Fixing wealth equality was never a narrative. In fact wealth incentives favoring early adopters were built in day 0.
It’s impossible and maddening to keep the “movement” on track in messaging. Every era is less educated technically and cares less about ideological or political goals and more about the bottom line of making some wealth.
So of course the movement is diluted. Influencers are rarely true cypherpunks and are the loudest by profession. But it doesn’t mean it isn’t working. IMHO the traditional finance system has only gotten more troubling since Satoshi’s whitepaper while crypto has grown more and more capable. It’s true there have been new challenges that have emerged, some of which are still ongoing, but that’s part of growth.
The main issue for outsiders is that the industry is surrounded by snake oil salesman and people that don't know what they're talking about (the 'evil central bank' types), but the underlying tech is real and the potential is real (imo). If you look at it quickly you might dismiss it all, but I think that'd be a mistake.
The ability to manage decentralized state is very cool, but there's a lot to build to make it viable (and as a result, there's a lot of opportunity). When something is hard, there's often value in making it easier.
There's also a lot of stuff in legacy finance that requires humans to do and is slow. Multi-day financial transfers for clearing and high associated fees for wires (at some banks) - crypto options are much better and modern implementations of the legacy stack. The current state is still a bit unstable, and the UX is a disaster, but the future is clearly better (imo) in a way legacy systems will have trouble competing with.
As an aside, 'wealth inequality' is a feature you want in effective capitalist systems (you can still protect the lower bound). http://paulgraham.com/ineq.html
In 1999 a lot of people recognized the value of the internet (though many still dismissed it [0]), but there was also a lot of dumb money and failure - loud people who didn't know what was going on. The web obviously became extremely economically relevant despite all of that. There's some similar potential here - I think it'll just take a while to shake out.
[0] "By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s." -Paul Krugman (1998)
Irony of the above quote is it's wrong on two levels - the internet, but also the impact of the fax machine (also huge).
Yes, the loud mouths on twitter and other social networks are definitely a turn-off and pretty annoying.
For anyone who's looking into more serious/technical discussions, I think looking through github contributions, whitepapers, technical parts of bitcointalk and in depth interviews of legitimate contributors to the ecosystem (like Vitalik) is much more informative and has better signal to noise ratios.
I'm not convinced Vitalik is a great leader. Ethereum is currently an infinite coin like Doge. The miners have taken control and blew past the original soft cap of 100M Eth of EIP 669. I'm sure he made more mistakes, but that and the ETH classic debacle makes me think he's an idol to be worshiped. Heck POS is a reaction to the original ETH being unable to scale.
Sure infinite coins can be fixed later, but the same can be said about Bitcoin. If POS works, it can be implemented on Bitcoin.
POS is a reasonable trade-off to solve scaling and make DeFi practical (imo) - his blog posts about it and arguments make sense.
> "Sure infinite coins can be fixed later, but the same can be said about Bitcoin. If POS works, it can be implemented on Bitcoin."
In theory yes, in practice no. BTC community elevated a clear con-man fake Satoshi because he took sides in a block size political battle. They can't even agree to increase the block size. This lack of leadership is a problem, moving to ETH2 is a serious project and requires a leader, priorities, direction etc. I don't think BTC can do any of this.
Yes, but can you convince the hardcore PoW maximalists to join your fork? IMO Bitcoin is doing its best to be a raw, pseudo-physical element.
That means immutability, costs rooted in the physical world, etc. The community will change its protocols sparingly and slowly.
To some who prefer rapid change and development this is unattractive. But to Bitcoiners, decentralization and immutability are the foundations of this new type of property. They are uninterested in technical gains that come with complexity and risk.
Infinite coins with reasonable inflation could be better as actual currencies. Anything with a hard finite supply that is also subject to breakage due to lost keys is ridiculously deflationary and will take on the dynamics of a Ponzi scheme.
DOGE is problematic because it's an infinite coin with an inflation rate that is too high.
I saw him speak once, in EE380 at Stanford. He tried to bullshit the audience about how the smart contract system was secure due to proof by construction. (The audience was Stanford computer science faculty, students, and tech people from Silicon Valley. Not a group to try to bullshit.)
Are you sure that wasn't about Vlad Zamfir's proof-of-stake ideas? Back then Vlad gave a bunch of talks about those being "correct by construction," and he and Vitalik worked closely together.
I don't recall Vitalik ever claiming that arbitrary smart contracts built on top of Ethereum were provably safe. Back then nobody was applying formal proof to smart contract code, it was just regular devs slamming out Solidity scripts with minimal third-party audits. That's what the vulnerable DAO code was; there wasn't a formal proof within miles of that stuff. The hack did not target the Ethereum protocol itself.
Applying formal proofs to smart contracts does make sense, since failures are expensive and the code is short. There's been gradual movement in that direction but it's been slow.
EIP669 was a difficulty bomb delay, which happens every year or so. The difficulty bomb was never intended to make monetary policy. The point was to keep upgrades from failing to deploy due to node operator complacency. The difficulty bomb forces them to upgrade their code in some way, either to the upgraded version, or to the same old version with a bomb delay.
Issuance right now is 2 ETH/block. The white paper just promised 5 ETH/block forever.
Net issuance will be lower after 1559 rolls out in August and starts burning a portion of transaction fees. Combining that with the PoS merge in half a year or so, and net issuance may well go negative. (Ethereum's PoS isn't really a scaling solution though.)
DYOR (Do Your Own Research), don't fomo into coins just because they are pumping in price. Read through their code (or how many contributors, how much contributions it gets, etc) which is something that you can't do with current financial system and if any of those projects don't open source their code, stay as far away as possible. Inspect the on-chain data to see how much is it actually used, etc. Look at Google Trends, look at their community sizes, etc.
There's a lot of datapoints that you can use or you can find reliable people and rely on their judgments. Also, if you're simply looking for investment, you can't go wrong with BTC/ETH portfolio, they have been proven to work over many years now and most of the remaining altcoins are correlated with them in price anyways.
Unfortunately, as is becoming more and more true in our pretty weird modern inter-connected world there's no substitute for getting your own hands dirty, reading primary sources and trying to understand what's true and what's bullshit yourself. Only then can you really evaluate who is worth listening to and what is actually interesting (I found the above stuff I linked to be good, but you should judge them for yourself).
The 'investment' bit is kind of secondary (https://soliditylang.org/), I personally think BTC, ETH, and Coinbase stock are the main long term bets - other stuff has extreme risk and requires a lot of attention to know if it's worthwhile or not. I do think the ZCash privacy model is cool.
Basically, I wouldn't invest unless you're going to sort through the nonsense yourself. Though like any investing the stuff where the value is harder to see is also where the bigger returns are (and the bigger failures).
Are you trying to argue that transaction capacity is the most important metric?
If so, then you don't want Bitcoin. You can use Paypal.
However if you want to own an asset that can't be debased by central banks, where your transactions can't be censored, where you can participate from anywhere geographically, then you might want Bitcoin.
Those features come at a transaction capacity tradeoff.
I'm not trying to argue that transaction capacity is the most important metric, but it's a metric you yourself mentioned as important and it's a metric I have not been able to verify for many cryptocurrencies I've looked at.
If you say "Choose proven cryptocurrencies with transactions" I am going to assume you don't mean ten transactions/day.
I do not think it is unreasonable to ask "How many people are actually transacting with this cryptocurrency?".
You can do a quick search to have the answers to all these simple questions, it has about ~200k transactions per day which settles about ~2B$ worth of Bitcoin a day (which is up very significantly since last year and down quite a bit from few months ago).
Honestly I would avoid asking Internet forums for advice, you paint yourself as a target
HN is probably fine, I just feel bad for anyone who learns about crypto on YouTube and asks a newbie question in the comments - they are swarmed by bot armies recommending “investment strategies” over WhatsApp
DeFi is terrible. I spent a lot of effort digging into the DeFi ecosystem but it's either scams or pointless. I've seen one or two interesting ideas like e.g. these decentralized hedge fund things, but 100% of them are money losers relative to just holding eth - and that's without factoring in all the wasted money in gas fees. DeFi is DOA.
Maker is pretty useful for getting collateralized loans, compound is pretty useful for generating yield by lending to others, uniswap is freaking amazing as a dex and you can trade anything by creating liquidity pools without permission, aave is very useful for arbitraging market inefficiencies away risk-free, so on and on. Gas fees are going to become minimal with layer 2.
If you dig enough, you'll see a lot of very useful and important projects being built by some very capable engineers.
This kind of comment reminds me of when people were predicting that internet was going to be a useless thing[1].
To me this is like complaining about webvan in the 90s and missing the forest through the trees.
DAOs, and AMMs are interesting - there's a lot of potential in leveraging DeFi to make systems that can work in ways better than existing legacy tech, it's just hard and people don't have it already figured out to the point where looking at it makes it obvious. General public state is a new thing and how it can be used is being figured out (oracles, programmable money, etc.).
When something is new it looks more 'pointless' and toy-like. It takes a while for its value to become truly obvious to everyone (and it requires some people to see that value early).
DeFi is broadly speaking a decentralized 2008. The leverage and liquidations are IMO part of the reason for the magnitude of the draw-down in the last month, and why there's a lot more room to the downside. There's reasons why we have regulations and laws governing investment. Because without them we had the Great Depression.
I believe the great financial speed-run has hit Mid-1929.
Before the Securities Act, Securities Exchange Act, Regulation S and Regulation T, before the SEC, CFTC and FDIC. A world of unrestricted margin, wildcat banks, hucksters, shills, snake-oil salesmen, and some, I assume, are good people.
Crypto is what the stock market would look like if everyone at the SEC decided to take a few months vacation at once, a financial version of The Purge.
If you create a system without a central authority able to correct for incentive failures of system design, you can end up trapped by the incentives themselves. [0]
That can lead to bad outcomes we already see in existing systems (NIMBY housing, partisan politics, etc.)
2008 loans to save the system were wildly successful, in DeFi - there is no authority that can jump in with liquidity temporarily to save the system. Maybe some consensus could be reached, but it definitely seems like there's big future risk in this area.
2012-2013 bitcointalk forums had a lot of smart people talking about technology and building stuff. There was also dumb stuff, but I think I'd probably call it a "era of highly educated and high minded people"
I remember when someone built a 'crypto stock exchange' (for crypto projects, not traditional stocks) in a month or so. They launched it, and was a technically sufficient stock exchange. It eventually fell apart due to too many questionable projects being listed, and perhaps some additional regulatory factors - but it "worked"!
Pretty cool that a 'garage-scale' team can make a functioning technolibertarian market so rapidly. (But also helped me learn to appreciate the utility of regulation :-P) IIRC I think Trendon Shavers/pirateat40's "miner financing" ponzi's implosion was a significant factor in taking it down.
There were lots of cool little projects popping up every month. Gambling sites that allowed wagers to be made directly on the blockchain - most engineering was around proving to gamblers that outcome determination was being done fairly. Accountless websites where you'd log in by sending a small fraction of a bitcoin, and your address was used as your identity. When bitcoin was less than $20, it was exciting and easy to experiment with - who cares if the $5 you sent disappears - but then the price spiked, and so fees increased and all of the 'loose change' people had everywhere was suddenly a significant amount of money - exit scams became frequent and people stopped being willing to store small amounts with others, because that small amount could 20x in 4 years.
Lots of small businesses posting that they'd accept bitcoin for their products. Found a lovely beekeeper's business that made great honey caramels and beeswax chapstick. I paid a teenager to custom make perler bead pixel art of Liu Kang and Raiden from the original Mortal Kombat (I think I may have paid multiple bitcoins for those :-P - hope they hodled!)
I meant early adopters of cryptocurrency, versus second or third wave newcomers, versus the type of people joining in the last couple years. Each population definitely has their own levels of sophistication and interests by large.
As an example I don’t think Hal would have much interest in shibemoon pump and dump telegram channels and likewise most people joining today don’t have much interest in the implementation details of rootstock.
I knew Hal Finney. He was a special case, and not representative of anyone else I know.
For example, at the last minute he decided to enter a Gomoku-playing computer programming contest. He learned Gomoku and wrote a program that trashed the competition (including the MIT entry) in a weekend.
The author completely misunderstands not only Bitcoin, but also economics. To mention just one point, where he complains how only 10,000 addresses (which could be 10K or fewer people and organizations) own 60% of bitcoin.
How does it matter to me as a saver or user of money, how many people own how much gold, or silver? It doesn't matter at all. I acquire it at market price, I hold it, and then I sell it at market price.
Bitcoin is a failed cryptocurrency, but for completely unrelated reasons and you won't read about that in the author's blog - that's for sure.
Full transparency is in the "DNA of crypto" imo, and shady dealings being out in the open is definitely a check against "crony capitalism." However, beyond the surface, claiming that crypto will clean up corruption is laughable.
The reality of the blockchain is that its guarantees only extend to what can be wholly represented and encapsulated on-chain. That's why only abstract/fiat currencies have emerged after 14 years of research as viable use cases. The boundary between the chain and reality is where these guarantees break down.
The blockchain cannot guarantee the reserves in Tether's bank account. That's not transparency, that's the illusion of transparency. That's much worse than intentional opacity IMO since it throws people off the trail.
This is not even really a surprising result. Bitcoin is not designed to be a functional currency in any modern sense. It's never going to be the basis of a complex, large economy. It is far too inflexible and inefficient. It is designed to be a hoardable asset, as long as you can keep convincing people to pay into the system. The lack of government oversight and control obviously appeals to the criminal and the corporate mobsters.
Bitcoin is functional in the modern sense. It's post modern compared to credit cards or cash. It current doesn't scale currently to replace the existing system for everyone.
You could say the lack of oversight around cash makes it appeal to criminals. The truth is most criminals have bank accounts. The majority of thief happens with credit cards not bitcoin.
I love that they included Stuart Hoegner's tweet. Hoegner is a hilarious villain, sort of the Saul Goodman of Bitfinex/Tether (he's their GC). He was the head of compliance at Excapa, the parent company of the wildly non-compliant Ultimate Bet. That online poker site had a back door where some of their friends could see other poker players cards [1]
Seeing him call anyone a liar - as he does regularly - is downright hilarious.
After all, at one point he had all of Tether's entire backing dollars (a small fraction of outstanding USDT) with his personal funds in his Bank of Montreal account. [2]
Now that’s a system I’d like to see some innovation on: a smart contract card dealer that manages to keep your hand secret. Would be a great demo for a privacy coin.
But decentral system are useless and everything works better if centralized ryt?
Funny how "blockchains" solve problems exactly like the one you just pointed out.
It doesn't really though, and a centralized solution with verifiability is faster, more efficient and a better implementation. Heck, regulation is a better solution. That's how slot machines manage in Vegas. Doesn't mean doing it on the blockchain isn't neat or a fun project, the same way I implemented a GameBoy on an FPGA.
A slot machine in Vegas is objectively worse then a decentralized slot machine simply by the fact that someone takes a cut (Up to 25%). A decentral gambling system can be truly "fair", no third party that always wins. Regulations are not a better solution at all. Verifying, even if it would be simple, is meaningless if all I can verify is that the system is intentionally made with odds against the user but only as much as allowed legally.
Many are, and in the early days this statement was mostly true, but today there are many legitimate uses for cryptocurrency. In Latin America for instance it is becoming increasingly common to use cryptocurrency for remittance payments, because it is way more efficient than international bank transfers with no questions asked to boot. I expect this trend will eventually start wider adoption by the broader merchant community here, as more people are coming into contact with cryptocurrency in this fashion.
"no questions asked" like, "how did you earn this?" and "did you pay taxes on this income?". I agree that cyberbucks are great for laundering drug money and avoiding taxes.
Cryptocurrency has no real world utility. It's a tool for gambling, speculative investment, and pump-and-dump schemes. There, I said it.
I was an Ethereum enthusiast back in 2017, but it didn't take long for me to see that cryptocurrency as it stands will never work. Smart contracts are too fragile, trading is too inaccessible, and keeping assets safe is too difficult.
There has been barely any innovation in scalability over the years, and I'm wondering if that's because proof of work has become too big to fail. Too profitable for it to end.
Smart contracts also have near (but not completely) zero utility since they're only useful when applied to entities that are entirely contained on the blockchain.
The big challenge is actually the set of core features: decentralization, trustlessness and permissionlessness.
These are the features that allow the pricing to be manipulated beyond any semblance of connection to reality. Any number you see, any stat you see, any data presented to you is likely fake. This is made possible because of trustlessness, permissionlessness and decentralization. Nobody can stop it by design.
95% of all trading volume is fake. Exchanges fake volume to draw in new gamblers. [1] The pricing is determined by Tethers, which account for 65% of all trading volume [2, 3] but are backed by $0.03USD per USDT and hot air and are not redeemable by anyone [4]. Even USDC is now backed by "approved investments" instead of dollars [5]. That's just a small sliver.
Aparently 1/3 of all small and medium businesses in America accept crypto! Fun fact. Are you sure? Because I haven't seen a single one. [6]
The actual market is roughly speaking totally unrecognizable.
The only thing we know for a fact is that new money has to come into PoW coins equal to the cost of mining just to keep the price stable. Anything above and beyond that is almost impossible to know for sure.
This is what libertarianism looks like (humorous take [7]). It kinda sucks.
Especially when you consider that a large percentage of stocks don't pay dividends, so you're only holding it because you think the company will do better which may or may not translate into increased share value.
This does give me pause and is pretty weird when you think about it.
The 'old way' makes a nice kind of sense. Company goes to the public to raise money to build a factory or something. In exchange the public gets a share of the company. The company builds the factory and is able to grow as a result, the public ownership of the stock rewards owners with some small cut of the profits.
Today almost none of that is true. There's enough private money that there's no financial need to go to public markets a lot of the time. Going public is mostly done for recruiting and giving employees that helped build the company liquidity. Public share holders no longer even have impactful voting rights a lot of the time (something I'm fine with, but still is relevant in comparing the value). The public invests because of the stock being tied to growth without dividends (and large passive index funds investments in retirement funds).
Why does stock value track company value when there's no actual value coming from it? Am I missing something obvious?
The above is the best case too - the bad case is best described by Matt Levine [0].
In some ways crypto assets are easier to understand - they're often tied to supporting the network infrastructure itself, or in the case of tokens whatever the protocol is doing. It aligns incentives around adoption of a decentralized protocol. The same is sort of true for share holders, but not really to the same extent and not as direct.
[0]: >"There are other business models. For instance you could make a product that people kind of want, or that they would want if it were affordable. Then you convince people to buy it by selling it for much less than it costs you to make it, or by paying them to buy it. If you do this well, you will have high revenue and rapid revenue growth, because lots of people are buying your product. You will not, however, get rich, because you’ll be spending more money making the product than you get from your customers. Your revenue will be high but your net income will be negative; it will cost you money to run this business.
> But then you will go to investors, and you will say “look, I have a company with rapidly growing revenue, that’s worth something, you should pay me for a share of my company.” And they will agree—“we love rapid revenue growth,” they will say—and you will sell stock in the company for hundreds of millions of dollars. And then it will cost them money to run the business, and you will be rich. There are various possible endgames; in some of them you go to prison but in quite a lot of them you just stay rich and become an elder statesman admired for your business acumen."
Companies have assets and cashflows which could be given to shareholders in a liquidation. What you're describing is more like what's called a "binary option" which is actually quite similar to a lot of crypto projects.
What are some of the businesses that raised money with ICOs and became successful? Are there any that aren't themselves cypto-financial-services products?
I'd say the majority of new coins/tokens are launched with something like an ICO over the past 5 years.
Most/all of them are crypto-financial. I generally think non-crypto businesses using ICOs are extra scammy, because redemption of services is usually a squishy meatspace process - fungibility is rare. I am not a fan of 'blockchain' companies that fundraise with ICOs for IRL redemption of products or services - really gambling on the integrity of company leadership to not alter the terms before redemption.
(Personally I think 'access rights' is the only subset that is feasible for crypto<>IRL commerce - digital content DRM, event tickets, stuff like that)
Which ones are successful is certainly the subject of debate (I'd probably say "we don't know yet"), but I think over half of the top 40 coins on https://coinmarketcap.com/ were created via ICO.
I love reading articles like this. Not because I'm going long on crypto or anything, but because the market needs a crash. If we can't shake off Wall Street, there will be no democratization of finance. If crypto crashes now, I'd feel much better about the future of digital currency.
I've been waiting for a crash for years so that the parasites looking to "get rich quick" leave and the discussion can return to technical matters like privacy, scalability, and ease of use instead of Elon Musk's latest cryptocurrency-related tweets and the coin value. For the past ~8 years the discourse has been significantly focused on the latter.
It’s still higher than it ever was before 2021 from a quick perusal of the Google chart for BTC, so I think if you bought your Bitcoin before then, this year might just be called “volatile”
Why can there be no rich bitcoin holders? Sure you want coins distributed to some degree, but the mere fact that there are rich and poor bitcoin holders is natural and expected. And they will be the minority (less than 10 000).
There certainly can, however crypto has a worse wealth distribution than the US dollar and any banana republic. Freeing the poor from the tyranny of wealth inequality was one of the flagship features the community has been touting for a decade. The claims do not align with reality, and are likely antithetical to the goals of a functioning, efficient, equitable society.
The world would be worse off with such a distribution, IMO.
For the record, I'm pro wealth inequality and income inequality, so long as its coupled with social mobility and a high standard of living for the lower classes.
Opinion pieces in mainstream outlets isn't exactly representative of "the community". The dates for those articles are also quite recent, within the last 3 years or so. Where are all the bitcointalk topics from 2011 (ie. "a decade" ago) where everyone collectively thought it was going to end wealth inequality?
In my opinion, that's the central thrust of the text in the genesis block. That the "banks were bailed out" - allowing the wealthy to manipulate the market and remain wealthy while the schlubs were hung out to dry. That is the crux of the modern inequality narrative. JMHO.
[edit] I'll be the first to admit I wasn't there in 2010, but I'm led to believe they were discussing a 'peer to peer digital cash' so I guess a lot can change! Certainly the last 5 years have been filled with inequality narrative.
Further, I would argue that yes in the last 5 years once bitcoin entered the zeitgiest, that these mainstream thought pieces are actually more representative of 'the community' as retail gamblers poured in outnumbering earlier participants.
There was a time in 2014/15 where paying for goods with cryptocurrency was becoming popular. Its at this time when coincidentally, regulations towards requiring PII was instantiated in the US, essentially freezing most in/outroads of fiat. It was the end of traded goods for crypto. This coincided with many of the original arguments on how & whether to increase transaction capacity (bitcoin cash debate), we see who influenced these (core devs/miners/exchanges/regulatory reps sponsored by banks) and how they played out in hindsight. I'm not saying this was a coordinated effort, rather an oversimplification of the natural response from traditional fiat participants towards a threat to the 'status quo' at the time. However, this shift, happening at the most crucial tipping point, is what I believe to be the end of the ideal 'cryptorevolution' and instead a new compromise with the existing system. These disruptions were 'successful' But.. you know... thats just my opinion.. man...
There's many patients that still accept crypto, you're just not coverting to fiat in the process. I would argue that's the point where there stopped being compromise with the existing system.
The list of crooks involved with cryptocurrencies is significant. And a big problem.
Binance really was banned from operating in the Cayman Islands.[1] That's an achievement.
China's crackdown on Bitcoin mining halved the hash rate.[2] This time, it's serious. Several weeks ago, power was disconnected by the authorities from major Bitcoin mining operations. This is significant, because Bitcoin was being used as a legal way to move money out of China. It's manufacturing and exporting, which is both legal and encouraged. Or was. The crackdown continues.[3] Over a thousand people arrested so far.
Three stablecoins have gone to zero in recent weeks. When stablecoins crash, they go all the way .
The NFT thing seems to be over, although it's hard to see that, because NFTs stall rather than crashing. As I've pointed out before, NFT markets look like Beanie Baby markets on eBay - offers to sell at high prices, no bids. No liquidity. Highly publicized single transactions at high prices are probably sales between cooperating parties. The real point of NFTs is that they are neither a commodity nor a security, and thus evade regulation.
Most importantly, the cryptocurrency world has never experienced a general recession and the resulting net outflow of capital. Remember what happened to Madoff.
I suppose one could count IRON and TITAN as only one collapse. TITAN was supposed to partially collateralize IRON.
There's also Iron's TITANIUM token, which collapsed as well.
- IRON Titanium Token (TITAN) $0.00000145
- All-Time High $64.19 -100.0% Jun 16, 2021
The whole Iron Finance house of cards collapsed, taking down multiple tokens. Not that you'd know this from their main web site, "https://iron.finance/". The new hype:
Iron Finance relaunch scheduled for Monday, 12 July 2021 at 1PM UTC on Polygon Network
The relaunch will include a new token and IronSwap, the Iron Finance stable swap product.
As most of you are already aware, the Iron Finance team has renounced ownership of the old TITAN token, it is now actively managed by the TitanDAO community initiative. As explained in our previous Medium article, STEEL, TITAN and DND tokens are no longer part of the Iron Finance products and ecosystem.
The new official Iron Finance token to replace the TITAN token will be the ICE token (=“TITANv2”). We were inspired by A Song of Ice and Fire novels, where the Iron Throne is a well-known symbol.
>disguising how Bitcoin has failed at almost everything Nakamoto set out to achieve
Satoshi mined over 1.1M BTC [1], and designed the emission schedule to give majority of holdings to very early adopters (ie. mostly himself). The coin also has no value source at all (not backed by anything, no income generation), the only way to realize a profit on bitcoin is at the expense of someone else's loss.
The name for this economic design is: a ponzi (new variation) and the one reason for a design like that - to become rich at the expense of others.
>Since we’re failing to witness any of this happen, however, the crypto dream is crumbling
Crypto has become less of a ponzi through the years because bitcoin is becoming less and less relevant with each year - transferring, lending and borrowing dollars is the first major use case that isn't fundamentally a ponzi variation. In fact for people in countries with capital controls saving in dollar in defi is probably the single best way to accumulate wealth.
Defi itself as an infrastructure is neutral - it can serve ponzis as well as fundamentally productive use cases (eg. tokenized houses -> defi mortgages), but due to lack of tokenized real assets except for (mostly) dollars, most of activity is related to some new ponzi variation. I think the switch to mostly productive ecosystem is going to happen during this decade - which necessarily requires bitcoin to lose importance to the point that seeing its price on coingecko/cmc requires scrolling.
Potential notwithstanding, the accumulated debt from wealth destruction since 2009 is enormous. Mining alone destroyed wealth equivalent to gdp of a small country, on top of that there's enormous loss of human potential (people playing in crypto instead of doing something actually productive - many very smart) and dangerously big wealth transfer to outright scammers that leverage that to scam even more. I estimate the total cumulative negative impact from crypto (esp. bitcoin) to be in the hundreds of billions of dollars. Even in the optimistic timeline in which defi makes everything significantly more efficient it's going to take a really long time to get back to net zero, and to make it a good investment (compared to other possible investment) - decades.
All of this is sunk cost, so imo banning crypto now would be a mistake, but even as someone who made a fortune from crypto I recently realized that world in 2021 would be a better place if it never existed.
> designed the emission schedule to give majority of holdings to very early adopters
And nearly every single one of the thousands of altcoins tilt the rewards to early adopters to a greater or same degree as bitcoin. Sadly, there is very little interest in minimizing the concentration of wealth...
So far, rewards to early adopters have been the way to bootstrap a currency that's initially useless because nobody else uses it.
Bootstrapping without that incentive would probably require promotion by some major entity like a central bank or FAANG company, which is likely to involve centralized control by that entity. I'm not convinced that's an improvement.
Its getting boring, just another Crypto-Hate-Articles with zero merit. Just repeat over and over again what has been said last year already and the year before and the year before. All the way back to 2015 or so when it first became mainstream to hate crypto.
Yes most of it is true/is a scam/has no use-case/ etc etc. that doesn't make repeat it any better. Everyone knows move on to something else to write about.
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[ 2.7 ms ] story [ 173 ms ] threadIt’s impossible and maddening to keep the “movement” on track in messaging. Every era is less educated technically and cares less about ideological or political goals and more about the bottom line of making some wealth.
So of course the movement is diluted. Influencers are rarely true cypherpunks and are the loudest by profession. But it doesn’t mean it isn’t working. IMHO the traditional finance system has only gotten more troubling since Satoshi’s whitepaper while crypto has grown more and more capable. It’s true there have been new challenges that have emerged, some of which are still ongoing, but that’s part of growth.
The DeFi tech is real, but early. Vitalik Buterin is a really good leader for Ethereum and development.
Vitalik Interview: https://www.stitcher.com/show/rationally-speaking/episode/in...
This is a worthwhile list to read through: https://danromero.org/crypto-reading/
The main issue for outsiders is that the industry is surrounded by snake oil salesman and people that don't know what they're talking about (the 'evil central bank' types), but the underlying tech is real and the potential is real (imo). If you look at it quickly you might dismiss it all, but I think that'd be a mistake.
The ability to manage decentralized state is very cool, but there's a lot to build to make it viable (and as a result, there's a lot of opportunity). When something is hard, there's often value in making it easier.
There's also a lot of stuff in legacy finance that requires humans to do and is slow. Multi-day financial transfers for clearing and high associated fees for wires (at some banks) - crypto options are much better and modern implementations of the legacy stack. The current state is still a bit unstable, and the UX is a disaster, but the future is clearly better (imo) in a way legacy systems will have trouble competing with.
As an aside, 'wealth inequality' is a feature you want in effective capitalist systems (you can still protect the lower bound). http://paulgraham.com/ineq.html
In 1999 a lot of people recognized the value of the internet (though many still dismissed it [0]), but there was also a lot of dumb money and failure - loud people who didn't know what was going on. The web obviously became extremely economically relevant despite all of that. There's some similar potential here - I think it'll just take a while to shake out.
[0] "By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s." -Paul Krugman (1998)
Irony of the above quote is it's wrong on two levels - the internet, but also the impact of the fax machine (also huge).
For anyone who's looking into more serious/technical discussions, I think looking through github contributions, whitepapers, technical parts of bitcointalk and in depth interviews of legitimate contributors to the ecosystem (like Vitalik) is much more informative and has better signal to noise ratios.
Sure infinite coins can be fixed later, but the same can be said about Bitcoin. If POS works, it can be implemented on Bitcoin.
> "Sure infinite coins can be fixed later, but the same can be said about Bitcoin. If POS works, it can be implemented on Bitcoin."
In theory yes, in practice no. BTC community elevated a clear con-man fake Satoshi because he took sides in a block size political battle. They can't even agree to increase the block size. This lack of leadership is a problem, moving to ETH2 is a serious project and requires a leader, priorities, direction etc. I don't think BTC can do any of this.
Yes, but can you convince the hardcore PoW maximalists to join your fork? IMO Bitcoin is doing its best to be a raw, pseudo-physical element.
That means immutability, costs rooted in the physical world, etc. The community will change its protocols sparingly and slowly.
To some who prefer rapid change and development this is unattractive. But to Bitcoiners, decentralization and immutability are the foundations of this new type of property. They are uninterested in technical gains that come with complexity and risk.
https://news.ycombinator.com/item?id=27843693
DOGE is problematic because it's an infinite coin with an inflation rate that is too high.
https://john-tromp.medium.com/a-case-for-using-soft-total-su...
This was before the DAO hack.
I don't recall Vitalik ever claiming that arbitrary smart contracts built on top of Ethereum were provably safe. Back then nobody was applying formal proof to smart contract code, it was just regular devs slamming out Solidity scripts with minimal third-party audits. That's what the vulnerable DAO code was; there wasn't a formal proof within miles of that stuff. The hack did not target the Ethereum protocol itself.
Applying formal proofs to smart contracts does make sense, since failures are expensive and the code is short. There's been gradual movement in that direction but it's been slow.
Once Stanford gets fully restarted, I'll see if I can dredge those up.
Issuance right now is 2 ETH/block. The white paper just promised 5 ETH/block forever.
https://ethereum.org/en/whitepaper/
Net issuance will be lower after 1559 rolls out in August and starts burning a portion of transaction fees. Combining that with the PoS merge in half a year or so, and net issuance may well go negative. (Ethereum's PoS isn't really a scaling solution though.)
There's a lot of datapoints that you can use or you can find reliable people and rely on their judgments. Also, if you're simply looking for investment, you can't go wrong with BTC/ETH portfolio, they have been proven to work over many years now and most of the remaining altcoins are correlated with them in price anyways.
Unfortunately, as is becoming more and more true in our pretty weird modern inter-connected world there's no substitute for getting your own hands dirty, reading primary sources and trying to understand what's true and what's bullshit yourself. Only then can you really evaluate who is worth listening to and what is actually interesting (I found the above stuff I linked to be good, but you should judge them for yourself).
The 'investment' bit is kind of secondary (https://soliditylang.org/), I personally think BTC, ETH, and Coinbase stock are the main long term bets - other stuff has extreme risk and requires a lot of attention to know if it's worthwhile or not. I do think the ZCash privacy model is cool.
Basically, I wouldn't invest unless you're going to sort through the nonsense yourself. Though like any investing the stuff where the value is harder to see is also where the bigger returns are (and the bigger failures).
Also, how many transactions/day does the second-most-used cryptocurrency facilitate?
If so, then you don't want Bitcoin. You can use Paypal.
However if you want to own an asset that can't be debased by central banks, where your transactions can't be censored, where you can participate from anywhere geographically, then you might want Bitcoin.
Those features come at a transaction capacity tradeoff.
If you say "Choose proven cryptocurrencies with transactions" I am going to assume you don't mean ten transactions/day.
I do not think it is unreasonable to ask "How many people are actually transacting with this cryptocurrency?".
2) Type "Bitcoin transactions per day", click search
3) View results
????
Is it really a good idea to invest in such a volatile asset?
(Genuinely asking as a complete noob)
HN is probably fine, I just feel bad for anyone who learns about crypto on YouTube and asks a newbie question in the comments - they are swarmed by bot armies recommending “investment strategies” over WhatsApp
If you dig enough, you'll see a lot of very useful and important projects being built by some very capable engineers.
This kind of comment reminds me of when people were predicting that internet was going to be a useless thing[1].
1: https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirv...
DAOs, and AMMs are interesting - there's a lot of potential in leveraging DeFi to make systems that can work in ways better than existing legacy tech, it's just hard and people don't have it already figured out to the point where looking at it makes it obvious. General public state is a new thing and how it can be used is being figured out (oracles, programmable money, etc.).
When something is new it looks more 'pointless' and toy-like. It takes a while for its value to become truly obvious to everyone (and it requires some people to see that value early).
I believe the great financial speed-run has hit Mid-1929.
Before the Securities Act, Securities Exchange Act, Regulation S and Regulation T, before the SEC, CFTC and FDIC. A world of unrestricted margin, wildcat banks, hucksters, shills, snake-oil salesmen, and some, I assume, are good people.
Crypto is what the stock market would look like if everyone at the SEC decided to take a few months vacation at once, a financial version of The Purge.
If you create a system without a central authority able to correct for incentive failures of system design, you can end up trapped by the incentives themselves. [0]
That can lead to bad outcomes we already see in existing systems (NIMBY housing, partisan politics, etc.)
2008 loans to save the system were wildly successful, in DeFi - there is no authority that can jump in with liquidity temporarily to save the system. Maybe some consensus could be reached, but it definitely seems like there's big future risk in this area.
[0]: Moloch basically: https://slatestarcodex.com/2014/07/30/meditations-on-moloch/
There is no bygone era of highly educated and high minded people.
Pretty cool that a 'garage-scale' team can make a functioning technolibertarian market so rapidly. (But also helped me learn to appreciate the utility of regulation :-P) IIRC I think Trendon Shavers/pirateat40's "miner financing" ponzi's implosion was a significant factor in taking it down.
There were lots of cool little projects popping up every month. Gambling sites that allowed wagers to be made directly on the blockchain - most engineering was around proving to gamblers that outcome determination was being done fairly. Accountless websites where you'd log in by sending a small fraction of a bitcoin, and your address was used as your identity. When bitcoin was less than $20, it was exciting and easy to experiment with - who cares if the $5 you sent disappears - but then the price spiked, and so fees increased and all of the 'loose change' people had everywhere was suddenly a significant amount of money - exit scams became frequent and people stopped being willing to store small amounts with others, because that small amount could 20x in 4 years.
Lots of small businesses posting that they'd accept bitcoin for their products. Found a lovely beekeeper's business that made great honey caramels and beeswax chapstick. I paid a teenager to custom make perler bead pixel art of Liu Kang and Raiden from the original Mortal Kombat (I think I may have paid multiple bitcoins for those :-P - hope they hodled!)
As an example I don’t think Hal would have much interest in shibemoon pump and dump telegram channels and likewise most people joining today don’t have much interest in the implementation details of rootstock.
For example, at the last minute he decided to enter a Gomoku-playing computer programming contest. He learned Gomoku and wrote a program that trashed the competition (including the MIT entry) in a weekend.
[1] https://twitter.com/halfin/status/1153096538?lang=en
The author completely misunderstands not only Bitcoin, but also economics. To mention just one point, where he complains how only 10,000 addresses (which could be 10K or fewer people and organizations) own 60% of bitcoin.
How does it matter to me as a saver or user of money, how many people own how much gold, or silver? It doesn't matter at all. I acquire it at market price, I hold it, and then I sell it at market price.
Bitcoin is a failed cryptocurrency, but for completely unrelated reasons and you won't read about that in the author's blog - that's for sure.
> Out of the tools we possess to rid the system of crony capitalism, crypto is still our best shot.
What in the DNA of "crypto" suggests that it would ever rid us of "crony capitalism"? Did I not get the memo?
The reality of the blockchain is that its guarantees only extend to what can be wholly represented and encapsulated on-chain. That's why only abstract/fiat currencies have emerged after 14 years of research as viable use cases. The boundary between the chain and reality is where these guarantees break down.
The blockchain cannot guarantee the reserves in Tether's bank account. That's not transparency, that's the illusion of transparency. That's much worse than intentional opacity IMO since it throws people off the trail.
You could say the lack of oversight around cash makes it appeal to criminals. The truth is most criminals have bank accounts. The majority of thief happens with credit cards not bitcoin.
Seeing him call anyone a liar - as he does regularly - is downright hilarious.
After all, at one point he had all of Tether's entire backing dollars (a small fraction of outstanding USDT) with his personal funds in his Bank of Montreal account. [2]
[1] https://bennettftomlin.com/2021/03/27/before-bitfinex-and-te...
[2] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... section 17.
Anyone who plays online poker for money is naive. The temptation for the programmers of such systems to cheat has to be enormous.
I was an Ethereum enthusiast back in 2017, but it didn't take long for me to see that cryptocurrency as it stands will never work. Smart contracts are too fragile, trading is too inaccessible, and keeping assets safe is too difficult.
There has been barely any innovation in scalability over the years, and I'm wondering if that's because proof of work has become too big to fail. Too profitable for it to end.
Everything else is proned for bugs
These are the features that allow the pricing to be manipulated beyond any semblance of connection to reality. Any number you see, any stat you see, any data presented to you is likely fake. This is made possible because of trustlessness, permissionlessness and decentralization. Nobody can stop it by design.
95% of all trading volume is fake. Exchanges fake volume to draw in new gamblers. [1] The pricing is determined by Tethers, which account for 65% of all trading volume [2, 3] but are backed by $0.03USD per USDT and hot air and are not redeemable by anyone [4]. Even USDC is now backed by "approved investments" instead of dollars [5]. That's just a small sliver.
Aparently 1/3 of all small and medium businesses in America accept crypto! Fun fact. Are you sure? Because I haven't seen a single one. [6]
The actual market is roughly speaking totally unrecognizable.
The only thing we know for a fact is that new money has to come into PoW coins equal to the cost of mining just to keep the price stable. Anything above and beyond that is almost impossible to know for sure.
This is what libertarianism looks like (humorous take [7]). It kinda sucks.
[1] https://www.forbes.com/sites/cbovaird/2019/03/22/95-of-repor...
[2] https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903
[3] https://coinlib.io/coin/BTC/Bitcoin - among others.
[4] https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b...
[5] https://www.coindesk.com/circle-is-not-winning-stablecoin-tr...
[6] https://bitcoinist.com/36-of-u-s-smes-accept-cryptocurrency-...
[7] https://www.newyorker.com/humor/daily-shouts/l-p-d-libertari...
That being said, you're right about it not being a suitable replacement for traditional finance.
The 'old way' makes a nice kind of sense. Company goes to the public to raise money to build a factory or something. In exchange the public gets a share of the company. The company builds the factory and is able to grow as a result, the public ownership of the stock rewards owners with some small cut of the profits.
Today almost none of that is true. There's enough private money that there's no financial need to go to public markets a lot of the time. Going public is mostly done for recruiting and giving employees that helped build the company liquidity. Public share holders no longer even have impactful voting rights a lot of the time (something I'm fine with, but still is relevant in comparing the value). The public invests because of the stock being tied to growth without dividends (and large passive index funds investments in retirement funds).
Why does stock value track company value when there's no actual value coming from it? Am I missing something obvious?
The above is the best case too - the bad case is best described by Matt Levine [0].
In some ways crypto assets are easier to understand - they're often tied to supporting the network infrastructure itself, or in the case of tokens whatever the protocol is doing. It aligns incentives around adoption of a decentralized protocol. The same is sort of true for share holders, but not really to the same extent and not as direct.
[0]: >"There are other business models. For instance you could make a product that people kind of want, or that they would want if it were affordable. Then you convince people to buy it by selling it for much less than it costs you to make it, or by paying them to buy it. If you do this well, you will have high revenue and rapid revenue growth, because lots of people are buying your product. You will not, however, get rich, because you’ll be spending more money making the product than you get from your customers. Your revenue will be high but your net income will be negative; it will cost you money to run this business.
> But then you will go to investors, and you will say “look, I have a company with rapidly growing revenue, that’s worth something, you should pay me for a share of my company.” And they will agree—“we love rapid revenue growth,” they will say—and you will sell stock in the company for hundreds of millions of dollars. And then it will cost them money to run the business, and you will be rich. There are various possible endgames; in some of them you go to prison but in quite a lot of them you just stay rich and become an elder statesman admired for your business acumen."
That would be like a worst case scenario though, right? Which would in turn make those shares worth a lot less to begin with.
Yes. Some of the same scammers are behind both.[1]
[1] https://www.timesofisrael.com/german-police-raid-call-center...
Why even compare a "currency" to the stock market? They are two different things.
Seems pretty similar in this respect...
Most/all of them are crypto-financial. I generally think non-crypto businesses using ICOs are extra scammy, because redemption of services is usually a squishy meatspace process - fungibility is rare. I am not a fan of 'blockchain' companies that fundraise with ICOs for IRL redemption of products or services - really gambling on the integrity of company leadership to not alter the terms before redemption.
(Personally I think 'access rights' is the only subset that is feasible for crypto<>IRL commerce - digital content DRM, event tickets, stuff like that)
Which ones are successful is certainly the subject of debate (I'd probably say "we don't know yet"), but I think over half of the top 40 coins on https://coinmarketcap.com/ were created via ICO.
The recent drop didn't count as a crash?
The world would be worse off with such a distribution, IMO.
For the record, I'm pro wealth inequality and income inequality, so long as its coupled with social mobility and a high standard of living for the lower classes.
It has?
[1] [2018] https://www.washingtonpost.com/news/theworldpost/wp/2018/01/...
[2] [2018] https://medium.com/predict/how-bitcoin-solves-the-problem-of...
[3] [2019] https://www.businessinsider.com/this-is-how-bitcoin-can-end-...
[4] [2021] https://www.forbes.com/sites/martinrivers/2021/06/15/how-bit...
[5] https://digiconomist.net/bitcoin-raises-inequality
Opinion pieces in mainstream outlets isn't exactly representative of "the community". The dates for those articles are also quite recent, within the last 3 years or so. Where are all the bitcointalk topics from 2011 (ie. "a decade" ago) where everyone collectively thought it was going to end wealth inequality?
[edit] I'll be the first to admit I wasn't there in 2010, but I'm led to believe they were discussing a 'peer to peer digital cash' so I guess a lot can change! Certainly the last 5 years have been filled with inequality narrative.
Further, I would argue that yes in the last 5 years once bitcoin entered the zeitgiest, that these mainstream thought pieces are actually more representative of 'the community' as retail gamblers poured in outnumbering earlier participants.
https://news.ycombinator.com/item?id=27800381
Binance really was banned from operating in the Cayman Islands.[1] That's an achievement.
China's crackdown on Bitcoin mining halved the hash rate.[2] This time, it's serious. Several weeks ago, power was disconnected by the authorities from major Bitcoin mining operations. This is significant, because Bitcoin was being used as a legal way to move money out of China. It's manufacturing and exporting, which is both legal and encouraged. Or was. The crackdown continues.[3] Over a thousand people arrested so far.
Three stablecoins have gone to zero in recent weeks. When stablecoins crash, they go all the way .
The NFT thing seems to be over, although it's hard to see that, because NFTs stall rather than crashing. As I've pointed out before, NFT markets look like Beanie Baby markets on eBay - offers to sell at high prices, no bids. No liquidity. Highly publicized single transactions at high prices are probably sales between cooperating parties. The real point of NFTs is that they are neither a commodity nor a security, and thus evade regulation.
Most importantly, the cryptocurrency world has never experienced a general recession and the resulting net outflow of capital. Remember what happened to Madoff.
[1] https://www.caymancompass.com/2021/07/02/cima-binance-not-au...
[2] https://www.coinwarz.com/mining/bitcoin/hashrate-chart
[3] https://www.cnbc.com/2021/07/06/china-cracks-down-on-crypto-...
I found Iron Finance (TITAN) and SafeDollar [1]. What's the third?
[1] https://www.newsweek.com/safedollar-price-hits-zero-despite-...
There's also Iron's TITANIUM token, which collapsed as well.
- IRON Titanium Token (TITAN) $0.00000145
- All-Time High $64.19 -100.0% Jun 16, 2021
The whole Iron Finance house of cards collapsed, taking down multiple tokens. Not that you'd know this from their main web site, "https://iron.finance/". The new hype:
Iron Finance relaunch scheduled for Monday, 12 July 2021 at 1PM UTC on Polygon Network The relaunch will include a new token and IronSwap, the Iron Finance stable swap product.
As most of you are already aware, the Iron Finance team has renounced ownership of the old TITAN token, it is now actively managed by the TitanDAO community initiative. As explained in our previous Medium article, STEEL, TITAN and DND tokens are no longer part of the Iron Finance products and ecosystem.
The new official Iron Finance token to replace the TITAN token will be the ICE token (=“TITANv2”). We were inspired by A Song of Ice and Fire novels, where the Iron Throne is a well-known symbol.
Satoshi mined over 1.1M BTC [1], and designed the emission schedule to give majority of holdings to very early adopters (ie. mostly himself). The coin also has no value source at all (not backed by anything, no income generation), the only way to realize a profit on bitcoin is at the expense of someone else's loss. The name for this economic design is: a ponzi (new variation) and the one reason for a design like that - to become rich at the expense of others.
>Since we’re failing to witness any of this happen, however, the crypto dream is crumbling
Crypto has become less of a ponzi through the years because bitcoin is becoming less and less relevant with each year - transferring, lending and borrowing dollars is the first major use case that isn't fundamentally a ponzi variation. In fact for people in countries with capital controls saving in dollar in defi is probably the single best way to accumulate wealth.
Defi itself as an infrastructure is neutral - it can serve ponzis as well as fundamentally productive use cases (eg. tokenized houses -> defi mortgages), but due to lack of tokenized real assets except for (mostly) dollars, most of activity is related to some new ponzi variation. I think the switch to mostly productive ecosystem is going to happen during this decade - which necessarily requires bitcoin to lose importance to the point that seeing its price on coingecko/cmc requires scrolling.
Potential notwithstanding, the accumulated debt from wealth destruction since 2009 is enormous. Mining alone destroyed wealth equivalent to gdp of a small country, on top of that there's enormous loss of human potential (people playing in crypto instead of doing something actually productive - many very smart) and dangerously big wealth transfer to outright scammers that leverage that to scam even more. I estimate the total cumulative negative impact from crypto (esp. bitcoin) to be in the hundreds of billions of dollars. Even in the optimistic timeline in which defi makes everything significantly more efficient it's going to take a really long time to get back to net zero, and to make it a good investment (compared to other possible investment) - decades.
All of this is sunk cost, so imo banning crypto now would be a mistake, but even as someone who made a fortune from crypto I recently realized that world in 2021 would be a better place if it never existed.
[1] https://bitslog.com/2019/04/16/the-return-of-the-deniers-and...
And nearly every single one of the thousands of altcoins tilt the rewards to early adopters to a greater or same degree as bitcoin. Sadly, there is very little interest in minimizing the concentration of wealth...
Bootstrapping without that incentive would probably require promotion by some major entity like a central bank or FAANG company, which is likely to involve centralized control by that entity. I'm not convinced that's an improvement.
Maybe there's a better way. Any ideas?