As long as it’s advantageous to those who own these publications to accumulate their share of BTC, ETH, or what have you, and once they’re satisfied the narrative will change.
What's interesting about this article isn't so much the contents as the biography of the author: https://www.atlanticcouncil.org/expert/robert-a-manning/ - Atlantic Council, ODNI, US National Intelligence Council, US Secretary of State's staff, Council on Foreign Relations and more.
I'm not sure how much attention the idea of banning cryptocurrency has had from these kind of circles before.
If you view banning cryptocurrencies as a prerequisite to CBDC, social credit scores and negative interests rates, there are volumes of policy papers from the WEF and others.
agreed, that is certainly the most noteworthy aspect. I can't say im surprised. Financial hegemony is critical for state apparatuses to maintain power. Frankly I'm more surprised it's taken them this long to begin the crusade against crypto currencies. I only expect it to ramp up further.
Yeah, when the pipeline ransomware thing happened, I figured that we'd see some big crackdowns on internet freedom as a result. And he mentions the pipeline early on in the article.
CFR folks like Bob might be equally interested in stopping cryptocurrency as a way for countries subject to US sanctions, like Iran and Venezuela, to have access to the international payment system. But that's probably not as appealing a pitch for the UN Security Council, the G7, and the G20, who I think are his real audience here. He knows a unilateral move against cryptocurrency by USG would be not only very difficult because of domestic opposition but also a bit of an own goal, cutting the US off from the developing permissionless international economy.
But if he can convince other governments' advisors that Bitcoin poses a threat to them that outweighs any potential protection it grants them from the US, then those concerns go away. PRC is already on board; Russia and India could maybe be persuaded, having flirted with total cryptocurrency bans and then backed away from them; Brazil, Japan, Korea, Taiwan, the EU and Commonwealth countries are likely to be more difficult. No idea about Mexico, the Saudis, Turkey, and Indonesia—they've all been rather nervous about it, except in Mexico where it's fully legal.
The only way you are going to "ban" cryptocurrencies is if you shut down the internet, and even that doesn't really go all the way, so good luck with that...
You can make it illegal for legitimate financial institutions to perform transactions related to cryptocurrency, crippling or outright destroying many of its applications. Sucking all the air out of the room is sufficient to address the negative externalities.
this would indeed be a serious blow to current price of crypto. Many projects would die and tons of liquidity would leave. Liken to a mass extinction event. But like all gov attempts to ban something, there would still be a cohort who believe in the product and keep it alive. And over time, from the ashes, the value would grow again
This is some of the worst junk writing I've seen on the hill. Some pretty wrong things in here, like insinuating that the only value of crypto is to criminals, and all but saying that the reason there are hackings to things like critical infrastructure is because crypto exists, which is just silly. Then it flags bitcoin as an environmental hazard, though estimates seem to be ~50-70% of BTC energy use is from renewables. I would label that as a bad faith argument because there isn't really a standardized basis of measuring things by energy consumption (what's the energy consumption to mine for gold? Create plastics? Etc.). All of this coupled with support for a government cryptocurrency? By a person who says they don't understand crypto or its value prop in the first sentence. That probably means they should go learn more before having an opinion...
For people not in this world, cryptocurrency does NOT mean digital money. It needs to be rebranding. It's a wave of projects building (mostly) decentralized tools or things secured by a blockchain secured through some protocol, such as finance exchanges, art minting and exchanging for digital scarcity, video games, real world supply chain tracking, music creation + tracking (hard to determine who is in every song and what sampling they used to pay artists), general contract writing with built in logic to be able to have trust in an interaction without having to involve a third party. There are many more examples, but it's more apt to call it Web 3.0 than cryptocurrency at this point.
> Then it flags bitcoin as an environmental hazard, though estimates seem to be ~50-70% of BTC energy use is from renewables.
Is Bitcoin offsetting other uses that those renewables would have gone for or are people building solar farms out of their Bitcoin gains to fund more Bitcoin?
Bitcoin mining can serve as a price floor to incentivize green energy production - ex. An otherwise unprofitable solar farm could be profitable because instead of peak production getting sent to the grid at low or negative rates, they can mine Bitcoin and monetize that energy that doesn't have other demand.
This is certainly not universally the case at the moment. It is probably offsetting in the majority of cases currently. But I bet there are a non-zero number of renewable energy products that were able to get greenlit purely because crypto mining can function as a buyer of last resort, and this number will continue increasing.
Bitcoin mining uses a higher proportion of green energy than most other industries though, so I think this energy use criticism is pretty shallow. Some people just don't like Bitcoin and so are enthusiastic to have a reason to complain about it that doesn't require any critical thinking about energy markets. These people believe Bitcoin is entirely worthless, so they'd complain about any level of energy usage, because there is no upside in their calculus.
So Bitcoin shouldn't use renewables because there may be other uses of renewables? I genuinely don't get the energy use argument, this is much more of a government policy problem than a cryptocurrency problem. It feels like this could be extended to any company or product you don't like because you want to save the clean energy for the approved uses.
"Then it flags bitcoin as an environmental hazard"
Well, it got that part right. Any non-POS scheme is just trading stake for something else, and buying and burning energy, no matter how green the source, is pure unnecessary waste. Skip the trading part and save the world.
I do agree, proof of work at this point is entirely outdated. I actually don't invest in Bitcoin because I think a lot of the technology is antiquated, and there are better solutions for everything but the network affect.
the people calling to ban crypto don't care about the environment, that's just an easy selling point for them to garner public support from people who normally wouldn't care. It's all about control of the financial system
I think it's probably a lot of motives, but one of them is that most of our (USA) politicians are too old, and frankly many too dumb, to properly grasp nuanced topics like these. They don't understand crypto, or the internet, or cyber warfare, or larger economic conflict, or any number of critical things they should be well informed on. Their prime focus is on getting reelected and pushing their own agenda, not good stewardship of the nation. I agree that they are pandering on the environment point, there are much more valuable things to spend your time on if you're worried about the environment.
> though estimates seem to be ~50-70% of BTC energy use is from renewables
Bullshit. When one coal mine in a remote region of China flooded, the Bitcoin hash rate measurably dropped by 30%. Keep in mind this was just one coal mine. Not all of China's production.
> it's more apt to call it Web 3.0 than cryptocurrency at this point.
I've said this so many times: But what does it doooooo??? Name one project that isn't "speculation" or "loans" built on cryptocurrency that has seen any uptick or utility. NFTs sure ain't it. DAOs sure ain't it. Supply chain tracking sure ain't it.
I haven't seen one work. Don't say it's the early internet and we'll find one eventually, because it's been 12 years since Bitcoin's launch in 2009, and the ideas are all still junk. Widespread broadband to the home was in strong demand in the early 90s, and Amazon was already selling books while dwellings with connectivity were in the single-digit numbers. The 80s saw university lines saturated by BBSes, newsgroups and MUDs. There was far more demand than supply, and it was very immediately clear what the utility was.
Not even that there is absence of evidence -- but absence of evidence is not evidence of absence. Moreover, your cherrypicking of "Internet-type" inventions that develop very quickly are definitely outliers. By contrast, the answering machine was invented in the 1930's, and didn't take off until 50ish years later.
It's absurdly and ignorantly early to declare "crypto has no utility."
Utility is subjective. If you don't find utility in something, don't use it. Compare these voluntary relationships to the coercive government solutions, like the CBDCs favored by the author.
You mean the answering machine didn't take off until after the wars and great depression ended, suburban life started becoming the default for large groups of people, and they were starting to be away from home for long periods of time, and that before then it saw only limited use by the fairly small numbers of people who were away from their home for long periods of time?
Well now I'm convinced. Guess I better buy tickets to El Salvador because clearly crypto is going to the mooooon.
You're on HN. Crypto isnt liked because it might steal jobs/shake up the status quo. More threads will be posted as user adoption continues and especially when price rises.
Last temper tantrum was like 6 months ago so its probably about that time.
Crypto in general isn't liked because it generally is BS propped up by holders to others to help their position like an MLM coworker. It isn't green (in it's current form for most). It doesn't solve real world problems(in it's current form for most). And it has effectively no avenue to ever being supported by major governments because lol, shocker, they would rather regulate money.
The thing about it all is that it has use, but 98% of all who are pro-crypto are just trying to get in on the gold rush rather than actually make it useful. Diamond hands is good for your position but awful for making it an actual currency.
I'm sure I'll get some five paragraph long response to this pin pointing little bits here and there that might make it possible but the fact of the matter is that as it currently exists and is being propped up, it is just burning our planet for a potential goldrush.
Ok. While you're in denial - its being adopted by social media platforms (twitter), ecommerce platforms (Amazon), its on corporate balance sheets (tesla, spacex, microstrategy, some others), all major payment vendors, banks (JMP), and something like 70 million americans, hundreds of millions globally own it and disagree with you.
Its useful to have a money system that isnt abused by central banks, destroying what you've worked for your whole life. The problem is accelerating and people seem to have found a solution. And energy "waste" is 1) an opinion of its utility and 2) more a function of grid structure. If the energy grid globally was all green then btc would be all green. It also less than 1% of global energy usage and does not scale with usage. It scales with price discovery which eventually maxes out long term.
You dont need to participate if you dont want to but sweeping it under the rug as all a scam is head in sand behavior.
JPM? If Jamie getting into it it can’t be too bad, but I looked just now and find this,
“I'm not a bitcoin supporter,” Dimon said during The Wall Street Journal CEO Council summit on Tuesday. “I don't care about bitcoin. I have no interest in it.”
Edit: sorry, I got the wrong bank (jpm vs jmp). Thanks for clarifying below.
Yeah I didnt say anything about Jamie Dimons opinion on bitcoin (the CEO of a bank). I said JMP is supporting bitcoin. All private clients have access to bitcoin funds (announced recently) and they bank coinbase.
Even if it functioned as a perfect replacement for all existing currency[0], it wouldn’t steal or create jobs, merely change some titles while the tasks (and likely the employers) remain the same. And the point of this website is to shake up the status quo specifically where tech meets business and finance, so we’d like it better if it actually did that.
[0] which it can’t partly for the same reason the U.K. dropped out of the ERM, partly because inflation is economically useful, partly because it replaces one-man-one-vote with one-computational-resource-one-vote and therefore is explicitly plutocratic instead of democratic, partly because no sane government would expose itself to the risk a different nation that chose not to use crypto would perform a 51% attack against it and the only defence against that is an arms race to control more than half of humanity’s compute resources even if that means a von Neumann manufactured Dyson swarm, partly because the transaction rate means that scale can only be achieved with intermediary layers that end up looking indistinguishable from the existing banking sector
"inflation is economically useful" is not proven (and at high levels is destructive and demotivating - look at socialist countries that blow up from hyperinflation and have no productivity) - its just the status quo. The idea that people dont spend in a stagnant/deflationary monetary environment is nonsense. People still want above average returns (investment) and will still spend on necessities and non necessities.
Im not sure of the rant you're going on. There is no argument that the govt is adopting bitcoin over the dollar. Its a private value store that can be transacted with as they wish.
-- Posting my response to below here since I hit a max:
Thats a perception and its not econ 101. If you take the feds balance sheet and divide it by the SPY, its flat over the past 10 years. Inflation does not drive growth. Production in the US is not up. Only the numbers are. Zimbabwe stock market is a top performer. Their production is trash.
You could make the argument were in the drowning phase as deficits widen relentlessly and asset prices are going parabolic.
I have heard basically nobody suggest the US govt is going to adopt bitcoin as the standard currency. Value store is the dominant narrative.
"inflation is economically useful" is not merely proven, it’s 101 econ, so fundamental is it that even people like me know about it. Trying to criticise it by comparison to hyperinflation is only a tiny bit worse than saying “water isn’t needed for life because people can overdose on it”.
> There is no argument that the govt is adopting bitcoin over the dollar.
On the contrary, roughly 75% of the time this topic comes up I see bitcoin supporters absolutely advocate for that.
> I've said this so many times: But what does it doooooo??? Name one project that isn't "speculation" or "loans" built on cryptocurrency that has seen any uptick or utility. NFTs sure ain't it. DAOs sure ain't it. Supply chain tracking sure ain't it.
In developing nations where the residents do not have access to regulated and "safe" investment vehicles like stock exchanges, where can they invest their saves? Physical bullion that can get stolen or damaged? Cash (and then real estate)?
Bernie Madoff's ponzi scheme started at least as early as 1991 and he was arrested 17 years later in 2008. So I guess these scams can go on quite a while.
"The Synthetix (SNX) project, one of the biggest ecosystems in decentralized finance (DeFi), recently launched the Hadar upgrade, which enabled tokenized real-world assets like Brent oil and the Nikkei stock index."
The article describes Synthetix as a means for speculating on real-world assets through the trading of tokens representing equity actually held on other exchanges. However, the tokens themselves merely underly the SNX crypto actually being exchanged.
IOW, it's just another vessel for speculating which purports to be backed by real financial assets in the same way Tether purports to be backed by cash.
> I've said this so many times: But what does it doooooo???
Are you asking about Bitcoin or Crypto? Bitcoin doesn't do much atm, but Ethereum does stuff, and Bitcoin Cash is pretty practical as a currency at the moment. There's plenty that can be done, but the market will have to decide what to converge on.
Does Ethereum do stuff well or efficiently?
My understanding is that gas prices have been both high and unpredictable, and as such even for use cases where smart contracts make sense in the abstract, it can be impractical to use it b/c the overhead would be too high.
Does it matter? BTC and ETH are the version 1 of something "new". The version one is the playground. There is plenty demand for ETH/BTC like systems without the inefficiencies and so people are building better systems. Flare is an new project that will (maybe, probably, who knows) be able to run everything ETH can because it uses the EVM but it does not use PoW or PoS and thus will not have the fees and slowness. Maybe Flare will still not cut it and die like the countless other projects then something else will come. Its just tech/code in the end. When it comes to real utility people will use whatever there is that delivers.
Unlike with the whole gambling where people mostly set their money on the big coins regardless of if its actually useful (its mostly not). There are some big companies out there building amazing stuff. Crypto people especially bitcoin people often hate them because they represent the "real world" with banks and regulations and all that. And ofc they dont build anything on BTC because its tech s*cks and is p much useless for anything beside speculation
Both BTC and ETH could be gone some day, the technology however will not go away. Most of the "bad" thing people point out is exclusively to PoW system anyway, like the whole energy wasting things. Its completely irrelevant for 99% of all other projects. Its kinda like if people would yell at cars because there are these huge diesel trucks that blow out black smoke in a world where ~99% of all cares are EVs. And then comes an article like this one here calling for banning cars because of the black smoke he saw the other day.
Reality check: We dont ban cars because some cares blow out black smoke.
We dont ban crypto because some (one) uses whole coal mines of energy.
- in an ancestor post, crypto skeptic asks "but what does it doooo?"
- response, "Bitcoin doesn't do much, but Ethereum does stuff"
- me, skeptical "But does Ethereum actually do stuff?"
- answer: "no, but something else in the future might"
We're 13 years into blockchain technologies, and it seems like there's still not a convincing case of it being a good, useful solution to a real need. Saying that the next thing will be better stretches credulity.
You have to differ between use-case and tech
A good use-case likely does not work on the popular tech that we have today.
Like the original use-case of p2p-money (ignore if this use-case actually makes sense or not). It does not work with bitcoin, its way to slow and expensive.
Now if you create a new "bitcoin" that does work for the use case p2p-cash then this should in theory replace the old bitcoin. But in reality it does not. Bitcoin turned into a gambling thing and tribalism over what the real bitcoin is and should do. And your actual solution likely gets no attention at all because its just one of many thousands of other blockchains from which 99+% are useless and probably hundred also say they solved the p2p-cash problem. The chance to taking over bitcoin is essentially zero in the near time future it doesn't matter how much better something is. We have tech that objectively way way better than bitcoin since at lest 8 years now and no one who is not into crypto has ever heard form it. Low TPS/Longe blocktims/energy consumption etc. etc. all solved problems since many many years, yet this is what mainstream crypto talks about.
So your better bitcoin does not "succeed" since 8+ years...
Does that mean the tech you made for p2p-cash is bad/useless?
Does that mean the tech does not work for the use-case?
Does that mean another XX years without anything useful coming out?
It sure looks like that but maybe it just means that everyone else has no clue what tech and use-cases actually could/would/do work because they are all in the shadow of the big 1 coin that failed at everything it tired to be but gets all the attention anyway.
I'm not saying the next thing will magically do everything better. But its just a matter of time before projects that actually do something get the attention. It may take a long long time for that to happen. Most of the new people who came into the crypto space in the last years are in no way able to distinguish between useless stuff like bitcoin, stuff that is straight out a scams and stuff that actually solve a problem better than solutions without blockchain tech could.
They are often not even into tech, they are into money. All the scams would not work if a majority of people would have a decent understanding of the tech.
And even the people who have the skills, can not evaluate the different techs in a meaningful way. Ive dug into many projects myself over the years and almost everything is useless but most I will never even look at because it somehow has to get my attention first.
Nonetheless there is n doubt the tech is revolutionary and it will sooner or later power stuff normal people use likely without them knowing, also likely stuff that has nothing to do with money. Its kinda funny how the whole crypto space focuses on how to use the tech with money but there so much more that can be done.
Stop trying to play cute. If smart contracts decentralize services that means that vendors collect money directly from the user with all the middle men reduced to a governable smart contract.
What does this mean ? Do you really need handholding to figure it out ?
It means that services will incur less fees for the client, and end up putting more money in the pocket of the vendor.
More money from the same transaction to the vendor == value by definition to the vendor.
Less fees from the same transaction for the client == value by definition to the user.
Saving money on services is perhaps the greatest value to society you can do. Who wouldn't want more money ? Is this not valuable to you ?
Quite simply, escrow. Programming complex escrow, that holds and releases funds when appropriate conditions are met. People have bundled many escrow statements together to create entire banks. People can pool different currencies together to create liquidity pools and exchanges between currencies.
It's not all that different from (transfer)wise except a bit less owned by one central firm.
It can be "pay this vendor when this thing ships" or "pay out this pot when this event or game score happens." Any measurable metric online can turn into the IF of an if then statement.
If you are genuinely interested, one nice example is this animated short series that sold out yesterday in half an hour: https://www.stonercats.com/faq
It sold NFTs (characters from the show with random properties, look at https://opensea.io/collection/stoner-cats-official for some examples) and each owner of an NFT obtains the right to view the actual episode when released. As these NFTs can be resold, people are collecting their favorite characters, bidding against each other. The makers of the series get a kickback for each sell
Because this is on Ethereum, this unlocks all sorts of other possibilities, some of which are described in the FAQ. Additionally:
* people could rent out their NFT in the future for others to view the episodes
* NFTs can be used as collateral for loans
* the makers of the series could distribute additional earnings back to the NFT holders
Of course, this is doable without a blockchain. But then it wouldn't have these directly on launch:
* a platform to sell the initial set of NFTs, publicly accessible and distributed provably fair
* a large number of wallets (and websites), all able to visualize the NFT to their owners
* a simple method of restricting access to the series to NFT buyers
Bitcoin does a lot. A store of value that hedges against government inflation is by definition a valuable service.
I don't understand why everyone is looking for a swiss-army knife like application from BTC. The value has already been proven in the marketplace, hence why everyone is buying it.
I'm sure everyone who bought bitcoin at >$50,000 would have something to say about whether its utility as a "store of value" has been proven in the marketplace.
There is a reason Fed and central banks exists. Governments just have to ban the transaction of crypto to any hard currencies and there goes the 2x in 5 years. The works to ban are now in the works and will be rolled out within that time frame. Good luck holding it for 2x. It will have values, but not for mass consumers markets. It is a musical chairs except the last one won't really get the chair to sit but more like a spiky seat.
Crypto democratizes and decentralizes finance, banking the unbanked, debanking the overbanked, and rebanking the debanked. Using lightning network crypto eliminates middlemen and the annoying experience of transacting money between businesses and customers. With brain wallet seeds you can take your wealth with you anywhere as long as you can remember it or write it down where nobody else will see it, ever. For maximum security you can send your funds to a burner address, withdrawing them from circulation and ensuring nobody can ever steal them.
I know you said no loans, but I can't skip mentioning DeFi which enables anybody to borrow their own money from themselves, anytime, fully electronically and without centralization.
Then you have smart contracts, which are like a computer, but on everybody's computer at the same time. You can write full programs with complexity nearing that of FizzBuzz and run them worldwide for only hundreds of dollars.
Just imagine a world without crypto. It would be like a world without hackysack, or a world without mail order swords on the shopping channel. Unrecognizable and primitive.
You seem like someone very "plugged in" (ha!) to the cryptocurrency world, so I have to ask: what's the best kind of epoxy to fill my ethernet ports with?
I don't know, but I'll sell you a synthetic asset that mimics epoxy brands, tracking their prices using an oracle[0]. Instead of buying, say, a tube of JB Weld, you can buy 2 $JBW[1] and take out an overcollateralized loan to get the cash to buy your 1 tube of actual epoxy. Because cryptos go up, your $JBW collateral will probably have doubled in value by the time you need to pay back the loan, making the purchase completely free. This technique can be used to end poverty worldwide.
[0] website
[1] $JBW tokens are not redeemable for epoxy. However, I pinky promise that every time you buy one, I buy a tube of actual epoxy and throw it in the garbage, creating value that your token represents.
Pretty please be satire because that flew over my head the first time and I'm still not really sure if you are sarcastic or serious. What an exemplar of the cultish enthusiasm and logical inconsistencies I consistently get from crypto enthusiasts, which is exactly why I'm wary of the whole thing.
Just because it doesn't serve a clear purpose doesn't mean it should be banned.
If governments simply allowed cryptocurrencies to exist outside of any regulation except the obligation to pay taxes on transactions and gains, eventually participation would decline as users of the currencies lost their money to scams or mismanagement, in the absence of a state interest in
protecting participants.
If the system is designed to resist state intervention, maybe letting it run as designed, and suffer the consequences, is the best approach. There's no need to regulate it out of existence just because it serves no apparent purpose. This is one case where the market will sort that out if we let it.
just because you don't use it or put in the effort to look at different decentralized projects doesn't mean there are "no use-cases".
I think with the amount of activity on AAVE and yearn, plus the growth these projects have received have killed that argument. Very 2017 argument that no longer makes any sense and is presented by luddites.
Most the bottlenecks right now to why you don't have day-to-day apps deployed on ecosystems like ethereum is because of the gas prices. You have hundreds of very intelligent developers working to decrease this to fractions of a cent.
There are legit architectural changes like proof-of-staking and L2-proposed changes that will for sure reduce the price of a function invocation in ethereum.
But you probably don't care about this, because you'd rather hang your nose high and pretend that you're much smarter than a whole ecosystem of extremely talented developers (including some award winners). Enjoy that feeling mate, it's not going to last long and it's all entirely ego-based.
the onus is not on me to hand-deliver you information. I'm just here to say OP is wrong, speaking emotionally/egotistically, and spreading trite arguments that have been debunked time and time again.
Go ahead and google "L2 ethereum" and "ethereum proof-of-staking migration". If you want to dive deep into the ecosystem it's all in plain sight for you to do so.
There is a lot going behind the scenes and I simply don't have time to regurgitate the information.
well not sure what this proves, but I guess you can bet against the ethereum developers delivering. I'm personally not making that bet, but if you want to do so, that's your view of the world lol.
I know core devs and hodl, just saying they continuously fail to deliver and that there is doubt that a solution is actually possible. Things get far more complex and the exploits quite interesting
that's fair, and you actually have an informed view on this matter.
The solution you have come to is a fair one (which is that truly developing a decentralized infrastructure that is reasonably priced to run apps on has too many challenges to succeed, at least the current solution that ethereum is providing).
I have hope that these problems can be surmounted by the ethereum development team. There are lots of challenges, and that is why everyone says we are at the beginning stages.
I think it's worth a shot, and if it succeeds I do believe we'd live in a better society.
If a blockchain is to succeed, it will likely be something other than ETH. The fees for ops is far more complicated than renting VM time from a hyper cloud and performance is terrible. The DX is worse than the UX, the issues they need to overcome are human problems, not technology ones
Im particularly fond of Hyperledger Fabric, though it is quite antithetical to the crypto narrative.
Let me just preface this by saying that I'm not anti-crypto. From what little I know about it, it's an interesting tech. I just literally don't understand _why_ people use it. So I dug in to what you mentioned.
Layer 2 Rollups
> Layer 2 is a collective term for solutions designed to help scale your application by handling transactions off the Ethereum mainnet (layer 1), while taking advantage of the robust decentralized security model of mainnet. Transaction speed suffers when the network is busy which can make the user experience poor for certain types of dapps. And as the network gets busier, gas prices increase as transaction senders aim to outbid each other. This can make using Ethereum very expensive.
So it makes Ethereum cheaper. As someone who doesn't really get the hype, this doesn't help at all. Making Ethereum cheaper doesn't help me if I don't have a reason to use Ethereum.
After Googling "ethereum proof-of-staking migration" my take away is that moving to proof-of-stake will make it more robust and more energy efficient. Again, it doesn't tell me anything about why I should use Ethereum (or any other cryptocurrency) in the first place.
Everything I read about crypto talks about how it's currency that can be produced by anyone* and blockchain inherently makes it possible to know who did what and when. As a layperson, none of this is interesting or useful. The average person isn't going to start mining, the average person isn't going to speculate on a very volatile market, and the average person has no way to spend any crypto that they own. I'm not saying it's your job to fix the optics here but I've read a ton of comments in this thread and not a single person has pointed to something that made me think "I could use that" and I'm the kind of person who likes to browse Github looking for weird things to try out.
* Provided you have enough money to build a powerful PC and afford the electricity cost
check out some of the DeFi projects for more hands-on applications (they all have githubs too):
Sushi, yearn, aave.
Right now with the current function invocation costs, ethereum ecosystem cannot support meaningful apps outside of trustless banks which is why L2 is extremely important. It's going to unclog a massive drain if done right.
Proof-of-stake is a strategy being used to make some cryptocurrencies more environmentally friendly. Instead of using lots of compute to compete create new bitcoins, cryptocurrencies using proof-of-stake, like Ethereum 2.0, dole out new coins to people relative to the amount of the currency they already own. Proof-of-stake uses orders of magnitude less compute than proof-of-work, so it's far more environmentally friendly.
Gas prices are transaction fees. Right now, both Bitcoin and Ethereum have high transaction fees - too high to use those currencies for small purchases. The high transaction fees are also delaying "Web 3.0" - new decentralized applications that use blockchains as databases. Once transaction fees go down (and Bitcoin's transaction fees have gone down a lot in the past couple of months), that will make cryptocurrencies practical for more purchases and applications.
> cryptocurrencies using proof-of-stake, like Ethereum 2.0, dole out new coins to people relative to the amount of the currency they already own
Doesn't this mean that those who don't have the funds to be able to safely stake their coins see their balance depreciate as the incoming coins go to people who have the ability to stake their wealth, implying that the most efficient way to use the system is to concentrate wealth?
The goal of proof-of-work is to prevent supermajorities from taking over the chain's verification by turning verification into a lottery of labor. Proof of stake doesn't seem like it solves that problem.
> Doesn't this mean that those who don't have the funds to be able to safely stake their coins see their balance depreciate as the incoming coins go to people who have the ability to stake their wealth, implying that the most efficient way to use the system is to concentrate wealth?
Not necessarily. If the currency's market value keeps increasing, then even if you don't stake your coins, your balance will still appreciate.
> The goal of proof-of-work is to prevent supermajorities from taking over the chain's verification by turning verification into a lottery of labor. Proof of stake doesn't seem like it solves that problem.
From the Ethereum website:
"The threat of a 51% attack still exists in proof-of-stake, but it's even more risky for the attackers. To do so, you'd need to control 51% of the staked ETH. Not only is this a lot of money, but it would probably cause ETH's value to drop. There's very little incentive to destroy the value of a currency you have a majority stake in. There are stronger incentives to keep the network secure and healthy.
"Stake slashings, ejections, and other penalties, coordinated by the beacon chain, will exist to prevent other acts of bad behavior." [0]
> Most the bottlenecks right now to why you don't have day-to-day apps deployed on ecosystems like ethereum is because of the gas prices. You have hundreds of very intelligent developers working to decrease this to fractions of a cent.
But I can deploy an app on AWS for fractions of a cent right now. What does Ethereum do?
no you cannot deploy an uber-like taxi app on AWS for fractions of a cent.
More like billions of dollars and thousands of employees plus regulations.
It's not just about the deployment infrastructure, it's also about the actual vendor-client interaction and the cost of running the service, and where the incentives are.
I think you fundamentally don't understand what Ethereum is trying to do if you are thinking like this. I suggest you read the documentation and learn about what the infrastructure actually allows you to do.
Ethereum will allow you to deploy a smart contract that enables taxi drivers to provide that service to taxi customers. You do not have any employees and rather the taxi drivers will decide whether they wish to use your contract or not.
For making money:
you can create a token which allows holders to have shareholder rights. You create a governance board to which the token shareholders vote on matters related to the business (expansion, token buy-back protocols, etc).
You're thinking with a centralized mindset. This decentralizes the service so it's driven by the community rather than a company. No one has employees.
So the service itself runs for pretty much free, and the consumer only pays overhead of staking and any programmatically added fees (which is going to be much, much less overhead than Uber carries).
After 10 years, which Uber app succeed with Eth? Enlighten me. Can and actual is very different. It is like saying Betamax is superior and yet we see VHS.
It would be more persuasive if you could point to something that has utility and viability in the here and now. A killer app or something that benefits society and offsets the much talked about negative externalities. From the outside it’s hard to see the good and so the crypto community would benefit greatly by focusing on pr at least as much as the technology itself. When I talk to working class people, the view of Bitcoin is as a tool for the wealthy young tech overlords to make even more outrageous fortunes. Punctuate that with news about ransomware and child trafficking and you can imagine. They hate it a lot. Crypto shouldn’t be an enemy of the poor, but it is according to every poor and working class person I ask. That’s a problem worth solving IMO.
A decentralized marketplace is more akin to what you would see in ancient bazaars of Mesopotamia.
It will allow vendors to collect more money for their service while at the same time allowing customers to pay less for the same service.
This is because a decentralized service does not need a thousand people and billions of dollars of VC funding to run (take Uber for instance).
Instead there will be the smart contract (which will require funding so there will be a very small fee per transaction), the governance body (which is going to be like the shareholder system of the stock market so token holders), and the vendors themselves.
Multiple layers of waste will be cut (middle management, needing an actual corporation to provide a service) and it's a more natural way of doing business. It's a pretty radical shift from the way we're doing things now and the wheels are in motion which is why so many people are excited.
I suggest you learn how the price of a product or service changes based on regulation, cost of employees, the amount of money a business owes in loans, basic stuff!
More overhead adds to the cost.
A smart contract infrastructure will not have zero overhead, but it will be close to it. Much less than a centralized service provider.
There is no "middlemen" but more just one "middleman" which is the smart contract which each will have a different protocol and how they handle fees.
Some will use it to pay for API calls, others will use it to do some automated token buy-backs. Depends on the contract.
And the beauty is, the contracts are all publicly available so you can read it before requesting to the service.
You're still missing a bunch of other skims off the top in crypto.
You are incorrect to make that logical jump since anything crypto is still very early stage and has yet to produce viable, long term business models
Note that hiring devs in crypto is more expensive than other industries, due to its bad rap. There is no amount of money that could get me to work in crypto
This is a great answer. I think my problem is explaining it to poor people, who see Elon musk and jack dorsey, pushing Bitcoin as “for the people” and they just think, oh it’s for those rich guys to hype their startup options into the stratosphere, not for us folks living in debt on the verge of homelessness. I want to help those people get in on it, so they aren’t left even further behind if that makes sense.
Yah I totally agree and I don't like the fact that tech giants like Elon & Jack are using their influence to fluctuate the price of crypto so they can make a few bucks.
I find it greedy and disgusting.
I think these guys have become pretty delusional with the amount of power they experienced the past few decades.
The true crypto movement inside the developer circles of ethereum is trying to displace these assholes by flipping the value infrastructure to the actual service provider rather than the one who sits at the top of the centralized pyramid.
It will help poor people in the long-run when it allows more accessible services like driving and food delivery to pay more to them.
It may not work, but it's worth a shot and theoretically possible.
This current system of mega-billion dollar centralized tech businesses is actually very unnatural and strange in my opinion.
Credit card payments, bank deposits, stock holdings: nearly everywhere humans hold value currently is a trust-based system that leaves you at the whims of more powerful counterparties.
If the bank decides to zero out your account balance, they can. You can sue them, and should be able to get you money back if you take them to court, but they have the absolute ability to destroy your wealth.
Bitcoin gives technologically savvy people the opportunity to store value in a way which is not subject to any other party. If I lock 1BTC up in an encrypted wallet, nobody can deprive me of that 1BTC without my consent and participation. That is the killer app.
>If I lock 1BTC up in an encrypted wallet, nobody can deprive me of that 1BTC without my consent and participation. That is the killer app.
And that's where you went wrong.
Its not "nobody" instead its everybody who participates in this who collectively decide where the price goes.
It doesn't matter at all that nobody can take your BTC the only thing that matters is the value of it which can be taken away while you still have it.
The value is defined by supply and demand and thus collectively moved by thousands of people by their actions. If enough people would sell the price would go so low that miners go out of business and the hash rate drops to the point where its no longer secure. At that point the value is essentially zero. You simply hope that there will never be enough people selling at the same time.
Yes, Bitcoin is much more volatile, but literally everything you said applies to every other currency or monetary instrument.
There is no guarantee that Tesla stock, or t-bills or the dollar will have value in 20 years. Money is a collective hallucination and can disappear as soon as people stop believing in it.
I called out whats wrong in your logic. I never claimed anything about fiat/stock or whatever. Its irrelevant, the only point you made FOR bitcoin (namely that no one can take it away from you) is moot because the value can still go away there is just no one to sue/blame if it happens.
Stocks, bonds, cash: all monetary instruments' value can go to zero. Non-crypto assets can also be taken from you against your will.
Part of why Bitcoin is valuable is because it cannot be seized without consent of the owner (if owner is diligent about security).
Your criticism of Bitcoin broadly applies to all forms of "saving money" or preserving value. Value can go away from any vehicle you park your money. Your argument essentially boils down to "I believe Bitcoin in particular will crash more than other monetary instruments, so it doesn't have value" - which could be correct and you could short BTC if you feel confidently about that, but I wouldn't recommend it.
No you missed the point. There was never any comparisons between BTC any other "money". There was just your claim that no one could take away you BTC which is true but irrelevant because you dont want the BTC you want the value. Which can be taken away form you any time. It doesn't matter that this is true for other money types as well. You specifically said that his is unique to BTC but its not true. No one said the claim you made is true for other types of money. Its just wrong for BTC.
>Your criticism of Bitcoin...
No, it did not it pointed out the flaw in your claim. Your logic is nonsense. Thats not a critic on BTC at all.
>Your argument essentially boils down to "I believe Bitcoin in particular will crash more than other monetary instruments, so it doesn't have value"
Again no, that was not my argument nor what I said and not even implied. You make shit up on the go to deflect from what I actually said which has nothing to do with bitcoin but everything with your nonsense claim t which you already agreed on that is is wrong as you said ...
>"....applies to all forms of "saving money" or preserving value."
The credit markets being built on top of crypto have been useful to me personally. Rather than going through the lengthy and invasive credit application/approval processes required by lenders, I can take out a cash loan against my crypto in 1 day with zero hassle. Early last year (prior to building my crypto position) I shut down my startup and had no cash to rely on. I ended up burning through credit while looking for work. It was very stressful. If I'd had the options I do now then I would have taken out a balloon loan against my crypto and taken more time to search for my next gig, rather than jumping on the first decent position I was offered because I needed the money. It has really opened a new world for me financially. I rest much easier knowing that I have this tool available.
>Bullshit. When one coal mine in a remote region of China flooded, the Bitcoin hash rate measurably dropped by 30%. Keep in mind this was just one coal mine. Not all of China's production.
FYI, China kicked out crypto miners, which is why hash rates tanked in the last few months:
So we don't know what percentage of mining is even left in China.
Also, dirty energy is a regulatory issue. Externalities should be captured in the price with taxation, and coal mining should not be subsidized by a nation state. When you do those things, energy consumers won't want to use dirty energy, they'll flock to renewables.
If BTC uses clean energy, someone else has to use the dirty energy because BTC took the renewable they could have used. Mining has also driven up costs for communities that had cheap renewables.
BTC is a waste of energy because it doesn't do any of the things it claims to do. It's highly centralized, far more wealth imbalance, and trending towards custodial accounts if it ever wants to reach mass adoption.
That would depend on where the financial motivation to produce renewable energy is coming from.
A logical argument could be made that bitcoin encourages the production and advancment of green energy technologies by rewarding such efforts with wealth generation.
Oh BS
I keep hearing about bitcoin farms that get shut down because they are stealing electricity. That is more likely than someone running one on solar and wind. AND that solar/wind would've been better used to offset a fossil fuel source of electricity than being used on completely and utterly fake and worthless "money"
The blockchain is just a platform. You have to build projects on top of the platform. Asking what does it do doesn't make any sense. It's like asking what does a piece of paper do.
The real question to ask is not what does it do but whether the trade offs of using decentralised tokenised platform for building real world apps is useful or scalable. The answers to which are still being discovered.
What has been built on Blockchain? Specifically I'm looking for examples of things that solve a problem that couldn't be solved without Blockchain, or at least were unsolved before.
Portable assets is one. You can buy and NFT on one market, use it within a game, display it in your virtual home, then sell it on a different market.
Blockchain allows individuals to actually own digital assets. (Whether those digital assets are valued correctly is a totally separate discussion - personally I think there are many that are grossly overvalued...)
World of warcraft items, amazon video or ebook purchases, etc. - you don't actually own those things: you are locked in and subject to the whims of the platform. If the platform wants to kill your account or remove your items, they can.
Disclaimer: I haven't done any of this myself and don't think any of these are rational investments.
Most NFT marketplaces have a 'portfolio' page that displays all of the NFTs you own.
Then there are second-life style digital worlds (where you can buy virtual real estate) that some people have created NFT galleries within. Seems like Cryptovoxels and Decentraland are the two leaders in this space.
There are also a handful of MMO-type games where tradable items have been turned into NFTs, so they can be traded and possessed externally to the game. Maybe some allow cross-game usage too? I'm not sure, haven't been following these that closely - there a bunch and I am too skeptical to dive into any of them.
On the other hand, if some centrally-run MMO were to use NFTs that they issue for its items (or, I guess probably maybe they shouldn’t be non-fungible really, because one “hammer of smiting” should probably be equivalent to any other “hammer of smiting”, no point keeping track of them as separate entities when you can just keep track of who owns how many of each. But that is beside the point),
Well, the game devs still control how these items actually behave in-game.
If they want to take away someone’s mystic scepter of lightning, they can just make the game cease to acknowledge the existing “mystic scepter of lightning” token, and give everyone other than that person a new token for “mystic scepter of lightning” and have the game recognize this new token.
So, sure, this person gets to keep their token, but it no longer has the in-game effect or appearance.
So, what’s the point? If the salt loses its saltiness, it is no longer good for anything, except to be thrown out and trampled underfoot.
Someone could make another game which does use the token, but, if this is an mmo, a large part of the value requires the other players. (As, otherwise, why bother making it an online game at all? Just make a local single player game, where the developers can’t change what is on the player’s computer (unless the player chooses to update) anyway,
so unless this other game can get a substantial player base, why would this make the old token for the lightning scepter useful again?
So, for [this strategy of using tokens for items in the game with the goal of making people really possess the items, not at the mercy of the people running the game] to make sense, the entire game would have to be decentralized, or something like that.
(The Cryptokitties thing was kind of like that iirc, in that the page to render them and whatnot was just released as a self-contained thing over IPFS, and while the developers could, of course, release a modified version of it later if they wanted, the original version would still be available and working as long as people wanted to continue using it. Also iirc other people made alternative clients for it which rendered the cats in different ways? So, that kind of fits the idea of “some other game including the scepter token” I guess?)
But if an mmo game is to have like, continuing updates, for new content and such, that doesn’t really seem compatible with the “you really own the items in a meaningful way”.
I suppose it could be set up such that players who didn’t want to update could continue to play an old version, with some degree of compatibility between earlier and later versions? But you can’t trade a Lugia from pokemon Silver to pokemon Blue (though you can trade a Paras from Silver to Blue).
Yeah, I personally think using NFTs for gameplay-altering items seems like a bad path that will lead to frustrated holders of useless things, because either meta will shift and they'll have to disable some items or they have to manage permanent power inflation (challenging to do well and will devalue the items anyways).
A lot of "Free to play" games get most of their money from cosmetic enhancements. I think cross-game cosmetic enhancements could increase demand. Ex. Team fortress 2 hats would be more valuable if you could also wear them in world of warcraft.
Seems tricky to figure out how to incentivize other developers to implement this support for items they don't get revenue from, but I bet someone will figure it out in the next few years.
I suppose what I said would be less of an issue for cosmetic items, good point.
As for “how to get other games to recognize the tokens for the cosmetic items”, I suppose one reason could be via the use of copyright: grant a license to other games to use the assets for the items, conditional on the requirement that they only allow it for people who have the token in question. If they are high quality assets, and in a format where they can be easily incorporated, then that could make it worthwhile to implement them. Of course, the game using the assets from the other game would prefer to be allowed to use the assets for anything they want, but, seeing as it is essentially for free, if it fits with the art style and setting/mood of the borrowing game, that could make it worth it, maybe. If the group granting the license wanted to provide additional encouragement to do this, they could also issue some number of the tokens to be distributed by the other game. This could maybe work as a cross-promotional thing. People from the first game which don’t have the token could be motivated to try the other game because they can use(wear) the item in the game they already play, and people who are playing the second game could be made aware of the first game by the introduction of the item. (Of course, many parts of this could be done without any sort of token by just having the game servers contact each-other on occasion, but tokens could allow the sharing between many games more easily maybe. Also allows making it really be the same item on both games such that if one sells it in one, it is also gone in the other, without needing the servers for the different games to constantly contact one-another over that kind of thing.)
I do think something that could be interesting would be to use a permission-ed authenticated append-only database (essentially like a proof-of-authority blockchain, except not necessarily a blockchain, could be closer to an ordinary database),
which could allow the kinds of cross-chain trades we see in actual blockchains, which could facilitate trades of items between different games, without requiring the players trust that the other player will uphold their end of the trade on the other game, just trust that the game servers don’t cheat, as the game servers would have basically no reason to do that.
I think these would be able to scale much more easily, while still being potentially compatible with actual blockchains.
That's an interesting idea. Cross game cosmetics would be especially interesting if certain items were not made available for sale by the developers, but had to be earned via in-game accomplishments.
Ex. if you kill the final boss in the game, you get a hat that you can sell, but every copy of this hat was earned by someone who beat the game.
Could be an interesting way for game studios to cross promote - if player of Game B wants that fancy hat, they have to either beat Game A or trade with someone who did, incentivizing more people to play Game A. Some number of people would be swayed in which games they chose to play if they could 'cash out' once they were done with it - even if it's only ~$20 for dozens of hours.
So this could be used to not only bring in revenue, it could alternately be structured to build audience.
That coal-mine flood was in Xinjiang, and Xinjiang has now kicked out all its Bitcoin miners, because the only way it's profitable to mine Bitcoin with fossil-fuel power is when it's subsidized, and it was being subsidized. But subsidizing Bitcoin mining is unprofitable for any government, so these subsidy-exploitation setups tend to be short-lived.
90% of Bitcoin mining in the PRC got shut down permanently last month with little warning, dropping the hashrate by half: https://www.globaltimes.cn/page/202106/1226598.shtml. Presumably it will nose back up over the next few months once deals have been signed and the mining hardware has been installed in new places with cheap unsubsidized electricity—necessarily from renewable sources.
I agree with your skepticism about non-currency uses of blockchains. Some people do seem to be using ENS now, and I think smart contracts might become usable eventually, but I'm not confident blockchains will be part of smart contracts as they actually get deployed.
As for the 12-years-into-the-internet thing, well.
The ARPANET started running in 01969. The first version of the FTP protocol we use today (USER, PASS, SOCK, TYPE, BYE) was standardized in RFC 354 in 01972. The "Internet Transmission Control Program" (TCP), featuring SYN/ACK/FIN bits, but 20-bit host numbers (divided into a 4-bit network ID and a 16-bit "TCP address") and 24-bit port numbers, is specified in RFC675 in 01974, and experimental deployments started in 01975. Version 2 of TCP is IEN 2 from 01977. Version 3 of TCP, with a separate IP layer so you could use it for voice over IP, is from 01978. 12 years after the ARPANET's launch was 01981, which is when the Internet Protocol was finally standardized (in RFC 791, IEN 128, replacing the 01980 RFC 760) as a future replacement for NCP. The switchover from NCP to TCP/IP was January 1, 01983.
So 12 years after the internet's launch was, depending on where you count from, either 01981, 01987, or January 1, 01995. Even on January 1, 01995, most of the US still had no for-profit ISPs; the closest thing most people could get was AOL over dialup (probably 14400 bps), which had three million users (1.5% of the US population) and wouldn't let you browse the WWW. AOL added an email gateway to the internet in 01992, Usenet access in September 01994, and web browsing later in 01995, all paid by the hour. At some later point AOL started providing actual internet access (so you could, for example, use telnet and ssh and upload files via FTP).
It was clear to me what the internet's utility was as soon as I got on it in 01992, 23 years after it started. But in 01995 Bill Gates's The Road Ahead dismissed the internet as a primitive precursor to the "information highway" he imagined, so it wasn't obvious to everyone, even 12 years after the switchover of the ARPANET to TCP/IP.
Similarly, the utility of Bitcoin is obvious to me, too, and to millions of other people. I've written about it here before, for example in https://news.ycombinator.com/item?id=27448744.
> I've said this so many times: But what does it doooooo???
It does exactly what it set out to do in the first sentence of the original white paper.
"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."[0]
You really seem like you're not open to having your mind changed here. You took many of the current use cases and threw it out for no reason. What would change your mind here?
I'm not making these estimates, so you can call bullshit but I'm just saying the numbers that have been reported.
It doooooes a lot actually. There are a lot of financial transaction tools, which are not reasonable to throw away. Ethereum alone is on pace to settle trillions this year in transactions. NFT's are a substantial market, and are more than just selling a jpeg (which is a massive business in and of itself). They're the more abstract idea of introducing uniqueness through scarcity into a system that is fault tolerant, distributed, and secure (without having to build that system).
Some of the best use cases I've seen are from Vechain (I invested in this project). Vechain does supply chain tracking, which you also threw away for no good reason, and they're currently live in the real world working with real companies. You can go into a Walmart in China and interact with their food supply chain tracking system today. They also just launched a covid vaccine passport for the San Marino government. There are video games being built on their ecosystem, just like there are on many other cryptocurrencies.
Comparing incremental advancements in technology to the fundamental creation of the internet and ecommerce isn't a valid argument for saying crypto isn't useful. Electric vehicles are junk because it's not a personal spaceship.
No one is saying we'll find a use case eventually. People were saying that 5 years ago, there are already use cases and people are building billion dollar companies in those spaces faster than Amazon grew to a billion dollars. You clearly have not been keeping up with this field, and throwing out anything that didn't fit into your narrative. You should try to revisit it with an open mind.
> and all but saying that the reason there are hackings to things like critical infrastructure is because crypto exists
Just to play devil's advocate, how do you imagine ransomware would work outside of crypto?
There had been a few toy ransomware attacks before Bitcoin, but the regulated payment industry ultimately prevented any major ransomware industry from developing.
Bitcoin has changed all of that. Since the release of CryptoLocker, the industry has exploded into a multi-billion dollar racket.
From my perspective, this industry did not and cannot exist absent cryptocurrency.
I don't think this is cause to shutdown crypto convertibility, but it also can't be dismissed out of hand.
I’m not too well read into this space, but I would argue a large cause in the boom of hacking is external to crypto. The fact that so much monetary value and information has moved online would make me believe the pie was by growing regardless of crypto. The article points out the Biden administration being unsure of how to tackle the hacking problem, but governmental infrastructure being hacked is not a monetary extraction problem, it’s a national security problem. I’m much more concerned about power companies being shut down than Target leaking customer records, for example.
I definitely won’t say crypto isn’t used effectively for ransomware payments, it’s obviously the current go to. My issue is the article seems to reduce it down to ceteris paribus, hacking wouldn’t be a problem. When many of the bad actors here are nation states, that is not a valid argument.
Give me one Web 3.0 thing that a non-trivial number of people use that is not directly related back to cryptocurrency itself (speculation, exchanges, gambling, etc.).
A product? A service? A game? A hosting solution?
The only one I can think of is Sia and maybe FileCoin if they actually ship something useful, and those have only a tiny number of actual users.
I guess maybe Steemit if someone actually still uses that.
We are now in year 13 of the cryptocurrency revolution and I'm having trouble thinking of anything you can do with this stuff.
Think about this in the context of the discussion. Does it follow that we should ban crypto if it doesn't appeal to you? Or should you just not use it personally?
I'm just responding to the debate about whether cryptocurrency is useful beyond... itself.
For the record I don't believe it should be banned broadly speaking. Banning legal exchanges for proof of work cryptocurrencies is something I might be convinced is a good idea since PoW is a disaster, but I would not support banning non-PoW consensus cryptocurrencies.
Get rid of PoW and a lot of the bad shit about cryptocurrency is gone. Yes you can still buy droogs with it, but most droogs are bought with cash anyway. Cryptocurrency is a small fraction of the droog market.
I described some of this in other comments, but my favorite use case is Vechain (I hold their coin). They primarily focus on supply chain logistics, Walmart uses them for their food supply chain. Food validation is a big issue in China, so you can scan a QR code and get information on where your food has been and the temperature it has been kept at all along the chain. They also just released a covid passport for the small country of San Marino.
Beyond just Vechain, Cardano is working with Ethiopia to give five million students a blockchain-based ID that will allow the government to track their academic performance. There are more examples like these, though admittedly many of them have been announced in the past year or so. Ethereum, which is a bit older than these projects, is on path to clear $1-2 Trillion this year.
I know the argument that this is early days isn't very compelling, but I think it makes more sense to look at generation 3 cryptos as the start of crypto's focus being fully blockchain projects instead of currency replacements.
> Some pretty wrong things in here, like insinuating that the only value of crypto is to criminals, and all but saying that the reason there are hackings to things like critical infrastructure is because crypto exists
Both of these are true.
> Then it flags bitcoin as an environmental hazard
"Cryptocurrency" is really an outdated name. Most of these don't claim to be currencies and aren't trying to replace standard money. Even bitcoin has pivoted to be a store of wealth with scarcity built in, akin to gold. Very few really think it should/will become a true replacement for typical currency at this point.
Edit: They do become a very valid replacement for a store of wealth in less stable economies however. Venezuela has seen a lot of utility from Bitcoin since their currency is even more volatile than Bitcoin is. You could imagine the quantity of countries that applies to grows as Bitcoin (or another coin) gets more adoption and it's price becomes less volatile. Particularly things like stable coins, which are pinned to the US dollar (1 stable coin effectively always equals $1).
So we can waste it on watching porn, pumping water to golf courses, running the light in your fridge, charging your fitbit, or whatever else you choose to do with it. You can extend that argument to anything that uses power which you don't approve of. Your problem isn't with crypto, it's with the power grid.
Here's a brilliant idea: what if you did the leg work to lobby your politicians to push for a power grid that did what you wanted without having to limit innovation...instead of complaining online?
No, it's really not. Every single thing you mentioned uses 100-100,000 times less power in whole of the entire world than Crypto uses. Your comment is like saying 'the problem with fossil fuels is not with their pollution but with that our planet is too sensitive to their output, change your planet, keep the fuel!'
If Crypto is innovation than it should innovate itself into making sense on the planet it exists. This is why POS-based crypto is key to the future but there are WAY too many miners and HODLers that don't want to lose their income because it was based on bad choices.
Don't call it Web 3.0 - these projects have proven very little to imply they are the true next progression of the "Web."
Most of the use-cases don't even especially benefit from decentralization. The main reason they have blockchains and coins is so the project founders can cash out the moment they release a mainnet (thus getting paid by the fans they hype up.)
Look at dfinity (ICP) for a recent example. First week or two it was selling for as high as $600ish and as low as almost $150. Now it goes for $44. Someone is always holding the founders' bag - their newfound cash came from somewhere!
EDIT: upon googling, it appears dfinity is getting sued for this potential pump and dump
That may be a fair criticism of the naming. My point was more that it doesn't make sense to be called cryptocurrency, and less that it's the true next progression of the web.
With regards to the cash outs, I think there's probably an argument to be made about web 1.0 and 2.0 companies that were highly unprofitable with no way to ever become profitable. There were investors propping up companies with bad fundamentals, IPO'ing, cashing out, and in the end the tech bubble pops and takes down the market and retail investors with it. Crypto definitely does it more quickly and violently, but it's not a crypto specific phenomenon.
> But dollars, euros and yen are backed by nations’ respective treasuries. If someone invents a cryptocurrency, any value is based solely on convincing others it has value.
They lost me here. Most countries indeed have currency that is backed by their nation's respective treasuries. However, those treasuries are filled dollars, euros and yen. All fiat money no longer backed by gold or anything tangible and whose values are based solely convincing others they have value.
No, the value of fiat money is backed by being the only means of paying taxes. If you do anything productive in America, you'll have to find dollars to pay taxes, or you'll go to jail.
The notion that nation-state issued fiat currency is based “solely” on convincing others they have value is quite a reductive over-simplification. The existence of organized societies with some central government body has shown value, and the means of exchange amongst citizens and with citizens of other societies is backed in part by that value. It’s quite a bit more complex than you suggest.
The value of fiat currencies is "based solely convincing others they have value" - it is trust in the issuer.
You are arguing that trusting issuers has been societal valuable, which sure - historically it has been for the fiat currencies that still exist (if you ignore survivorship bias).
Not sure what handwaving "society is valuable and that value is what backs fiat currencies" even means in concrete terms. The government has the power to print as much fiat currency as they want (and they frequently do with intentional inflation targets). There is nothing that stops governments from printing more money except fear that it will damage trust in their currency, leading to devaluation.
* The value of fiat currencies is "based solely convincing others they have value" - it is trust in the issuer.*
You can continue to assert this, but that doesn’t make it true. And it is definitely not “hand waving” to make the observation that organizational structures provide value. Some more than others, depending on the context and time. Fiat currency arises out of the dominant current organization into nation-states, and the value is from the same root. It’s more or less an emergent property, not the directed efforts of some few elites to convince everyone else of the value. If and when this organization loses value, we’d likely see a similar devaluation of fiat currency. For example, a “mad max” apocalypse scenario.
The US government should replicate the success of crypto, then ban it entirely.
> How should governments respond?
> Wolf argues that central banks (e.g., the U.S. Federal
> Reserve) should create their own official digital
> currencies — central bank digital currencies (CBDC)
> and make cryptocurrencies illegal.
This is a solution that works.
Cryptocurrencies are borne out of a desire to be rid of governments. They're the ultimate libertarian dream of a stateless world.
Bitcoin and its ilk award the early adopters and pre-miners. They are not vehicles of economic empowerment. In fact, unsophisticated and poor investors can be ruined by moving their assets into crypto when subject to wild price swings, pump and dumps, and HFT/finance operations.
Fiat is a system of levers that betters the health of the government that mints it. They can be used to defer recessions, hedge inflations, fund infrastructure and investments, and increase the wealth of the populace. Bitcoin cannot do this. The crypto system rewards the whales, hucksters, and scammers.
Money printing also correlates with the productivity of the population, otherwise it becomes unhealthy. Taxes reap a portion of the growth and reinvest them.
USD comes with assurances. FDIC and a wealth of other measures are in place to protect individuals. If it's attacked, the government will respond.
If you lose your crypto wallet, you're screwed. No government backs BTC, so if the crypto is defeated (as nation state actors may have already done), everyone's investments crash to zero with no restitution. One crypto attack destroys the entire house of cards, and it is coming.
It's also reassuring to know that the USD is backed by a democratically elected governance.
Crypto makes hacking and cybercrime easier. It isn't untraceable like many USD transactions leveraging layering/integration and similar techniques, but it certainly doesn't require the same level of financial crime sophistication as moving money in fiat does. You don't need vast networks of physical money laundering machinery and real people in the loop.
Crypto burns energy, wastes GPU resources, drives up prices, and puts our brightest minds to the task of solving stupid and meaningless problems.
Crypto does not benefit society and the US government needs to step in with an alternative to meet the demand. Once they've become the de facto standard, then they can ban crypto.
Yes, it's about time. These steamy piles need to be banned - it's the only way to cut down on the greed-fueled scams. They solve no problems - despite of their "whitepapers"! They are the Rube Goldberg machine of the 21st century - invented as a honeypot by NSA or as means for the Chinese to export capital.
Note: Dear HODLers, instead of downvoting me, get lives!
I'm curious if crypto enthusiasts believe crypto currencies won't be as regulated as other currencies and if not, in what way will it be more free and open in a beneficial manner?
Right now, the government taxes USD cash savings at 5.4% (current inflation rate).
There are good reasons for fiat currencies to continue existing, but it is also easy to understand why savers find a currency that cannot be devalued by federal reserve policy appealing.
Personally, I also think the transparency of Bitcoin is a positive quality. Even the federal reserve does not have the capability to trace exactly where a given dollar has been - they are just integers in black box databases owned by banks. They settle net amounts, but enumerating the history of any particular dollar is impossible - even an accurate approximation would be prohibitively expensive. History is integral to the architecture of Bitcoin, so being able to trace where exactly money came from is much easier to do than for the dollar. If governments were forced to use crypto for expenses, it would provide much more transparency into government spending. I think this is especially beneficial to NGOs - they can publish their addresses and the public can audit their income and expenses directly.
Technically, you're right, but I think a centralized database doesn't provide much trust beyond current govt reporting methods.
The nice thing about decentralized blockchains for government transparency is that it is absolute and mandatory.
I'd worry that a centralized database would simply omit some expenditures if they were used for black-ops or things that could otherwise hurt the reputation of the government.
Transparency would have to be legislated to be mandatory, database or Blockchain. Transition to Blockchain would be complex and likely create more issues than it alleviates, compared to private infra.
Pretty bold to lead the article with “I‘ve never quite understood.“ I think the article would have been way better if the author would have taken the time to at least understand a bit why cryptocurrencies are worth a lot to a lot of people.
ah yes the war on money, because the war on drugs went so well.
moral panic has never helped anyone. appeals to authority and banning peoples jobs and hobbies wont get anyone on your side. prove your way is better, we'll keep building ours too.
Good for bitcoin the concept, bad for the gold-chasing crypto-geeks who want their 10,000% return get-rich-quick scheme.
If mining was banned, it would force a move to a POS system like ETH 2.0 and would solve most of the environmental problem. Just the people who hold it and the miners would lose their income source. This should make it clear that you have the people who want crypto as a currency and people who just want profits and they don't know they are enemies.
I’m making an excellent side income with cryptocurrency. The Bitcoin boom and bubble allowed us to get a down payment for the house we live in. I don’t know where the money came from but cryptocurrency investment has been a boon for out fiancees.
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[ 2.8 ms ] story [ 211 ms ] threadUndermined his credibility right there. Not worth reading the rest.
I'm not sure how much attention the idea of banning cryptocurrency has had from these kind of circles before.
CFR folks like Bob might be equally interested in stopping cryptocurrency as a way for countries subject to US sanctions, like Iran and Venezuela, to have access to the international payment system. But that's probably not as appealing a pitch for the UN Security Council, the G7, and the G20, who I think are his real audience here. He knows a unilateral move against cryptocurrency by USG would be not only very difficult because of domestic opposition but also a bit of an own goal, cutting the US off from the developing permissionless international economy.
But if he can convince other governments' advisors that Bitcoin poses a threat to them that outweighs any potential protection it grants them from the US, then those concerns go away. PRC is already on board; Russia and India could maybe be persuaded, having flirted with total cryptocurrency bans and then backed away from them; Brazil, Japan, Korea, Taiwan, the EU and Commonwealth countries are likely to be more difficult. No idea about Mexico, the Saudis, Turkey, and Indonesia—they've all been rather nervous about it, except in Mexico where it's fully legal.
For people not in this world, cryptocurrency does NOT mean digital money. It needs to be rebranding. It's a wave of projects building (mostly) decentralized tools or things secured by a blockchain secured through some protocol, such as finance exchanges, art minting and exchanging for digital scarcity, video games, real world supply chain tracking, music creation + tracking (hard to determine who is in every song and what sampling they used to pay artists), general contract writing with built in logic to be able to have trust in an interaction without having to involve a third party. There are many more examples, but it's more apt to call it Web 3.0 than cryptocurrency at this point.
Is Bitcoin offsetting other uses that those renewables would have gone for or are people building solar farms out of their Bitcoin gains to fund more Bitcoin?
This is certainly not universally the case at the moment. It is probably offsetting in the majority of cases currently. But I bet there are a non-zero number of renewable energy products that were able to get greenlit purely because crypto mining can function as a buyer of last resort, and this number will continue increasing.
Bitcoin mining uses a higher proportion of green energy than most other industries though, so I think this energy use criticism is pretty shallow. Some people just don't like Bitcoin and so are enthusiastic to have a reason to complain about it that doesn't require any critical thinking about energy markets. These people believe Bitcoin is entirely worthless, so they'd complain about any level of energy usage, because there is no upside in their calculus.
Well, it got that part right. Any non-POS scheme is just trading stake for something else, and buying and burning energy, no matter how green the source, is pure unnecessary waste. Skip the trading part and save the world.
Your examples of use are all good.
Bullshit. When one coal mine in a remote region of China flooded, the Bitcoin hash rate measurably dropped by 30%. Keep in mind this was just one coal mine. Not all of China's production.
https://fortune.com/2021/04/20/bitcoin-mining-coal-china-env...
> it's more apt to call it Web 3.0 than cryptocurrency at this point.
I've said this so many times: But what does it doooooo??? Name one project that isn't "speculation" or "loans" built on cryptocurrency that has seen any uptick or utility. NFTs sure ain't it. DAOs sure ain't it. Supply chain tracking sure ain't it.
I haven't seen one work. Don't say it's the early internet and we'll find one eventually, because it's been 12 years since Bitcoin's launch in 2009, and the ideas are all still junk. Widespread broadband to the home was in strong demand in the early 90s, and Amazon was already selling books while dwellings with connectivity were in the single-digit numbers. The 80s saw university lines saturated by BBSes, newsgroups and MUDs. There was far more demand than supply, and it was very immediately clear what the utility was.
It's absurdly and ignorantly early to declare "crypto has no utility."
Well now I'm convinced. Guess I better buy tickets to El Salvador because clearly crypto is going to the mooooon.
https://www.jstor.org/stable/3106703
Last temper tantrum was like 6 months ago so its probably about that time.
The thing about it all is that it has use, but 98% of all who are pro-crypto are just trying to get in on the gold rush rather than actually make it useful. Diamond hands is good for your position but awful for making it an actual currency.
I'm sure I'll get some five paragraph long response to this pin pointing little bits here and there that might make it possible but the fact of the matter is that as it currently exists and is being propped up, it is just burning our planet for a potential goldrush.
Its useful to have a money system that isnt abused by central banks, destroying what you've worked for your whole life. The problem is accelerating and people seem to have found a solution. And energy "waste" is 1) an opinion of its utility and 2) more a function of grid structure. If the energy grid globally was all green then btc would be all green. It also less than 1% of global energy usage and does not scale with usage. It scales with price discovery which eventually maxes out long term.
You dont need to participate if you dont want to but sweeping it under the rug as all a scam is head in sand behavior.
“I'm not a bitcoin supporter,” Dimon said during The Wall Street Journal CEO Council summit on Tuesday. “I don't care about bitcoin. I have no interest in it.”
Edit: sorry, I got the wrong bank (jpm vs jmp). Thanks for clarifying below.
There was also a crypto-downturn in their years of operation and these two protocols didn't need "bailouts" to survive.
[0] which it can’t partly for the same reason the U.K. dropped out of the ERM, partly because inflation is economically useful, partly because it replaces one-man-one-vote with one-computational-resource-one-vote and therefore is explicitly plutocratic instead of democratic, partly because no sane government would expose itself to the risk a different nation that chose not to use crypto would perform a 51% attack against it and the only defence against that is an arms race to control more than half of humanity’s compute resources even if that means a von Neumann manufactured Dyson swarm, partly because the transaction rate means that scale can only be achieved with intermediary layers that end up looking indistinguishable from the existing banking sector
Im not sure of the rant you're going on. There is no argument that the govt is adopting bitcoin over the dollar. Its a private value store that can be transacted with as they wish.
-- Posting my response to below here since I hit a max:
Thats a perception and its not econ 101. If you take the feds balance sheet and divide it by the SPY, its flat over the past 10 years. Inflation does not drive growth. Production in the US is not up. Only the numbers are. Zimbabwe stock market is a top performer. Their production is trash.
You could make the argument were in the drowning phase as deficits widen relentlessly and asset prices are going parabolic.
I have heard basically nobody suggest the US govt is going to adopt bitcoin as the standard currency. Value store is the dominant narrative.
> There is no argument that the govt is adopting bitcoin over the dollar.
On the contrary, roughly 75% of the time this topic comes up I see bitcoin supporters absolutely advocate for that.
If you’re going to argue with multiple nobel laureates about their own field of expertise WRT evidence for inflation being useful, we’re done here.
It lets me transact value online without sacrificing my privacy.
In developing nations where the residents do not have access to regulated and "safe" investment vehicles like stock exchanges, where can they invest their saves? Physical bullion that can get stolen or damaged? Cash (and then real estate)?
"The Synthetix (SNX) project, one of the biggest ecosystems in decentralized finance (DeFi), recently launched the Hadar upgrade, which enabled tokenized real-world assets like Brent oil and the Nikkei stock index."
IOW, it's just another vessel for speculating which purports to be backed by real financial assets in the same way Tether purports to be backed by cash.
Are you asking about Bitcoin or Crypto? Bitcoin doesn't do much atm, but Ethereum does stuff, and Bitcoin Cash is pretty practical as a currency at the moment. There's plenty that can be done, but the market will have to decide what to converge on.
Unlike with the whole gambling where people mostly set their money on the big coins regardless of if its actually useful (its mostly not). There are some big companies out there building amazing stuff. Crypto people especially bitcoin people often hate them because they represent the "real world" with banks and regulations and all that. And ofc they dont build anything on BTC because its tech s*cks and is p much useless for anything beside speculation
Both BTC and ETH could be gone some day, the technology however will not go away. Most of the "bad" thing people point out is exclusively to PoW system anyway, like the whole energy wasting things. Its completely irrelevant for 99% of all other projects. Its kinda like if people would yell at cars because there are these huge diesel trucks that blow out black smoke in a world where ~99% of all cares are EVs. And then comes an article like this one here calling for banning cars because of the black smoke he saw the other day.
Reality check: We dont ban cars because some cares blow out black smoke. We dont ban crypto because some (one) uses whole coal mines of energy.
- in an ancestor post, crypto skeptic asks "but what does it doooo?"
- response, "Bitcoin doesn't do much, but Ethereum does stuff"
- me, skeptical "But does Ethereum actually do stuff?"
- answer: "no, but something else in the future might"
We're 13 years into blockchain technologies, and it seems like there's still not a convincing case of it being a good, useful solution to a real need. Saying that the next thing will be better stretches credulity.
Like the original use-case of p2p-money (ignore if this use-case actually makes sense or not). It does not work with bitcoin, its way to slow and expensive.
Now if you create a new "bitcoin" that does work for the use case p2p-cash then this should in theory replace the old bitcoin. But in reality it does not. Bitcoin turned into a gambling thing and tribalism over what the real bitcoin is and should do. And your actual solution likely gets no attention at all because its just one of many thousands of other blockchains from which 99+% are useless and probably hundred also say they solved the p2p-cash problem. The chance to taking over bitcoin is essentially zero in the near time future it doesn't matter how much better something is. We have tech that objectively way way better than bitcoin since at lest 8 years now and no one who is not into crypto has ever heard form it. Low TPS/Longe blocktims/energy consumption etc. etc. all solved problems since many many years, yet this is what mainstream crypto talks about.
So your better bitcoin does not "succeed" since 8+ years...
Does that mean the tech you made for p2p-cash is bad/useless? Does that mean the tech does not work for the use-case? Does that mean another XX years without anything useful coming out? It sure looks like that but maybe it just means that everyone else has no clue what tech and use-cases actually could/would/do work because they are all in the shadow of the big 1 coin that failed at everything it tired to be but gets all the attention anyway.
I'm not saying the next thing will magically do everything better. But its just a matter of time before projects that actually do something get the attention. It may take a long long time for that to happen. Most of the new people who came into the crypto space in the last years are in no way able to distinguish between useless stuff like bitcoin, stuff that is straight out a scams and stuff that actually solve a problem better than solutions without blockchain tech could. They are often not even into tech, they are into money. All the scams would not work if a majority of people would have a decent understanding of the tech.
And even the people who have the skills, can not evaluate the different techs in a meaningful way. Ive dug into many projects myself over the years and almost everything is useless but most I will never even look at because it somehow has to get my attention first.
Nonetheless there is n doubt the tech is revolutionary and it will sooner or later power stuff normal people use likely without them knowing, also likely stuff that has nothing to do with money. Its kinda funny how the whole crypto space focuses on how to use the tech with money but there so much more that can be done.
What does this mean ? Do you really need handholding to figure it out ?
It means that services will incur less fees for the client, and end up putting more money in the pocket of the vendor.
More money from the same transaction to the vendor == value by definition to the vendor.
Less fees from the same transaction for the client == value by definition to the user.
Saving money on services is perhaps the greatest value to society you can do. Who wouldn't want more money ? Is this not valuable to you ?
It's not all that different from (transfer)wise except a bit less owned by one central firm.
It can be "pay this vendor when this thing ships" or "pay out this pot when this event or game score happens." Any measurable metric online can turn into the IF of an if then statement.
It sold NFTs (characters from the show with random properties, look at https://opensea.io/collection/stoner-cats-official for some examples) and each owner of an NFT obtains the right to view the actual episode when released. As these NFTs can be resold, people are collecting their favorite characters, bidding against each other. The makers of the series get a kickback for each sell
Because this is on Ethereum, this unlocks all sorts of other possibilities, some of which are described in the FAQ. Additionally:
* people could rent out their NFT in the future for others to view the episodes
* NFTs can be used as collateral for loans
* the makers of the series could distribute additional earnings back to the NFT holders
Of course, this is doable without a blockchain. But then it wouldn't have these directly on launch:
* a platform to sell the initial set of NFTs, publicly accessible and distributed provably fair
* a large number of wallets (and websites), all able to visualize the NFT to their owners
* a simple method of restricting access to the series to NFT buyers
I don't understand why everyone is looking for a swiss-army knife like application from BTC. The value has already been proven in the marketplace, hence why everyone is buying it.
I know you said no loans, but I can't skip mentioning DeFi which enables anybody to borrow their own money from themselves, anytime, fully electronically and without centralization.
Then you have smart contracts, which are like a computer, but on everybody's computer at the same time. You can write full programs with complexity nearing that of FizzBuzz and run them worldwide for only hundreds of dollars.
Just imagine a world without crypto. It would be like a world without hackysack, or a world without mail order swords on the shopping channel. Unrecognizable and primitive.
[0] website
[1] $JBW tokens are not redeemable for epoxy. However, I pinky promise that every time you buy one, I buy a tube of actual epoxy and throw it in the garbage, creating value that your token represents.
If governments simply allowed cryptocurrencies to exist outside of any regulation except the obligation to pay taxes on transactions and gains, eventually participation would decline as users of the currencies lost their money to scams or mismanagement, in the absence of a state interest in protecting participants.
If the system is designed to resist state intervention, maybe letting it run as designed, and suffer the consequences, is the best approach. There's no need to regulate it out of existence just because it serves no apparent purpose. This is one case where the market will sort that out if we let it.
I think with the amount of activity on AAVE and yearn, plus the growth these projects have received have killed that argument. Very 2017 argument that no longer makes any sense and is presented by luddites.
Most the bottlenecks right now to why you don't have day-to-day apps deployed on ecosystems like ethereum is because of the gas prices. You have hundreds of very intelligent developers working to decrease this to fractions of a cent.
There are legit architectural changes like proof-of-staking and L2-proposed changes that will for sure reduce the price of a function invocation in ethereum.
But you probably don't care about this, because you'd rather hang your nose high and pretend that you're much smarter than a whole ecosystem of extremely talented developers (including some award winners). Enjoy that feeling mate, it's not going to last long and it's all entirely ego-based.
Go ahead and google "L2 ethereum" and "ethereum proof-of-staking migration". If you want to dive deep into the ecosystem it's all in plain sight for you to do so.
There is a lot going behind the scenes and I simply don't have time to regurgitate the information.
The solution you have come to is a fair one (which is that truly developing a decentralized infrastructure that is reasonably priced to run apps on has too many challenges to succeed, at least the current solution that ethereum is providing).
I have hope that these problems can be surmounted by the ethereum development team. There are lots of challenges, and that is why everyone says we are at the beginning stages.
I think it's worth a shot, and if it succeeds I do believe we'd live in a better society.
Im particularly fond of Hyperledger Fabric, though it is quite antithetical to the crypto narrative.
Layer 2 Rollups
> Layer 2 is a collective term for solutions designed to help scale your application by handling transactions off the Ethereum mainnet (layer 1), while taking advantage of the robust decentralized security model of mainnet. Transaction speed suffers when the network is busy which can make the user experience poor for certain types of dapps. And as the network gets busier, gas prices increase as transaction senders aim to outbid each other. This can make using Ethereum very expensive.
So it makes Ethereum cheaper. As someone who doesn't really get the hype, this doesn't help at all. Making Ethereum cheaper doesn't help me if I don't have a reason to use Ethereum.
After Googling "ethereum proof-of-staking migration" my take away is that moving to proof-of-stake will make it more robust and more energy efficient. Again, it doesn't tell me anything about why I should use Ethereum (or any other cryptocurrency) in the first place.
Everything I read about crypto talks about how it's currency that can be produced by anyone* and blockchain inherently makes it possible to know who did what and when. As a layperson, none of this is interesting or useful. The average person isn't going to start mining, the average person isn't going to speculate on a very volatile market, and the average person has no way to spend any crypto that they own. I'm not saying it's your job to fix the optics here but I've read a ton of comments in this thread and not a single person has pointed to something that made me think "I could use that" and I'm the kind of person who likes to browse Github looking for weird things to try out.
* Provided you have enough money to build a powerful PC and afford the electricity cost
Sushi, yearn, aave.
Right now with the current function invocation costs, ethereum ecosystem cannot support meaningful apps outside of trustless banks which is why L2 is extremely important. It's going to unclog a massive drain if done right.
Gas prices are transaction fees. Right now, both Bitcoin and Ethereum have high transaction fees - too high to use those currencies for small purchases. The high transaction fees are also delaying "Web 3.0" - new decentralized applications that use blockchains as databases. Once transaction fees go down (and Bitcoin's transaction fees have gone down a lot in the past couple of months), that will make cryptocurrencies practical for more purchases and applications.
Doesn't this mean that those who don't have the funds to be able to safely stake their coins see their balance depreciate as the incoming coins go to people who have the ability to stake their wealth, implying that the most efficient way to use the system is to concentrate wealth?
The goal of proof-of-work is to prevent supermajorities from taking over the chain's verification by turning verification into a lottery of labor. Proof of stake doesn't seem like it solves that problem.
Not necessarily. If the currency's market value keeps increasing, then even if you don't stake your coins, your balance will still appreciate.
> The goal of proof-of-work is to prevent supermajorities from taking over the chain's verification by turning verification into a lottery of labor. Proof of stake doesn't seem like it solves that problem.
From the Ethereum website:
"The threat of a 51% attack still exists in proof-of-stake, but it's even more risky for the attackers. To do so, you'd need to control 51% of the staked ETH. Not only is this a lot of money, but it would probably cause ETH's value to drop. There's very little incentive to destroy the value of a currency you have a majority stake in. There are stronger incentives to keep the network secure and healthy.
"Stake slashings, ejections, and other penalties, coordinated by the beacon chain, will exist to prevent other acts of bad behavior." [0]
[0] https://ethereum.org/en/developers/docs/consensus-mechanisms...
But I can deploy an app on AWS for fractions of a cent right now. What does Ethereum do?
More like billions of dollars and thousands of employees plus regulations.
It's not just about the deployment infrastructure, it's also about the actual vendor-client interaction and the cost of running the service, and where the incentives are.
Ethereum will allow you to deploy a smart contract that enables taxi drivers to provide that service to taxi customers. You do not have any employees and rather the taxi drivers will decide whether they wish to use your contract or not.
For making money: you can create a token which allows holders to have shareholder rights. You create a governance board to which the token shareholders vote on matters related to the business (expansion, token buy-back protocols, etc).
You're thinking with a centralized mindset. This decentralizes the service so it's driven by the community rather than a company. No one has employees.
So the service itself runs for pretty much free, and the consumer only pays overhead of staking and any programmatically added fees (which is going to be much, much less overhead than Uber carries).
It will allow vendors to collect more money for their service while at the same time allowing customers to pay less for the same service.
This is because a decentralized service does not need a thousand people and billions of dollars of VC funding to run (take Uber for instance).
Instead there will be the smart contract (which will require funding so there will be a very small fee per transaction), the governance body (which is going to be like the shareholder system of the stock market so token holders), and the vendors themselves.
Multiple layers of waste will be cut (middle management, needing an actual corporation to provide a service) and it's a more natural way of doing business. It's a pretty radical shift from the way we're doing things now and the wheels are in motion which is why so many people are excited.
So you are saying there are still middlemen who take a cut of the transactions?
I suggest you learn how the price of a product or service changes based on regulation, cost of employees, the amount of money a business owes in loans, basic stuff!
More overhead adds to the cost.
A smart contract infrastructure will not have zero overhead, but it will be close to it. Much less than a centralized service provider.
There is no "middlemen" but more just one "middleman" which is the smart contract which each will have a different protocol and how they handle fees.
Some will use it to pay for API calls, others will use it to do some automated token buy-backs. Depends on the contract. And the beauty is, the contracts are all publicly available so you can read it before requesting to the service.
Centralized processors have infra costs, perhaps they have found a good price point already
You could also be more respectful if you are on HN
(staking fees && smart contract fees) <<< (overhead of running a multi-billion dollar corporation)
You are incorrect to make that logical jump since anything crypto is still very early stage and has yet to produce viable, long term business models
Note that hiring devs in crypto is more expensive than other industries, due to its bad rap. There is no amount of money that could get me to work in crypto
I think these guys have become pretty delusional with the amount of power they experienced the past few decades.
The true crypto movement inside the developer circles of ethereum is trying to displace these assholes by flipping the value infrastructure to the actual service provider rather than the one who sits at the top of the centralized pyramid.
It will help poor people in the long-run when it allows more accessible services like driving and food delivery to pay more to them.
It may not work, but it's worth a shot and theoretically possible.
This current system of mega-billion dollar centralized tech businesses is actually very unnatural and strange in my opinion.
Credit card payments, bank deposits, stock holdings: nearly everywhere humans hold value currently is a trust-based system that leaves you at the whims of more powerful counterparties.
If the bank decides to zero out your account balance, they can. You can sue them, and should be able to get you money back if you take them to court, but they have the absolute ability to destroy your wealth.
Bitcoin gives technologically savvy people the opportunity to store value in a way which is not subject to any other party. If I lock 1BTC up in an encrypted wallet, nobody can deprive me of that 1BTC without my consent and participation. That is the killer app.
And that's where you went wrong.
Its not "nobody" instead its everybody who participates in this who collectively decide where the price goes.
It doesn't matter at all that nobody can take your BTC the only thing that matters is the value of it which can be taken away while you still have it.
The value is defined by supply and demand and thus collectively moved by thousands of people by their actions. If enough people would sell the price would go so low that miners go out of business and the hash rate drops to the point where its no longer secure. At that point the value is essentially zero. You simply hope that there will never be enough people selling at the same time.
There is no guarantee that Tesla stock, or t-bills or the dollar will have value in 20 years. Money is a collective hallucination and can disappear as soon as people stop believing in it.
Bitcoins value can go to zero.
Stocks, bonds, cash: all monetary instruments' value can go to zero. Non-crypto assets can also be taken from you against your will.
Part of why Bitcoin is valuable is because it cannot be seized without consent of the owner (if owner is diligent about security).
Your criticism of Bitcoin broadly applies to all forms of "saving money" or preserving value. Value can go away from any vehicle you park your money. Your argument essentially boils down to "I believe Bitcoin in particular will crash more than other monetary instruments, so it doesn't have value" - which could be correct and you could short BTC if you feel confidently about that, but I wouldn't recommend it.
>Your criticism of Bitcoin...
No, it did not it pointed out the flaw in your claim. Your logic is nonsense. Thats not a critic on BTC at all.
>Your argument essentially boils down to "I believe Bitcoin in particular will crash more than other monetary instruments, so it doesn't have value"
Again no, that was not my argument nor what I said and not even implied. You make shit up on the go to deflect from what I actually said which has nothing to do with bitcoin but everything with your nonsense claim t which you already agreed on that is is wrong as you said ... >"....applies to all forms of "saving money" or preserving value."
FYI, China kicked out crypto miners, which is why hash rates tanked in the last few months:
https://www.blockchain.com/charts/hash-rate
So we don't know what percentage of mining is even left in China.
Also, dirty energy is a regulatory issue. Externalities should be captured in the price with taxation, and coal mining should not be subsidized by a nation state. When you do those things, energy consumers won't want to use dirty energy, they'll flock to renewables.
The coal mine flood happened about a month before the widespread ban of Bitcoin in China, and we can see both events on the hashrate over time chart.
BTC is a waste of energy because it doesn't do any of the things it claims to do. It's highly centralized, far more wealth imbalance, and trending towards custodial accounts if it ever wants to reach mass adoption.
A logical argument could be made that bitcoin encourages the production and advancment of green energy technologies by rewarding such efforts with wealth generation.
The blockchain is just a platform. You have to build projects on top of the platform. Asking what does it do doesn't make any sense. It's like asking what does a piece of paper do.
The real question to ask is not what does it do but whether the trade offs of using decentralised tokenised platform for building real world apps is useful or scalable. The answers to which are still being discovered.
Blockchain allows individuals to actually own digital assets. (Whether those digital assets are valued correctly is a totally separate discussion - personally I think there are many that are grossly overvalued...)
World of warcraft items, amazon video or ebook purchases, etc. - you don't actually own those things: you are locked in and subject to the whims of the platform. If the platform wants to kill your account or remove your items, they can.
Where can I do that? I don't have a virtual home, how can I get one?
Most NFT marketplaces have a 'portfolio' page that displays all of the NFTs you own.
Then there are second-life style digital worlds (where you can buy virtual real estate) that some people have created NFT galleries within. Seems like Cryptovoxels and Decentraland are the two leaders in this space.
There are also a handful of MMO-type games where tradable items have been turned into NFTs, so they can be traded and possessed externally to the game. Maybe some allow cross-game usage too? I'm not sure, haven't been following these that closely - there a bunch and I am too skeptical to dive into any of them.
On the other hand, if some centrally-run MMO were to use NFTs that they issue for its items (or, I guess probably maybe they shouldn’t be non-fungible really, because one “hammer of smiting” should probably be equivalent to any other “hammer of smiting”, no point keeping track of them as separate entities when you can just keep track of who owns how many of each. But that is beside the point), Well, the game devs still control how these items actually behave in-game. If they want to take away someone’s mystic scepter of lightning, they can just make the game cease to acknowledge the existing “mystic scepter of lightning” token, and give everyone other than that person a new token for “mystic scepter of lightning” and have the game recognize this new token.
So, sure, this person gets to keep their token, but it no longer has the in-game effect or appearance.
So, what’s the point? If the salt loses its saltiness, it is no longer good for anything, except to be thrown out and trampled underfoot.
Someone could make another game which does use the token, but, if this is an mmo, a large part of the value requires the other players. (As, otherwise, why bother making it an online game at all? Just make a local single player game, where the developers can’t change what is on the player’s computer (unless the player chooses to update) anyway, so unless this other game can get a substantial player base, why would this make the old token for the lightning scepter useful again?
So, for [this strategy of using tokens for items in the game with the goal of making people really possess the items, not at the mercy of the people running the game] to make sense, the entire game would have to be decentralized, or something like that.
(The Cryptokitties thing was kind of like that iirc, in that the page to render them and whatnot was just released as a self-contained thing over IPFS, and while the developers could, of course, release a modified version of it later if they wanted, the original version would still be available and working as long as people wanted to continue using it. Also iirc other people made alternative clients for it which rendered the cats in different ways? So, that kind of fits the idea of “some other game including the scepter token” I guess?)
But if an mmo game is to have like, continuing updates, for new content and such, that doesn’t really seem compatible with the “you really own the items in a meaningful way”. I suppose it could be set up such that players who didn’t want to update could continue to play an old version, with some degree of compatibility between earlier and later versions? But you can’t trade a Lugia from pokemon Silver to pokemon Blue (though you can trade a Paras from Silver to Blue).
A lot of "Free to play" games get most of their money from cosmetic enhancements. I think cross-game cosmetic enhancements could increase demand. Ex. Team fortress 2 hats would be more valuable if you could also wear them in world of warcraft.
Seems tricky to figure out how to incentivize other developers to implement this support for items they don't get revenue from, but I bet someone will figure it out in the next few years.
I do think something that could be interesting would be to use a permission-ed authenticated append-only database (essentially like a proof-of-authority blockchain, except not necessarily a blockchain, could be closer to an ordinary database), which could allow the kinds of cross-chain trades we see in actual blockchains, which could facilitate trades of items between different games, without requiring the players trust that the other player will uphold their end of the trade on the other game, just trust that the game servers don’t cheat, as the game servers would have basically no reason to do that. I think these would be able to scale much more easily, while still being potentially compatible with actual blockchains.
Ex. if you kill the final boss in the game, you get a hat that you can sell, but every copy of this hat was earned by someone who beat the game.
Could be an interesting way for game studios to cross promote - if player of Game B wants that fancy hat, they have to either beat Game A or trade with someone who did, incentivizing more people to play Game A. Some number of people would be swayed in which games they chose to play if they could 'cash out' once they were done with it - even if it's only ~$20 for dozens of hours.
So this could be used to not only bring in revenue, it could alternately be structured to build audience.
90% of Bitcoin mining in the PRC got shut down permanently last month with little warning, dropping the hashrate by half: https://www.globaltimes.cn/page/202106/1226598.shtml. Presumably it will nose back up over the next few months once deals have been signed and the mining hardware has been installed in new places with cheap unsubsidized electricity—necessarily from renewable sources.
I agree with your skepticism about non-currency uses of blockchains. Some people do seem to be using ENS now, and I think smart contracts might become usable eventually, but I'm not confident blockchains will be part of smart contracts as they actually get deployed.
As for the 12-years-into-the-internet thing, well.
The ARPANET started running in 01969. The first version of the FTP protocol we use today (USER, PASS, SOCK, TYPE, BYE) was standardized in RFC 354 in 01972. The "Internet Transmission Control Program" (TCP), featuring SYN/ACK/FIN bits, but 20-bit host numbers (divided into a 4-bit network ID and a 16-bit "TCP address") and 24-bit port numbers, is specified in RFC675 in 01974, and experimental deployments started in 01975. Version 2 of TCP is IEN 2 from 01977. Version 3 of TCP, with a separate IP layer so you could use it for voice over IP, is from 01978. 12 years after the ARPANET's launch was 01981, which is when the Internet Protocol was finally standardized (in RFC 791, IEN 128, replacing the 01980 RFC 760) as a future replacement for NCP. The switchover from NCP to TCP/IP was January 1, 01983.
So 12 years after the internet's launch was, depending on where you count from, either 01981, 01987, or January 1, 01995. Even on January 1, 01995, most of the US still had no for-profit ISPs; the closest thing most people could get was AOL over dialup (probably 14400 bps), which had three million users (1.5% of the US population) and wouldn't let you browse the WWW. AOL added an email gateway to the internet in 01992, Usenet access in September 01994, and web browsing later in 01995, all paid by the hour. At some later point AOL started providing actual internet access (so you could, for example, use telnet and ssh and upload files via FTP).
It was clear to me what the internet's utility was as soon as I got on it in 01992, 23 years after it started. But in 01995 Bill Gates's The Road Ahead dismissed the internet as a primitive precursor to the "information highway" he imagined, so it wasn't obvious to everyone, even 12 years after the switchover of the ARPANET to TCP/IP.
Similarly, the utility of Bitcoin is obvious to me, too, and to millions of other people. I've written about it here before, for example in https://news.ycombinator.com/item?id=27448744.
It does exactly what it set out to do in the first sentence of the original white paper.
"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."[0]
[0] https://bitcoin.org/bitcoin.pdf
I'm not making these estimates, so you can call bullshit but I'm just saying the numbers that have been reported.
It doooooes a lot actually. There are a lot of financial transaction tools, which are not reasonable to throw away. Ethereum alone is on pace to settle trillions this year in transactions. NFT's are a substantial market, and are more than just selling a jpeg (which is a massive business in and of itself). They're the more abstract idea of introducing uniqueness through scarcity into a system that is fault tolerant, distributed, and secure (without having to build that system).
Some of the best use cases I've seen are from Vechain (I invested in this project). Vechain does supply chain tracking, which you also threw away for no good reason, and they're currently live in the real world working with real companies. You can go into a Walmart in China and interact with their food supply chain tracking system today. They also just launched a covid vaccine passport for the San Marino government. There are video games being built on their ecosystem, just like there are on many other cryptocurrencies.
Comparing incremental advancements in technology to the fundamental creation of the internet and ecommerce isn't a valid argument for saying crypto isn't useful. Electric vehicles are junk because it's not a personal spaceship.
No one is saying we'll find a use case eventually. People were saying that 5 years ago, there are already use cases and people are building billion dollar companies in those spaces faster than Amazon grew to a billion dollars. You clearly have not been keeping up with this field, and throwing out anything that didn't fit into your narrative. You should try to revisit it with an open mind.
Just to play devil's advocate, how do you imagine ransomware would work outside of crypto?
There had been a few toy ransomware attacks before Bitcoin, but the regulated payment industry ultimately prevented any major ransomware industry from developing.
Bitcoin has changed all of that. Since the release of CryptoLocker, the industry has exploded into a multi-billion dollar racket.
From my perspective, this industry did not and cannot exist absent cryptocurrency.
I don't think this is cause to shutdown crypto convertibility, but it also can't be dismissed out of hand.
I definitely won’t say crypto isn’t used effectively for ransomware payments, it’s obviously the current go to. My issue is the article seems to reduce it down to ceteris paribus, hacking wouldn’t be a problem. When many of the bad actors here are nation states, that is not a valid argument.
A product? A service? A game? A hosting solution?
The only one I can think of is Sia and maybe FileCoin if they actually ship something useful, and those have only a tiny number of actual users.
I guess maybe Steemit if someone actually still uses that.
We are now in year 13 of the cryptocurrency revolution and I'm having trouble thinking of anything you can do with this stuff.
For the record I don't believe it should be banned broadly speaking. Banning legal exchanges for proof of work cryptocurrencies is something I might be convinced is a good idea since PoW is a disaster, but I would not support banning non-PoW consensus cryptocurrencies.
Get rid of PoW and a lot of the bad shit about cryptocurrency is gone. Yes you can still buy droogs with it, but most droogs are bought with cash anyway. Cryptocurrency is a small fraction of the droog market.
Beyond just Vechain, Cardano is working with Ethiopia to give five million students a blockchain-based ID that will allow the government to track their academic performance. There are more examples like these, though admittedly many of them have been announced in the past year or so. Ethereum, which is a bit older than these projects, is on path to clear $1-2 Trillion this year.
I know the argument that this is early days isn't very compelling, but I think it makes more sense to look at generation 3 cryptos as the start of crypto's focus being fully blockchain projects instead of currency replacements.
Both of these are true.
> Then it flags bitcoin as an environmental hazard
This is true.
Motivating wealth production through destruction of the environment is irresponsible.
Green Energy production is an environmental boon
Motivating wealth production through green energy utilization is responsible.
Edit: They do become a very valid replacement for a store of wealth in less stable economies however. Venezuela has seen a lot of utility from Bitcoin since their currency is even more volatile than Bitcoin is. You could imagine the quantity of countries that applies to grows as Bitcoin (or another coin) gets more adoption and it's price becomes less volatile. Particularly things like stable coins, which are pinned to the US dollar (1 stable coin effectively always equals $1).
Here is a brilliant idea...What if all of that renewable energy was...not wasted on crypto?
Here's a brilliant idea: what if you did the leg work to lobby your politicians to push for a power grid that did what you wanted without having to limit innovation...instead of complaining online?
If Crypto is innovation than it should innovate itself into making sense on the planet it exists. This is why POS-based crypto is key to the future but there are WAY too many miners and HODLers that don't want to lose their income because it was based on bad choices.
Most of the use-cases don't even especially benefit from decentralization. The main reason they have blockchains and coins is so the project founders can cash out the moment they release a mainnet (thus getting paid by the fans they hype up.)
Look at dfinity (ICP) for a recent example. First week or two it was selling for as high as $600ish and as low as almost $150. Now it goes for $44. Someone is always holding the founders' bag - their newfound cash came from somewhere!
EDIT: upon googling, it appears dfinity is getting sued for this potential pump and dump
With regards to the cash outs, I think there's probably an argument to be made about web 1.0 and 2.0 companies that were highly unprofitable with no way to ever become profitable. There were investors propping up companies with bad fundamentals, IPO'ing, cashing out, and in the end the tech bubble pops and takes down the market and retail investors with it. Crypto definitely does it more quickly and violently, but it's not a crypto specific phenomenon.
They lost me here. Most countries indeed have currency that is backed by their nation's respective treasuries. However, those treasuries are filled dollars, euros and yen. All fiat money no longer backed by gold or anything tangible and whose values are based solely convincing others they have value.
You are arguing that trusting issuers has been societal valuable, which sure - historically it has been for the fiat currencies that still exist (if you ignore survivorship bias).
Not sure what handwaving "society is valuable and that value is what backs fiat currencies" even means in concrete terms. The government has the power to print as much fiat currency as they want (and they frequently do with intentional inflation targets). There is nothing that stops governments from printing more money except fear that it will damage trust in their currency, leading to devaluation.
You can continue to assert this, but that doesn’t make it true. And it is definitely not “hand waving” to make the observation that organizational structures provide value. Some more than others, depending on the context and time. Fiat currency arises out of the dominant current organization into nation-states, and the value is from the same root. It’s more or less an emergent property, not the directed efforts of some few elites to convince everyone else of the value. If and when this organization loses value, we’d likely see a similar devaluation of fiat currency. For example, a “mad max” apocalypse scenario.
The reason people believe in the worth of cryptocurrencies is greed and fear of missing out.
Cryptocurrencies are borne out of a desire to be rid of governments. They're the ultimate libertarian dream of a stateless world.
Bitcoin and its ilk award the early adopters and pre-miners. They are not vehicles of economic empowerment. In fact, unsophisticated and poor investors can be ruined by moving their assets into crypto when subject to wild price swings, pump and dumps, and HFT/finance operations.
Fiat is a system of levers that betters the health of the government that mints it. They can be used to defer recessions, hedge inflations, fund infrastructure and investments, and increase the wealth of the populace. Bitcoin cannot do this. The crypto system rewards the whales, hucksters, and scammers.
Money printing also correlates with the productivity of the population, otherwise it becomes unhealthy. Taxes reap a portion of the growth and reinvest them.
USD comes with assurances. FDIC and a wealth of other measures are in place to protect individuals. If it's attacked, the government will respond.
If you lose your crypto wallet, you're screwed. No government backs BTC, so if the crypto is defeated (as nation state actors may have already done), everyone's investments crash to zero with no restitution. One crypto attack destroys the entire house of cards, and it is coming.
It's also reassuring to know that the USD is backed by a democratically elected governance.
Crypto makes hacking and cybercrime easier. It isn't untraceable like many USD transactions leveraging layering/integration and similar techniques, but it certainly doesn't require the same level of financial crime sophistication as moving money in fiat does. You don't need vast networks of physical money laundering machinery and real people in the loop.
Crypto burns energy, wastes GPU resources, drives up prices, and puts our brightest minds to the task of solving stupid and meaningless problems.
Crypto does not benefit society and the US government needs to step in with an alternative to meet the demand. Once they've become the de facto standard, then they can ban crypto.
Even stupid fake money should be legal. How authoritarian can we get?
Note: Dear HODLers, instead of downvoting me, get lives!
There are good reasons for fiat currencies to continue existing, but it is also easy to understand why savers find a currency that cannot be devalued by federal reserve policy appealing.
Personally, I also think the transparency of Bitcoin is a positive quality. Even the federal reserve does not have the capability to trace exactly where a given dollar has been - they are just integers in black box databases owned by banks. They settle net amounts, but enumerating the history of any particular dollar is impossible - even an accurate approximation would be prohibitively expensive. History is integral to the architecture of Bitcoin, so being able to trace where exactly money came from is much easier to do than for the dollar. If governments were forced to use crypto for expenses, it would provide much more transparency into government spending. I think this is especially beneficial to NGOs - they can publish their addresses and the public can audit their income and expenses directly.
Imagine what happens when some agency loses their wallet key...
The nice thing about decentralized blockchains for government transparency is that it is absolute and mandatory.
I'd worry that a centralized database would simply omit some expenditures if they were used for black-ops or things that could otherwise hurt the reputation of the government.
moral panic has never helped anyone. appeals to authority and banning peoples jobs and hobbies wont get anyone on your side. prove your way is better, we'll keep building ours too.
If mining was banned, it would force a move to a POS system like ETH 2.0 and would solve most of the environmental problem. Just the people who hold it and the miners would lose their income source. This should make it clear that you have the people who want crypto as a currency and people who just want profits and they don't know they are enemies.