. She does very much grok the concept of cash money though, and is quite fond of exercising her freedom with it.
When I first explained bitcoin to my mom and her friends, they didn't get it.
The second time, I explained it, they didn't get it. The third time, I sat them down, and made them learn how to run full nodes, run a few commands on the command line, and use bitcoin. Western Union is certainly not guaranteed, nor tyranny proof. If the governments of Argentina or Pakistan need the USD bad enough, they will every dollar Western Union is holding for recipients. To keep the story quiet and the money flowing in, they may imprison the recipients and their families. Desperate times call for desperate measures.
It’s the long date concept, promoted by the Long Now foundation [1] which promotes long-term thinking and gives a nod to this by writing years in 5-digit format.
The irony with the GP’s post is that I can’t see using Bitcoin, with its current incredibly-high power usage and associated environmental destruction, as long-term thinking in any way, shape or form.
Bitcoin doesn't have associated environmental destruction right now that I know of. I assume you're referring to its energy consumption, but at the moment it's a subsidy to renewable energy, because nuclear energy and fossil fuels (except for flare gas) are too expensive to compete with super-cheap wind, geothermal, hydroelectric, and photovoltaic energy.
Now, at some point in the future, Bitcoin might become an environmental problem; the cheapest ways to get energy have been environmentally destructive in the past, and they may be so again. Maybe in 50 years we'll have to campaign against Bitcoin miners who want to convert the mass of Jupiter into energy with their fusion reactors or black-hole clusters. But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
It is simply not true that if governments removed all fossil-fuel subsidies today then electricity production would become 100% carbon-free overnight. There are massive issues around supplying base load (requiring cheap energy storage tech that doesn't exist yet), construction lead time, limited materials, workforce, and so on and so on. Then the non-fossil-fuel energy sources have their own environmental costs, e.g. we aren't able to recycle grid-scale batteries or turbine blades yet and those produced today may never be recycled.
For the forseeable future energy production cannot be carbon-free. All uses of energy, including Bitcoin mining, will continue to impose an environmental cost. For those of us who believe Bitcoin achieves nothing useful that can't be done better some other way, that cost translates into a pure negative.
> It is simply not true that if governments removed all fossil-fuel subsidies today then electricity production would become 100% carbon-free overnight.
Certainly not, but that isn't what I claimed. Electricity production using fossil fuels is too expensive for Bitcoin miners; like aluminum smelters, they are forced to move their operations to places with cheaper renewable electricity in order to remain profitable, and governments subsidizing fossil-fuel consumption are forced to eliminate those subsidies in order to remain solvent, which drives the Bitcoin miners elsewhere. None of the issues of base load and construction lead time and so on are relevant to this process at all. The Harvard Business Review article I linked above goes into some detail about how this happens.
> we aren't able to recycle grid-scale batteries or turbine blades yet and those produced today may never be recycled.
This is basically nonsense. It isn't the Carboniferous Period any more, and even the wastes of the Carboniferous are getting recycled now. In fact, that's sort of the whole problem with global warming: that in the eyeblink since salt miners in the Song Dynasty started drilling for oil, we have recycled a significant fraction of the carboniferous wastes of the Carboniferous Period.
> those of us who believe Bitcoin achieves nothing useful
Well, that's basically the issue, isn't it? Because you judge our lives useless, you engage in motivated reasoning to find excuses to sweep us away, like your genocidal rapist namesake*, regardless of whether your arguments make any sense objectively or not.
_____
* You thought nobody here would know who Roca was, didn't you? You thought that by naming yourself after a less famous white supremacist mass murderer than Hitler, you'd get away scot-free? You thought wrong.
> The Harvard Business Review article I linked above goes into some detail about how this happens.
It doesn't make the argument you have just elucidated, which is an interesting one. I'll think about it.
> Because you judge our lives useless, you engage in motivated reasoning to find excuses to sweep us away,
"Bitcoin not useful" != "your life is useless". I think you have invested rather too much of your identity into Bitcoin.
Regarding "Roca", please check my HN bio. My real name is "Robert O'Callahan" and 'roca' is a handle I've used online since 1990. I have never heard of your "Roca" before.
I explained that for years I've been making a living by getting paid in Bitcoin, and that there isn't a better alternative. To argue that Bitcoin's uses are unimportant, you must argue that it is unimportant for me to make a living, much as Roca did with the Native Americans he murdered and enslaved.
1) You could just as fucking well be paid in something that doesn't use as much electricity as Switzerland.
2) Electricity is one of the few things that are about as fungible as money. All your blithering about how "crypto uses only the most environmentally friendly energy!" is bullpucky, since that only means that some actually useful stuff must now run on other, less environmentally friendly energy.
3) You misspelled "I sincerely apologise for my unfounded and calumnious accusation". Please stop being such an egregious arsehole.
① actually there isn't an alternative, except for working for Argentines, who are desperately competing for the available jobs.
② electricity is fungible, but not portable or storable, and is almost all generated within 200km of its point of use (and well under 10 milliseconds). Also, the supply of electrical power is not fixed; it is rapidly expanding in response to demand. So one use of electricity does not imply less electrical power available even for other things in the same location. https://news.ycombinator.com/item?id=27449443 has a much deeper dive on the issues.
WRT "roca", I guess the Author of my story has quite a sense of humor. You clearly didn't create the account or choose the name to argue against measures that limit the powers of the Argentine government to abuse fiat currencies, since you've been using the name on HN since 02014, and I believe you when you say you've been using it online since 01990.
Yet imagine my perception when I find that someone has popped up here to argue against such safeguards, and he's using the name of the guy whose face is on the $100 bill, whose fame primarily derives from commanding genocidal Argentine government abuses against the peoples in Argentina who didn't use the Argentine currency, and who is also the most famous person in the world by that name. The Roca $100 bills are gradually being replaced—all the ones I have here have Eva Perón instead of Roca on them—but it's only been, I think, a couple of days since the last portrait of that white-supremacist rapist visage has been inflicted upon me, when I got my change at the supermarket on Monday.
So, I hope you can forgive my error of assuming that the astounding degree of relevance of your chosen name to the topic at hand, which I take to be the social value of alternatives to the state-imposed currency system in Argentina, was intentional partisan trolling on your part, rather than a sort of absurd coincidence of cosmic proportions. I should have at least checked your HN bio, as you say, before assuming ill intent.
I continue to maintain that your dismissal of the utility of Bitcoin bespeaks either an astonishing degree of willingness to prioritize your own interests, and the interests of people like yourself, over the interests of people like me; or an astonishing degree of confidence in your own judgment of what causal relations obtain in Argentina over the judgment of those of us who live here.
After this exchange, though, I don't blame you if you don't think much of my judgment!
Patently false. Bitcoin put a dollar value on under-utlized energy. That can be coal, hydro, whatever. If you believe that Bitcoin is just a more wasteful version of Paypal or ACH, then it matters a lot that this subsidized energy is being converted into waste heat by a bunch of special-purpose ASICs that have no use outside of *coins, and take a lot of metals and energy to create and ship, on limited-capacity fabs.
I ctrl-F "subsid" in your link and don't see any source for your claim. Bitcoin puts a dollar value on (subsidizes) -ALL- energy. If there's a dirty coal plant you can run in your backyard without the government shutting you down, Bitcoin wants to know about it.
Your claim is (1) bitcoin takes energy (2) renewable is cheaper than nonrenewable (3) bitcoin is causing tons of new renewable capacity.
If that were true, why isn't every power plant in the US renewable? How on earth did Bitcoin manage to get this capacity that nobody else has? Money talks, right? Why aren't the mayors of San Francisco, New York, Chicago etc. trumpeting their new 100% renewable grids?
Then you might say that Bitcoin is tech-enabled and decentralized, you can run a mining rig near any energy+internet source. But that's equally true of a cloud compute farm. The fact that bitcoin is pointless hashes and not cloud compute is a historical quirk. Any Bitcoin node/farm could be replaced with an identical-power-usage server farm and do more good for society.
I'd like a source on your Bitcoin only uses renewable claim. I think if I run a miner on my home PC, which I believe has some natural gas in the energy mix, that argument fails.
> But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
I wrote this whole comment without getting to the end of your inane post. We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy). But your wordsmithing here is bad faith. Your argument is basically "governments thought people wouldn't be complete jerks, and Bitcoin sure proved them wrong!" Yeah it's human nature and perhaps inevitable, but 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Bitcoin is an ongoing real time climate catastrophe. Get back to me when China and the US ban all forms of carbon-emitting energy production. Until then, those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find. I suggest cloud computing as a baseline. "environmental destruction right now" is exactly the current state of things.
It's disappointing that you felt the need to post such an aggressive and poorly informed comment, without, as you admit, even bothering to read the comment you were ostensibly responding to. There is a great deal more information about most of the points you touch on in my comments from today: https://news.ycombinator.com/item?id=27449443
I don't think bitcoin is "causing tons of new renewable capacity", if by that you mean inducing people to bring up many new power plants; its overall power usage is estimated at only about 12 GW. By comparison, PRC installed 71.7 GW of new wind power in 02020; at China's historical wind capacity factor of 22% that'll be 15.8 GW, more than the entire bitcoin network. Including the parts that are running off hydropower and the parts that are outside China.
> We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy)
I wasn't talking about implicit subsidies, which aren't enough to make fossil-fuel power price-competitive with renewables. I was talking about explicit subsidies. Like when I was in Venezuela you could fill up the 20-gallon gas tank on an old car for 19¢, because the gasoline was subsidized. That's the kind of subsidy that can make fossil fuels cheaper than renewables: you can run your bitcoin farm off a gas generator. It's not just "failing to tax them".
> 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Yeah, that's not what I'm talking about.
> those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find.
Not really. I mean, a little? That 01967 Buick swilling that 1¢ per gallon gasoline is producing almost exactly the same amount of CO₂ as if the gasoline were getting burned by a nice new Honda motorcycle (or generator), and it's also producing a fair amount of unburned hydrocarbons and even methane. That matters a lot to the kids with asthma who live next door, and the global warming potential of the total horrific exhaust cocktail is a bit higher than if it were cleanly burned to CO₂ and H₂O. But, from a climate-change point of view, the high-order bit of the problem is that the government was subsidizing the burning of fossil fuels, which results in a lot more fossil fuels getting burned.
So the real problem is not what the energy is getting used for, but that the subsidies make it attractive to get that energy from fossil fuels instead of solar, because you pay for solar but the government pays for gasoline. If bitcoin mining could bring those subsidies to an end by making them suddenly much more costly, which I doubt, then so much the better.
But really, zooming out a bit, Venezuela is not the main culprit in climate change. Whatever happens there isn't going to have a big effect on climate change, one way or the other, until things chang a lot. Europe and the US are the main culprits.
> Bitcoin is an ongoing real time climate catastrophe.
12 GW is about 0.07% of total world marketed energy consumption. There's an ongoing real-time climate catastrophe, but at the moment Bitcoin is almost as much of a distraction as plastic straws. Not that it couldn't get bigger.
There are cases of Bitcoin mines stealing electricity and fossil fuel powerplants being retrofitted for Bitcoin mining there is no way miners care about the source of their energy.
I have no idea why you are being downvoted. This is absolutely valid reasons for bitcoin to exist, but you don't have to be a failed state.
I'm from Canada, and moved to Australia. I was moving money from Canada to Australia, it was easier, faster, and cheaper for me to move that money via crypto (I used Eth rather than Bitcoin at the time) than going through the banking system.
That seems like a compelling use case. The next thing I wonder though is whether that can exist without the ponzi scheme on the side. Is it the remittances, or the ransomware and speculation that funds the infrastructure?
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).
Gold also has a fatal flaw, there's only so much of it, building a currency based on gold (ie the US dollar on the gold standard) limits the size of the economy, it can't grow if you can't pay for stuff - it's why we left the gold standard.
Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.
No, economies based on gold or bitcoin can ONLY grow by inflating their currency ....
At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
Growth of the economy without growth of the money supply leads to deflation, which harms consumption and investment, because hanging on to your money becomes competitive with actively doing something with it.
A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.
Perpetuating the fear of deflation is the greatest feat the Fed has ever pulled off.
Deflation is good. Every wage earner becomes more wealthy as their rate of pay buys more. Sticky wages arent a problem with deflationary money. Hell, at least half the complaints about the modern economy are the result of inflation. But, no, deflation would utterly destroy the economy.
> Every wage earner becomes more wealthy as their rate of pay buys more.
Income is not the same as wealth. Savers become wealthier, debtors (such as anyone with a mortgage) lose wealth.
> Sticky wages arent a problem with deflationary money.
Um, what? Your last sentence was all about how deflationary money guarantees wage earners increasing pay in real terms. That makes the sticky wages problem much worse.
Wages have kept pace with inflation over the last decades. This means they earned more currency units over time. If we had 0% inflation, they would earn the same number of units. With deflation they would earn fewer units.
If you want to change the amount of wealth low-income earners have, stop focusing on the units. This is not JPow's fault, it's a job for congress - it's social and fiscal policy not monetary policy. This is just a quixotic quest against the wrong opponent.
If you want to help low-income folks, advocate for unions (so labor can push back against capital), advocate for wealth taxes, higher marginal taxes for the rich, minimum wage indexed to inflation, a strong social safety net and national zoning laws to stop metros from preventing adding enough housing supply to meet demand. Things that would help.
That was from 2013, and written from the perspective that gold represents “real” worth - some platonic ideal constant measure, but it doesn’t. It’s a deflationary non-productive asset whose value is speculative and usually varied with general fear of inflation. Inflation is benchmarked against CPI. This is goldbuggery and fringe economics. By the way; that’s from the Forbes opinion piece section, not Forbes proper.
The author suggests you cannot measure inflation except by dividing by the spot price of gold. This is false, and why we have the CPI.
>Every wage earner becomes more wealthy as their rate of pay buys more.
You will get wage cuts because it becomes harder to employ you at your currency salary or you just get fired. If you can't find a job, deflation will have made your life a lot worse. You are also incentivized to stick with your first job because future jobs will pay less than past jobs. Basically you hope you build a stash of cash in your 20s because your potential to earn money shrinks with every single year but your wealth gains in value from doing nothing.
We are running into that problem with Bitcoin and land. Do you really think that if you signed a contract to get paid 10 BTC per year in 2017 (when it was $20k) that you will still get 10 BTC today? (at $38k). No, you will get 5 BTC this year.
>Hell, at least half the complaints about the modern economy are the result of inflation
Pretty much all of the complaints about the modern economy are about inadequate attempts to fight off deflation. The Fed has reached a point where it cannot do anything to fight off deflation, it takes a pandemic to fight off deflation, that's how bad the situation is.
Just take a look at Japan, they have deflation and nobody is jealous of their economy.
When I look at the IT industry, I see deflation that has been going on for at least 50 years. Every year you can buy more computer for less money.
Yet, people keep buying computers. Why?
I would argue deflation has been the most significant driver of the IT industry in the last 30 years and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
On the other side you have inflation that kills savings. And since most people save with a goal in mind, not because it's fun and exciting, the higher the inflation, the longer they will have to save before they reach that goal.
The majority of wealth is owned by the top 5%. Are they really spending a significant fraction of that wealth on computers? Deflation is never about what people buy, it's what they keep.
>I would argue deflation has been the most significant driver of the IT industry in the last 30 years
No it hasn't. The IT sector drives deflation and there is nothing wrong with productivity improvements. You just got cause and effect backwards.
>and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
Inflation increases future incomes. If computers cost the same but you get higher salaries that's a good thing.
90% of all bitcoin ever have already been mined. If your solution to the limited number of bitcoins is rampant deflation you probably don't have a viable currency
Deflation is awesome. It's way better than inflation. It incentivizes you to not buy stupid junk that pollutes the world, you only buy the stuff you really need/want.
You might have difficulty measuring out two atoms of gold to change hands, but that's dwarfed by the difficulty in measuring out two Satoshis - given that they aren't a physical thing at all. So, if you can keep track of it with Satoshis, why couldn't you keep track of it with gold atoms?
That is, if your position is "Bitcoin isn't limited like gold because of Satoshis" then the same argument works equally well for gold with atoms, doesn't it?
That is, gold can't represent the entire economy because nobody would pay so much for a gram of gold, but why would they then pay that much for a quanity of the even less physical Bitcoin?
It doesn't limit the size of the economy. It incentivises saving over investing, since the value of the currency tends to increase as the economy grows. Modern fiat currency is designed to disincentivise savings and incentivise investing, in order to supercharge economic growth.
A counter-position from the Austrian/Chicago school is that supercharging growth drives malinvestment, and they can't be entirely wrong about that - I've seen tons of dumb money flow into dodgy companies during tech booms.
It incentivizes holding currency instead of making productive investments with your capital. Currency only has value when it moves, not lives under your grandma's mattress.
Inflation incentivizes investment because you are going to lose 2% per annum if you don't.
Fiat offers you the maximum flexibility because you can back your personal economy any way you want - if you want to back it with gold, just buy some. If you want to back it with crypto, bless your heart, buy some.
The current economic system is in trouble because people save too much damn money, that money has to go somewhere, anywhere, otherwise you get unemployment and underemployment.
Interest rates are low because everyone is saving, nobody is borrowing, nobody is investing.
You’re going to need a bit more evidence on the “criminals love gold” point. Your thailand example just shows people will scam for small, valuable, fungible things.
Gold didn’t have a rep as the hub of black market transactions before bitcoin.
No it did not, but art did and still does. A lot of art in the future will have a non-fungible identity on chain. It's starting and will only grow rapidly.
Companies like Chainalysis have unwound and track the large majority (probably 80%) of Bitcoin transactions. Bitcoin’s lack of fungibility and any semblance of transactional privacy is actually one of the arguments against its suitability as a currency.
I've studied some of these, in varying depth. But it honestly seems like we've built a tremendous amount of impressive technology that currently has very little impact outside of its own ecosystem, in terms of enabling new industries or consumer services.
I’m not sure how you’re qualifying impact. A lot of people seem to have unrealistic expectations for these currencies to take over right away. It’s just not possible without massive adoption, stability, etc. It takes time to get there, technology-wise, and ecosystem-wise.
If I wanted to be more optimistic I would look at the level of adoption today as insane compared to 5y ago.
I have bought a lot of pizzas with BTC (and other cryptocurrencies), as the local food ordering platform accepts it. Worked grear, but at some point the crypto payment processor started requiring KYC. I'm not gonna upload my passport to pay for pizza. I dont know if this problem is because of crypto or excessive regulation.
Use of cryptocurrencies for transactions is also limited due to tax treatment - in the US and many other countries you are expected to calculate and report capital gains for every transaction. Of course this sort of treatment won’t be done for CBDCs (algorithmic stablecoins with governance tokens is the answer here. I’m still waiting for someone to combine this with a reasonable mobile UX, feeless transfer, and transactional privacy. All these properties exist independently (Frax, Nano, Nano, Monero, for example) but not in a single product. Yet.)
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.
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.
The problem is you’re looking at a technological dead end (Bitcoin). There’s no innovation there, financial or otherwise, just momentum. However all you have to do is to turn your eye adjacent to the dapp space and see where developer and user adoption is definitely happening. There’s no shortage of “stuff to do” in DeFi and over the past few months the pattern is that it maxes out the transactional capacity every single network it touches. There are currently multiple networks in production (BSC, Polygon, Solana) that have billions in TVL and handling hundreds of transactions/second right now and no shortage of contenders/alternatives and a huge amount of innovation at every layer.
Complaining about nothing to do on Bitcoin feels like complaining how empty the gopher server are after everyone’s moved onto the web.
Crypto only solves problems crypto itself created. DeFi is a perfect example of that.
The reason is that blockchain can only offer its trustless, decentralized and permissionless guarantees to things that are wholly representable on-chain. As soon as you try and sync it with the real world, the real world is the source of truth and the chain representation is meaningless.
Further, by boat anchoring solutions to the fundamental inefficiencies of blockchain, you leave your chain solutions at a material disadvantage to centralized, permissioned solutions anyways. This creates huge adverse selection bias, leaving only the criminals and scammers using it.
Concrete example: Sia has 800TB of storage - total! - in spite of an $800M market cap and millions spent on R&D. You could achieve the same result with a half of a 1U rack of hard drives and $40,000 - or a few bucks on AWS. Why? Because why on earth would anyone use it?
On the other hand, Chia has 1.5 exabytes of wasted hard drive capacity loaded up with bingo cards lol.
This is crypto.
DeFi is particularly fun, it's basically just decentralized 2008, a way to extend way too much leverage to people who simply should not have it, in exchange for fanciful 3-digit percentage APR to lenders.
I think it's easy to get lost in the weeds on this. What was the fundamental innovation of Bitcoin? It was a blockchain that functioned as a decentralized ledger that allowed un-trusted parties to verifiably exchange value without a trusted intermediary. Game theoretical mechanics were added to try to prevent collusion, resist censorship, and to make the network permissionless, to varying degrees of success. What is the cost of this? Obviously, massive inefficiency. Bitcoin's solution to the Byzantine Generals problem (which was previously unsolved) was to propose that everyone store a copy every single transaction that ever happened and have everyone verify that, and then to protect that network, to instigate a Red Queen's race incentivized by a self-reinforcing reward mechanism. Is this an optimal solution? No. Did design decisions lead to perverse consequences that the creator(s) didn't intend? Yes. Is this also extremely limited in functionality due to it's original design constraints (which have since ossified, perhaps intractably)? Sure. And do most things require the function that a blockchain (or decentralized ledger technology in general) provides? No. But, it does solve a very real problem, and all of this "waves hands" is part of the process of discovering where it's most appropriate.
I think what's being lost in this discussion, since almost no one posting here is either passingly familiar with the past decade of crypto-economic research, or with the current state of the art in "crypto" technology (almost none of which revolves around or even involves Bitcoin these days). Almost all of the promising new networks provide at least 1000X transaction throughput at 1000X+ transaction efficiency while retaining decent Nakamoto coefficients and allowing some level of computation ("smart contract") and composability. (Yes there is also plenty of useless stupid stuff that sadly is a huge waste of resources, but hey, we survived Dotcom Bubble. It's just part of the process.)
I don't begrudge anyone who doesn't see the potential there, just as I don't worry about anyone who might have said that the Internet's impact would be no greater than the fax machine (in fact, a single Nobel laureate chimed in early on to both of these sentiments) - whether this turns out to be true will depend largely on the people who choose to build their vision and prove people wrong... or not.
Also, there's no question it's all a damn mess, but much more broadly than crypto.
A major challenge is that there is an enormous disincentive to choose the best solutions, since advocates tend to own a lot of coins. If you’ve got a considerable portion of your wealth wrapped up in btc then something showing up and eating btc’s lunch is bad for you. This is very different than many other fields of innovation, where friction to move to better options is far far lower.
> No. But, it does solve a very real problem, and all of this "waves hands" is part of the process of discovering where it's most appropriate.
It solves a technical problem - the byzantine generals problem - but does it solve a problem people have? I don’t know anyone who’s had the Byzantine generals problem personally.
I've been trying to give this part of the world an open-minded go over the past couple weeks. I do think it's true that many of us got excited about Bitcoin, which is definitely a dead end, and when we realized that we closed our minds to the entire "industry". But the DeFi world is definitely different and if it's also a dead end, it isn't for the same reasons that Bitcoin was.
Having said all that, I still can't figure out what the hell to do in the DeFi world. It seems like all I can do is lend my assets to people who also have nothing to do besides speculate or themselves lend their assets to other speculators. I can't figure out anything to do that pushes out of the speculative bubble in any way. Maybe you can help me?
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.
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.
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.
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.
If you think these defi projects are hurting the environment then you have not been paying attention to the industry. Proof of Stake, what most smart contract tokens are moving to, is very energy efficient.
Is anyone actually really sure that Proof of Steak is secure though?
Anyway, none of this matters because Bitcoin exists and is the dominant shitcoin (due to first mover advantage). All these other shitcoins can claim whatever efficiency, but it doesn't matter because that's a very isolated view of the problem. The shitcoin economy as a whole will still be fueled by mining unless somehow Bitcoin gets dethroned and the whole mining thing just goes away. I can't imagine that happening without the whole economy crashing completely into the ground – but that would bring all these efficient coins down with it.
Yes, they've been live for years. Bitcoin can't do smart contracts, it's not a Turing complete scripting language and it's very difficult to work with, so of course it matters.
Ethereum is transitioning to proof of stake which means the nodes will run on raspberry pis. At any rate, if you think data centers are burning the planet, you really should boycott the internet. Its data centers and mainframes all the way down.
Second Life did this 3D virtual world stuff almost 20 years ago, and even managed to use real money with an exchange rate as well to do exactly the things you're saying are now new with crypto and blockchains.
Also for your other points - the games in this space are universally unfun to play with hardly anyone actually playing them; I can pay normal money to commission artwork; and I can use a zillion platforms that already exist to raise money.
They did, but they were an insular community as a result. NFTs allow for a common open standard to be interoperable between games. That helps create an economy where, for example, you can buy a digital artwork at a Christie's auction and display it in Decentraland and have it be verifiably authentic.
Second Life was awesome! This Metaverse trend is pushing that concept much, much further and it's giving ownership and utility to the makers.
I don't think any of that matters at all to people who enjoy the games or virtual worlds. I understand your point, I just disagree that it will matter in any way.
>you can buy a digital artwork at a Christie's auction and display it in Decentraland and have it be verifiably authentic
I can't imagine anyone would give a shit about someone's virtual art being "authentic" for whatever meaning of authentic NFTs pretend to claim. This is basically receipt porn at this point. Truly we're talking about bragging about wealth, one of the shittiest traits a person can have.
And how does it interoperate with the virtual artwork NFT ecosystem that is burgeoning right now? Can I use a song I purchased on Audius to play in my virtual pad on Decentraland while showing off some art work that I purchased on OpenSea?
There is no reason whatsoever for Activision to join forces with Epic and let your Call of Duty gun skins cross over to Fortnite. Even if they do, both titans will never in a million years allow an indie shooter to be cross-compatible. It'd be free advertising for the smaller game.
From a competitive standpoint, why would I want Activision's digital locks (you can only import NFT'd content) instead of something like Second Life which is more open?
If Activision really wanted purchases to carry over, they could've made it happen. No NFT needed. An open standard does not imply NFT, and vice versa. The 360 era was probably the peak of the 'gaming interoperability' trend, and it went almost nowhere. Your Xbox gamer picture would show up in some games. Everyone knew it was authentic because MS uses cryptography and doesn't let you sideload third party images. No NFT needed.
Same reason my company doesn't like me displaying awards from my last company. The obstacle is entirely social rather than technical.
> These are 3D virtual world environments and people are using (VIRTUAL CURRENCY) to build an online economy. They are trading property, buying virtual artwork and creating galleries, setting up clubs and meeting spaces, etc.
What you're describing here is Roblox (2006), which was launched 2 years before Bitcoin was conceived, and has attained a market cap of >$50 billion without any cryptocurrency nonsense. Or Second Life (2003). Or RuneScape (2001).
Cryptocurrency doesn't enable online trading with virtual currency -- if anything, it's dramatically _more_ difficult to use than either real plastic, or virtual currency sitting in a SQL table.
What it enables is theoretical trust in a shared ledger (handwaving that a Sybil attack isn't attempted by any of the massive mining pools); but this trust is assuming you're a computer scientist capable of auditing the clients and contracts. Yet, even professional programmers have lost hundreds of millions of dollars worth of crypto with programming mistakes and security flaws in their smart contracts and clients! If even professional crypto software developers can't take advantage of cryptocurrency's supposed benefits, how are the players of an online game supposed to?
The answer is of course that they have to relegate trust, in the same way that online shoppers relegate trust to Visa/Mastercard. The important difference being that only Visa/Mastercard guarantee your funds are returned if you're defrauded.
No, I'm not describing Roblox. Roblox is a great game and has many great characteristics, but this is bigger and broader than that.
Sybil attacks would be detected in an open network first of all. If you can pull it off, I invite you to try: there's hundreds of billions of dollars on the table protected by nothing but cryptography and game theory. Knock yourself out. I'm sure all the people in this space are idiots and haven't seen the holes you claim are there.
I'm old enough to remember when using a credit card was a hassle or seen as predatory on consumers and many people either refused to use credit or accept credit in their businesses. For several decades using a credit card wasn't any more convenient than using cash or check even. Over time, the scanners got better and faster, Visa and MasterCard integrated with ATM debit cards, and then mobile phones and swiping plugins enabled it all to get better. Now it's ubiquitous. But that ubiquity will make it all the more easier for merchants to adopt crypto.
It turns out there is already crypto insurance protocols like Nexus Mutual and Cover that will cover you if a loss occurs. Insurance is really just a business problem that is easily fixable.
On the plus side crypto is far more secure than Visa or MasterCard, because it works on public/private key cryptography and you simply sign a transaction rather than enter your name and address and all the same information you'd need to commit a fraudulent credit card transaction.
> Now it's ubiquitous. But that ubiquity will make it all the more easier for merchants to adopt crypto.
The point is that no-one needs to adopt crypto for payments because the existing payment platforms work fine, better than crypto. Making transactions immutable, requiring users to maintain perfect IT security, currencies swinging in value by 20% every time Musk tweets about them, etc, are regressions.
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 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.
Pauli, what are you talking about? Bitcoin, Ethereum or Cryptokitties?
What group are you talking about when you accuse them of "Scientology-like groupthink"? What comparisons can you draw? I think it's important you back up and explain what you're saying.
It's funny that these dismissive, trash-talk comments with zero value get upvoted on HN as long as it's against crypto. It really is a double-standard here. Ironically, that comment is also part of the groupthink.
I think the issue is that mostly these smart contracts and efficient coins are not the main attraction.
The main attraction is Bitcoin and recently Dogecoin. BTC is slow and costly and mostly a speculative play. Dogecoin is a joke, but also worth billions.
Also these coins are speculatively often first, and useful second. Not all but many. Thus instead of being useful for exchange, they become methods of speculation.
It is also used for fraud a lot -- both various types of pump-and-dumb, Ponzi and money laundering.
And on top of all that it is usually inefficient.
So what we need are digital currencies that are fast, stable, and that can implement smart contracts (but these tend to be buggy as hell with no roll back.)
But that isn't what cryptocurrency is all about these days. It has been overtaken with speculation.
If we could get the benefits I outlined, that would be amazing, but it seems that very few are actually interested in that.
"Smart contracts" (public finance bots) are basically Ponzi-as-a-Service. Someone launched an explicit "PonziCoin" on ETH even.
"It's just overtaken" is not a great take. The problems are way more fundamental – the whole concept of trustless irreversible digital cash just does not work in the real world for normal transactions.
I am essentially pasting an old comment of mine: The Internet was always something where demand--and desired applications--were vastly over capacity and capability. From the moment computers were networked, more people wanted to do more things over those networks, and both infrastructure and underlying technology had to grow to barely keep up (or, in fact, could not keep up--many long desired applications only became feasible in the 2000s or so). This does not resemble the history of Blockchains.
In the case of the Internet, people were doing either new things, or existing things more efficiently (e.g. sending emails vs. postal mail and fax, or transferring files vs. swapping disk media or printouts). As the Internet progressed, efficiency increased.
In the case of cryptocurrencies, people are doing existing things that can already be done quickly and efficiently vastly less efficiently, in a system that is purposely designed to be less efficient, where efficiency is in fact actively counteracted. Databases and online money transactions were possible before, at a fraction of the total cost inherent to the system and at vastly higher performance.
I can send unlimited amounts of money, anywhere on earth, for (at most) dollars in a few seconds. I don't need to rely on any government for any reason, and no government can stop me.
The Internet provided solutions to technical problems, regardless of any societal/political considerations. They may have resulted, but as a secondary effect.
When theorizing about societal/political benefits, take into account the societal/political problems cryptocurrencies created by inventing a machine that allows converting resources directly into money of miners' digital wallets without regulation.
Your sending any amount of money, actual practicality and realizability aside, comes at the cost of a lottery, where miners perform literally 100.000.000.000.000.000.000 computations per second whose outcome is completely thrown away, unless they are lucky enough to be one of the 6 computations per hour that win. This cannot be made more efficient: If computing one hash costs less energy, the difficulty will be adjusted to require more calculations to keep the target of 6 hashes per hour.
By the decentralized property of cryptocurrencies, it is by design not possible to regulate where the energy for this lottery is coming from.
Proof of Stake coins eliminate the electrical cost of mining yet maintain decentralization. ETH2 is live now but not fully in control of the network https://beaconscan.com/
Many other Proof of Stake blockchains like Cosmos have been live and working fine for years.
I have looked into proof-of-work in meticulous detail, I have not looked into proof-of-stake. If proof-of-stake exists and eschews the problems I have stated, then what I said here about the problems it creates does not apply anymore.
I have many other doubts against the usefulness and sensibility of blockchains in general, e.g. I have doubts how smart contracts actually succeed to reach their goals in a reality where humans make mistakes and courts are used to settle disputes and ambiguities. But these concerns then only affect the viability of technologies that I and others are not forced to participate in.
Proof-of-work on the other hand, as long as it continues to exist, affects everyone in that in incentivizes burning resources directly for money without regulation, no matter how dirty or wasteful.
I do not play videogames, I think all videogames are a waste of time. Not only do they waste enormous amounts of electricity, but they also waste untold hours in fantasy worlds of meaningless nonsense.
That said, I think everyone should be able to buy electricity and spend it on what they want, even dumbfuck videogames that waste their life away. If we play the "your electricity is bad, my electricity is good" game then it leads to the majority restricting the minority.
Instead, we should price electricity based on externalities and let purchasers use it as they want. If electricity is 100% clean and the buyer chooses to mine bitcoin, that's their value decision, just as you playing videogames is your (very stupid) decision, but I support your right to waste electricity on it.
I agree that proof of work seems to have outlived it’s usefulness as a mean to prevent spam on the ledger.
That being said, I still see proof of stake and proof of coverage as interesting way to maintain said ledger integrity in the like… 3 actually existing use case where a blockchain is superior to a SQLite instance with good security.
You’re talking about Bitcoin when there’s a multitude of other cryptocurrencies that are not trying to be the digital gold but rather a mean of payment.
This is obviously not true. You cannot buy, say, 3 million USD of bitcoin to transfer to another person who then cashes it out for 220 million rubles. More than one government will be clued in, many will stop you until you identify yourself, and it certainly won't be at most a few dollars to exchange.
You are 100% incorrect. I worked at Circle which had the second-largest OTC desk while I was there, and $3 million in BTC even back then was trivial. The markets now are ~25x more liquid than they were a few years ago. I don't think you know even the smallest thing about this industry because your comment is so entirely mistaken it reveals you are clueless. Converting from BTC to rubles is a different matter but BTC / fiat trades of major currencies is very easy for USD and I can't imagine rubles are difficult.
Either Circle decided to be legal with KYC after you left or you've forgotten about the part where they ID their customers, for the benefit of the government.
You're not sending money. You're sending tokens. People who say that they are sending money "on the blockchain" are being disingenuous.
You have to account for transaction fees into cryptocurrency, the blockchain transaction fee itself, and the conversion into the target local currency.
You left 2/3rds of that process out, conveniently.
That, literally all by itself, would be enough for me to think building the internet was worth it.
You kids have no idea how much fun it was to go downtown to a travel agent just to find out how much it would cost to fly home from college for Christmas.
("You kids" should realize that most of the stuff done on the web today was done by mail or phone during most of the XX century, especially in a country as spread out as the US. Ring up the merchant with the order, sing out the credit card, done, was the MO from the 70s to the late 90s.)
I mean, yes. You’d need to go get the paper tickets.
Obviously there were variations on how people would do things and mail order existed but I’m speaking literally, that’s how we used to do it and when the internet came along it got way way better.
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.
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.
1) You just flatly contradicted yourself without even realizing it. The top level comment said "The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access.". When challenged, you moved the bar to "Well, it eventually became useful to everyone!".
2) You're condescending "I can see how people in their twenties would fall for this...", "Handwaving", "Shell games".
3) You've got some internal benchmark about what qualifies as useful that appears to mean "if it's not useful to me, then it doesn't count" (see comment about Venezuela).
4) You seem to think of yourself as some kind of gatekeeper or authority on nerddom.
I'm not going to change your mind about anything. I've been around the internet long enough to spot people pretending to want genuine engagement when they really despise your ideas and just want to publicly slam dunk on you.
Your experience does count. Your anger and seeming intent on winning the arguments no matter what could be tainting or tilting your positioning of your experiences as worse than they were.
I don’t know what you mean by point 1. The qualifier I used was “everyone who got access”, and I stand by that.
Initially only nerds had access and they couldn’t get enough. When access expanded to the general public, they couldn’t get enough either.
“You’ve Got Mail” is a 1998 movie starring Tom Hanks and Meg Ryan. The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
> The qualifier I used was “everyone who got access”, and I stand by that. Initially only nerds had access and they couldn’t get enough. When access expanded to the general public, they couldn’t get enough either.
My whole family had access. And the families of all my friends. They hated it. It was boring and complex. If you mean "everyone who sought access" then it's a self-fulfilling prophecy isn't it? You're either misremembering or engaging in disingenuous word play.
>The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
So 16 years is the benchmark? Seems arbitrary (because it is). Bitcoin is 12 years old. When the Internet was about 12, what did Newsweek say?
>If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
The discussion wasn't whether Crypto is a more important technology than the internet. It was about how clunky and shitty it was at the beginning. Nothing more. Stop trying to "slam dunk" on people.
There does not appear to be a point in engaging with you. You’re trying to trip up people on technicalities and anal specifics of amt of years as equivalencies for the 2010s and the 80s and 90s.
AOL was a bonanza. I didn’t use it but that started getting big enough in the mid 90s. I got on the internet as a kid barely in school in 93-94. It was vast to me. To my older brother, etc.
—
Your attitude and anger appears to be doing exactly what you’re claiming others are doing. Liken slam dunking on people.
To answer your last question first, crypto clearly is a superior platform for finance, exactly because of the explosion in "self-referential shell games" - it's in fact an extreme democratizer of "finance" - anyone can create their own liquidity pools, it's trivial to create not just CDOs, but CDO2s, 3s 4s, and they all run 24/7 forever. (no, this does not have much relevance to "real" economic activity, but this is true of almost all financialization and the more people that people understand that the better, IMO)
They recent launched a governance token and DAO (many other projects have been experimenting with various types of on-chain governance models).
Both of these pursuits are widely applicable for creating sustainable models for funding and managing distributed common good projects.
Brave has over 25M active users and has built a model on their token to pay website users and creators for ads, as well as allow in-browser tipping, etc.
Many DeFi projects are experimenting with various novel forms of tokenomics (hold X tokens to access Y features; yield earned w/ Z tokens accrue to the developers) which are interesting alternatives for creating sustainable development/operational models for software.
There are projects that are doing interesting work bridging digital and physical assets (particularly in harmonizing the legal mechanisms for property) like Mattereum, but I'd argue even the simplest types of digital-only tokenization become interesting when it can be made composable with other dapps (eg, fractional ownership of projects that can later be made liquid on the open market or that can be collateralized). This ties back to the domain of not just coordinating, but incentivizing distributed collaboration/human resources.
Can you explain why I need a crypto(tm) Gitcoin and not just a cyber chuck e cheese token? I give cyber-chuck $1 and he gives me 1 cyber token. I can subdivide it 10,000 times and micro-tip any site I want. Why do I need cryptocurrency?
If your argument is that crypto would decentralize it, and guarantee a cap on coin totals, I don't buy it. That's not the reason a site owner wouldn't join a coin plan. "I would love to get paid, but I hate inflation too much to consider your proposal". Fantasy land.
That's easy and has nothing to do with what you're thinking (although you could hard-code/guarantee emission schedules if you built a smart contract on a decentralized platform) but let's ask, how and where do you redeem your $1 cyber-chuck? Presumably only with the issuer? With a crypto-token, particularly an ERC20 you have the ability to take it to any DEX and use (or create) a liquidity pool that you can then swap for high any number of high-liquidity tokens that you can use or cash out anywhere. (You can also perform price discovery and see if your $1 cyber tokens really are worth $1 on the open market, or utilize your newly acquired cyber-chucks to generate yield by providing liquidity, collateralizing it, etc).
Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO. While it may have a market value (it certainly has some value for those who want to participate), but there is a different purpose to this type of token (the same for utility tokens).
You propose a world where cyberchuck tokens are useless, but cyberchuck crypto tokens are readily traded on the open market. Cashing out requires people to value the token underneath, and that's a function of who governs the token (and what they let you do with it), not crypto vs. not crypto. Although currently "crypto anything" seems to boost the price of your asset, even if it's just Blockchain Iced Tea.
Fraud reduction by looking at the open market ("nobody's selling these $1 tokens for anything above a nickel!") isn't plausible either - you can do the same thing today by looking at YouTuber payout rates. Those aren't public but it would take the collusion of 10,000+ top tier YouTubers, many of whom don't like YouTube very much, to lie. If YouTube were ever threatened by a more open model (ex. on Patreon, you can see actual income for some creators), they might switch to stay competitive.
> utilize your newly acquired cyber-chucks to generate yield by providing liquidity, collateralizing it, etc).
I can do this with USD so we're really talking about that X day period where my tokens haven't become USD yet. Maybe there is or will be a crypto coin or five that do what Bitcoin was supposed to do - low fees, high volume, easier and cheaper than ACH or Paypal. But if those fees are low enough, I don't necessarily need to keep by cyber chucks as cyber chucks. I could convert to USD and then back into cyber chucks, if cyber chucks is the token of choice. But I think it's far more likely that out of the hundreds-thousands of current coins, the one you pick is going to be a loser in terms of long term utility. Safer to convert to USD and then into whatever today's hot coin is.
Even today, some stock options have surprisingly little price discovery (low volume, big difference between bid and ask price). And those are real, regulated financial instruments with a direct objective relationship to present and future value. I think they can be traded across the whole market too (buy at broker A, sell to someone at broker B). I don't get how, outside of speculation, Company X's coin is going to be worth more than that. Nor will it have better price discovery - there are multiple billion dollar companies who trade stocks and options.
In current "company scrip" modes (ex. casino chips) people generally don't hold onto the not-cash. They exchange it for USD within days. If MGM decides to screw over their customers and cut the conversion rate by 10x, (1) that might be illegal, (2) the % of total customers in history that will be affected are small.
We're also generally proposing micro- or mini-payments - if it's high dollar like a salary, you'll just get USD from working at a company. How many people would take a job at 1-to-1 equivalence in a crypto token instead of a USD salary? Today, I can buy stock in my company using the USD they give me. It's much safer to me because I can choose how much to put in. If I got paid in CompanyCoin that would be a return to the company scrip days. I'd be tied up in risk for minimal gain. If the coin is stable it doesn't matter if I can only invest my USDs every payday.
I admit I don't know much about ERC20 specifically. I still don't see why you can't make a useless token on ERC20. Analogous to making an app that works with all bank accounts that nobody wants to use.
> Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO.
People talk about using crypto for democratic community governance. I said this in another comment chain:
> You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin.
> why wouldn't you do it on a (performant) blockchain
I don't see value here over JP Morgan Chase operating the market as a neutral third party. Maybe Chase won't really be neutral because they want to steer you to USD and not tokens. But there's gotta be some neutral party that can govern it, something like Coinbase.
Boring old databases and the tech of 10-30 years ago are more efficient than blockchain in all cases, afaik. No matter how efficient, the design of blockchain requires distributed workers verifying each other's transactions. On Chase's server farm, server A can trust server B. All I need is a ledger of how many tokens I have, and a way to convert to USD, the tether of the real world. I can use USD to get into Ether and those 1000 tokens any time I want.
> a 1000 such tokens can interact.
It's basically an API / standard for tokens right? Today I can make an app that uses the IMDB api, but if nobody cares, the app is useless. You can make an app that uses the latest hot tech (raytracing in GPUs) but if nobody likes what you made, it's useless. Same with ERC20, if I understand correctly. I can stand outside Chuck E Cheese and try to make a secondary market in tokens. Nothing illegal about that. Tokens are traded using the hand-to-hand protocol. Yet the number of such businesses is close to zero.
Gift cards for places like Walmart and Amazon are nearly as good as cash on eBay. Nobody buying them is worried about those companies issuing too many cards and crashing the currency.
A bank operating the platform is a good example. It is certainly possible, and people can and have taken the Ethereum Virtual Machine and ran it as a permissioned network. To the extend that we can trust Chase to do it, that would work fine.
But to that I would say that the banks haven't built it, and I don't see it happening or gaining adoption. Whatever they build will by definition not be an open network, and will likely not cross too many geographic borders.
It is sort of inconceivable that some 16 year olds would be allowed to run a lending protocol on the Chase blockchain, or even a random adult, for that matter. Plenty of people would find that positive, no doubt, but it is even hard to imagine a platform being built where companies in say India could get access to on the same terms as those in the US.
Ultimately, the permission-less nature of Ethereum is what has built the DeFi infrastructure we have today, which for all its flaws, is pretty impressive.
No, it's not a good comparison. The internet was always state of the art and better at solving actual problems the worse solutions were tackling.
Fidonet was always, on a technical level, a worse experience than the internet.
BBSs have their charm, but were absolutely obviously worse at what they did that the internet.
Cryptocurrencies are just awful at solving real problems, compared to existing solutions.
Why are you talking about the general public? Are you equating "well the internet was only cool to nerds, solving their needs" with "Bitcoin is only good for its MLM speculation properties, and to buy drugs and murders"?
"Unless you were in academia"... So you admit that it WAS useful? And how it WAS much better than what it replaced? Because that's the opposite of Bitcoin.
Yeah! My brother was an expert in 1990 at 6. Me at 6 in 93-94. Except we most certainly weren’t.
You’re giving a completely wrong impression of how the early web was and the early internet. I wasn’t around for that so I won’t personally give my input but for the time, each iteration every few years was great.
If domain knowledge wasn’t needed by the 90s. When was serious domain knowledge needed? When did that stop?
Some people found the internet hard to use and found it required more domain knowledge than they had every single year since the internet snd web have been around. Including in the 2020s.
Comparing cryptocurrencies to the Internet is about comparing its usefulness, not it's understandability. I won't argue that people in general understood the Internet.
Take my example of Fidonet. If you were not a computer expert then you had never heard of Fidonet. BBSs? Maybe you'd heard of it in some news clip about the dangers of computers.
Hell, the only time non-experts even saw anything close to a BBS was probably the movie Wargames.
> You’re giving a completely wrong impression of how the early web was and the early internet.
In what way?
> I wasn’t around for that so I won’t personally give my input
You probably won’t see this any more so I won’t respond to rest unless you respond.
For your last point. Were you around for the development of Arpanet? I don’t think there are many people who were adults in the 69s in the few places arpanet was developed at.
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So not being around for something doesn’t exclude you from being able to discuss internet related things.
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For understanding internet. I don’t think 99.9% of the population understands the difference between the internet and protocols like the web. Not sure that’s relevant any way tho.
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.
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?
Wow, blast from the past! I actually got a check from one of those pay per hour ad services more than 20 years ago, and to this day it's still the only check I've ever received :-)
(It was 15 USD so costed almost as much to cash in Europe as it was worth)
I remember Usenet before Eternal September and before Canter and Siegel, when the backbone was NSFnet and before the National Information Infrastructure Act of 1993.
If someone was doing anything commercial over e-mail or usenet you could contact their "sysop" or their upstreams and have them removed.
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.
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.
It is like the early Internet and you are like one of the old telco guys I worked w/ in 2000 who said people would never make phone calls on the Internet.
They suppose both parties have equal power (money, ability to analyze the smart contract). I doubt most contract negotiations are like that. Signing a smart contract with Google, written by Google engineers, is like signing your own death warrant. You'd have to hire your own E&Y consultants to verify the contract doesn't screw you, and then we're back to the problems of regular contracts.
Perhaps useful in 1% of contracts, useless otherwise.
can you give some examples of them being legitimately useful and advantageous compared to the existing financial infrastructure?
haven’t seen anything where it’s actually needed or better. and basically all examples end up with some sort of trust needed at some point.
such as gambling on the outcome of a sports game. it would still require a dependency on some sort of Api to provide the sports results and then you’re trusting the api to give uncorrupted correct results… which defeats the purpose of “trustless”
Decentralized insurance pools allow anyone in the world to tap into that liquidity. Allowing farmers and businesses in developing countries to get stability they've never been able to buy before.
Futures contracts so they can easily sell their products at a good price regardless of market fluctuations, transfers the risk to the investors.
Smart contracts are still in super early days, the first foundational building blocks are being laid. Soon many more things will be possible.
You are thinking way too extreme. An API is still a hell of a lot better than a sketchy bookie. I would trust the former and not the latter. Which helps break up the centralization of betting because it is much easier to establish trust in a 3rd party source of truth than it is to establish trust in someone being financially responsible / honorable.
Will it improve the established market providers for sports betting? No. But that's the point. It enables people to make a small business betting shop
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.
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.
> 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.
Every time a Musk tweet swings the value of BTC by 20% --- in either direction --- Bitcoin loses credibility as a store of value. "Price greater than zero" is not enough to make something a good store of value.
BTC as a means of payment is a joke. Most Bitcoin fans I engage with have actually given up on that. In fact, the scaling limitations of Bitcoin transactions are now touted as a good thing because that bounds the eventual energy usage of the network.
The Bitcoin cult is strong enough that I have no doubt Bitcoin is here to stay. It's sad, but it doesn't bother me. On the other hand it's obvious why Bitcoin HODLers have a deep financial interest in crypto being "here to stay".
The store of value concept makes no sense because such a thing cannot exist. When you buy Bitcoin you hope the seller does something that maintains the existence of an economy that exchanges their currency for Bitcoin.
You can't just pile up gold and then expect to get something for it if everyone else is dead. You need a group of people (aka economy) willing to work for the gold.
One difference between Gold and Bitcoin which I don't see discussed often is that it's pretty clear the people who got in first get the most gains. With gold, you can't do anything about that until you invent time travel. With BitCoin, as soon as you realise that, you have an incentive to spin up your own cryptocoin with the only difference being that you get in first. Other people have an incentive to get into your cryptocoin speculating that they can be in first, and then because they are in they have an incentive to hype it to others.
https://coinmarketcap.com/all/views/all/ I clicked "load more" until I saw 1400 cryptocurrencies, if Bitcoin is 12 years old, that's averaging a new cryptocurrency every 3 days since Bitcoin's creation. There's probably a lot more than that.
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.
Yes I am afraid, I am afraid that I won't be able to acquire some real estate properties to rent them out at reasonable prices. This literally has nothing to do with Bitcoin.
Oh, I am also worried about not completing that robotics project I started, because I don't have enough time.
A shitcoin wasting electricity and causing absolutely massive emissions of greenhouse gases is a first point. I'm not looking forward to the planet I live on being utterly fucked. And I'm even less happy about frat tech bros pumping bitcoin because it makes them money.
I've evaluated Bitcoin probably 10 separate times. I regret not getting in at time #1 when it was $30, but I know I would've sold at $35 or $50 or $100 or $1000 based on where I was economically then.
I have no regrets investing in broad market index funds, because I know what they represent, how they work, and how even if Amazon drops to 1/10th of its value I still own a small slice of the company. If bitcoin drops I own a bitcoin, which no adherent can explain the purpose of.
There's no "there" there. It doesn't do what it's supposed to do, most of the adherents don't know what they're buying, the "store of value" argument just makes it a worse version of fine art, gold, or real estate. The economic case for bitcoin is anti-fiat. Fine, but that's a minority opinion. Hundreds of millions of Americans buzz along in a fiat system and don't seem much worse for the wear. The massive COVID bailout kept millions out of poverty, kept food on the table, kept businesses open, etc.
"Failed states print money and crash the economy so they need bitcoin". Why Bitcoin and not another crypto? I can never answer that. Hardly anything in tech is forever. BASIC was once cool, now it's Python. Would I bet $30,000 that Python is the language of choice 50 years from now? No. Bitcoin is a cool proof of concept that is eclipsed tech wise by dozens of other coins. I'm still skeptical of other coins, and hardcore skeptical of PoW when the W is useless (hashing). Bitcoin is the top of the skepticism pyramid. There's no point.
> "I’m becoming convinced that naysayers are more and more afraid of having been wrong and missing the boat as time goes on."
"Bitcoin value has changed 200,000x in a decade and just halved in a few weeks."
"You're envious because you didn't get rich quick."
"I thought this wasn't a get rich quick scheme?"
"It isn't, how could you suggest such a thing? It's a currency used to buy groceries in Venezuela."
"Then why do you care about it - do you put your savings into the Mongolian Tugrik because it's a currency used to buy groceries? Do you go round singing its praises on the internet?"
"No, because they won't get me rich quick. It's still a currency, deal with it."
"Doesn't that rapid change in value make it a poor thing to use as currency?"
"It's unquestionably better than a hyperinflationary fiat currency in a collapsing state."
"Almost anything would be."
"You're just dissing it out of envy because you didn't get rich quick. Look at that - over $30,000/coin, nothing that valuable could be nonsense or scammy!"
"Tulips?"
"That's all you ever say, Tulips, Madoff, Ponzi, Pyramid."
"They were all things that had high valuations and were nonsense. At least tulips have some inherent value, unlike Bitcoin, you can't grow or eat Bitcoin."
"Ah! Ah! You can't eat gold!"
"Indeed you can't. If you like that kind of thing, do you hold any gold?"
"No, gold won't get me rich quick."
> "It’s been more than a decade. It’s here to stay."
I guess this is why you're religious - it's been here for a long time, many people believe in it, that's enough to convince you, yes?
I deeply regret that HN's system gives me at most one upvote to bestow upon this.
(Hey, couldn't it be something like one potential upvote per comment I read, in stead? And then I could give several of those from comments I don't deem worthy of upvoting to those I do.)
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.
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 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 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...
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.
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.
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.
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.
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 am not sure why this is flagged - it seems a reasonable and timely opinion piece.
Cryptocurrency is a subject that has to have a deep and public debate. What the OP is saying (which I take to be "the tech world has a duty to point out the flaws in cryptocurrency to avoid giving an impression of a clean bill of health to every ICO out there") - that is a valid socially useful debate.
There are valid real world uses of bitcoin (see Turkey shutting down payment apps recently). but yeah it is also a volatile wild west that is miles away from anyone's expectation of normal regulated currency behaviour.
Yes there is a crying need for an "internet native" currency. What will that be - I don't know. But it is not here yet, and it is reasonable to make that clear and loud.
Edit: oh, the much simpler answer is that it was posted twice and both posts were on the front page. People flagged the dupe. That's fair. https://news.ycombinator.com/item?id=27336405.
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I think the submitted title probably had something to do with it; As a title, "the emperor has no clothes" is generic and baity. It's also false in the sense that there's no consensus view, so to the extent that the analogy is meaningful, it doesn't apply. I've attempted to replace that with a more neutral and representative title now, drawn from the author's own words. Suggestions for a better title are welcome.
Beyond that, HN has had so many threads arguing the same points about cryptocurrency over and over, that it's not clear there can ever again be a new discussion about it. Repetition is a curiosity killer, and usually indignation takes its place as people resort to hammering each other over the head with the same dumbed-down clubs, back and forth.
However, I think we can try turning the flags off on this one because Macjiej is at least trying to take a different and more specific angle on cryptocurrency critique.
>>> Beyond that, HN has had so many threads arguing the same points about cryptocurrency over and over, that it's not clear there can ever again be a new discussion about it.
It's certainly not a 100% tech topic? there aren't any (or hardly any) of those anyhow, no? but the main thing I want to say is thanks for that "putatively". Post HN I want to work on a society for endangered words.
Edit: well, one thought...IMO the dynamic that the explicitly-political threads and this sort of thread have in common is that people's identities are strongly vested in their position. The more we do that the more it feels like our existence is being threatened, rather than just our view. Then it's a fight to the rhetorical death.
That happens with emotional tech themes too, for example when people (god help us) identify strongly for or against some $BigCo or $celebrity.
Large sums of money being involved are a big multiplier of all this.
It's flagged because it's flame baiting. It's posting opinions and acting like it's representing the "tech world". This is just some unknown twitter account
Here for example is The Economist on his bookmarking site:
>>> Mr Cegłowski runs Pinboard, a paid social-bookmarking service which allows subscribers to store web links with annotations and share them with others. In broad terms, it is similar to Delicious, which Yahoo! acquired in 2005.
But yes, this is a controversial subject. It shouldn't be. It should be an easy yes / no. But something is wrong. We should not be afraid of the discussion about what is wrong.
> What we especially need to stress to regulators...
Lol. Talking like that obviously shows that cryptocurrencies are not for you. This tech has cypherpunk and crypto-anarchy roots, regulators/governments are not the intended users for this tech, even if you like it or not. If you do not view cryptocurrencies from an cypherpunk perspective you will not see their social benefits, it is an entire way of life an alternative view from the centralized shit show we have now. Yes the tech has flaws, just like how digicash, hashcash, b-money etc had flaws, this is an evolutionary process and nothing you or your government says can stop it.
I think that cyberpunk dream died when billionaires and VC got involved and Bitcoin (and other) currencies skyrocketed in price from millions of people playing crypto-lottery.
Strikes against it:
- It's burning a massive amount of resources and that is just increasing
- I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
- A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
- Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
> It's burning a massive amount of resources and that is just increasing
Do you own a car? Have you ever used plastic? How much resources are burned by banks?
> I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
Yea lets also ban computers because they allow cryptocurrencies.
> A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
Ever heard about Zcash or Monero
> Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
Yes the tech is not perfect but tons of research (Proof of Stake etc) is happening to make it perfect.
Really surprised you brought up Proof of Stake for decentralization and not the environmental aspect. It could actually solve the environment issue!
But decentralization? How will the ease of entry not allow allow rich people to dump money into it and be the main players/money makers in that system. Perhaps they wont all be in one country but they'll certainly (by stake owned) be one predominantly one demographic.
This doesn't read as a particularly intelligent thread. There are no interesting insights here, at least not anything that's new and hasn't already been debated/debunked/pushed back on, before.
Seems like one of those tweetstorms where people perceive it to be saying something worthwhile because it's long and is said with adamancy.
Probably because it mostly contains rehashed opinion and conjecture and almost nothing of substance.
I don't know why people would bother flagging something like this though, threads as content-less generally die on their own without much fanfare. OP and his friends get an ego boost from making front page and then it fades. NBD, no need to be contentious about it.
If you're in rural India and don't have access to a bank account, but you do have internet access via a smartphone, then I could definitely see cryptocurrency being valuable to you. And that doesn't even take into account countries like Venezuela that are experiencing hyperinflation, where cryptocurrency would be much more useful. There are cryptocurrencies that are energy efficient and have low (or even zero) transaction fees. I doubt the author has looked into these coins.
Beyond just currency uses, smart contracts open the door to phasing out escrow middlemen for purely digital transactions (like buying/selling domain names, etc.) Decentralized lending and borrowing is another major use of smart contract coins.
How exactly do you imagine that an unbanked person living in rural India would be able use cryptocurrency? It isn't like they can just enter their credit card into a website and buy some. Not to mention that even if they someone managed to acquire some, the $5+/transaction fees are going to make something like bitcoin or ethereum completely impractical.
Nano has free transactions. Other cryptos like Stellar and Solana have low cost transactions. People can use sites like localbitcoins to exchange cash for crypto.
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 think NFTs will transform the concept of ownership, and take power away from major corporations in the process. This is just one aspect of crypto that I think more than justifies its value. But there is a ton of hype and a ton of bad stuff going on yes, but that will be pushed to the background as it goes more mainstream. All people inside the industry think this is just the beginning and there is a lot of value to be extracted. Is it overvalued for what it delivers on today? 100%. But I believe it will catch up and surpass it soon. There are multiple singular companies that are more valued than the entire crypto market right now. It’s a drop in the bucket.
I think NFTs will transform the concept of ownership
The current concept of ownership appears to be that if I own something, broadly speaking, that means people generally agree (and the state, and ultimately their monopoly on force, will back up) that I get to say what gets done with it and who gets to make use of it, and that it's not OK for someone else to take it away from me without my consent.
If NFTs are going to change that, I'm not sure I like it.
I don't understand the belief that any of this takes power from corporations. If you look at NFTs right now, big participants include the NBA, Sotheby's, and a whole lot of venture capital. What's the dynamic that's going to shut them out as they become more lucrative?
Creators of content controlling that content without the need for big corp involvement, which can be corporations yes, but also the little people. This could be access/distribution, royalties, licensing, and more.
The big corporations have binders full of techniques to take control of content from the little creators and claim it for themselves. A popular one right now goes: A one-person operation making and selling designs could find their online work subject to pointless DMCA complaints or even threats. They'd crumble at even the threat of a big corporation actually suing for infringement. Now the big company copies the individual's designs, and collects rent on something it didn't create.
An NFT is ... a digital receipt that “money” flowed at one moment in time. The referenced digital artwork or something is only referenced by an URI. That is ownership? Seems a very transformed concept to me.
My supermarket gives me an NFT in paper form every-time I buy something.
If you look at that thread, people are relying on a company called Reserve, that essentially issues its own currency (a 'stablecoin'). This is the part that I don't get—how is it cryptocurrency when you are relying on trusted third parties?
I've been trying to find coverage of Reserve from non-Bitcoin/Cryptocurrency publications - basically because I don't trust any of those publications - and I've not been able to find anything convincing yet.
This is a general problem I have with crypto stories: every crypto coin has a built in incentive for people who hold it to hype it so it's really hard to tell if actual regular users are finding it useful yet.
> What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency.
The final goal is not to be able to convert crypto to fiat, the goal is to keep everything in crypto. Do you think all this infrastructure is being build just to convert it back to fiat, what cypherpunks want is to destroy fiat.
But how, you can't use Bitcoin for day to day transactions due to slow settling times and high transaction costs. You could use some of the alt-coins, but how do you coordinate which to use and why would you trust it?
I understand the final goal, but if I want to send my relative in Venezuela half my paycheck this week, how does she spend it on groceries and at the pharmacy before the Crypto Revolution comes?
Inevitably the answer is "some trusted third party" that turns it into a vanilla remittance.
Once you have enough liquidity of cryptocurrency in the country this isn’t an issue. And the incentives to own cryptocurrency in a place like Venezuela is high.
I live in Argentina, not Venezuela, but here there are 3 ways to go crypto -> fiat.
- If you have a bank account you can go through crypto exchanges. Centralized of course.
- There are p2p platforms that connect buyers with sellers. So in the platform, similar to Binance p2p, you can see how many transactions other people have and buy/sell crypto from them.
- There's a black market which has home-delivery. So you contact them through the internet (you can find links in reddit and other sites, most go through Discord) and they send you a person with your crypto/fiat and make the transaction in your home. You can also go to their location if you prefer.
Not sure if that really answers the question, but if I was receiving remittances from abroad doing options 2 or 3 would be simpler and cheaper than using any traditional finance tools, which all require you to have a bank account in the first place (a LOT of people don't have one here because of the requirements to open one) and have higher fees and bureaucracy.
>> 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 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.
These pieces[1][2] on the economy of soviet Poland say there was a black market of US Dollars:
> "the government, which controlled all official foreign trade, continued to maintain a highly artificial exchange rate with Western currencies. The exchange rate worsened distortions in the economy at all levels, resulting in a growing black market and the development of a shortage economy.[25] The only way for an individual to buy most Western goods was to use Western currencies, notably the U.S. dollar, which in effect became a parallel currency. However, it could not simply be exchanged at the official banks for Polish złotys, since the government exchange rate undervalued the dollar and placed heavy restrictions on the amount that could be exchanged, and so the only practical way to obtain it was from remittances or work outside the country. An entire illegal industry of street-corner money changers emerged as a result. The so-called Cinkciarze gave clients far better than official exchange rate and became wealthy from their opportunism albeit at the risk of punishment, usually diminished by the wide scale bribery of the Militia.[23]"
> "As Western currency came into the country from emigrant families and foreign workers, the government in turn attempted to gather it up by various means, most visibly by establishing a chain of state-run Pewex and Baltona stores in all Polish cities, where goods could only be bought with hard currency."
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".
> 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.
Cryptocurrency allows people to exchange money without dealing with financial institutions or governments. I don't own any as an investment, I use it for playing poker online. That's it.
We give too much voice to all these people suffering from hysteria. I suspect the only reason these people are given a voice is because they usually call for more laws to "fix" more things which benefits those in power.
edit: Also speaking of things we should ban, I think if we are talking about things that are actually harmful to society (not that I actually give a damn), we should start with banning twitter so that we can stop hearing these "moral" rants
That's not really accurate. For most people, they deal with financial institutions directly via the fiat onroads and offroads fror the exchanges.
The fact that you can formally buy, exchange, and cash out of crypto with full banking support gives cryptocoins a veneer of Government support and legitimacy.
The USA bans online gambling and ponzi schemes. Cyrptocoins are worse, because they include a side order of immense waste of electricity and advanced manufactured computer chips, and enable ransomware.
I think this article is completely correct. We, as members of the tech community, have a duty to communicate with the public and democratic representatives that cryptocurrencies are a harmful technology, and the formal exchange of them for fiat should be banned.
Can you (and your representative) please just leave me alone so I can harm myself with this "harmful technology"? Whatever the outcome, I'll take my chances. Please leave me alone.
Yeah, all the problems of the world are due to bitcoin and cryptocurrencies. Embarrassingly, more than a decade in, HN is still struggling with it. I don't consider harmful, I consider it a godsend. Ten years ago, I knew HN was wrong, it will still be wrong in a decade.
I want to see those things go away too, but we're going to need to significantly increase the energy efficiency of our entire society to be able to achieve that. Cryptocurrency mining is anti-efficient, by design. How much coal generation could we retire just by eliminating the energy demand from cryptocurrency mining? I suspect the answer to that question is more than zero.
> The environmental harms of cryptocurrencies hurt everyone. It's a classic externality.
A rational solution would be a carbon tax, so pollution is no longer an externality. Focusing only on Bitcoin only makes sense if one's agenda is just to hurt Bitcoin.
Does that make it right? Ignoring that, many private institutions go out of their way to ban transactions in things that the government doesn't even ban. Marijuana in states where it is legalized for example. All forms of sex work on the misguided belief that it somehow benefits the sex worker. Etc.
Also I don't have a duty to follow your misguided morals.
Cryptocurrencies do not add anything to either beyond what was already done by cryptography.
> “bank accounts”
We already have bank accounts. In banks, hence the name. What’s the average transaction fee for the most popular cryptocurrency? By one of many metrics by which cryptocurrency fails even against the status quo.
“Not everyone” has a computer of any kind, not even a cellphone, not even of the not-smartphone variety.
Underbanked people more so than the general population.
And this group is also the most harmed by current cryptocurrency transaction fees — I’ve met someone (friend of a friend in Nairobi) for whom, assuming rent is paid monthly, current fees would raise their rental cost by 10%, and they’re already struggling.
> 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.
I think they're referring to the ratio of household wealth to total value of the fed balance sheet. Which is a number easy to calculate and his claim is factually true (mostly because the fed balance sheet has never been bigger).
But while his claim is true, in a Boolean sense, I don't know what exactly we're supposed to conclude about the world based on it. This isn't a ratio I've ever seen talked about before.
I'm guessing they're insinuating that the size of the feds balance sheet is somehow related to inflation, which it is only in a fairly loose sense.
This, this is a scam: https://fred.stlouisfed.org/series/M1SL Notice the 5x supply increase without a corresponding 5x in economic efficiency. Bitcoin is what it is. It's worth what people think it's worth. Just like gold. Gold has minimal practical use in real life but it was used as a type of money off and on for 5000 years.
> 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.
I think you’re being too literal. There are lots of tech people who quietly feel this way — just look at the comments here. The point is that they shouldn’t be so quiet about it.
If someone only knows crypto from stories in mainstream press or cable news, they’d probably incorrectly assume “tech people” are almost universally for it.
Well, I work in the field and I think there’s both. Scams and real technology advances that would blow anybody’s mind if they would spend a bit of time to look into it. I promise there is more than Bitcoin and dogecoin.
Please don't cherry pick the worst example and apply it for the whole population.
Tether is one stablecoin, and arguably the worst example since it is literally the one coin every coiner will agree with you is a bad stablecoin. Do a deep dive on MakerDAO's DAI instead.
Why can't the tech be neat/super cool and primarily be used to run a scam?
I mean bittorrent is neat tech as well but it's still primarily used for piracy. Doing a deep dive into how bittorrent works doesn't suddenly change the fact that 99.9% of torrents out there are violating somebody's intellectual property.
All I'm saying is, there's lots of super neat tech out there that's primarily used for not-so-super-neat stuff.
(sidenote, I actually think piracy is pretty neat, but it was too good an analogy to pass up)
Are there numbers on what the primary uses of cryptocurrency are? I would guess remittances, purchasing illegal things, purchasing legal things, and ransomware - but I'm not sure in what order.
I am not sure remittance counts as a "use", especially if it is only useful for remitting money because it is also actually "used" for settling ransomware payouts or buying cocaine.
I have a lot of digital artist friends who used to rely on live performances and installations for their money, now they're seriously killing it selling NFTs
Some of them opt out of more environmentally unfriendly stuff like Ethereum for sure
Personally I've developed systems for paying for everyday things like your bus fare or phone bill using crypto in a country where there's a hell of a lot less confidence in fiat (Brazil) -- hell check out the history of the Brazilian Real if you want an idea of what real candycorn money looks like
Personally I just feel a hell of a lot of privileged bullshit out of people arguing that crypto is some good for nothing shit. Yeah sure great try living in a country where your government is fucked. We truly don't live in some francis fukuyama neoliberal fantasy world where we can trust stuff like traditional financial markets which have gone and failed us in the non english speaking world time and time again. I welcome any and all alternatives
Wow, you can actually pay your bus fare and phone bills in Brazil with crypto? That sounds either very impressive or totally unbelievable.
I could not find anything on Google, so if someone could you link/cite to some actually used examples (I guess apps or utility website?) that would be very helpful. Sincere thanks.
As with anything cryptocurrency related, it's safe to assume that the justification is contrived and the actual use case is niche, at best.
My experience as a Brazilian is that I've never seen anyone using cryptocurrencies in real life. On the other hand, the government's new instant payments system (Pix), allows anyone with a mobile phone to easily make small payments. In less than one year since launch it's already ubiquitous.
yeah i mean not like a condescending tone is going to covince me to try and convince you to give away PII on this one i mean this account is linked to my name you can do your thing
I think the interesting use is more in the blockchain than the currency. Public, verifiable, tied to an identity, decentralized statements that can be used as public records or provide an audit trail. Cryptographically & blockchain secured bodycams is an example that I've been looking into recently
The problem is that the distributed consensus in a blockchain is only possible if that blockchain is also used as a currency. If you remove the currency aspect, it's no better than a Git repository, which also has a merkle tree ( but no way to say which repo is the canonical one).
Yes, though (to their benefit) traditional currencies don't work as well for ransomware. Possibly the same for illegal purchases.
Remittances seems like one of the true benefits of cryptocurrency... but that's why I'd like to know what amount of usage is actually that and what is, let's say non-beneficial.
> Manufacturing, Music, Politics and now The final big boss, money.
Isn't that a "they laughed at Galileo" argument?
They thought the Internet was snake oil. They thought Napster was snake oil. They thought BitTorrent was snake oil. ... but they also thought Pixelon was snake oil.
Considering that almost all legitimate users have been priced out of the market due to ever-increasing transaction fees and increasingly draconian regulations (often stricter than for non-cryptocurrency) and the resulting interoperability issues...
Yeah, I think it's safe to say that the primary use of cryptocurrency nowadays is as either casino chips or a money laundering mechanism. The economics no longer make any sense for anyone else.
it depends on how you count. if you measure "primary use of email" by number of emails, then yes spam wins out, but that's only because a tiny fraction of human users are sending out tens of millions of spams. if you measure "primary use of email" in terms of users, the vast majority of people who use email use it for useful, non spammy purposes. The same can't necessarily be said for cryptocurrencies, as far as trying to prove that cryptocurency has a large userbase that is not there just for speculation/inflation and/or illicit use cases.
Because email has no value except as a means of communication. Bitcoin and other cryptocurrencies are massive speculation scams. It's popular because everyone wants to hold one in the hopes it goes up in value. There's no reason for it to go up in value except that other people think it will go up in value and want to buy one too.
You're buying a number on a blockchain somewhere in the hope someone else will want it for more money, that's it.
there is no such thing. Too big to fail is another coded way to describe political allies and backers who get influence in the government through their contributions. The size of the problem isn't the issue, it's who has the problem that is.
basically piracy bad, bittorrent bad, ok lets ban bittorrent.
edit: downvoters, look, you're supposed to swap 'piracy' with [insert bad thing about cryptocurrency] and 'bittorrent' with your favourite cryptocurrency of choice.
I wouldn't agree that piracy is the same thing as a scam, so the analogy doesn't really works. When people download a bittorrent client, most of the time they know exactly what they're doing and that's what they're going to get. No scam here. The thing is that bittorrent moves information, and crypto moves money, and there's a bigger chance of things being a scam when it's about money. Maybe something like religions and sects would be a good analogy? Religions will bring you lots of information you may not care about, and sects will try to scam you of your money. But some religions have mandatory donations so the analogy isn't perfect.
That's actually the best analogy I've heard, and I'm a crypto believer!!!
But it doesn't negate the value of the technology. Yes, piracy is neat and useful, but illegal. But was the benefit of piracy that you got free stuff? Or was it that it was an easier system than any other at the time?
I like your analogy. I'll add another. VHS. The early adopter to VHS tapes was the porn industry. No longer did people have to watch porn in a seedy movie theater, they could do it privately at home.
So, yeh, early adopters may often be driven by the seedy side of culture.
You're not very good at experimenting then. I first bought BTC in 2013 because of a legitimate purpose: to pay for online goods (legal software) to a seller who wanted to completely eliminate any risk of chargebacks.
Surely you recognize that this is a bad faith argument? The average transaction fee today is around $8 USD. That's a small price to pay for knowing that a transaction is set in stone.
Completely eliminating any risk of chargebacks mostly shifts risk back onto the customer; I don't think it's a net benefit. Some businesses seem to intrinsically have sky-high chargeback rates but I'd prefer that those businesses simply not exist rather than put up with the existence of crypto.
I once bought donuts from a food truck with BTC and the donuts were good but the payment process was really slow.
I own a small online business selling custom-configured RPIs and chargebacks are terrible. Businesses build reputations but expect their customers to be anonymous every time. It would be far better if chargebacks were eliminated and customers could review the merchants to reduce fraud. Putting all the risk on the merchants is backwards.
The merchant is the one who has more capital and more information about the product he's selling. I think it's fair that the merchant bears most of the risk.
Credit Card/Chargebacks are not a silver bullet. Countries like India have alternative payment methods without chargebacks and some
Merchants insist on them.
Stablecoins like USDC, if everything around it is legit, can be viewed as a programmable dollar... circumventing everything and anything bank-related to do the same work. That's pretty legit IMO.
I notice that you say "can be viewed as" not "are used for"... USDC is just used as a lubricant for crypto speculation. Payment or remittance providers don't use USDC because it isn't actually better. Sure, now you have a programmable dollar; why isn't anyone programming anything good with it?
That’s a big if. People are offering 10+% interest for USDC, but not for USD. This implies massive risk, as those interest rates are much higher than junk bonds.
Ha ha ha. That would only be possible with a government issued digital currency. Any private company running a "stablecoin" is guaranteed fraudulent. Can't be legit.
> Nothing about blockchains, DLTs, crypto, at its core is a scam to me.
I think everyone is talking past each other, because no one's exactly defining what the "scam" is, so you're talking about different things.
I don't think anyone's suggesting that, say, deep in the BitCoin code there is some algorithm giving Satoshi Nakamoto a dollar for evert transaction.
On the other hand, I believe that the vast majority of buyers are buying simply because they hope that someone else will buy at a higher price tomorrow, or next year.
This causes everyone to cheer-lead about how everyone else needs to buy or HODL, because they simply want to drive the price up.
For me, personally, I'd say this is what I'd call a "scam," in the sense that a MLM company is a "scam": that the motivation of the majority of people extolling the virtues of buying crypto tends to be simply personal enrichment.
Yeah. And I think some people see that and think, “okay I can get in on that too!” while others think, “this whole thing smells and can’t be sustainable.”
I fall into the latter camp. I don’t begrudge the former. I just don’t think it’ll last and have little taste for speculating.
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).
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.
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.
You're actually almost right. While Bitcoin was launched with lofty goals, it was pretty quickly overtaken by capitalist vultures who saw a low-regulation industry to extract money from people.
Importantly though, it's not an either/or. Capitalism is problematic and cryptocurrency is problematic. Both can be true at the same time.
Bitcoin inventors were anarcho-capitalists, an ideology that promotes an extreme version of capitalism where there are no governments and corporations have unlimited power.
But Bitcoin investors are mostly indifferent to the goals or mechanisms behind Bitcoin and merely hope to sell a coin to someone else for more than they paid for it.
It’s 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.
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.
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.
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 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.
The hard part is not the data structure behind it (Merkle tree) but the economics. An entirely new branch of economics has spun of it and it's far from trivial.
I can understand mapping out a new branch of a field is nontrivial. But I’d also hope that domain experts could explain it well enough to bring others to a basic level of understanding without saying, “it’s too hard.”
Reductionism can be applied to anything. I am confident that very few understand it just fine. Because it cannot be understood without taking a very serious deep dive.
There are non-technical heuristics that we can all employ, through our knowledge of history and sociology, that allow us to identify late stage bubbles (and the pyramids and ponzis that accompany them).
I don’t have a taxi driver but I do have taxi driver equivalents in my life that are currently giving me all the signals I need.
> If I'd make a list of 100 questions regarding crypto, an exam so to speak, I am reasonably sure that this silent majority can't even answer 5% of the questions.
I'd reckon that the average HN cryptocurrency skeptic would do better than the average person who's actually invested in crypto.
Reading the comments here, most of the criticism seems to imply that the technology has stopped at Bitcoin and that no other breakthrough has come after. “It consumes too much energy”, “it’s too slow”, “it takes too much space”, “the fees are too high”.
You got them all wrong. I wasn’t talking about bitcoin specifically but about cryptocurrencies in general. If you’re interested in learning I can help but not with that attitude.
Answer to question two is yes for Bitcoin and all blockchain like that. There are some new ones like Mina who propose a different system in which you only need to verify the last hash.
Answer to question three is not restricted to Bitcoin. There are many other systems, e.g. Proof of stake (POS).
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.
> Crypto is so large, complex and fast-moving that it takes thousands of hours to grasp.
The thing is, regular money is, from a certain perspective, also a "scam". A lot of the financial system is effectively make-believe, with massive conflicts of interest at every corner and dynamics that keep working because everyone believes they should - until, for one reason or another, they stop believing, and then you have 2008.
Crypto is just another big mountain of make-believe systems (and getting bigger with every new contraption), but it is so young that the games of pretend are still very visible; and the key actors in crypto are different from the key actors in regular finance, which means it gets a bad rap from the latter. But if it can survive long enough (say, 30 or 40 years), people will just stop pointing out the "scam" and will go along with it, because "why not? If it works, it works".
Fiat money has value because it is widely, almost universally, accepted in exchange for things of intrinsic value (food, shelter, toys, tools).
I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity. And in fact all of the fiat currencies I know of originated as representative money.
Bitcoin is not widely accepted in exchange for things of values, and I see no reason to believe that will ever change. Being able to spend it is the "killer app" of cryptocurrencies, and none of them have actually implemented it, despite many, many attempts.
> Fiat money has value because it is widely, almost universally, accepted in exchange for things of intrinsic value
No, technically fiat money has value because it is accepted by a government to settle taxes. Which is why it loses value dramatically when a state collapses or otherwise becomes irrelevant to the local economy. Because traditionally the state itself was the issuer of such currency, already we have a massive conflict of interest at the very start: when the state pays out his own debts in its own currency, it's effectively asking his creditors to believe that currency has some value in the real world, while also telling them exactly how much that is supposed be. To "solve" this problem they invented central banks, which are supposed to keep governments away from the process of determining the actual value of a currency, if you believe that they are as independent as they proclaim. In the end, what matters is that enough people believe that certain arrangements are fair, and that the government will still be there tomorrow asking them for taxes. As long as that's true, one might well use the currency as a unit to settle private trades too, but that is a consequence of the original belief.
> I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity
The key in this sentence is "widespread", which is something you can redefine pretty arbitrarily and hence move goalposts as required. In practice, other tokens have been used here and there, but in the end, what wins tends to be government-backed tokens for the simple reason that authorities will always enjoy a right to put you in prison if you don't settle your taxes in the currency they desire.
If you look at it from a technical perspective, any collapsed state where the local currency has been wiped out and internal trades are settled in USD or EUR (a pretty common occurrence), in practice is already using an non-government-backed token, something on which nobody in the local economy has any control. To these areas, it doesn't really matter that the USD will be accepted by the US Federal Government to settle taxes; they just need a unit, and since this unit is accepted at the fringes of their system, well, might as well use it internally too.
> Being able to spend it is the "killer app" of cryptocurrencies
No, being able to convert into other tokens at the fringes is the killer app. Which quite a few cryptocurrencies do have, although in an extremely fragile state. The longer they keep them up, though, the easier it gets, as more and more people believe that the underpinning arrangements are fair and exchanges will still be here tomorrow to exfiltrate value to prison-avoiding currencies.
> No, technically fiat money has value because it is accepted by a government to settle taxes.
Not true. There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires for taxes, fees, etc.
In fact, the origin of using taxes + coinage goes back to a pragmatic way for ancient kings to not have to organize the logistics of feeding and housing a large army. Pay the soldiers in coin. Require citizens to pay a tax in the same coin. Boom, they self organize.
Money itself came about far earlier, and was independently invented in multiple places. The example most people look at is temple complexes in the Levant, where debt records came first, and currency second. It was an adaptation of earlier gift economy behavior to enable scaling to groups too large to have intrinsic social trust, and allowing for specialization of labor in building and maintaining the temples.
David Graeber's book will educate you about all this.
This is an irrelevant historical tangent. The point is why and how money defines values today.
> There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires
If you'd read the rest of my comment, you would have seen that I explicitly address this case. Instead you went for a pointless appeal to authority about thousand-year-old situations that don't matter to the current environment.
Fiat money is legal tender, so "acceptance" suggests a choice that isn't there. Regardless, enforced or not, wide acceptance is of course no lie for hard fiat currencies. Fine.
Bitcoin in its current form should not be seen as a payment currency, instead as digital gold. A new asset class similar to actual gold/silver, real estate, stocks, etc.
Something to put part of your wealth in, hoping it appreciates over time. And as Bitcoin appreciates over time so well so far (12 years of 200% appreciation per year on average), it doesn't really make sense to spend Bitcoin. It is deflationary by design.
Bitcoin already is a killer "app" as such. An accessible way for anybody to preserve/grow wealth, a hedge against inflation and the lack of return on a normal savings account.
Your take on crypto for payments is needlessly pessimistic. It's inevitable, the winner just isn't clear yet.
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).
Twitter crypto-haters essentially act as the "anti" to the crypto-bro "pro".
Both repeat the same memes to each other in a self-reenforcing echo chamber. The underlying link is to political consensus. Leftist-socialist Twitter is eager to say that socialism is good because Bitcoin is bad. Trumpist-conservativist Twitter loves to say that Bitcoin is good because Joe Biden is bad. Nihilistic crypto permabulls are so hyped up that they jump into every thread to defend their favorites and their negativity is usually limited to the dismissive "sorry you want to be poor".
It never really goes anywhere. Someone comes up with a new crypto narrative - adoption, value, environmental impacts, human interest - and it's all you hear about for the next month. If you try to find good information you are presented with an opaque wall of obvious scams, not as obvious scams, and people who believe or do not believe in them.
There is interesting stuff going on, but the people studying it carefully are so hard to find through all the noise now.
Yet one would hope that if the discussion is on HN, then we'd rise above flamewars, and talk specifics, specific limitations, specific advantages, etc.
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.
"A lot of observers", "Many people say", "Everyone says". Let's stop using weasel words, if you consider yourself a techie, come up with some real evidence-based arguments.
First it was a payment method, now the fees are too high. Then it was a store of value, but it is too volatile for people who want a safe storage. It's also not private, as appare tly payments can be traced back to their user.
So, what's left? I know you can still make money with it if you joined earlier and you're lucky. Same with a MLM, but at least those don't waste so much energy nor ruin the GPU markets.
- Instant loans without paperwork or credit agencies, algorithmically collateralized
- Micropayments to websites you visit rather than ads
- Electronic payments that can remain private if participants are smart. Much better privacy protections than electronic payment options like Visa/Paypal.
- Truly democratic governance protocols in which important decisions can be voted on in real-time by participants with skin in the game.
- The ability for a code itself, not associated with a human, to earn and hold money.
- Algorithmically enforced contracts that are more resilient to bribes and other forms of subversion compared to traditional court systems.
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 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.
When I first heard of cryptocurrency I was reminded of when people started idling in Team Fortress 2 to get content drops. It was such a daft cart before the horse approach, but of course those dropped items could be sold for fractions of a penny and people can be dumb.
It also reminded me of Folding at Home. Here people completed by virtue of their personal compute resources.
Of course crypto serves as neither a form of entertainment or scientific discovery and is just a massive waste of resources to create artificial wealth. If only all that computation did something useful.
No, there's not. It's a fundamental principle among PoS cryptocurrencies that the work needs to have no additional utility or else it will help the attacker "subsidize" 51% attacks against the cryptocurrency you've built, because now they can both launch 51% attacks which cost $X abut subsidize it by selling the useful compute for $Y they've gotten by launching the attack, which ends up costing $X - $Y.
Compared with a PoS cryptocurrency yielding no useful compute as a side effect, it costs $Y cheaper for someone to 51% attack.
I’ve come to the conclusion that Bitcoin was a perfect “isolated” P2P currency system. If it was just considered Monopoly money, that is. The moment you try to find its worth by buying/selling it against Fiat - you get the exact same thing you get when you allow real world trading on any game currency - scams.
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[ 3.4 ms ] story [ 427 ms ] thread> The two things people need to know about cryptocurrency are completely non-technical:
> 1. If it doesn't work, it's just an easy to lose casino chip
>2. If it works, it creates an end run around all financial regulation, and will be dominated by uses those regulations try to stop
(edited for formatting)
Hmm.
It’s a fraudulent “con” and also very dangerous because it subverts regulations.
Hmm.
Seems pretty contradictory, no?
You can either criticize bitcoin for not working or for working too well but Maciej seems to be trying to do both at once.
I’m not a Bitcoin user or particularly a fan but these self contradicting attack lines don’t seem likely to be politically effective. Just choose one. I’d go with “mostly used for crime.” And then add “environmentally ruinous” for good measure.
I'd say we all subsidize bitcoin and the likes indirectly and unwillingly through the price hikes in HW directly or indirectly attributed to something of dubious (to put it mildly) tangible value.
Not true, you can exchange Bitcoin locally with other individuals. Mailing paper money or checks over postal service is not comparable to making payments using Bitcoin online. Especially when considering international payments.
Yeah that’s what I’m saying. People meet up in real life and exchange Bitcoin for cash locally. Various forums, web systems, and message boards exist to facilitate this.
> What we especially need to stress to regulators is that there's no relationship between the technical claims of cryptocurrency and our now over 13 years of experience. It's not decentralized, it's not a currency, it's not a store of value, and it's not a promising technology
> Cryptocurrency solves no problems that it didn't first create, and most of those it doesn't solve. Smart contracts are neither of those things—at worst they're an API for fraud, or as @qrs put it, self-funding bug bounties at best
Those are a lot of hasty statements made without indisputable evidence.
Edit: I'll take any evidence if indisputable evidence is too high a bar.
That reminds me of that guy who didn't receive his package and filed a complaint to the store he bought it from. They asked for a proof that the package didn't arrive, and he replied with the photo of his empty hands.
I'm unsure what claims you're alluding to. But I'd love to help out as much as I can.
What degree of that difference, if any, is a consequence of payment frictions rather than other factors (say: most activity and interactions are local).
What preferences are exhibited by major international buyers and sellers for payment or credit systems?
And making blind assertions and veiled insults is not?
The claim was made. Its relevance should be determinable.
That aside:
- Gravity model of trade.
- "Research: How Far Will Consumers Travel to Make Routine Purchases?" https://blog.accessdevelopment.com/research-how-far-will-con...
Yes. Bad actors ask these sorts of questions in order to stofle conversation. You basically asked this person to do a research papers worth of research in order to prove his argument while you put basically zero effort into your comment. If you think the stats dobt align with what he said look it ul yourself and tell us. Asking questions like the parent did is lazy and often badly intentioned
If it does have relevance, then the questions do in fact matter.
https://en.m.wikipedia.org/wiki/M-Pesa
- Phone number not required
- Crypto-coins work in more countries countries then mpesa
The tone deaf tech elite have done it again and thought that the US is the entire world.
Please leave your americentrism at the door.
edit: flagged for the truth now? pathetic.
It has virtues.
As someone who works in applied Cryptography and has also worked for the European Central Bank, we need “crypto”.
1) seigniorage is an abused privilege. Source: US debt ceiling at 27TRN.
2) permissionless money has value, I cannot send more than 5k a day using my bank. I can send any amount using crypto. I also don’t need two utility bills and an address to open an “account”
3) it’s censorship resistant. Govt’s can’t just stop payments or shutdown the network.
Use Monero.
EDIT: downvoted again. I’m not contributing here anymore.
If they have a firewall, they could block the majority of exchanges, wallet apps, and even ips of some of the largest mining groups.
Unless they have something as complex and comprehensive as China's firewall, they couldn't, because the protocol could just route around it.
The evil of democratic government (as opposed to a strong republic) is that that 51% can vote to rob the 49% of everything they own. Crypto prevents this.
First, your use of "holistically" doesn't make sense to me.
> ho·lis·ti·cal·ly | ˌhōˈlistik(ə)lē/ | > adverb
> mainly Philosophy in a way that is characterized by comprehension of the parts of something as intimately interconnected and explicable only by reference to the whole: the damage caused by unethical behavior needs to be examined holistically.
> • Medicine in a way that treats the whole person, taking into account mental and social factors, rather than just the symptoms of a disease: he has been treated holistically for a heart murmur.
Second, are you characterizing the people on HN as being mostly or completely against cryptocurrency? This sounds like anecdotage. Remember, not everyone with an opinion broadcasts it.
Cryptocurrency is maybe the most important innovation is human history.
Or perhaps neither.
Some other simple explanations include:
1. People see it differently than you do.
2. People are not engaging in conversation as a way to learn from each other; rather they are talking past each other.
I'm inclined to think it is a mix of both.
Like I mentioned in a comment nearby, people on HN seem to vote based on different criteria. The lack of clarity can make it hard to extract clear meaning from votes.
Electricity? The wheel? Money? Sulfa drugs? Spoken language? Counting? Agriculture? Written language? There's a long, long list and to put cryptocurrency on it seems awfully hubristic.
In fact, you're so breathlessly ecstatic about the cult of bitcoin that I have to wonder if I'm being spoofed...
It's not a simple concept to explain so here's a couple of videos which might help you to understand it better.
Bitcoin Is Protecting Human Rights Around the World: https://www.youtube.com/watch?v=xLYYh4aPXAM
Philosophy of Bitcoin from First Principles: https://www.youtube.com/watch?v=HrehEWYj16s
Have you reviewed the HN Guidelines at https://news.ycombinator.com/newsguidelines.html ?
> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
I'll offer my two cents in case it gives another perspective you haven't considered. The meaning of voting on HN is far from obvious. Various people downvote for different reasons.
Maybe they are unimpressed by your comment, maybe they disagree with it, maybe they think it is inappropriate somehow, maybe they don't like that you plugged a particular cryptocurrency, or something else.
In any case, I recommend not worry about the votes, up or down. At times, it can be helpful to see if what you are writing is perceived as useful, if you can take the feedback in that manner without taking it personally.
> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
Am I accurately stating your concern?
How do I tell someone that I value his input even though I respectfully disagree? It's pretty much impossible on HN without writing a post.
Most of HN just follows MSM talking points, and the MSM hates crypto now because it's a threat to the powers that be.
If you don’t like it, support better alternatives or create your own. That’s really the only solution here.
I don’t say this to be sarcastic. The train has already left the station.
I guess it’s just a reaction to the constant hype being pushed by the crypto world. As a mostly neutral observer, I really don’t get it.
Regardless, this isn’t the point I was making. Crypto cannot be stopped. At best, you’ll have regulations against PoW mining.
https://news.ycombinator.com/newsguidelines.html
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.
- 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.
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?”
What's interesting to me is that the original idea was clearly brilliant, but never found any of those lateral steps. It's kind of a string theory for programmers now.
First, the underpinnings of Bitcoin are ideological, namely in Austrian economics. This means that any change that caused any inflation would be socially resisted.
Second, most of the issues with Bitcoin stem from the lack of a central authority to do things like chargebacks and handle conflict resolution. It is not possible to solve many of the issues of Bitcoin without a central authority, and that was not going to happen for obvious reasons.
As soon as it claimed to be money, then it was all about the money. If you look at early BitcoinTalk, you'll see a pile of scams that are extremely similar to the jargon still used in crypto to this day - the scammers got in very early indeed.
The problem is that delivering AR with enough fidelity to fool the eye is capital-H Hard. Michael Abrash had a good series of blog posts on this.
So... like git?
And that algorithm is indeed novel! It also has a lot of drawbacks that ultimately makes the whole system not worth the trouble.
I hear that darknet markets tend to use cryptocoins. Which while probably mostly illegal, isn't a Ponzi scheme and isn't (necessarily, depending on what's being sold) fraud.
Amusingly enough the darknet use of crypto may only be possible because of the Ponzi-beginnings. Criminals are unlikely to accept Pokémons as currency until after they see others doing it.
The actual interesting and novel thing about crypto-coins was solving the "trust problem" of a distributed ledger. But this solution, to be honest, is quite clumsy: PoW. But nobody ever found a better solution until now. Any other proposal is kind of centralized somewhere.
The question that needs to be asked is now "Do we really want, or even need, a fully decentralized 'value moving system'"?
In a world where you could ultimately trust someone else the answer would be clearly "no".
But when there is on thing to learn about humans than it's "never ever trust someone ultimately as you're going to be scammed by those people eventually". Just look at what government do around the globe…
As long as this fact doesn't change (and it won't change until we create a new species of intelligent beings, better than us) there will be room for something like BitCoin. And as those are distributed systems there even doesn't need to be any agreement on that point.
And then there is what we do know about what happens in practice:
https://www.cnbc.com/2019/03/22/majority-of-bitcoin-trading-...
https://www.theregister.com/2018/11/30/blockchain_study_find...
"We found a proliferation of press releases, white papers, and persuasively written articles," Burg et al wrote on Thursday. "However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development."
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Only if you have a wildly incorrect view of what a blockchain is.
Merkle trees are part of a blockchain, but they are not blockchains on their own. What you’re missing here is that blockchains also include something to determine which branch is the correct one, to protect against double spend attacks. This is why “blockchain” gets a different name rather than just being called Merkle trees.
I'm pretty sure that if I posted a fork of Linux somewhere, approximately everyone would know that it's not the correct one.
I thought that Monero at least served some purpose as a currency even if it goes against the wishes of some countries' governments. The fact that there are people that talk down cryptocurrencies that are actually being used as a currency really put things into perspective.
It's just multi level marketing schemes all the way down.
https://theintercept.com/2021/03/24/andrew-cuomo-covid-ibm-b...
"Blockchains are typically public, their contents transparent to anyone with an internet connection, but the one behind Excelsior Pass will be private, meaning only parties sanctioned by IBM will be able to check the contents."
But the blockchain is the protocol for updating the information where other players aren't trusted. As soon as any "party" can be "sanctioned to be able" there's just no need for blockchain at all. It's just selling of snake oil, and yes, IBM is indeed doing it.
Now who'd expect that? The technology company uses the hyped technologies to sell their services and products, even if the said technologies don't make the products any better?
Of course, blockchain promoters would tell you that "there will be something else, comes Really Soon (tm) which won't use "proof of work"."
One can more efficiently use public key cryptography, hashing and signing without the blockchain for any other problem than "implementing bitcoin."
https://en.wikipedia.org/wiki/Paxos_(computer_science) An old algorithm used for sharding big-data databases.
https://en.wikipedia.org/wiki/Raft_(algorithm) A simplified version of paxos.
http://www.scs.stanford.edu/~dm/home/papers/losa:stellar-ins... The new paper about SCP which allows replication with subjective notions of trust (no central participant-stake list like paxos/raft).
ps: actually i remove "chained" from the idea. If you want to keep the whole authenticated linked-list thing and do it right you'll end up somewhere near https://irmin.org/ (a generalization of git), which is very useful, but doesn't tackle the "strong decentralized commit". You'll probably want to either centrally manage the "lastest-hash(s)" (like git is usually done), or pair it with a state-machine replication protocol. In that last case it may seem useless to use the chained thing if you already have a real replication protocol, but it is much like using public-key crypto for encrypting small ephemeral symmetric keys and encrypting actual data with symmetric crypto: it's an optimization.
Of course, PoS like Ethereum's takes much inspiration from byzantine paxos. But I wouldn't call this a solve problem, and crypto has innovated in this space. We can just debate whether or not the innovation has been worthwhile ;).
[1] https://www.cs.utexas.edu/~lorenzo/papers/fab.pdf
This is gold, I'm gonna steal it
Cryptocurrency seems like that for endless numbers of tech nerds. It’s even worse than the impossible shape they were going to use on the Borg since it plugs right into humanity’s biggest cognitive vulnerability: gambling.
Maybe it’s a weapon sent by aliens to make halt our technological progress. 25 years from now cryptocurrency will have soaked up all surplus capital and locked it into a Ponzi and all our best minds will be churning out increasingly Byzantine coin hacks. Then the hypervelocity impactors start arriving…
Sologenic DEX [1] is an modern UI for a DEX to trade. Cutting out the middlemen was once a key point of p2p and decentral systems. It was kinda lost with all the non tech savvy people storming the crypto space.
[1] https://www.sologenic.com/ecosystem/sologenic-decentralized-... (The DEX runs on the XRPL, Manticore Securities AS(the company behind sologenic) has no control over it)
What do you mean by saying people fell for "this"? I assume you mean it's a scam but I will wait for your reply.
For a payments system, the fact that all transactions are final is pretty bad. I'd say this, by itself, makes the system unusable in the real world.
(1) https://en.m.wikipedia.org/wiki/Multisignature
SWIFT international wires do cost the DI more, but not several orders of magnitude more. I don't happen to know that number off hand.
Some retail banks charge a lot for wires because they can - people don't use them frequently (as to your point its not what people want most of the time) and usually only for bigger purchases so the fee matters less.
However, if this is something you do more often, banks offer steep, steep discounts over sticker.
The slow transition away from “mass adoption soon!” is extremely entertaining to me.
Why, pray tell, for a currency would developers matter more than end users?
Multisig escrow is also better in every way if people want to involve a third party in case of a dispute
There are already a large number of crypto projects partnering with existing businesses to address real problems. I don't see a minority ideology standing in the way of this.
Here's various businesses running oracles for smart contracts including Deutsch Telecom: https://chain.link/ecosystem/data-providers
Here's Ernst & Young's take on the technology: https://www.ey.com/en_us/blockchain
They are not. They're offering a pre-paid card that users can top up with their crypto.com wallets. [1]
The Crypto.com Visa Card is a prepaid card. Broadly speaking, prepaid cards are the same as debit cards. The difference is that debit cards are linked to your bank account, but prepaid cards need to be topped up. In our case, you can top up using bank account transfers, other credit/debit cards, or cryptocurrency.
And Deutsch Telecom isn't using a blockchain either. They're selling data to a company that then puts the data on a blockchain. That's not using a blockchain.
[1] https://crypto.com/cards
And Visa clearly said: that Anchorage will be its “digital asset settlement agent” and that it will “integrate [its] treasury systems with Anchorage.”
“After further testing and additional conversations with clients, partners and members of the regulatory community, we hope to launch this capability for other partners in the year ahead,” Visa said in a blog post about the news.
Read it from their official press release, a couple times: https://usa.visa.com/about-visa/newsroom/press-releases.rele...
The fundamental issue is that creating scalable, cheap credit infrastructure for mass economic activity is fundamentally in opposition with creating an investment that will continually gain in value. You see this really clearly in Ethereum, where’s gas fees can be exceptionally high compared to traditional financial institutions.
Or https://compound.finance/ also a great project.
Ethereum's gas fees have nothing to do with the price of the base asset: it has to do with limited block size availability. When the network is congested, block size is limited and this causes transactions to be bid up in an auction format to get in first.
This is one of the costs of decentralization. However, recent advances in Zero Knowledge Proof cryptography has paved a path for Ethereum to take to get to VISA scale and beyond and be able to process 200K transactions per second (at pennies or less per tx): see https://zksync.io/ and https://starkware.co/.
With technology getting faster, I regret not mining a few coins.
I even bought the sound cards?
A life if regrets because I didn't follow my gut feelings, or let people sway my decisions?
(Would I invest in Bitcoin now. Hell no, but years ago yes. It will deflate, along with NTF's, and the stock market soon.)
Not be able to reverse transaction is not a feature, it's a fundamental flaw. There is absolutely no advantage to the consumer or the producer to have all transactions immediately permanent.
The rest of your comment reveals your bias: You don't really care about it working technologically, you just wish you had made money on it.
And BTW no we dont need bitcoin for this at all its depreciated tech. But other DLT can be very usefully. There is a reason CBDCs are a huge topic in global finance.
That's just what humans do to each other. New tech is always like this when there are gains to be made.
Some folks look at the trend that central banks have been on and the creep of financial surveillance and think purposefully going backward in some areas isn't silly at all.
In the end, it's software you don't have to use. Nobody is forcing anyone to opt in, right (you know, like the credit bureaus who in America force you to opt in if you intend to... I dunno, participate in the economy in a meaningful way)?
Humans have been using credit systems for millennia. The implication that in the olden days people only walked around with bits of gold in their pockets is a bit of “retconning.”
Paper currency is a couple millenia older than the printing press, using woodlblock printing.
If we're talking specifically about credit cards, the credit card went from new invention to ubiquity in a couple of decades. But I think that's too narrow a scope to look at, to be honest.
Early credit systems did not depend upon the printing press; think of the widespread use of tally sticks in medieval Europe to enable illiterate low-technology credit systems.
It's really hard to approach this anthropologically, IMO, because so many other variables change. Less complex economies do fine with "local communism" and person-to-person debt, but it's hard to imagine using such a thing to order from Amazon. Conversely, coinage historically was useful if you had to exchange with someone with whom you didn't have a personal relationship (say, you're traveling to a faraway land and you can't just provide an IOU), but that's somewhat obsolete now.
I guess my conclusion would be that these historical analogies don't shed a lot of light.
This article includes some interesting tidbits: https://www.newyorker.com/magazine/2019/08/05/the-invention-...
https://www.amazon.com/History-Money-Jack-Weatherford/dp/060...
Second, adoption is way up and btc is only one cryptocurrency. It gets first-mover advantage in this market (unfairly, probably) and so continues to be a bellwether despite the fact that it is a relative dinosaur, technology wise. I'm fine with that, personally, despite the problems with the technology.
That you haven't adopted the tech doesn't mean that adoption is failing, you know. There are more users every year (this is difficult to pin down for obvious & good reasons, but the indicators are solid) and no technology with millions of users globally, including institutional adopters, can be said to be failing.
Further, to call any payments technology 'mildly popular' which safeguards USD 1.5-2.5 trillion (total cryptocurrency market cap, BTC accounting for over 760 billion alone, despite the recent corrections) in deflationary wealth undermines your argument to the point of bad faith. Is the cryptocurrency market overheated and full of nonsense? Of course. But let's do the analyses with level heads at least.
In Europe credit cards are not very common, and debit card transactions are often not reversible.
A generalisation like this is no better than the frequent occurrence of HNers posting articles headlined with "the nation" which mean "the USA".
Anyone who has worked with payment processing can tell you how rare debit card chargebacks are, this is because they’re usually vastly more difficult.
I don't use dispute resolution unless someone actually stole my credit card number like when my card info was jacked at a gas pump one time. Credit cards are quite insecure and we still have to type in all our personal info online every single transaction which is dangerous and dumb and makes the whole system vulnerable to credit card fraud in a way that crypto isn't. When you use crypto you simply sign a transaction message, you don't have to give away your private keys to make the transaction occur.
And no, your comment on Ethereum is about 4 years outdated.
That a transaction is final is not a flaw but one of the main features.
Many people are certainly buying in to crypto with the intent of selling it later at a profit. But that’s unrelated from its utility.
Usage as in number of network participants. People investing time, energy, risk into the system. Miners, traders, validators, second layer operators. Similar to members of facebook, servers in the internet. Price as in market price. And I'm only talking Bitcoin here.
First I've heard of this. Do you have more information?
And the idea that miners have a god-given right to make $100 per transaction, $40m per day, and therefore if the mining reward halves, the price of BTC must inevitably double, is obviously preposterous.
It'd be like if the number of Facebook accounts kept rising, but hardly anyone posts content anymore. If I were a Facebook investor, that would worry me.
I agree with you. Both versions of this argument have to stop in favor of actual discussion (which, it seems, there is a good amount of in this thread)
Most technology companies should hold it on their balance sheets and employ a contributor.
Note, not speculation in Bitcoin, usage of it as an actual currency.
Curious what you landed on, though.
The NFTs that just point to a painting or a youtube video, I don't think so. They don't do anything and I don't think owning them will be valuable.
The NFTs of, like, NBA clips I can sort of understand as digital trading cards. Being purely digital I think they're inferior to the baseball cards I collected as a kid, but I can kinda see it. But 1) they don't need a blockchain; a public database would probably work better for everyone and 2) I don't think sports trading cards are generally a good investment.
There's something maybe interesting in the "creator economy" angle where like a new podcaster auctions off NFTs of the episodes to early fans, who then become invested in its success. If the show takes off, newly minted NFTs will go for more and more money benefitting the creator and the secondary market will appreciate for early supporters. To be clear, I don't think this is actually a good idea for a lot of reasons... but it's interesting.
All the games and pets and racehorses seem like junk.
Like, sure, NFTs hypothetically make it so that ownership of Top Shots can persist regardless of whether the company that operates it survives. But would the actual Flow blockchain survive the demise of Dapper Labs? I kind of doubt it. And where would the Top Shots I supposedly own continue to be hosted? It's effectively just a centralized marketplace.
I've tried to think about what would truly be unique and interesting about decentralized NFTs, and to me, they make sense if they hold credibility independent of any producer. So, something like a tradable auth role that is respected in many spaces. Kind of like an identity, except that I think the concept of a role makes a bit more sense as something that people can trade. Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
To me, that's where it starts to enable something that's unlike what's existed before, but it's still hard for me to imagine a real use case. And that's core of the problem of the crypto world: the technology solves problems that don't map on to existing B2B or B2C services. It's literally a solution in search of a problem.
They don't confer copyright or licensing or anything at all other than a URL. This means it would be illegal to build a site that displays such content, and it would get instantly DMCA'd into oblivion.
My issuing an NFT of the Mona Lisa is basically me grabbing a museum map from the Louvre, circling the Mona Lisa on it, signing my name, then selling that map to you for big money. The map doesn't given you a license to display the Mona Lisa. It's just a set of instructions re: how to find it alongside my signature. If they move the painting to a new location, it gets stolen, destroyed, or the Louvre is shut down - well, tough. And anyone can do it, with any map of the Louvre.
> Consider it to be like an event ticket that is respected in an entire ecosystem of different companies.
Event tickets have one issuer and one point of redemption. Generally, Ticketmaster is on both sides (they own the issuance via Ticketmaster and they own the redemption side - the venues - via Live Nation). It's not in their interest as a business to relinquish even the tinies bit of control.
Also, consider that in NFTs, the only one selling an NFT to the Mona Lisa is Leonardo.
No. Copyright must be explicitly assigned.
> Also, consider that in NFTs, the only one selling an NFT to the Mona Lisa is Leonardo.
Nah anyone can do it any time.
No one is talking about assigning copyright. The question is about a license to display the content on a website. I am fairly certain you have heard of non-verbal contracts before. For example, here is what the UK government has to say about an implied copyright license:
https://www.gov.uk/guidance/license-sell-or-market-your-copy...
> Nah anyone can do it any time.
Anyone can also sell a signature of Clooney. And yet no one does, nor would anyone buy it. This is not something that plays into a serious analysis of the NFT space, and so I am not sure why you would want to find it interesting to talk about.
Agreed on the unlikelihood of NFTs supplanting event tickets. I'm just speculating on the type of novel product/ecosystem the technology enables. But building a compelling experience around this concept is a whole other challenge. It remains to be seen whether someone eventually does. Even if that happens, it doesn't mean we're talking about an entire new market of significance.
I guess I'd just say absence of evidence isn't evidence of absence, when it comes to the utility, but a level of outside-the-box thinking is required that no one's motivated to do when you can simply mint NFTs of URLs and sell them for absurd sums of money.
Agreed that the artificial scarcity is a tell that there's not a particularly impressive amount of innovation.
[1] https://anchor.fm/aviv-milner
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 necess...
I've already addressed your point about governmental change.
The reality is that it's just another means for the wealthy (and criminals) to evade currency controls.
Currency controls are actually preventing the recovery of the country. They are a short term fix for a short term problem but they create long term problems in the process and those long term problems are definitively the worse poison.
What is unclear to me, is how these remittances work in practice. I get that in the US you can exchange USD to Bitcoin with a credit card and then send that to a person in, say, Venezuela (or share the wallet password). But how is it converted back to Venezuelan Bolivar? I can't imagine you buying a pizza with bitcoin in Caracas.
Side question, why do you write your years with a leading zero? I've never seen that before and it has quite a cognitive strain for me.
Not OP, but I had the same question and did a few seconds of cursory searching to no avail. But rather than cognitive strain, I found it opened up a much larger vista on the perception of time and our seeming place in it. While I am unlikely to adopt it, perhaps the experience would be even broader with a few more zeros tacked on! ;-)
https://simple.wikipedia.org/wiki/Holocene_calendar
One thing I do know is that a lot of overseas Venezuelans whose remittances are via Bitcoin don't know Bitcoin is involved. They know a storefront where people transmit money to Venezuela, and the guy there tells them where to instruct their family members in Venezuela to pick up the money. How the agent in Venezuela gets paid is no concern of the customers; they only care that the money they give the guy arrives safe and sound.
https://news.bitcoin.com/venezuelans-can-now-use-bitcoin-to-...
That's likely a Long Now reference: https://blog.longnow.org/02013/12/31/long-now-years-five-dig...
How do you turn your Bitcoin into food, housing, utilities, and other necessities?
> And, yeah, 13 years after the internet's invention was 01982
The Internet was not available to virtually anyone in 1982 much less 1969. Nor was the ARPANET of 1969 even remotely similar to the Internet. TCP came about in 1974. IPv4 in 1982.
> So why does Bitcoin have tens of millions of users
It doesn't. It has a lot of speculators, and a handful of users. And no one knows or could possibly know how many there are.
etc.
I sell it for dollars to people in person; some of the dollars I have to change into Argentine pesos before I can spend them. Isn't that how everybody does it?
> The Internet was not available to virtually anyone in 1982 much less 1969
It was available to almost anyone who knew someone who had access, which is the same situation as Bitcoin. Precisely what Maciej is complaining about is that so little of the economy is hooked up to Bitcoin is that most of us can't buy a pizza with it without going through intermediaries.
> Nor was the ARPANET of 1969 even remotely similar to the Internet
It was remotely similar; it provided telnet over a packet-switched network, with routing. You could argue that substantial technical changes happened in Bitcoin over the last 13 years, too. Maciej did, in fact, make that argument: he pointed out in particular the dramatic shift to centralized intermediaries like Coinbase (the ANS.NET of Bitcoin?) and from CPU mining to GPU, FPGA, and then ASIC mining, as well as the proliferation of alternative cryptocurrencies. We could also mention segwit, the BCH schism, Lightning, BIP39 and Electrum seed phrases, and lightweight clients like Electrum. Those changes are not over yet. So the situations are in fact quite closely parallel.
No, most people just spend their currency directly on the things they need to purchase, actually.
> It was available to almost anyone who knew someone who had access
That's not even remotely true, and is also a tiny number of people.
> It was remotely similar
But... it wasn't. As I already have shown.
The ARPANET, then the Internet, have all gone through steady evolution. It has not spent 13 years stagnant or regressing in terms of either design or use.
Just because you read somewhere that "ARPANET was the predecessor of the Internet" does not mean that ARPANET was the Internet.
If you care to see, it’s in my comment history not long ago. And the thread is fascinating because at best the replies just cherry pick and do semantic tricks like this.
Crypto has a wealth of interesting uses. Tech company co-ops, incentivizing content curation, new and organic stock distribution mechanisms for open source projects, and of course the giant one of providing a far better investment and transfer vehicle to the non-first world countries.
I mean, I can totally see the arguments that it is wasteful, or a bubble, overhyped, and not reaching its potential. But the ones who say it has no or next to no uses are in my opinion on the same plane as Krugmans “the internet will be less useful than the fax machine” or the classic Slashdot iPod “less space than a nomad” comment. It may take even 20 years to prove it, IMO that’s not unreasonable, but it will be claim chowder I’ll be happy to revisit.
If proof of stake works out, there’s no doubt the next Google will be a crypto company that gives revenue back to the user base to incentive good contribution. Content sites absolutely will be totally disrupted. Well look back at writing reviews for the Yelps and Googles as being anachronistic, “why did we used to give all this content to the largest company in the world for free”. Instead, a crypto-based Yelp or Reddit that used a coin and distributed it fairly in relation to contribution would absolutely blow up.
I think VC is also better done with coins in general. Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock. That’s a 10x more incentivized early adopter because they actually could make something more than lunch money.
The reason crypto is blowing up isn’t because it’s a ponzo scheme. It’s because laws around accredited investing are truly the most egregiously disgusting instantiation of class warfare ever to exist, and finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it. All the “pure” crypto companies are total bullshit, minus many BTC and ETH, because they have no product. That I agree with. But in time you’ll see a huge growth in companies that are simply normal tech companies with novel tech/uses, but who build in community ownership, rewards and incentives that actually share profit with their user base.
Again: why do people not get paid for contributions to Pinterest, Yelp, Reddit? These are companies paying millions of dollars to employees, and 100% of their content is given to them by users. In a better world they are actually run by the community, owned by the community, and developed in the open.
Any company could do this with fiat currency today. "Crypto" has nothing to do with it.
> Take any traditional tech company that has nothing to do with crypto and just change one thing: instead of paying early adopters who help the platform grow $150 bucks, which is nothing, pay them in what is essentially a micro-dose of stock.
Likewise, there is nothing stopping a company doing this today without "crypto".
> finally small guys have a chance to do what the wealthy have been doing since forever: take their extra money and invest it
You're ignoring the existence of the stock market, index funds, exchange-traded funds, fractional share purchasing, Robinhood no-fee trading, etc.
And your final response is an absolutely perfect example of cherry picking. I said VC, you reply with index funds. Laughable.
This is nonsense. Sure, on a technical level, you can ensure that Google2 will only have 10,000 crypto-shares, and will never issue any more. Regular Google can issue new stock and there's not much that can be done.
But the volume at which public companies or even private companies trade stock is so huge that there's no use case you can imagine that would tank the stock. You're talking about micro-payments -- Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google). Google1 could issue a million new shares of the stock to pay its moderators, and all they'd do is tank the stock price. But all their most valuable employees are paid heavily in stock. They wouldn't be happy and would quit or riot. It's a soft-regulation on that kind of silly behavior.
Despite 20+ years of "pay users to use the site" being an obvious conclusion, almost no site has done this in a meaningful way. There are hardly any even paying people in funny money / company scrip. All I can think of are Eve Online and Steam. You can't convert money OUT (regulations) but you can use their chuck-e-cheese tokens to buy stuff within their business. On Steam, the money you get per value the user puts in is a pittance. Valve takes a 30ish % cut on almost everything you do, even "secondhand" trading card transactions.
You can speculate that financial regulations are preventing it, but I think it's more likely that the owners of Google2 would much prefer to keep as much capital for themselves and not let its users/"staffers" get a slice. Similarly, Google1 pays its low-level moderator staff very little (compared to an engineer or upper level manager). Most corporations turn a profit. That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin. If you can't fork the coin, then it sounds like regular stock or company scrip.
https://money.stackexchange.com/questions/18843/how-does-a-p...
> Google2 is not going to pay people $30 an hour (crypto or USD) to upvote comments or submit useful content. I know this because Google1 barely pays YouTubers (outside of the top x% who make real money, and even they have ad dollars siphoned off by Google)
Google pays tons of content people, they also have 130 billion in cash.
Google2 may make the mistake of being greedy, but GoogleN may not because they have a team that realizes less greed = users paid more = more incentive. Forking is a feature not a bug.
Success being correlated with fairness in equity distribution, users having stake and say in the platforms they use, creators having contracts with how they earn their living that can’t be changed on a whim, and if they ever do change, it’s by a democratic process, and creators then being able to vote with their feet to fork.
Seems like a good thing.
> even they have ad dollars siphoned off by Google
> That's a very clear indicator of 'money on the table' - money that the owners chose not to return to the people performing labor for the company, whether volunteer or employee.
These are arguments for crypto.
> https://money.stackexchange.com/questions/18843/how-does-a-p...
GoogleN can design the coin/share pool however they want, so I don’t see what the argument is.
Looking at the current front page, seems like a Wikipedia2 would work too https://www.dailydot.com/debug/wikipedia-endownemnt-fundrais...
To be clear, I think these companies need to be non-profit but still pay their team well (a fixed rate to some sort of inflation basket that tracks competitive engineer salaries, for example).
Safeguarding hard physical cash is something most everyone, old and young, technically literate or technically illiterate, poor or rich, intrinsically knows how to do. And when it is stolen or lost, there are viable approaches to pursue with favorable probabilities of a happy resolution: tell a police cop to see if they can catch the thief using detective work, you could try looking around if you think you might have misplaced it, etc.
With BTC on the other hand, ensuring your wallet isn't had by committed and technically proficient bad-actors or that your wealth isn't all erased in the blink of an eye with a hdd crash or a distressed acquaintance wiping your data away, you can't expect normal people to be up to the task of combatting all of this. And retrieving stolen BTCs from bad-actors living a continent away is a task that police cops are not up to doing or even the slightest bit capable of. You are a really smart guy kragen, I'm sure you won't forget your computer's password one day or have your wallet compromised, but someone like my mom or grandma would, and the thought that simple mistakes and viruses and computer illiteracy could and probably would be the thing that leaves someone's wealth irretrievably erased without much avenue of recourse saddens me, and makes me wish that people in our profession who understand this would stop encouraging its usage.
I come from a nation that ranks lower than Argentina in stability. My family went through this very dance of receiving money from abroad and having to go to WU to get it. The risk of a bad accident happening is infinitesimally small in that than with BTC.
With either banks or Bitcoin, you can hedge your risks by converting to fiat currencies. But with fiat currencies, you can hedge your risk by converting (partly) to Bitcoin.
So maybe you should buy your grandma a Trezor. What country does she live in?
In comparison to getting your wallet compromised by viruses searching for it (and they will probably become more aggressive and adept as BTC usage increases), the chance of this happening I feel is exceedingly low. And avenues of recourse exist: there are clear leads to follow on for an investigative team.
> I've had my bank ATM card cloned by a skimmer on an ATM while I was traveling overseas
I know that my credit card covers me for this and I would get my money back if such a thing were to happen to me.
> I've had WU give me ridiculously unfavorable exchange rates, and there was nothing I could do about it
And BTC transaction fees are ever-increasing. And so is its environmental cost.
My grandma lives in .pk. I fear she would not be capable of understanding the concept of BTC or Trezor as she can barely understand how a TV remote works. She does very much grok the concept of cash money though, and is quite fond of exercising her freedom with it.
The second time, I explained it, they didn't get it. The third time, I sat them down, and made them learn how to run full nodes, run a few commands on the command line, and use bitcoin. Western Union is certainly not guaranteed, nor tyranny proof. If the governments of Argentina or Pakistan need the USD bad enough, they will every dollar Western Union is holding for recipients. To keep the story quiet and the money flowing in, they may imprison the recipients and their families. Desperate times call for desperate measures.
But that money isn't free, you may for it through higher merchant fees and lower bank interest rates.
The irony with the GP’s post is that I can’t see using Bitcoin, with its current incredibly-high power usage and associated environmental destruction, as long-term thinking in any way, shape or form.
[1]: https://en.wikipedia.org/wiki/Long_Now_Foundation
https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...
Now, at some point in the future, Bitcoin might become an environmental problem; the cheapest ways to get energy have been environmentally destructive in the past, and they may be so again. Maybe in 50 years we'll have to campaign against Bitcoin miners who want to convert the mass of Jupiter into energy with their fusion reactors or black-hole clusters. But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
For the forseeable future energy production cannot be carbon-free. All uses of energy, including Bitcoin mining, will continue to impose an environmental cost. For those of us who believe Bitcoin achieves nothing useful that can't be done better some other way, that cost translates into a pure negative.
Certainly not, but that isn't what I claimed. Electricity production using fossil fuels is too expensive for Bitcoin miners; like aluminum smelters, they are forced to move their operations to places with cheaper renewable electricity in order to remain profitable, and governments subsidizing fossil-fuel consumption are forced to eliminate those subsidies in order to remain solvent, which drives the Bitcoin miners elsewhere. None of the issues of base load and construction lead time and so on are relevant to this process at all. The Harvard Business Review article I linked above goes into some detail about how this happens.
> we aren't able to recycle grid-scale batteries or turbine blades yet and those produced today may never be recycled.
This is basically nonsense. It isn't the Carboniferous Period any more, and even the wastes of the Carboniferous are getting recycled now. In fact, that's sort of the whole problem with global warming: that in the eyeblink since salt miners in the Song Dynasty started drilling for oil, we have recycled a significant fraction of the carboniferous wastes of the Carboniferous Period.
> those of us who believe Bitcoin achieves nothing useful
Well, that's basically the issue, isn't it? Because you judge our lives useless, you engage in motivated reasoning to find excuses to sweep us away, like your genocidal rapist namesake*, regardless of whether your arguments make any sense objectively or not.
_____
* You thought nobody here would know who Roca was, didn't you? You thought that by naming yourself after a less famous white supremacist mass murderer than Hitler, you'd get away scot-free? You thought wrong.
It doesn't make the argument you have just elucidated, which is an interesting one. I'll think about it.
> Because you judge our lives useless, you engage in motivated reasoning to find excuses to sweep us away,
"Bitcoin not useful" != "your life is useless". I think you have invested rather too much of your identity into Bitcoin.
Regarding "Roca", please check my HN bio. My real name is "Robert O'Callahan" and 'roca' is a handle I've used online since 1990. I have never heard of your "Roca" before.
2) Electricity is one of the few things that are about as fungible as money. All your blithering about how "crypto uses only the most environmentally friendly energy!" is bullpucky, since that only means that some actually useful stuff must now run on other, less environmentally friendly energy.
3) You misspelled "I sincerely apologise for my unfounded and calumnious accusation". Please stop being such an egregious arsehole.
② electricity is fungible, but not portable or storable, and is almost all generated within 200km of its point of use (and well under 10 milliseconds). Also, the supply of electrical power is not fixed; it is rapidly expanding in response to demand. So one use of electricity does not imply less electrical power available even for other things in the same location. https://news.ycombinator.com/item?id=27449443 has a much deeper dive on the issues.
③ https://news.ycombinator.com/item?id=27377190 was posted the day before your unworthy comment.
Yet imagine my perception when I find that someone has popped up here to argue against such safeguards, and he's using the name of the guy whose face is on the $100 bill, whose fame primarily derives from commanding genocidal Argentine government abuses against the peoples in Argentina who didn't use the Argentine currency, and who is also the most famous person in the world by that name. The Roca $100 bills are gradually being replaced—all the ones I have here have Eva Perón instead of Roca on them—but it's only been, I think, a couple of days since the last portrait of that white-supremacist rapist visage has been inflicted upon me, when I got my change at the supermarket on Monday.
So, I hope you can forgive my error of assuming that the astounding degree of relevance of your chosen name to the topic at hand, which I take to be the social value of alternatives to the state-imposed currency system in Argentina, was intentional partisan trolling on your part, rather than a sort of absurd coincidence of cosmic proportions. I should have at least checked your HN bio, as you say, before assuming ill intent.
I continue to maintain that your dismissal of the utility of Bitcoin bespeaks either an astonishing degree of willingness to prioritize your own interests, and the interests of people like yourself, over the interests of people like me; or an astonishing degree of confidence in your own judgment of what causal relations obtain in Argentina over the judgment of those of us who live here.
After this exchange, though, I don't blame you if you don't think much of my judgment!
I ctrl-F "subsid" in your link and don't see any source for your claim. Bitcoin puts a dollar value on (subsidizes) -ALL- energy. If there's a dirty coal plant you can run in your backyard without the government shutting you down, Bitcoin wants to know about it.
Your claim is (1) bitcoin takes energy (2) renewable is cheaper than nonrenewable (3) bitcoin is causing tons of new renewable capacity.
If that were true, why isn't every power plant in the US renewable? How on earth did Bitcoin manage to get this capacity that nobody else has? Money talks, right? Why aren't the mayors of San Francisco, New York, Chicago etc. trumpeting their new 100% renewable grids?
Then you might say that Bitcoin is tech-enabled and decentralized, you can run a mining rig near any energy+internet source. But that's equally true of a cloud compute farm. The fact that bitcoin is pointless hashes and not cloud compute is a historical quirk. Any Bitcoin node/farm could be replaced with an identical-power-usage server farm and do more good for society.
I'd like a source on your Bitcoin only uses renewable claim. I think if I run a miner on my home PC, which I believe has some natural gas in the energy mix, that argument fails.
https://arstechnica.com/tech-policy/2021/05/private-equity-f...
> But right now the only places that Bitcoin is causing environmental damage are places where some government has unwisely subsidized fossil-fuel consumption, and Bitcoin itself is what puts an end to those subsidies.
I wrote this whole comment without getting to the end of your inane post. We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy). But your wordsmithing here is bad faith. Your argument is basically "governments thought people wouldn't be complete jerks, and Bitcoin sure proved them wrong!" Yeah it's human nature and perhaps inevitable, but 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Bitcoin is an ongoing real time climate catastrophe. Get back to me when China and the US ban all forms of carbon-emitting energy production. Until then, those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find. I suggest cloud computing as a baseline. "environmental destruction right now" is exactly the current state of things.
I don't think bitcoin is "causing tons of new renewable capacity", if by that you mean inducing people to bring up many new power plants; its overall power usage is estimated at only about 12 GW. By comparison, PRC installed 71.7 GW of new wind power in 02020; at China's historical wind capacity factor of 22% that'll be 15.8 GW, more than the entire bitcoin network. Including the parts that are running off hydropower and the parts that are outside China.
> We agree that implicit subsidies are bad (burning fossil fuels creates externalities, failing to tax them is a subsidy)
I wasn't talking about implicit subsidies, which aren't enough to make fossil-fuel power price-competitive with renewables. I was talking about explicit subsidies. Like when I was in Venezuela you could fill up the 20-gallon gas tank on an old car for 19¢, because the gasoline was subsidized. That's the kind of subsidy that can make fossil fuels cheaper than renewables: you can run your bitcoin farm off a gas generator. It's not just "failing to tax them".
> 50+ years for some of these hydro dams without a problem until Bitcoin came in and ruined everything.
Yeah, that's not what I'm talking about.
> those "subsidies" continue, and it matters quite a lot what use for the subsidized energy we find.
Not really. I mean, a little? That 01967 Buick swilling that 1¢ per gallon gasoline is producing almost exactly the same amount of CO₂ as if the gasoline were getting burned by a nice new Honda motorcycle (or generator), and it's also producing a fair amount of unburned hydrocarbons and even methane. That matters a lot to the kids with asthma who live next door, and the global warming potential of the total horrific exhaust cocktail is a bit higher than if it were cleanly burned to CO₂ and H₂O. But, from a climate-change point of view, the high-order bit of the problem is that the government was subsidizing the burning of fossil fuels, which results in a lot more fossil fuels getting burned.
So the real problem is not what the energy is getting used for, but that the subsidies make it attractive to get that energy from fossil fuels instead of solar, because you pay for solar but the government pays for gasoline. If bitcoin mining could bring those subsidies to an end by making them suddenly much more costly, which I doubt, then so much the better.
But really, zooming out a bit, Venezuela is not the main culprit in climate change. Whatever happens there isn't going to have a big effect on climate change, one way or the other, until things chang a lot. Europe and the US are the main culprits.
> Bitcoin is an ongoing real time climate catastrophe.
12 GW is about 0.07% of total world marketed energy consumption. There's an ongoing real-time climate catastrophe, but at the moment Bitcoin is almost as much of a distraction as plastic straws. Not that it couldn't get bigger.
I'm from Canada, and moved to Australia. I was moving money from Canada to Australia, it was easier, faster, and cheaper for me to move that money via crypto (I used Eth rather than Bitcoin at the time) than going through the banking system.
Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.
At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.
Deflation is good. Every wage earner becomes more wealthy as their rate of pay buys more. Sticky wages arent a problem with deflationary money. Hell, at least half the complaints about the modern economy are the result of inflation. But, no, deflation would utterly destroy the economy.
Income is not the same as wealth. Savers become wealthier, debtors (such as anyone with a mortgage) lose wealth.
> Sticky wages arent a problem with deflationary money.
Um, what? Your last sentence was all about how deflationary money guarantees wage earners increasing pay in real terms. That makes the sticky wages problem much worse.
If you want to change the amount of wealth low-income earners have, stop focusing on the units. This is not JPow's fault, it's a job for congress - it's social and fiscal policy not monetary policy. This is just a quixotic quest against the wrong opponent.
If you want to help low-income folks, advocate for unions (so labor can push back against capital), advocate for wealth taxes, higher marginal taxes for the rich, minimum wage indexed to inflation, a strong social safety net and national zoning laws to stop metros from preventing adding enough housing supply to meet demand. Things that would help.
https://www.forbes.com/sites/realspin/2013/10/09/measured-in...
The author suggests you cannot measure inflation except by dividing by the spot price of gold. This is false, and why we have the CPI.
[1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
You will get wage cuts because it becomes harder to employ you at your currency salary or you just get fired. If you can't find a job, deflation will have made your life a lot worse. You are also incentivized to stick with your first job because future jobs will pay less than past jobs. Basically you hope you build a stash of cash in your 20s because your potential to earn money shrinks with every single year but your wealth gains in value from doing nothing.
We are running into that problem with Bitcoin and land. Do you really think that if you signed a contract to get paid 10 BTC per year in 2017 (when it was $20k) that you will still get 10 BTC today? (at $38k). No, you will get 5 BTC this year.
>Hell, at least half the complaints about the modern economy are the result of inflation
Pretty much all of the complaints about the modern economy are about inadequate attempts to fight off deflation. The Fed has reached a point where it cannot do anything to fight off deflation, it takes a pandemic to fight off deflation, that's how bad the situation is.
Just take a look at Japan, they have deflation and nobody is jealous of their economy.
Yet, people keep buying computers. Why?
I would argue deflation has been the most significant driver of the IT industry in the last 30 years and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
On the other side you have inflation that kills savings. And since most people save with a goal in mind, not because it's fun and exciting, the higher the inflation, the longer they will have to save before they reach that goal.
The majority of wealth is owned by the top 5%. Are they really spending a significant fraction of that wealth on computers? Deflation is never about what people buy, it's what they keep.
>I would argue deflation has been the most significant driver of the IT industry in the last 30 years
No it hasn't. The IT sector drives deflation and there is nothing wrong with productivity improvements. You just got cause and effect backwards.
>and in turn has been one of the greatest drivers of prosperity in that same period. As computers become cheaper, more people can afford more them and more value is added to society.
Inflation increases future incomes. If computers cost the same but you get higher salaries that's a good thing.
Bitcoin is limited by the block size and the lack of working L2 solutions (lightning is permanently broken).
But other currencies, like BCH don't have that problem, and can easily represent the whole US economy.
90% of all bitcoin ever have already been mined. If your solution to the limited number of bitcoins is rampant deflation you probably don't have a viable currency
You might have difficulty measuring out two atoms of gold to change hands, but that's dwarfed by the difficulty in measuring out two Satoshis - given that they aren't a physical thing at all. So, if you can keep track of it with Satoshis, why couldn't you keep track of it with gold atoms?
That is, if your position is "Bitcoin isn't limited like gold because of Satoshis" then the same argument works equally well for gold with atoms, doesn't it?
That is, gold can't represent the entire economy because nobody would pay so much for a gram of gold, but why would they then pay that much for a quanity of the even less physical Bitcoin?
A counter-position from the Austrian/Chicago school is that supercharging growth drives malinvestment, and they can't be entirely wrong about that - I've seen tons of dumb money flow into dodgy companies during tech booms.
Inflation incentivizes investment because you are going to lose 2% per annum if you don't.
Fiat offers you the maximum flexibility because you can back your personal economy any way you want - if you want to back it with gold, just buy some. If you want to back it with crypto, bless your heart, buy some.
This is a false narrative.
Interest rates are low because everyone is saving, nobody is borrowing, nobody is investing.
Wealth is a verb, not a noun. The wealth of nations is measured in how much they do, not how much they have.
The US arguably defeated the USSR via looser monetary policy. China is now doing the same to the US.
Gold didn’t have a rep as the hub of black market transactions before bitcoin.
You can read some of their public reports here: https://blog.chainalysis.com/?tab=articles-tab
If I wanted to be more optimistic I would look at the level of adoption today as insane compared to 5y ago.
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.
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.
Complaining about nothing to do on Bitcoin feels like complaining how empty the gopher server are after everyone’s moved onto the web.
The reason is that blockchain can only offer its trustless, decentralized and permissionless guarantees to things that are wholly representable on-chain. As soon as you try and sync it with the real world, the real world is the source of truth and the chain representation is meaningless.
Further, by boat anchoring solutions to the fundamental inefficiencies of blockchain, you leave your chain solutions at a material disadvantage to centralized, permissioned solutions anyways. This creates huge adverse selection bias, leaving only the criminals and scammers using it.
Concrete example: Sia has 800TB of storage - total! - in spite of an $800M market cap and millions spent on R&D. You could achieve the same result with a half of a 1U rack of hard drives and $40,000 - or a few bucks on AWS. Why? Because why on earth would anyone use it?
On the other hand, Chia has 1.5 exabytes of wasted hard drive capacity loaded up with bingo cards lol.
This is crypto.
DeFi is particularly fun, it's basically just decentralized 2008, a way to extend way too much leverage to people who simply should not have it, in exchange for fanciful 3-digit percentage APR to lenders.
It's all a damn mess.
I think what's being lost in this discussion, since almost no one posting here is either passingly familiar with the past decade of crypto-economic research, or with the current state of the art in "crypto" technology (almost none of which revolves around or even involves Bitcoin these days). Almost all of the promising new networks provide at least 1000X transaction throughput at 1000X+ transaction efficiency while retaining decent Nakamoto coefficients and allowing some level of computation ("smart contract") and composability. (Yes there is also plenty of useless stupid stuff that sadly is a huge waste of resources, but hey, we survived Dotcom Bubble. It's just part of the process.)
I don't begrudge anyone who doesn't see the potential there, just as I don't worry about anyone who might have said that the Internet's impact would be no greater than the fax machine (in fact, a single Nobel laureate chimed in early on to both of these sentiments) - whether this turns out to be true will depend largely on the people who choose to build their vision and prove people wrong... or not.
Also, there's no question it's all a damn mess, but much more broadly than crypto.
It solves a technical problem - the byzantine generals problem - but does it solve a problem people have? I don’t know anyone who’s had the Byzantine generals problem personally.
Having said all that, I still can't figure out what the hell to do in the DeFi world. It seems like all I can do is lend my assets to people who also have nothing to do besides speculate or themselves lend their assets to other speculators. I can't figure out anything to do that pushes out of the speculative bubble in any way. Maybe you can help me?
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.
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.
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...
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.
You couldn't Google that. Because there was no Google, and you were stuck in a basement.
Fun and exciting times :)
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/).
This all happens in Second Life and doesn't need to burn the planet to do it.
Anyway, none of this matters because Bitcoin exists and is the dominant shitcoin (due to first mover advantage). All these other shitcoins can claim whatever efficiency, but it doesn't matter because that's a very isolated view of the problem. The shitcoin economy as a whole will still be fueled by mining unless somehow Bitcoin gets dethroned and the whole mining thing just goes away. I can't imagine that happening without the whole economy crashing completely into the ground – but that would bring all these efficient coins down with it.
And already more transactions and more daily volume is settled on Ethereum than Bitcoin, see https://money-movers.info/ and https://cryptofees.info/ (pink lines are Ethereum DeFi applications)
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.
Second Life was awesome! This Metaverse trend is pushing that concept much, much further and it's giving ownership and utility to the makers.
>you can buy a digital artwork at a Christie's auction and display it in Decentraland and have it be verifiably authentic
I can't imagine anyone would give a shit about someone's virtual art being "authentic" for whatever meaning of authentic NFTs pretend to claim. This is basically receipt porn at this point. Truly we're talking about bragging about wealth, one of the shittiest traits a person can have.
From a competitive standpoint, why would I want Activision's digital locks (you can only import NFT'd content) instead of something like Second Life which is more open?
If Activision really wanted purchases to carry over, they could've made it happen. No NFT needed. An open standard does not imply NFT, and vice versa. The 360 era was probably the peak of the 'gaming interoperability' trend, and it went almost nowhere. Your Xbox gamer picture would show up in some games. Everyone knew it was authentic because MS uses cryptography and doesn't let you sideload third party images. No NFT needed.
Same reason my company doesn't like me displaying awards from my last company. The obstacle is entirely social rather than technical.
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.
Sybil attacks would be detected in an open network first of all. If you can pull it off, I invite you to try: there's hundreds of billions of dollars on the table protected by nothing but cryptography and game theory. Knock yourself out. I'm sure all the people in this space are idiots and haven't seen the holes you claim are there.
I'm old enough to remember when using a credit card was a hassle or seen as predatory on consumers and many people either refused to use credit or accept credit in their businesses. For several decades using a credit card wasn't any more convenient than using cash or check even. Over time, the scanners got better and faster, Visa and MasterCard integrated with ATM debit cards, and then mobile phones and swiping plugins enabled it all to get better. Now it's ubiquitous. But that ubiquity will make it all the more easier for merchants to adopt crypto.
It turns out there is already crypto insurance protocols like Nexus Mutual and Cover that will cover you if a loss occurs. Insurance is really just a business problem that is easily fixable.
On the plus side crypto is far more secure than Visa or MasterCard, because it works on public/private key cryptography and you simply sign a transaction rather than enter your name and address and all the same information you'd need to commit a fraudulent credit card transaction.
The point is that no-one needs to adopt crypto for payments because the existing payment platforms work fine, better than crypto. Making transactions immutable, requiring users to maintain perfect IT security, currencies swinging in value by 20% every time Musk tweets about them, etc, are regressions.
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.
The main attraction is Bitcoin and recently Dogecoin. BTC is slow and costly and mostly a speculative play. Dogecoin is a joke, but also worth billions.
Also these coins are speculatively often first, and useful second. Not all but many. Thus instead of being useful for exchange, they become methods of speculation.
It is also used for fraud a lot -- both various types of pump-and-dumb, Ponzi and money laundering.
And on top of all that it is usually inefficient.
So what we need are digital currencies that are fast, stable, and that can implement smart contracts (but these tend to be buggy as hell with no roll back.)
But that isn't what cryptocurrency is all about these days. It has been overtaken with speculation.
If we could get the benefits I outlined, that would be amazing, but it seems that very few are actually interested in that.
"It's just overtaken" is not a great take. The problems are way more fundamental – the whole concept of trustless irreversible digital cash just does not work in the real world for normal transactions.
Lots of meme coins have launched -- does not delegitimize everything else.
> ...whole concept of trustless irreversible digital cash just does not work in the real world for normal transactions
Layers will be built on top to provide that. Your vision is limited.
Yes there is a lot of money in BTC, but its not more than half, and doge coin is not #2.
In the case of cryptocurrencies, people are doing existing things that can already be done quickly and efficiently vastly less efficiently, in a system that is purposely designed to be less efficient, where efficiency is in fact actively counteracted. Databases and online money transactions were possible before, at a fraction of the total cost inherent to the system and at vastly higher performance.
When theorizing about societal/political benefits, take into account the societal/political problems cryptocurrencies created by inventing a machine that allows converting resources directly into money of miners' digital wallets without regulation.
Your sending any amount of money, actual practicality and realizability aside, comes at the cost of a lottery, where miners perform literally 100.000.000.000.000.000.000 computations per second whose outcome is completely thrown away, unless they are lucky enough to be one of the 6 computations per hour that win. This cannot be made more efficient: If computing one hash costs less energy, the difficulty will be adjusted to require more calculations to keep the target of 6 hashes per hour.
By the decentralized property of cryptocurrencies, it is by design not possible to regulate where the energy for this lottery is coming from.
Many other Proof of Stake blockchains like Cosmos have been live and working fine for years.
I have many other doubts against the usefulness and sensibility of blockchains in general, e.g. I have doubts how smart contracts actually succeed to reach their goals in a reality where humans make mistakes and courts are used to settle disputes and ambiguities. But these concerns then only affect the viability of technologies that I and others are not forced to participate in.
Proof-of-work on the other hand, as long as it continues to exist, affects everyone in that in incentivizes burning resources directly for money without regulation, no matter how dirty or wasteful.
That said, I think everyone should be able to buy electricity and spend it on what they want, even dumbfuck videogames that waste their life away. If we play the "your electricity is bad, my electricity is good" game then it leads to the majority restricting the minority.
Instead, we should price electricity based on externalities and let purchasers use it as they want. If electricity is 100% clean and the buyer chooses to mine bitcoin, that's their value decision, just as you playing videogames is your (very stupid) decision, but I support your right to waste electricity on it.
That being said, I still see proof of stake and proof of coverage as interesting way to maintain said ledger integrity in the like… 3 actually existing use case where a blockchain is superior to a SQLite instance with good security.
https://support.circle.com/hc/en-us/articles/213560643--Iden...
You have to account for transaction fees into cryptocurrency, the blockchain transaction fee itself, and the conversion into the target local currency.
You left 2/3rds of that process out, conveniently.
"Myanmar’s government shuts down internet indefinitely" - https://www.theverge.com/2021/4/1/22362767/myanmar-military-...
"Bangladeshi government shuts down callphone/internet access in Rohingya camps" - https://www.hrw.org/news/2019/09/13/bangladesh-internet-blac...
"Democratic Republic of the Congo shuts down internet and SMS" - https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?N...
"Indian government shuts down internet in Kashmir" - https://www.hrw.org/news/2019/08/28/india-restore-kashmirs-i...
"Iranian authorities shut down internet" - https://www.hrw.org/news/2019/11/27/iran-deliberate-coverup-...
"Independent group observes 'near-total' shutdown of Iraqi internet access" - https://www.hrw.org/news/2019/11/08/iraq-teargas-cartridges-...
"Sudan's ongoing internet shutdown" - https://www.hrw.org/news/2019/06/12/sudan-end-network-shutdo...
"China bans ICOs, shuts down domestic exchanges, and uses great firewall to block foreign exchanges and crypto websites" - https://www.yahoo.com/news/china-enlists-apos-great-firewall...
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.)
Obviously there were variations on how people would do things and mail order existed but I’m speaking literally, that’s how we used to do it and when the internet came along it got way way better.
Darn, no mail service either. That's harsh.
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.
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.
Also completely irrelevant for any of the cryptocurrencies and smart contract systems.
1) You just flatly contradicted yourself without even realizing it. The top level comment said "The reality is that the internet was immediately extremely interesting (either useful or fun) for practically everyone who got access.". When challenged, you moved the bar to "Well, it eventually became useful to everyone!".
2) You're condescending "I can see how people in their twenties would fall for this...", "Handwaving", "Shell games".
3) You've got some internal benchmark about what qualifies as useful that appears to mean "if it's not useful to me, then it doesn't count" (see comment about Venezuela).
4) You seem to think of yourself as some kind of gatekeeper or authority on nerddom.
I'm not going to change your mind about anything. I've been around the internet long enough to spot people pretending to want genuine engagement when they really despise your ideas and just want to publicly slam dunk on you.
Not interested.
You can also tell me, as a nerd who has lived through both eras, why my experience doesn't count?
Initially only nerds had access and they couldn’t get enough. When access expanded to the general public, they couldn’t get enough either.
“You’ve Got Mail” is a 1998 movie starring Tom Hanks and Meg Ryan. The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
My whole family had access. And the families of all my friends. They hated it. It was boring and complex. If you mean "everyone who sought access" then it's a self-fulfilling prophecy isn't it? You're either misremembering or engaging in disingenuous word play.
>The internet was completely mainstream just 16 years after the military decided to standardize on IPv4.
So 16 years is the benchmark? Seems arbitrary (because it is). Bitcoin is 12 years old. When the Internet was about 12, what did Newsweek say?
>If there will be a 2024 Hollywood blockbuster called “You’ve Got Bitcoin”, it’s going to be a dark parody of speculation and greed, not a heartwarming tale of how much cryptocurrency helped average people connect with each other.
The discussion wasn't whether Crypto is a more important technology than the internet. It was about how clunky and shitty it was at the beginning. Nothing more. Stop trying to "slam dunk" on people.
AOL was a bonanza. I didn’t use it but that started getting big enough in the mid 90s. I got on the internet as a kid barely in school in 93-94. It was vast to me. To my older brother, etc.
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Your attitude and anger appears to be doing exactly what you’re claiming others are doing. Liken slam dunking on people.
If all the speculative activity isn't real enough, how about the ransoms being paid to ransomware authors?
https://en.wikipedia.org/wiki/Financialization
https://en.wikipedia.org/wiki/Real_economy
Now for some of the more useful/interesting stuff I've seen:
Gitcoin has been pioneering Quadratic Funding for open source projects for some time now: https://github.com/gitcoinco/quadratic-funding
They recent launched a governance token and DAO (many other projects have been experimenting with various types of on-chain governance models).
Both of these pursuits are widely applicable for creating sustainable models for funding and managing distributed common good projects.
Brave has over 25M active users and has built a model on their token to pay website users and creators for ads, as well as allow in-browser tipping, etc.
Many DeFi projects are experimenting with various novel forms of tokenomics (hold X tokens to access Y features; yield earned w/ Z tokens accrue to the developers) which are interesting alternatives for creating sustainable development/operational models for software.
There are projects that are doing interesting work bridging digital and physical assets (particularly in harmonizing the legal mechanisms for property) like Mattereum, but I'd argue even the simplest types of digital-only tokenization become interesting when it can be made composable with other dapps (eg, fractional ownership of projects that can later be made liquid on the open market or that can be collateralized). This ties back to the domain of not just coordinating, but incentivizing distributed collaboration/human resources.
If your argument is that crypto would decentralize it, and guarantee a cap on coin totals, I don't buy it. That's not the reason a site owner wouldn't join a coin plan. "I would love to get paid, but I hate inflation too much to consider your proposal". Fantasy land.
Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO. While it may have a market value (it certainly has some value for those who want to participate), but there is a different purpose to this type of token (the same for utility tokens).
Fraud reduction by looking at the open market ("nobody's selling these $1 tokens for anything above a nickel!") isn't plausible either - you can do the same thing today by looking at YouTuber payout rates. Those aren't public but it would take the collusion of 10,000+ top tier YouTubers, many of whom don't like YouTube very much, to lie. If YouTube were ever threatened by a more open model (ex. on Patreon, you can see actual income for some creators), they might switch to stay competitive.
> utilize your newly acquired cyber-chucks to generate yield by providing liquidity, collateralizing it, etc).
I can do this with USD so we're really talking about that X day period where my tokens haven't become USD yet. Maybe there is or will be a crypto coin or five that do what Bitcoin was supposed to do - low fees, high volume, easier and cheaper than ACH or Paypal. But if those fees are low enough, I don't necessarily need to keep by cyber chucks as cyber chucks. I could convert to USD and then back into cyber chucks, if cyber chucks is the token of choice. But I think it's far more likely that out of the hundreds-thousands of current coins, the one you pick is going to be a loser in terms of long term utility. Safer to convert to USD and then into whatever today's hot coin is.
Even today, some stock options have surprisingly little price discovery (low volume, big difference between bid and ask price). And those are real, regulated financial instruments with a direct objective relationship to present and future value. I think they can be traded across the whole market too (buy at broker A, sell to someone at broker B). I don't get how, outside of speculation, Company X's coin is going to be worth more than that. Nor will it have better price discovery - there are multiple billion dollar companies who trade stocks and options.
In current "company scrip" modes (ex. casino chips) people generally don't hold onto the not-cash. They exchange it for USD within days. If MGM decides to screw over their customers and cut the conversion rate by 10x, (1) that might be illegal, (2) the % of total customers in history that will be affected are small.
We're also generally proposing micro- or mini-payments - if it's high dollar like a salary, you'll just get USD from working at a company. How many people would take a job at 1-to-1 equivalence in a crypto token instead of a USD salary? Today, I can buy stock in my company using the USD they give me. It's much safer to me because I can choose how much to put in. If I got paid in CompanyCoin that would be a return to the company scrip days. I'd be tied up in risk for minimal gain. If the coin is stable it doesn't matter if I can only invest my USDs every payday.
I admit I don't know much about ERC20 specifically. I still don't see why you can't make a useless token on ERC20. Analogous to making an app that works with all bank accounts that nobody wants to use.
> Note that in Gitcoin's case, GTC serves as a governance token which gives voting rights for their DAO.
People talk about using crypto for democratic community governance. I said this in another comment chain:
> You imply a kind of 51% governance of an open source or community driven project. History shows that community projects fork all the time over personal differences, and majority does not always rule. Google2 coin won't matter if people get mad at Google2's governance and fork it for Google2.5 coin.
Open source is generally driven by a smal...
You could issue those tokens in a centralized way, but with Ethereum, a 1000 such tokens can interact.
The question is rather, if you wanted to do a cyber chuck e cheese, why wouldn't you do it on a (performant) blockchain?
If the question is why do we need all those tokens for, and this is a good perspective on it:
https://insights.deribit.com/market-research/why-i-have-chan...
I don't see value here over JP Morgan Chase operating the market as a neutral third party. Maybe Chase won't really be neutral because they want to steer you to USD and not tokens. But there's gotta be some neutral party that can govern it, something like Coinbase.
Boring old databases and the tech of 10-30 years ago are more efficient than blockchain in all cases, afaik. No matter how efficient, the design of blockchain requires distributed workers verifying each other's transactions. On Chase's server farm, server A can trust server B. All I need is a ledger of how many tokens I have, and a way to convert to USD, the tether of the real world. I can use USD to get into Ether and those 1000 tokens any time I want.
> a 1000 such tokens can interact.
It's basically an API / standard for tokens right? Today I can make an app that uses the IMDB api, but if nobody cares, the app is useless. You can make an app that uses the latest hot tech (raytracing in GPUs) but if nobody likes what you made, it's useless. Same with ERC20, if I understand correctly. I can stand outside Chuck E Cheese and try to make a secondary market in tokens. Nothing illegal about that. Tokens are traded using the hand-to-hand protocol. Yet the number of such businesses is close to zero.
Gift cards for places like Walmart and Amazon are nearly as good as cash on eBay. Nobody buying them is worried about those companies issuing too many cards and crashing the currency.
But to that I would say that the banks haven't built it, and I don't see it happening or gaining adoption. Whatever they build will by definition not be an open network, and will likely not cross too many geographic borders.
It is sort of inconceivable that some 16 year olds would be allowed to run a lending protocol on the Chase blockchain, or even a random adult, for that matter. Plenty of people would find that positive, no doubt, but it is even hard to imagine a platform being built where companies in say India could get access to on the same terms as those in the US.
Ultimately, the permission-less nature of Ethereum is what has built the DeFi infrastructure we have today, which for all its flaws, is pretty impressive.
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.
You can hate crypto and still agree with me on the above point. It's a pretty innocuous observation.
I'm not going to engage the rest of your argument which has no bearing on the point being made.
You’re giving a completely wrong impression of how the early web was and the early internet. I wasn’t around for that so I won’t personally give my input but for the time, each iteration every few years was great.
If domain knowledge wasn’t needed by the 90s. When was serious domain knowledge needed? When did that stop?
Some people found the internet hard to use and found it required more domain knowledge than they had every single year since the internet snd web have been around. Including in the 2020s.
Comparing cryptocurrencies to the Internet is about comparing its usefulness, not it's understandability. I won't argue that people in general understood the Internet.
Take my example of Fidonet. If you were not a computer expert then you had never heard of Fidonet. BBSs? Maybe you'd heard of it in some news clip about the dangers of computers.
Hell, the only time non-experts even saw anything close to a BBS was probably the movie Wargames.
> You’re giving a completely wrong impression of how the early web was and the early internet.
In what way?
> I wasn’t around for that so I won’t personally give my input
You don't know, but you know I'm wrong about it?
For your last point. Were you around for the development of Arpanet? I don’t think there are many people who were adults in the 69s in the few places arpanet was developed at.
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So not being around for something doesn’t exclude you from being able to discuss internet related things.
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For understanding internet. I don’t think 99.9% of the population understands the difference between the internet and protocols like the web. Not sure that’s relevant any way tho.
Is your argument "it's hard to use, and therefore it's useful"?
If not, then I really don't understand what your point is.
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.
(It was 15 USD so costed almost as much to cash in Europe as it was worth)
If someone was doing anything commercial over e-mail or usenet you could contact their "sysop" or their upstreams and have them removed.
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.
It's not that we don't believe it. It's that it's a dystopia.
I will get off your lawn now.
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
Perhaps useful in 1% of contracts, useless otherwise.
haven’t seen anything where it’s actually needed or better. and basically all examples end up with some sort of trust needed at some point.
such as gambling on the outcome of a sports game. it would still require a dependency on some sort of Api to provide the sports results and then you’re trusting the api to give uncorrupted correct results… which defeats the purpose of “trustless”
Futures contracts so they can easily sell their products at a good price regardless of market fluctuations, transfers the risk to the investors.
Smart contracts are still in super early days, the first foundational building blocks are being laid. Soon many more things will be possible.
Will it improve the established market providers for sports betting? No. But that's the point. It enables people to make a small business betting shop
Edit: first thing bought on the internet apparently was weed https://www.smithsonianmag.com/smart-news/what-was-first-thi...
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.
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.
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".
You can't just pile up gold and then expect to get something for it if everyone else is dead. You need a group of people (aka economy) willing to work for the gold.
All people mean by this is the demand and supply for Gold is very predictable, relatively speaking.
https://coinmarketcap.com/all/views/all/ I clicked "load more" until I saw 1400 cryptocurrencies, if Bitcoin is 12 years old, that's averaging a new cryptocurrency every 3 days since Bitcoin's creation. There's probably a lot more than that.
Oh, I am also worried about not completing that robotics project I started, because I don't have enough time.
Thanks for your comment.
That's exactly what it does.
Most electrical power plants are still coal-, oil-, or gas-fired.
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?
(Hey, couldn't it be something like one potential upvote per comment I read, in stead? And then I could give several of those from comments I don't deem worthy of upvoting to those I do.)
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.
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.
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.
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...
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.
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.
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.
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.
Cryptocurrency is a subject that has to have a deep and public debate. What the OP is saying (which I take to be "the tech world has a duty to point out the flaws in cryptocurrency to avoid giving an impression of a clean bill of health to every ICO out there") - that is a valid socially useful debate.
There are valid real world uses of bitcoin (see Turkey shutting down payment apps recently). but yeah it is also a volatile wild west that is miles away from anyone's expectation of normal regulated currency behaviour.
Yes there is a crying need for an "internet native" currency. What will that be - I don't know. But it is not here yet, and it is reasonable to make that clear and loud.
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I think the submitted title probably had something to do with it; As a title, "the emperor has no clothes" is generic and baity. It's also false in the sense that there's no consensus view, so to the extent that the analogy is meaningful, it doesn't apply. I've attempted to replace that with a more neutral and representative title now, drawn from the author's own words. Suggestions for a better title are welcome.
Beyond that, HN has had so many threads arguing the same points about cryptocurrency over and over, that it's not clear there can ever again be a new discussion about it. Repetition is a curiosity killer, and usually indignation takes its place as people resort to hammering each other over the head with the same dumbed-down clubs, back and forth.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
However, I think we can try turning the flags off on this one because Macjiej is at least trying to take a different and more specific angle on cryptocurrency critique.
Fair point. Sad, but fair :-)
I do find it interesting that there's this putatively 100% tech topic that has the same dynamic as political threads.
Edit: well, one thought...IMO the dynamic that the explicitly-political threads and this sort of thread have in common is that people's identities are strongly vested in their position. The more we do that the more it feels like our existence is being threatened, rather than just our view. Then it's a fight to the rhetorical death.
That happens with emotional tech themes too, for example when people (god help us) identify strongly for or against some $BigCo or $celebrity.
Large sums of money being involved are a big multiplier of all this.
Here for example is The Economist on his bookmarking site:
>>> Mr Cegłowski runs Pinboard, a paid social-bookmarking service which allows subscribers to store web links with annotations and share them with others. In broad terms, it is similar to Delicious, which Yahoo! acquired in 2005.
https://www.economist.com/babbage/2011/04/04/stick-a-pin-in-...
But yes, this is a controversial subject. It shouldn't be. It should be an easy yes / no. But something is wrong. We should not be afraid of the discussion about what is wrong.
Lol. Talking like that obviously shows that cryptocurrencies are not for you. This tech has cypherpunk and crypto-anarchy roots, regulators/governments are not the intended users for this tech, even if you like it or not. If you do not view cryptocurrencies from an cypherpunk perspective you will not see their social benefits, it is an entire way of life an alternative view from the centralized shit show we have now. Yes the tech has flaws, just like how digicash, hashcash, b-money etc had flaws, this is an evolutionary process and nothing you or your government says can stop it.
Oh yeah? Let's find out.
Strikes against it:
- It's burning a massive amount of resources and that is just increasing
- I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
- A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
- Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
Do you own a car? Have you ever used plastic? How much resources are burned by banks?
> I don't have the stats but I imagine the exponential growth in Bitcoin/coin prices is mainly from people using it as a pyramid scheme/casino not simple an upticl in usage
Yea lets also ban computers because they allow cryptocurrencies.
> A transaction is still pretty trackable (we know where the mt gox money is, yeah?)
Ever heard about Zcash or Monero
> Over 60% of bitcoin mining takes place in one country on specialized hardware, not terribly decentralized anymore
Yes the tech is not perfect but tons of research (Proof of Stake etc) is happening to make it perfect.
But decentralization? How will the ease of entry not allow allow rich people to dump money into it and be the main players/money makers in that system. Perhaps they wont all be in one country but they'll certainly (by stake owned) be one predominantly one demographic.
Seems like one of those tweetstorms where people perceive it to be saying something worthwhile because it's long and is said with adamancy.
see: https://twitter.com/Pinboard/status/1399094306221166592
This thread was previously [flagged] [dead], but is now back to normal. I assume via moderator action?
I don't know why people would bother flagging something like this though, threads as content-less generally die on their own without much fanfare. OP and his friends get an ego boost from making front page and then it fades. NBD, no need to be contentious about it.
Beyond just currency uses, smart contracts open the door to phasing out escrow middlemen for purely digital transactions (like buying/selling domain names, etc.) Decentralized lending and borrowing is another major use of smart contract coins.
India’s smartphone penetration is at 41%.
All exchanges in India require a Savings Bank account for Fiat transfers. How are these unbanked people meant to use crypto really?
you're talking as if bitcoin and ethereum is all of cryptocurrency.
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.
The current concept of ownership appears to be that if I own something, broadly speaking, that means people generally agree (and the state, and ultimately their monopoly on force, will back up) that I get to say what gets done with it and who gets to make use of it, and that it's not OK for someone else to take it away from me without my consent.
If NFTs are going to change that, I'm not sure I like it.
My supermarket gives me an NFT in paper form every-time I buy something.
Otherwise I don’t know what else to say
This is a general problem I have with crypto stories: every crypto coin has a built in incentive for people who hold it to hype it so it's really hard to tell if actual regular users are finding it useful yet.
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.
Inevitably the answer is "some trusted third party" that turns it into a vanilla remittance.
- If you have a bank account you can go through crypto exchanges. Centralized of course. - There are p2p platforms that connect buyers with sellers. So in the platform, similar to Binance p2p, you can see how many transactions other people have and buy/sell crypto from them. - There's a black market which has home-delivery. So you contact them through the internet (you can find links in reddit and other sites, most go through Discord) and they send you a person with your crypto/fiat and make the transaction in your home. You can also go to their location if you prefer.
Not sure if that really answers the question, but if I was receiving remittances from abroad doing options 2 or 3 would be simpler and cheaper than using any traditional finance tools, which all require you to have a bank account in the first place (a LOT of people don't have one here because of the requirements to open one) and have higher fees and bureaucracy.
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.
Is this such an incredulous thing to believe in a country where the official fiat currency is worthless?
Whether this is a good thing or not probably depends on what you think of illegal markets in desperate situations.
> "the government, which controlled all official foreign trade, continued to maintain a highly artificial exchange rate with Western currencies. The exchange rate worsened distortions in the economy at all levels, resulting in a growing black market and the development of a shortage economy.[25] The only way for an individual to buy most Western goods was to use Western currencies, notably the U.S. dollar, which in effect became a parallel currency. However, it could not simply be exchanged at the official banks for Polish złotys, since the government exchange rate undervalued the dollar and placed heavy restrictions on the amount that could be exchanged, and so the only practical way to obtain it was from remittances or work outside the country. An entire illegal industry of street-corner money changers emerged as a result. The so-called Cinkciarze gave clients far better than official exchange rate and became wealthy from their opportunism albeit at the risk of punishment, usually diminished by the wide scale bribery of the Militia.[23]"
> "As Western currency came into the country from emigrant families and foreign workers, the government in turn attempted to gather it up by various means, most visibly by establishing a chain of state-run Pewex and Baltona stores in all Polish cities, where goods could only be bought with hard currency."
https://www.nytimes.com/1981/10/09/business/the-lure-of-a-do...
https://en.wikipedia.org/wiki/Polish_People%27s_Republic#Eco...
It's a side point to the thread though.
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.
We give too much voice to all these people suffering from hysteria. I suspect the only reason these people are given a voice is because they usually call for more laws to "fix" more things which benefits those in power.
edit: Also speaking of things we should ban, I think if we are talking about things that are actually harmful to society (not that I actually give a damn), we should start with banning twitter so that we can stop hearing these "moral" rants
The fact that you can formally buy, exchange, and cash out of crypto with full banking support gives cryptocoins a veneer of Government support and legitimacy.
The USA bans online gambling and ponzi schemes. Cyrptocoins are worse, because they include a side order of immense waste of electricity and advanced manufactured computer chips, and enable ransomware.
I think this article is completely correct. We, as members of the tech community, have a duty to communicate with the public and democratic representatives that cryptocurrencies are a harmful technology, and the formal exchange of them for fiat should be banned.
Electricity shortages: https://www.cnbc.com/2021/05/26/iran-bans-bitcoin-mining-as-...
Chip shortages: https://www.fxempire.com/forecasts/article/bitcoin-mining-ad...
Ransomware: https://www.marketwatch.com/story/bitcoin-extortion-how-cryp...
In terms of overall negative impacts, crypto is worse than ponzi schemes and online gambling.
A rational solution would be a carbon tax, so pollution is no longer an externality. Focusing only on Bitcoin only makes sense if one's agenda is just to hurt Bitcoin.
Does that make it right? Ignoring that, many private institutions go out of their way to ban transactions in things that the government doesn't even ban. Marijuana in states where it is legalized for example. All forms of sex work on the misguided belief that it somehow benefits the sex worker. Etc.
Also I don't have a duty to follow your misguided morals.
- “bank accounts”
- a universal notary and authenticity service
These are building blocks for a number of applications.
Most order applications don’t make sense, but hey, everybody needs “bigdata” too
Cryptocurrencies do not add anything to either beyond what was already done by cryptography.
> “bank accounts”
We already have bank accounts. In banks, hence the name. What’s the average transaction fee for the most popular cryptocurrency? By one of many metrics by which cryptocurrency fails even against the status quo.
So no, we don't have bank accounts.
Underbanked people more so than the general population.
And this group is also the most harmed by current cryptocurrency transaction fees — I’ve met someone (friend of a friend in Nairobi) for whom, assuming rent is paid monthly, current fees would raise their rental cost by 10%, and they’re already struggling.
> 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.
But while his claim is true, in a Boolean sense, I don't know what exactly we're supposed to conclude about the world based on it. This isn't a ratio I've ever seen talked about before.
I'm guessing they're insinuating that the size of the feds balance sheet is somehow related to inflation, which it is only in a fairly loose sense.
Counterpoint: most "tech people" I know — including people who have worked in crypto — both know about it and also think it's a scam.
If someone only knows crypto from stories in mainstream press or cable news, they’d probably incorrectly assume “tech people” are almost universally for it.
> Nothing about blockchains, DLTs, crypto, at its core is a scam to me
Which I took as an implication that you didn’t see Tether as a deeply troubling or a scam
Tethers management is the problem - obfuscation and using other crypto as collateral instead of just USD.
Tether is one stablecoin, and arguably the worst example since it is literally the one coin every coiner will agree with you is a bad stablecoin. Do a deep dive on MakerDAO's DAI instead.
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)
Some of them opt out of more environmentally unfriendly stuff like Ethereum for sure
Personally I've developed systems for paying for everyday things like your bus fare or phone bill using crypto in a country where there's a hell of a lot less confidence in fiat (Brazil) -- hell check out the history of the Brazilian Real if you want an idea of what real candycorn money looks like
Personally I just feel a hell of a lot of privileged bullshit out of people arguing that crypto is some good for nothing shit. Yeah sure great try living in a country where your government is fucked. We truly don't live in some francis fukuyama neoliberal fantasy world where we can trust stuff like traditional financial markets which have gone and failed us in the non english speaking world time and time again. I welcome any and all alternatives
Wow, you can actually pay your bus fare and phone bills in Brazil with crypto? That sounds either very impressive or totally unbelievable.
I could not find anything on Google, so if someone could you link/cite to some actually used examples (I guess apps or utility website?) that would be very helpful. Sincere thanks.
My experience as a Brazilian is that I've never seen anyone using cryptocurrencies in real life. On the other hand, the government's new instant payments system (Pix), allows anyone with a mobile phone to easily make small payments. In less than one year since launch it's already ubiquitous.
on the other hand the boleto system is incredibly sweet and is what we based our stuff around
https://www.google.com/search?hl=en&q=comprar%20passagem%20d...
plenty of options now wow so hard to find
Remittances seems like one of the true benefits of cryptocurrency... but that's why I'd like to know what amount of usage is actually that and what is, let's say non-beneficial.
And of course new sectors that are not established can seem like snake oil, simply because they are new industries.
The internet has steamrollered many industries and fundamentally changed the way they work.
Manufacturing, Music, Politics and now The final big boss, money.
It will take another ten years for this industry to mature. But in amongst the sham and drudgery we have the first non-violent system of currencies.
Isn't that a "they laughed at Galileo" argument?
They thought the Internet was snake oil. They thought Napster was snake oil. They thought BitTorrent was snake oil. ... but they also thought Pixelon was snake oil.
Yeah, I think it's safe to say that the primary use of cryptocurrency nowadays is as either casino chips or a money laundering mechanism. The economics no longer make any sense for anyone else.
It’s like arguing the most popular restaurant is so crowded, no one goes there anymore.
You're buying a number on a blockchain somewhere in the hope someone else will want it for more money, that's it.
edit: downvoters, look, you're supposed to swap 'piracy' with [insert bad thing about cryptocurrency] and 'bittorrent' with your favourite cryptocurrency of choice.
capeesh?
But it doesn't negate the value of the technology. Yes, piracy is neat and useful, but illegal. But was the benefit of piracy that you got free stuff? Or was it that it was an easier system than any other at the time?
So, yeh, early adopters may often be driven by the seedy side of culture.
How would a merchant of physical goods even know about something like Celo, whatever that is?
I once bought donuts from a food truck with BTC and the donuts were good but the payment process was really slow.
The first economist says, "Look at that $20 bill."
The second says, "That can't really be a $20 bill lying there, because if it were, someone would have picked it up already."
They walk on.
Ha ha ha. That would only be possible with a government issued digital currency. Any private company running a "stablecoin" is guaranteed fraudulent. Can't be legit.
https://twitter.com/Bitfinexed/status/1398722723543760897
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.
I fall into the latter camp. I don’t begrudge the former. I just don’t think it’ll last and have little taste for speculating.
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).
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.
Tether smells extremely fishy and seems to be used for a huge amount of trade volume on BTC and other cryptocurrencies.
https://iota.stackexchange.com/questions/8/why-does-iota-use...
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.
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.
[1][https://news.ycombinator.com/item?id=1251519]
Every other coin is basically a scam. Privacy coins may have a purpose
Importantly though, it's not an either/or. Capitalism is problematic and cryptocurrency is problematic. Both can be true at the same time.
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.
Additionally, there is no "silent majority" in tech that think it is a scam; the author has invented this.
It's not supposed to. No need for a permanent ledger to store cheap day-to-day transactions.
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.
Tragedy of the commons is fully evident in the bitcoin block size debacle.
More like, everything old is new again. Nicholas Weaver called it "speedrunning 500 years of bad economic history".
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.
This is always how cryptocoin nuts argue.
Do you really need to go through all the history of the system in order to be convinced of the latest state?
What are the different ways to decide who should be the next person that gets to choose the next block of transactions?
Can you hide the amount you’re sending? What about the recipient? Or your own identity?
Can you transfer bitcoin into ethereum or more generally one cryptocurrency into another?
Is it possible to send funds to a recognizable shortname instead of an hexadecimal string?
Are there ways to protect your funds with several keys instead of a single one?
- No
- Another google search for "bitcoin + <your question>"
- "Yes" for literally the rest of the questions.
This wasn't an exam, this was basically an advertisement for "look what cool things you can do with this"
If I got any wrong, whatever. I have literally never researched bitcoin or blockchain. If I got them right, well... nice try on the exam I guess.
Answer to question three is not restricted to Bitcoin. There are many other systems, e.g. Proof of stake (POS).
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.
Have you heard of mina?
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".
I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity. And in fact all of the fiat currencies I know of originated as representative money.
Bitcoin is not widely accepted in exchange for things of values, and I see no reason to believe that will ever change. Being able to spend it is the "killer app" of cryptocurrencies, and none of them have actually implemented it, despite many, many attempts.
No, technically fiat money has value because it is accepted by a government to settle taxes. Which is why it loses value dramatically when a state collapses or otherwise becomes irrelevant to the local economy. Because traditionally the state itself was the issuer of such currency, already we have a massive conflict of interest at the very start: when the state pays out his own debts in its own currency, it's effectively asking his creditors to believe that currency has some value in the real world, while also telling them exactly how much that is supposed be. To "solve" this problem they invented central banks, which are supposed to keep governments away from the process of determining the actual value of a currency, if you believe that they are as independent as they proclaim. In the end, what matters is that enough people believe that certain arrangements are fair, and that the government will still be there tomorrow asking them for taxes. As long as that's true, one might well use the currency as a unit to settle private trades too, but that is a consequence of the original belief.
> I'm not aware of any non-government-backed fiat currency which has gained widespread use in the history of humanity
The key in this sentence is "widespread", which is something you can redefine pretty arbitrarily and hence move goalposts as required. In practice, other tokens have been used here and there, but in the end, what wins tends to be government-backed tokens for the simple reason that authorities will always enjoy a right to put you in prison if you don't settle your taxes in the currency they desire.
If you look at it from a technical perspective, any collapsed state where the local currency has been wiped out and internal trades are settled in USD or EUR (a pretty common occurrence), in practice is already using an non-government-backed token, something on which nobody in the local economy has any control. To these areas, it doesn't really matter that the USD will be accepted by the US Federal Government to settle taxes; they just need a unit, and since this unit is accepted at the fringes of their system, well, might as well use it internally too.
> Being able to spend it is the "killer app" of cryptocurrencies
No, being able to convert into other tokens at the fringes is the killer app. Which quite a few cryptocurrencies do have, although in an extremely fragile state. The longer they keep them up, though, the easier it gets, as more and more people believe that the underpinning arrangements are fair and exchanges will still be here tomorrow to exfiltrate value to prison-avoiding currencies.
Not true. There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires for taxes, fees, etc.
In fact, the origin of using taxes + coinage goes back to a pragmatic way for ancient kings to not have to organize the logistics of feeding and housing a large army. Pay the soldiers in coin. Require citizens to pay a tax in the same coin. Boom, they self organize.
Money itself came about far earlier, and was independently invented in multiple places. The example most people look at is temple complexes in the Levant, where debt records came first, and currency second. It was an adaptation of earlier gift economy behavior to enable scaling to groups too large to have intrinsic social trust, and allowing for specialization of labor in building and maintaining the temples.
David Graeber's book will educate you about all this.
> There are quite a few places in the world where the de facto dominant currency is not the currency the local government requires
If you'd read the rest of my comment, you would have seen that I explicitly address this case. Instead you went for a pointless appeal to authority about thousand-year-old situations that don't matter to the current environment.
Before the 1900s the vast majority of currencies were valued based on their precious metal content (gold or silver), not government fiat.
> you: Before the 1900s the vast majority of currencies were valued based on their precious metal content (gold or silver), not government fiat.
ORLY? I didn't know that. Oh wait I literally said it in the comment you replied to.
Bitcoin in its current form should not be seen as a payment currency, instead as digital gold. A new asset class similar to actual gold/silver, real estate, stocks, etc.
Something to put part of your wealth in, hoping it appreciates over time. And as Bitcoin appreciates over time so well so far (12 years of 200% appreciation per year on average), it doesn't really make sense to spend Bitcoin. It is deflationary by design.
Bitcoin already is a killer "app" as such. An accessible way for anybody to preserve/grow wealth, a hedge against inflation and the lack of return on a normal savings account.
Your take on crypto for payments is needlessly pessimistic. It's inevitable, the winner just isn't clear yet.
Legal tender also only applies to paying public debts (i.e. taxes)... not paying a business.
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).
Not a very good way to convince me of cryptocurrencies' greatness by saying 'oh its too complicated to understand, but trust me its big'.
i'm not very into crypto - and everytime i look it feels like another speculative bubble but this time the speculators are even more hyped.
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.
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.
So, what's left? I know you can still make money with it if you joined earlier and you're lucky. Same with a MLM, but at least those don't waste so much energy nor ruin the GPU markets.
- Instant loans without paperwork or credit agencies, algorithmically collateralized
- Micropayments to websites you visit rather than ads
- Electronic payments that can remain private if participants are smart. Much better privacy protections than electronic payment options like Visa/Paypal.
- Truly democratic governance protocols in which important decisions can be voted on in real-time by participants with skin in the game.
- The ability for a code itself, not associated with a human, to earn and hold money.
- Algorithmically enforced contracts that are more resilient to bribes and other forms of subversion compared to traditional court systems.
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.
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.
It also reminded me of Folding at Home. Here people completed by virtue of their personal compute resources.
Of course crypto serves as neither a form of entertainment or scientific discovery and is just a massive waste of resources to create artificial wealth. If only all that computation did something useful.
Compared with a PoS cryptocurrency yielding no useful compute as a side effect, it costs $Y cheaper for someone to 51% attack.