>>Let’s start with this: Venmo is a free service to transfer dollars, and bitcoin transfers are not free.
Is the author really unaware of the horror stories of Venmo and PayPal freezing customer accounts?
Articles like this want a return to serfdom, under the control of officialdom. There is no other conceivable reason why someone would not want people to have at least the option of taking custody over their own money, in a form more useful than physical cash.
Maliciously freezing accounts is a result of bad regulation. Overbearing regulation that on one hand encourage companies to be extremely risk-averse and prone to many false positives, and on the other hand not enough consumer-focused regulation that would allow consumers recourse in case things go wrong (false positive or outright malicious theft of funds).
>From my point of view serfdom is the (block)chain. Only people with enough stake or those who pays are in control.
I disagree with this but even if one assumes this to be the case, I'd much rather prefer a monetary system subject to the control of free market forces rather than the modern monetary system which is subject to a small group of unelected and unaccountable technocrats operating under the feeble assumption of central bank independence and whose power is extended through coercion and not voluntary association.
If crypto replaces fiat can you really say it is voluntary still if you need to pay your taxes in bitcoin or whatever currency your government wants to collect to pay for things?
> For instance, you can't use Venmo if you're under 18 (sorry, kids). And several Venmo users told BuzzFeed News that the company suspended their accounts and held their funds after they wrote silly captions to friends or tried to sell something to a friend — like a used computer. [0]
It's not that its illegal. It's that its "discouraged" via arbitrary regulation usually under the guise of money laundering or high charge backs. For instance, cam girls are legal in the US, but they have a difficulty getting a payment provider Same is true for states with recreational marijuana.
Cryptocurrency also solves the problem of charge-backs. Venmo and PayPal gives a sense of finality, but it actually takes days to transfer the funds. That's why there are so many paypal scams on craigslist
Charge-backs aren't there to purely annoy/scam sellers, you know.
> difficulty getting a payment provider
Because there are too many money laundering attempts via transactions in that industry. If you want to deal with the stuff Paypal/Venmo/etc doesn't want to deal with, go ahead.
> There is no other conceivable reason why someone would not want people to have at least the option of taking custody over their own money
You're attacking a straw man here. The author doesn't argue for eliminating the blockchain or crypto assets.
His thesis is that blockchain hasn't gained significant traction (for anything other than speculation, especially as people panic about USD inflation) because people don't want to decentralize trust. They inherently like institutions and want institutions they can trust.
> in a form more useful than physical cash
Literally the whole point of the article is to argue that Bitcoin (and other crypto "currency") is less useful than cash and less appealing to consumers. He is also arguing that this is inherent to the technology itself and will never change.
Nothing is ever going to replace fiat if it's deflationary, and no one is going to "invest" (i.e. buy and keep) a digital fiat replacement unless it's deflationary. It's a catch-22 that digital assets can't solve.
Serfdom was abolished long before central banking emerged in the US.
The institutions created since the creation of the Federal Reserve, like a vast regulatory apparatus that closes off economic opportunities for the masses, and income taxation that abolishes privacy rights while seriously diminishing private property rights, have taken society toward serfdom.
Perhaps there is no other reason you can (or are willing to) conceive, but that does not make it fact.
A major issue with cryptocurrency and blockchain discussions is that vocal proponents speak as if they’re arbiters of truth with perfect knowledge of the the world and everyone who doesn’t subscribe to their view is an envious dunce. They speak in insults and talking points and seem to be more interested in sounding superior than having a conversation.
Humility and openness to be wrong are sorely lacking, but both are needed for a good-faith dialogue.
The only fundamental difference inherent to the respective designs of blockchains and traditional banking, is censorship resistance through genuine self-custody. The former is designed to provide this quality, and the latter is not.
So yes, I maintain people opposed to blockchain on principle - as opposed to problematic elements within the contemporary blockchain space - oppose individual liberty, which I characterize as desiring for the population to be under a technocratic form of serfdom.
>blockchain on principle - as opposed to problematic elements within the contemporary blockchain space
The problems are impossible to decouple from "blockchain on principle" because the problems are intrinsic to the data structure itself, not "contemporary" approaches to the data structure implementation.
I am probably aligned with you politically (if not more radical in my libertarian sentiments), and I can sympathize with the stated goals of the crypto space/bitcoin whitepaper. The problem is that the technology and computer science behind it fails completely to deliver on these goals from both an abstract and practical perspective.
>>The problems are impossible to decouple from "blockchain on principle" because the problems are intrinsic to the data structure itself, not "contemporary" approaches to the data structure implementation.
If that is indeed the belief, then I concede that is an example of someone opposed to blockchains in principle, for a reason that is not an illiberal political agenda.
In any case, I like to think I am pretty well informed on blockchain technology, and I can't think of a single problem that currently afflicts the space, that cannot be solved through engineering a solution that does not involve moving away from the general blockchain architecture, or more generally, a solution that does not involve moving away from autonomous ledgers that use cryptoeconomics to maintain consensus.
A transaction is definitionally something that has been written to the blockchain, so no it isn't.
In the case of layered solutions, you're no longer using blockchain. If we want to count uncomitted transactions on a second layer as "reversible", that comes with a host of its own issues, and points out another intrinsic flaw of blockchain: incapable of fulfilling its philosophical purpose, and requires secondary solutions that violate the very core philosophy of the data structure in hopes of overcoming just one of its many issues.
>>A transaction is definitionally something that has been written to the blockchain, so no it isn't.
You can have a smart contract that writes reversible transactions to the blockchain. This would mean that the smart contract imposes a delay for withdrawals, to allow time for any possible requests for reversals. There could optionally be an expedited wirhdrawal upon some set of authorities deeming the balance as finalized and not subject to any reversals.
>>requires secondary solutions that violate the very core philosophy of the data structure in hopes of overcoming just one of its many issues.
Even when you lose some of the benefits of blockchains, via secondary solutions like a reversible transaction smart contract, you retain some benefits, like:
* optionality, e.g. those who are fine with irreversible transactions are free to use them,
* permissionless market entry, e.g. any party is free to deploy their own 'reversible transaction' smart contract, giving payment consumers maximum choice
* stronger guarantees of the integrity of transaction processing, with transparency into any tampering, given the code that executes the transactions, along with the transaction itself, is publicly auditible
* debundling the provision of the different services that are required for transaction processing, by allowing transactions to be processed by immutably open smart contracts that no third party can later close off access to.
>>You can have a smart contract that writes reversible transactions to the blockchain
No you can't. Once a smart contract is included in a block, it has finished executing and is irreversible. The transaction is irreversible, again, by definition.
>>Even when you lose some of the benefits of blockchains
>>Once a smart contract is included in a block, it has finished executing and is irreversible. The transaction is irreversible, again, by definition.
The transaction is irreversible, in the sense that it can't be removed from the blockchain, but the transfer from person A to person B can be made reversible, via a smart contract that doesn't allow person B to withdraw from the smart contract for a duration, during which time person A can effect a reversal transaction that would effectively undo the transfer.
>>So you're no longer using a blockchain.
In my example, you are using the blockchain in all cases. You are just using smart contracts in a way that reduces some of disadvantages of naive blockchain use (e.g. allowing a consumer to dispute a fraudulent charge) while giving up some of its advantages (e.g. reduced risk of charge backs for honest merchants).
You may not be realizing that PayPal's primary business is fraud detection and dispute resolution, not merely moving money. PayPal is layer above money transfers, providing insurance and reversibility of transactions that cryptocurrencies themselves don't have, and most don't want to have.
PayPal is the closest thing to the cryptocurrency experience in traditional banking. The layer below it - banks and wire transfers - is even more susceptible to financial censorship.
More bad takes from people who don't understand the point of Bitcoin and its blockchain. It's all so... tiresome.
The fact that the author is comparing to services like Venmo or PayPal really goes to show how much they don't understand about what Bitcoin was built to achieve.
FYI the author of this ^ article is the Chief Strategy Officer at the Human Rights Foundation. All his articles on that site are worth reading to gain a more global perspective of what Bitcoin is doing outside of the western hemisphere.
Yeah... if you barely know how to use a smartphone Bitcoin isn't going to be much help to you, unless you learn.
That doesn't mean Bitcoin isn't already helping millions of people in these types of countries that have unstable currencies, governments, or both, but also have wide spread internet and smartphone adoption.
Read the Alex Gladstein articles I mentioned above.
You probably wouldn't use Bitcoin for direct payments, though you certainly could if someone else was willing to accept it. I imagine you'd primarily use it to store wealth on an open and permissionless network, and then convert it to local currency when needed to make the purchases you want.
As I mentioned, Alex Gladstein has lots of good articles outlining how people in countries that are affected by war, authoritarianism, hyperinflation, or all of the above, use Bitcoin. These are the best articles for that:
Tbf, blockchain is the dark matter of technology. People are never allowed to criticize it without the same, repeated feedback “If that’s what you think blockchain is, then you don’t understand it.”
Why doesn’t someone, then, who actually understands their almighty blockchain god, illuminate us, mere mortals, on the wonders of blockchain and how it can be good for society in the foreseeable future.
You know what’s really tiresome? Having the promises of blockchain sold to us for years now without a single, useful purpose for it in sight other than, well, cryptobros.
Criticisms are okay, but this isn't a good criticism.
From the article:
> Let’s start with this: Venmo is a free service to transfer dollars, and bitcoin transfers are not free. Yet after I wrote an article last December saying bitcoin had no use, someone responded that Venmo and Paypal are raking in consumers’ money and people should switch to bitcoin.
Not everyone has access to Venmo or PayPal. For instance, sex workers are routinely booted off the platform in the US with their funds being frozen. People in developing countries also may not have access.
> In fact, I would assert that there is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast.
How about people that want to hold western stable coins and they are legally prevented from holding dollars or similarly stable currency?
My company operates in a highly international business area. The whole industry is moving towards using crypto for B2B payments. Every provider and partner offers payment by crypto - because international bank payments are slow, expensive and complicated (gets stuck, countries blocked, unclear KYC etc, opaque AML blockers etc).
except those KYC and AML laws still apply to the companies making the transfers. And some of the regulators are extremely aggressive in their enforcement.
so your company either has to set up its own KYC/AML compliance department (noting that this is often a regulated profession) or it is probably breaking the law.
International bank payments are slow, but they are also reversible and compliance is not your problem.
It's not but its a lot easier and safer to hold digital currency than wads of cash in your floorboards. Easier to acquire, receive from abroad and verify as well. It allows for a form of civil disobedience against unjust laws
You can print out a seed phrase and hold it under your floorboards as well, or better yet, memorize it. It takes up less space. You can split the phrase up and give it to a few trusted parties. You can do multi-sig. It's easier to transport, etc etc etc
Various weights of gold or silver are the better comparison versus wads of cash, but your point is taken since I guess the completely digital acquisition is the difference.
Do this actual person really exist? They were looking for a way to hold some dollars they had lying around, did some research, found blockchain and have now put the dollars into USDT or whatever?
There are people legally prevented from holding USD. Take a look at Argentina [0]. They're legally banned from holding USD and if they have an account with USD it'll get taken by the state and converted to quickly depreciating bonds. Of course there is a black market for USD but holding substantial amounts of USD under your mattress in order to preserve your wealth is impractical and dangerous.
This is the exception not the rule. Also making this as your main argument for why crypto is a net positive is telling because you understand that there are 0 uses for crypto in a functional democratic society.
You have a very limited view of the history of capital controls. In the history of the world, capital controls are very common. It's a cycle. The state controls the money supply, they debase it through printing (dilution during gold standard), the value depreciates and everyone panics. One of the first things they do is restrict the ability of people to transfer money out of their currency. When everything is stable, you don't see this happen. But when its not (i.e. what its most advantageous) capital controls are applied. You see this happening in Turkey right now:
> Turkey had an 80% foreign currency surrender requirement in place from September 2018 to late 2019 during a previous iteration of a currency crisis and has also used other “soft” capital controls including changing fees charged on currency conversions and adjusting the requirements for currency hedging.
There are financial assets I cannot hold due to the accident of geography. For instance, I can't hold Chinese stocks. I cannot easily and safely send money to family in Cuba, Iran or North Korea. There are a lot of places I cannot hold real estate.
Capital controls and monetary debasement are very much the rule on a long enough timespan.
Fiat currencies are used in literally every country on the planet and have been through the largest economic booms in history. Limited/hard currencies on the other hand, have a 100% failure rate with one ongoing experiment happening right now in El Salvador. Which would I rather bet on?
I bet we agree on many issues including, let people move freely between countries, have less rules, have smaller countries. But there is nothing wrong with the idea of a government backed currency even if you can point to failures like Turkey, Venezuela and many more.
Also are you seriously saying that because you can't rent seek land in Liberia there is a problem with the global economic order?
> Fiat currencies are used in literally every country on the planet and have been through the largest economic booms in history. Limited/hard currencies on the other hand, have a 100% failure rate with one ongoing experiment happening right now in El Salvador. Which would I rather bet on?
Something has existed for tens of thousands of years and in the last 50 years has been supplanted by something else. Which would I bet on surviving 1,000 years from now? Hard currency.
We are talking about a system that completely floundered under pressure from economic expansion (hard money) vs a system that has been presiding over the largest economic booms in history and is currently adopted by every government in the world (fiat) and your argument is "well look which is older".
1. I never claimed hard money was the earliest form of money. Read my original post more carefully. Gold has been used as a currency for at least 3,000 years. Likely earlier.
2. I never claimed fiat was invested 50 years ago. I stated that the global monetary system switched over from predominately hard money with fiat
> We are talking about a system that completely floundered under pressure from economic expansion (hard money) vs a system that has been presiding over the largest economic booms in history and is currently adopted by every government in the world (fiat) and your argument is "well look which is older".
It floundered because it was routinely debased and not adhered to. That was my whole point. I would also say that fiat has failed a lot. You google list of hyperinflation to get a sense of how bad it has been over time. Even today you have people living in countries in which they have to watch their wealth disintegrate every year by double digit amounts
In that article he conflates theoretical trustworthiness (software verifiability) with practical trustworthiness (system comprehensibility to a supermajority of voters). Blockchains might be made to work in a verifiable way, but they won't work for enough of the voting base to trust that they do in fact operate correctly.
The entire point of voting is to provide a way to pick something that virtually everyone can agree was fair. Blockchains are too complex for virtually everyone to understand, and so most people can't agree that they're a fair way to decide on things. They require trust in the programmers and cryptographers, *and most people don't have that trust*. And with good reason, programmers are notorious for making buggy, unreliable, confusing software.
Vitalik entirely ignores this argument against blockchains for voting, and pretends that the most important objections are the technical ones.
"Blockchains are too complex for virtually everyone to understand, and so most people can't agree that they're a fair way to decide on things"
Almost nobody understands any of the complex systems in their life (e.g. banking, software) but it doesn't stop people trusting them. People have trust in these systems because they reliably produce the desired output not because they understand how they work.
> Having the promises of blockchain sold to us for years now without a single, useful purpose for it in sight other than, well, cryptobros.
the issue is that we show the things being made and hn calls them all scams and ponzis and fraud.
we show the rates adoption, and the growth in use and hn says its all speculation and fraud and needs to be made illegal.
we point out that crypto is in many ways doing better than other industries to represent marginalized communities and we all get labelled cryptobros and any of us who arent that get erased from the picture.
if we post anything positive linking to a twitter account that account starts getting endless abuse.
there are very few people who bother coming to hn anymore, pretty much everyone working in the space has given up on it.
We have automated stable currencies, permission-less loans and lending, streaming payments, UBI experiments, co-ops governing land use, automated taxation and public goods funding experiments, sybil resistance mechanisms for 1p1v governance, resilient p2p infrastructure that people are using every day to pay each other and run their businesses. Composability for all of these things to quickly build your own business logic on top of it. Standards for tokenising royalties/payments/tickets... All running on p2p infrastructure anyone can participate in. Thats pretty amazing imo.
At what point will what we've been building be considered useful?
If you took any of these things and wrap it in a saas startup connected to stripe hn would eat it up and claim its the greatest startup of the decade.
but because its built on crypto it can only ever be world destroying disaster capitalist alt-right incubating cartoon villain fraudulent vc led scammers right? its just so tiring.
> At what point will what we've been building be considered useful?
Can you share some of the numbers you're citing? Who is using what to run their businesses daily? What's the number of transactions relative to current financial systems? How many actual users do you have for these things? The problem is anyone digging deeper sees it's all marketing and bullshit.
It starts being useful when it's not motivated by VCs and others with a financial stake trying to get higher exists hyping up products with no utility and no users.
>... hn says its all speculation and fraud and needs to be made illegal.
This is the part that confuses me. What is the theory of value here? If you don't like it don't buy it. If you're not interested, don't buy it. If you don't see the benefits, don't develop cryptocurrency applications.
Nobody is compelling developers or users to use this technology. Meanwhile state run currencies are forced upon us. Walled gardens and browsers force tech choices on developers.
Isn't it enough to dislike something and avoid it entirely? Why advocate for limiting the choices of others? How is this not authoritarian paternalism?
Adoption... Bitcoin has roughly 500K transactions per day with an estimated 80% of them being trades (with an estimated 77% of those trades going through the "big three" exchanges). Visa has 1B transactions per day and virtually every single one of them is someone purchasing a good or service.
Credit cards were "invented" in 1951. By 1970 51% of US households had at least one. All happening well before the internet. Even with all of the hype an estimated 13% of American households even traded crypto last year. Want to guess how many households used it to purchase a good or service?
Globally we're more connected than ever. It's been 13 years - if bitcoin was actually superior for anything other than speculative trading people would be using it for something other than speculative trading.
Regarding the abuse here on HN - tweet something negative about blockchain and I think your perspective on the "abuse" coming from the HN community will change. By nature "cryptobros" and other people pumping these things are doing so for their own financial gain. People that are negative about crypto typically don't have any skin in the game and even if they do (somehow) their ferocity pales in comparison to the portions of the population that are expecting to retire with it.
> Adoption... Bitcoin has roughly 500K transactions per day with an estimated 80% of them being trades (with an estimated 77% of those trades going through the "big three" exchanges).
Source for this?
Also, all of these transaction numbers are for on-chain transactions. They don't include layer 2 solutions like the Lightning Network. Given that the Lightning Network is built for micro-transactions, where sats can literally be streamed to a creator, while someone listens to a podcast for example, it's possible (though impossible to definitively confirm?) that on-chain AND off-chain transactions already exceed credit card services.
You have to understand that Bitcoin (the blockchain network) isn't trying to be a credit card network. It's a settlement layer/clearing house. Traditionally for a transaction to occur with finality would take days, perhaps weeks to occur. When you make a purchase with a credit card that payment isn't occurring with finality in the banking system. It takes days to "lock in". On Bitcoin it takes 10 minutes and is completely automated and trustless.
The Lightning Network (enabled by the SegWit upgrade) allows for payments to occur instantly, with low fees, and can be used for micro-transactions. The tradeoff to that convenience is it's less secure. This is why you would have a Lightning wallet for your day to day usage, and your "savings account" in cold storage on-chain. You would only use on-chain transactions for big purchases, or to open a Lightning channel.
> Globally we're more connected than ever. It's been 13 years - if bitcoin was actually superior for anything other than speculative trading people would be using it for something other than speculative trading.
It literally is, you're just not paying attention. As already mentioned it is being used to stream payments in podcasts as your listen, it is being used in competitive video games, there are gift card services like Bitrefill,
The Lightning Labs blog does a good job of summarizing the state of the Lightning Network.
I understand and am aware of L2 solutions like lightning. My own startup uses Polygon (Ethereum L2) to store copies of user asset verification records.
Generally speaking, L2s are interesting because they all make compromises from the principals of blockchain (as you mention - but that's for another day). It's been interesting, to say the least, to watch some of the fundamental definitions and principals such as "decentralized" and "secure" get redefined over the years.
I use statistics for Bitcoin transaction volume in these comments for several reasons:
1) Bitcoin is more widely known than any other blockchain based technology.
2) It's (essentially) only used for payments so transaction volume is more easily directly compared to other uses. For example, Ethereum has roughly double the daily transaction rate of Bitcoin but it's not clear to me how to easily breakout payments for direct comparison to Bitcoin, Visa, etc.
3) I'd use Lightning transaction volumes if I could find them. Anywhere. I've researched this quite a bit and all I can find are posts like the ones you provided (from Lightning Labs themselves) or from places like the Dailyhodl, etc talking about how big all of the markets Lightning is going to take over are, how much potential there is, etc. The typical "by 2030 we'll be doing (insert astronomical number)".
If you have a reputable/reliable source for the number of transactions on the Lightning Network I'd love to see it. The amount of bitcoin on it, the number of channels, the number of nodes, etc make for some impressive looking graphs but I suspect the transaction volume (to me the only real number that matters in terms of adoption) is still extremely low. If it wasn't everyone in the blockchain sphere would be hyping that too.
Let's circle back - I use blockchain at my current startup. I had 200 GPUs mining Ethereum in 2017. I'm not anti-blockchain by any means. I bring up what I consider to be valid criticisms because the bubble inside a bubble wrapped in an echo chamber present in blockchain today isn't doing anyone any favors. The reality is that (zooming out) after 10 years blockchain is still a toy. If it has any chance of ever living up to the promise and hype at least some people need to step out of the bubble and ask themselves why it's actually been one of the most slowly adopted technologies in the last 100 years.
And "blockchain" is pointless outside of Bitcoin, which might explain why its adoption has been slow as a more general technology. The blockchain was created to solve a very specific problem related to Bitcoin's mission statement (as defined by Satoshi). With that problem solved by Bitcoin, what else is there to use "blockchain" as a technology on exactly? Ok, there might be some very niche use cases that are applicable, but those aren't going to see the technology widely adopted.
> If you have a reputable/reliable source for the number of transactions on the Lightning Network I'd love to see it.
I don't think it's actually possible to determine this. There's no way to see transactions that occur across the entire network. Nodes are only aware of the transactions that route through them. Maybe some clever people have determined a way to infer it, but I'm not aware of any. The metric most people use to judge growth of the Lightning Network is btc capacity i.e. how many bitcoin are "held" in channels between nodes, which is open information.
That's an interesting graph. They appear to have cherry picked data and used strange start dates for each. Based on numbers I've seen it looks more like this:
Bitcoin launched 1/2009 - as of now there are 100M users (your graph says 135M, which seems to be a very high estimate but lets go with that).
World Wide Web was released 4/1993 - 13 years later there were at least 700M users (very conservative estimate). Mind you this growth depended on everything from having a computer (22.9% of US households had a computer in 1993) to laying untold miles of fiber optics, undersea cables, building out physical datacenters, etc. Literally people digging ditches and ships circling the globe - many thousands of miles over.
By being essentially just another internet application (most people consider WWW = internet) taking advantage of all of this infrastructure Bitcoin/blockchain had/has a HUGE advantage over the WWW. To be a bitcoin user in 2009 you had to have a computer and install a program. To be a bitcoin user for the vast majority of its life you could/can hear about bitcoin at a bar, pull your phone out, and install an app on your smartphone to be a "bitcoin user" for next to nothing in under five minutes.
To be a WWW user in 1993 you had to have a computer that could handle it (Windows? Trumpet Winsock?, CPU, RAM, modem, etc) and a local ISP, etc. I remember in 1994 having to install a modem, a second phone line, and dial into an ISP that was LONG DISTANCE... It literally took weeks to get on the internet in 1994 and especially in my case, it was very expensive and very technically challenging (Hayes commands anyone? Chat scripts? PPP/SLIP?).
Then a little later America Online (still crazy expensive), maybe have it at work or university, or in the later years get lucky and have broadband in your area. I couldn't get DSL until 2004, for example (and it was still very expensive).
Even with all of these monumental challenges the WWW grew at least 5x faster than bitcoin (and it's really probably closer to 10x).
I suspected that was the case with Lightning. I'll keep digging into this because as I'm sure you can tell I'm fascinated with this. Overall I'm really trying to ask:
Why has adoption in the "cryptosphere" been so terrible (arguably the worst rate of any recent technology)? This is a question every honest blockchain advocate needs to ask themselves because there are clearly significant issues impeding mass adoption. Whatever these issues are need to be identified and rectified to the extent they can. I truly hope it's not the obvious answer - "It doesn't provide anything most people want or need".
They were frank enough to tell me that their business could have done the same thing in a centralized fashion, but they wouldn't have gotten funding.
Cryptocurrencies don't have a "killer app". Something for the common person.
I suspect that even when they do, it will be incidental. Something that could have been developed as part of a centralized architecture, but built with cryptocurrencies because the financial support was there.
Blockchain is being used in supply chains (IBM tradelens) for immutable record keeping, NFT's (outside of selling URLs to jpgs...) are a good application for certificates of authenticity (some artists are selling their NFTs WITH a physical copy and using the NFT as the certificate of authenticity).
Any application where you need an immutable ledger is a good application for blockchain. Just because crypto enthuisiasts are trying to shoe horn this technology into anything and everything doesn't mean the above isn't true.
> Any application where you need an immutable ledger is a good application for blockchain.
What's your definition of good? An immutable ledger is a good idea and useful. An immutable ledger where every write costs 50-200 USD isn't as useful, for example.
Any application where you need an immutable ledger, and
1. You can't trust any single known party, or group of parties, to attest the integrity of the ledger (otherwise, you could just use plain old digital signatures)
2. You need infinite pseudonymous accounts in this ledger.
3. You need it so badly that you're willing to forgo a significant share of whatever value having this ledger creates, regularly, forever (mining fees).
There have been attempts to rebrand blockchain as anything containing a chain of digital signatures, no mining needed. In which case it's old technology - but in that case I also agree that it has a use.
Artists are by their nature known parties, as are factors in a supply chain. They may have a use for digital signatures, but they have no use for a scheme including mining.
A merkle tree is an excellent way to represent an immutable record. Adding a cryptocurrency does nothing to the system that makes it more immutable. You only need the currency bit if you want to create a financial incentive for the strangers to store your immutable record for you. Which you only really need if you need to send said currency via strangers as a sort of courier. However that comes with it's own set of very real problems.
1. That currency is going to be heavily speculated because it's unregulated by design.
2. That currency is going to be used to bypass regulations that do in fact protect people.
3. That currency will be used to bypass an international system that is designed to allow nations to punish other bad national actors without resorting to war.
If you want to foster anarchy and to create an expectation that any individual is on their own and are actually prevented from getting assistance when they lose everything then a cryptocurrency is an ideal ideological fit. If you want something more balanced then merkle trees might be a useful tool but leave the currency aspect out of it.
with money everyone has an agenda.
the biggest thing i've seen from blockchain is the emergence of stablecoins.
we will definitely see digital currencies being normalised globally.
but since bitcoin doesn't have any central authority it's not really fair to conflate the purpose/value of btc, blockchain tech with idea of cryptobros/scams/ponzis.
blockchain allows essentially instantaneous completion of transactions between unrelated parties with no clearing house.
Today there are many transactions that take days to clear. For example if you buy stock, it appears instantaneous to you, but the scenes your brokerage, the other brokerage, and the clearing house have to make sure all the money is there, the stock is there, etc
Clearinghouses make a lot of money just guaranteeing transactions. That is friction in the system.
Wire transfers, ACH, cashiers checks, etc all have the same issues.
Even things like title insurance, transfer of title, deeds of trust etc have those issues.
Instead of NFT for a gorilla picture, think of NFT for your house that essentially represents your deed. Transferring your deed is a very complicated process.
Think about how social media or app stores are essentially controlled by the choices of a few CEOs. Imagine a distributed social media will allow everyone to ignore you, but no party can censor you. You own your data instead of an entity like facebook.
> Transferring your deed is a very complicated process.
For regulatory reasons, not for technical ones. You're using the word "transaction", but you should distinguish between legal transactions and what is essentially a database transaction.
Having a well articulated purpose, and being "centralized" are two sides of the same coin. We can agree on a purpose for government money because it has been deliberately molded to specific purposes: A medium of exchange, short term store of value, and instrument of economic policy. We can measure its performance against those purposes, and in fact, that measurement process is part of the technology of our money system.
Not knowing the purpose of cryptocurrency is its purpose. There's nothing wrong with having a general purpose technology, like computer programming, that is adaptable to specific purposes on demand.
> People are never allowed to criticize it without the same, repeated feedback “If that’s what you think blockchain is, then you don’t understand it.”
That's because the criticisms are always the same talking points, all of which have been addressed multiple times ad nauseam. If Bitcoin advocates appear dismissive or opaque it may be that they're exhausted of debunking the same criticisms over and over again, particularly when there's a wealth of information out there to find. Though you have to be willing to leave the anti-Bitcoin media bubble. Perhaps all us Bitcoiners are sufferring from delusions reinforced by confirmation bias, but perhaps you are too?
> Why doesn’t someone, then, who actually understands their almighty blockchain god, illuminate us, mere mortals, on the wonders of blockchain and how it can be good for society in the foreseeable future.
This kind of snark also doesn't help with the above. But if you're actually curious I thought this did a decent job of explaining Bitcoin's blockchain, decentralisation, and trustlessness: https://dergigi.com/2021/01/14/bitcoin-is-time/
> You know what’s really tiresome? Having the promises of blockchain sold to us for years now without a single, useful purpose for it in sight other than, well, cryptobros.
Perhaps you should stop listening to the promises of "blockchain" and "crypto" and instead focus your learning efforts on Bitcoin only... cryptobros be damned. Bitcoiners probably dislike them more than regular folk.
> Meanwhile 1.7 billion people around the world do not have a bank account.
Do you know why the majority of those people don't have bank accounts? Because they have no fucking use for it! They either have no money (how does crypto help those people?) or they use banking services through their family/friends.
Do you know what 3.7 billion people don't have? Access to internet.
> Do you know why the majority of those people don't have bank accounts? Because they have no fucking use for it!
Everyone has use for a way to store their wealth, no matter how small. Economies that use money, in whatever form, are much more efficient than those based on barter.
> Do you know what 3.7 billion people don't have? Access to internet.
Yes, Bitcoin won't help people without access to the internet. There are still hundreds of millions (maybe billions?) of people that DO have access to the internet, but don't have a reliable way to store their wealth, either because of irresponsible governments or central banks.
You know what governments and central banks can do to the security and issuance of Bitcoin? Nothing. Absolutely nothing.
> Everyone has use for a way to store their wealth, no matter how small. Economies that use money, in whatever form, are much more efficient than those based on barter.
Oh ffs, what are you talking about? Do you think that the poorest people on earth are poor because they choose not to deal with money? Will they store their blanket and cup on the blockchain? My god.
> You know what governments and central banks can do to the security and issuance of Bitcoin? Nothing. Absolutely nothing.
What is preventing a government from getting >51% of mining power and just wrecking havoc on the chain? Afraid of governments but can't think of the possibility of them taking over mining operations or just fucking up the internet to take it down. Is it wilful ignorance or naivety?
How does crypto solve that problem? Bitcoin has had a 1 year minimum of $30,000 and a maximum of $68,000. Etherium has had a 1 year minimum of $1200 and a 1 year maximum of $4800. I don't know about you but putting all my savings into a "currency" that is so volatile. "Stablecoins" don't seem all that stable either. Plus you have the high cost of transactions for many of these "currencys".
Stablecoins are perfectly stable, right up until the moment they aren't. They're only as good as the legal regime actually forcing the stablecoin provider to fulfill their promises of backing.
At that point, why not just bank with the legal regime you're already implicitly trusting?
for context this article is from 2018 when Bitcoin was crashing, author was obviously trying to dunk of the crypto community at the time. The entire crypto market is now over 5X larger since he wrote this. Author is also the founder of a traditional FinTech company with 68M raised, so he has obvious bias
most of his complaints about crypto being hard to use could easily be applied to the internet, cell phones, and computers in their early days. Almost all technology starts off with a niche community that is often mocked before it improves and becomes mainstream. Crypto gets even more hate because people who think they are smart are seething about missing the train and the cognitive dissonance demands that they write off the entire industry as useless
On what basis? Certainly not on the basis of volume of transactions used to purchase goods and services in the real economy. Nor on the basis of adoption of other use cases for smart contracts, supply chain provenance tracking, etc. I assume you mean on the basis of trading volumes and market caps, which are completely irrelevant.
"The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve." - Satoshi Nakamoto
I don't know about the author but I have a feeling that the track record of central banks isn't exactly stellar, and I'd much rather trust a decentralised system with zero ability for sustained debasement than trust a small centralised group of people who have time and time again abused that trust.
And how is the track record of decentralized "currencies"? Buying drugs, money laundering, rampant speculation, rug pulls, fraud, high fees, inefficiency, horrible UX, irreversible SFYL, and destroying the climate.
>Buying drugs, money laundering, rampant speculation, rug pulls, fraud, high fees, inefficiency, horrible UX, irreversible SFYL, and destroying the climate.
Every one of these charges happens every day and in some of them to a much greater scale in fiat, especially climate destruction due to inflationary monetary policy, which encourages consumption and waste and punishes thrift and savings.
Sure, but ransomware is just extortion and that is a concept that has existed for time immemorial. I think ransomware is a relatively small part of the global volume of generalised extortion which is almost certainly mostly settled in fiat and not crypto.
I find it strange that so many cryto people get so emotional when such comments are made. It makes it rather difficult to have an actual discussion on the issues.
It's difficult to have an actual discussion when the same old platitudes keep reappearing in every crypto discussion.
I can rephrase as a question: Should we stop using groundbreaking and individual-empowering technologies just because some criminals benefit? Every single technology is exploted by criminals. I fail to see how that is an argument for its disavowal. If anything, we need to normalise privacy and encryption among virtuous everyday individuals.
This is just another form of the "we should ban encryption because criminals use it" argument.
Criminals and wrongdoers will always exist. Statists and financiers are just another category of them, who have a system that conveniently covers their crimes. I will put all my weight behind anything that weakens their power over me: I.e cryptography and cryptocurrency.
To make an analogy, long distance travel also has a checkered history over the past 300 years. Today, most people hop on a plane or a bus with little thought about its safety, and manageable concerns about its arrival time. Likewise most of us expect our salary to hold steady in between payday and when we spend it, with manageable expectations about what it will be worth in six months.
Have you not ever read financial history and what things were like without central banks?
No one that knows what they are talking about can possibly think we were better off without central banks. It is a childish and clueless view.
House Of Morgan, History of Interest Rates from Wiley. Try reading some books instead of looking up things on wiki to back up your already nonsense beliefs. You can not read those books and come away thinking getting rid of central banks is a good idea.
You are just making the old clueless gold bug argument repacked in digital form.
Financial crises have been more severe, longer, and more sustained since the introduction of central banking. Let us also not forget that the industrial revolution and the extraordinary growth of Western economies in the late 1800s were mostly conducted under free banking without a central buyer and lender of last resort, and in some jurisdictions where a central bank existed it was regulated to follow a strict gold standard.
> Financial crises have been more severe, longer, and more sustained since the introduction of central banking.
I admit that I'm not willing to even look into your argument too deeply, although I have severe doubts about its validity. The reason is you omit one order-of-magnitudes factor: The economy has increased exponentially beginning with the industrial revolution, and world population similarly. So of course any disaster, including natural ones, without anything else impacts ever more people and is ever more complex to solve.
This is the major factor that you have to address before any other, but you simply ignore it. Like all the pro-crypto arguments, they always leave out extremely easily accessible points that are not hard to find, which I find strange, and which makes these discussions so tiresome.
And by the way, when it was new I looked into blockchains to the point of even taking programming courses for it, so it's not like I'm completely "armchair" about it. I rejected it only after doing active research.
Satoshi vanished more than a decade ago. He didn't get to comment on what became of his creation.
The current state is:
* Bitcoin (BTC) development is driven by a very small development team.
* Main discussion spaces (eg, /r/bitcoin) are owned by a small team.
* NFTs are almost exclusively sold on centralized marketplaces with the capability of banning a NFT from it if they don't like it.
* Miners aggregated into something like a dozen relevant mining pools.
* The main way of obtaining BTC is at large, centralized exchanges. Who often hold your balance in a database and not in the blockchain, because BTC transactions are expensive.
Yup, he completely fixed it. Rather than trusting an elected government in BTC people put their trust in whoever now gets to commit to the github repo.
"The root problem with conventional currency is all the trust that’s required to make it work."
Trust is required to make cryptos work too. Yes, a blockchain is "immutable", as long as the network isn't hacked w/ e.g., a 51% attack in Bitcoin's case. However, the price of Bitcoin isn't really anchored to anything, i.e., there's no natural demand for it like there is for fiat currencies (since people must pay their taxes in fiat), so basically, only the collective trust and hope of people is making it valuable.
In addition to that, current cryptos are lacking in either decentralization, efficiency, or both, nevermind the various decentralized applications that operate like any traditional company, which you'll have to trust in order to use the app. So as of now, a truly decentralized and efficient blockchain network is only a dream.
I'm not saying fiat currencies are without problems though -- they very much aren't. The regulation is problematic, but the bigger underlying issue stems from the expectation of infinite growth. Money in the modern economy is basically debt, whose interests are paid off with newly created debt. This cycle works only if the loan money is, on average, invested profitably, i.e., (in very rough terms) the GDP rises along with the money supply. This is difficult to begin with, but since compounding interests grow exponentially, it means that the GDP should rise exponentially too, which, since exponentially growing curves approach infinity relatively fast, means that the planet is fucked due to exponentially growing demand of energy and natural resources.
Clicked for me when I realised HN is compromised of the few for whom web2 has served quite nicely, so it's unsurprising that talk of web3 is received about as well as a brick through the Google bus window
Yeah it kind of makes sense why so many on HN hate it. Most of them are heavily entrenched in existing structures where friction for finance or regulatory capture are "working" well for them.
I hate it because from everything I see it's 1% useful idiots/fellow travelers (otherwise very smart folks, just like the original fellow travelers were!) swamped by 99% crooks that want to con simple people.
But hey, I hope they prove me wrong. I could use better financial tech, that's for sure.
HN is generally well served by the current financial system. Very included in banks/stock grants/VC money/a lot of accredited investors/easy access to world reserve currency, so there really isn't much need for any crypto solutions.
What does it mean to "miss out on crypto"? It's supposed to be a currency right? One hasn't "missed out on dollar" because they weren't alive in the 50's.
This is one of the problems crypto has to solve before becoming mainstream. It should be possible to "get in" at any moment, without being insulted at all times that you only fail to benefit from it because you were too late.
This article contains the best explanation of what a blockchain is that I have ever seen:
A blockchain is a specific data structure: a linear transaction log, typically
replicated by computers whose owners (called miners) are rewarded for logging
new transactions.
There are two things that are cool about this particular data structure. One is
that a change in any block invalidates every block after it, which means that
you can’t tamper with historical transactions. The second is that you only get
rewarded if you’re working on the same chain as everyone else, so each
participant has an incentive to go with the consensus.
The end result is a shared definitive historical record. And, what’s more,
because consensus is formed by each person acting in their own interest, adding
a false transaction or working from a different history just means you’re not
getting paid and everyone else is. Following the rules is mathematically
enforced—no government or police force need come in and tell you the transaction
you’ve logged is false (or extort bribes or bully the participants).
>Venmo is a free service to transfer dollars, and bitcoin transfers are not free
Then use a cryptocurrency that has 0 (or very tiny) transaction fees?
>in case this e-book author has hidden a recursion bug in their version to drain your ethereum wallet of all your life savings
An ethereum smart contract can't take ethereum from anyone. It can only take what you've sent it. Also I'm not sure why the author didn't add in that you still have to trust the author to serve you the ebook. The smart contract would only give you an NFT that the site would check.
>yet is your Afghan villager going to download the blockchain from a broadcast node and decrypt the Merkle root from his Linux command line to independently verify that his vote has been counted? Or will he rely on the mobile app of a trusted third party — like the nonprofit or open-source consortium administering the election or providing the software?
Let's be real. The vast majority of pro-cryptocurrency arguments break down to something like this: "I have Bitcoin, I want it to become the currency of the future so that the price will go up an I will become rich. Here are $reasons why that should become true, which all my fellow Bitcoin hodlers agree are very good reasons".
We are now many years past not only the creation of Bitcoin but also past it going "mainstream". Everyone who is going to hear about it has hear about it and yet in real terms it is a joke. It's a digital beanie baby, it being is used as described by BTC boosters as something resembling a currency only in a tiny fractional handful of edge cases. All the interest in Bitcoin is in the price going up. Even people who "accept Bitcoin payments" denominate their prices in US dollars and merely run the transactions using Bitcoin.
If the only thing that makes BTC "break" USD is that users want it to succeed more than USD users want USD to succeed, it is a wonderful story of adoption!
> All the interest in Bitcoin is in the price going up.
For years I have been interested in blockchain and cryptocurrency technologies for what they are technically and what they could enable, not what profit I can make. There are certainly others like me.
There's some really fascinating stuff being worked on in the cryptocurrency community, things like ZK-SNARKS or automated market makers. The original bitcoin paper is at the very least an interesting and novel solution to the double spend problem.
I think I could make a similar argument to yours about how the vast majority of people in the hackernews community are just there because they want to become rich. Or perhaps how the vast majority of anti-cryptocurrency arguments break down to soemthing like "I didn't buy bitcoin, so I don't want it to become the currency of the future since I will have missed out on being rich". There are elements of truth to both of those, but they're both pretty uninteresting takes on an interesting topic.
Since fascination is subjective you should never make that statement.
Edit: Scrap that, you are right, cryptography is a necessary building block of crypto-currencies. What you are actually saying is: Fascinating bricks exist without brick-houses, the reverse is not true. Which is logical.
Sure, some fascinating bricks would be created even without brick houses, but having brick houses means that many more people are thinking about and creating fascinating bricks, and using those bricks for more purposes.
It's like saying we shouldn't be pleased that pharmaceutical research is giving us greater insights into genetics because genetic science would exist even without pharmaceutical research. It's true that genetic science would exist, it's false that therefore pharmaceutical research adds no value to it.
Let's be real, the anti-cryptocurrency arguments are something like this: It eats to much energy so we should ban it (just like gaming! Oh wait...)
Meanwhile we suffer from a hugely incompetent global payment network that is horrible to deal with and makes some creators actually opt out of receiving donations because of the sheer annoyance and complexity of the system.
Yeah, we all want it to use less energy and perhaps we'll get there. But not by banning blockchain tech.
The fact that Venmo is free, is the problem, how can you deliver value for free... Because it's not free, the value is extracted elsewhere. I thought we were past this.
> Meanwhile we suffer from a hugely incompetent global payment network
Incompetence is a cop-out argument because you could argue any organization or community suffers from it given a sufficient amount of time in existence. Plus, it's not like crypto companies have a perfect record either. Look at mt gox, or more currently, the accusations against Tether. If it comes out that they've been lying about their capitalization, which many have argued that they are, it could cause major problems for the crypto industry.
True decentralization has not been achieved by the crypto industry, it's merely shifting the rent-seeking from one set of parties to another.
> global payment network that is horrible to deal with
With proper regulation, banks can have maximum terms on holding money mid-transfer, limits (or even abolition!) of transfer and withdrawal fees, etc.
It is possible to designate a product as an essential service or utility. It's just that the US government has chosen to not apply that kind of regulation to a lot of essential products like banking and telecoms, much like it hasn't chosen to enforce anti-trust laws, remove tax avoidance provisions, deal with corporate capture or reform the healthcare, education and electoral systems.
In essence, it's a people problem all the way down. Technology is incapable of solving those, which is why blockchain is a solution looking for a problem.
It’s not? To me that sounds like the only one on which basis I’d agree with limiting our freedom to do what ever we want.. because it actually may hurt others. That is, if we assume that to be true.
Is it? This is an article stating that the blockchain (and by extension crypto) is a crappy technology by some random dude. It's not Biden who wrote it, it's some random dude.
So who exactly is limiting your freedom? If a random dude can limit your freedom with a mediocre Medium article, then I'm afraid you don't really have much freedom to start with.
What I mean is: I have the freedom to use blockchain tech, or not. The only reason for me to accept the government telling me I can't use this would be if it truly had a devastating effect on the environment. I don't think this is true and I think the pros outweigh the cons. And I don't have a lot of assets, so in contrast to many people here, I'm not for or against blockchain tech because I either am heavily involved or failed to get involved early on.
Satoshi is not limiting my freedom because I can opt not to use his work. Net Freedom would be lost if I would force Satoshi to make BTC according to my vision.
I transfered some BTC around back in the day, order sushi, pay a fried, order Raspberry Pi stuff at the Pi Hut. It feels like magic so I'm a believer.
> Meanwhile we suffer from a hugely incompetent global payment network that is horrible to deal with and makes some creators actually opt out of receiving donations because of the sheer annoyance and complexity of the system.
Chesterton's fence. Have you ever wondered why the financial systems is the way it is?
All that regulation is because of fraud. People REALLY, REALLY want to steal money and they will get INCREDIBLY creative to do it.
So someone stole a coin one way, we added a rule to stop it. They stole a coin another way, we added another rule. Another coin, another rule. Repeat a million times.
What do you expect will happen with a shiny, pristine, tech system once it faces the real world??? It's going to suffer the same fate.
We need iterative improvements to existing systems, not burn-the-world-pseudo-solutions.
> Let's be real, the anti-cryptocurrency arguments are something like this: It eats to much energy so we should ban it (just like gaming! Oh wait...)
The real argument is a bit more subtle: with gaming (and most other uses of power), the incentive is to lower the power usage for a given level of functionality. With cryptocurrency, the incentives are to increase the power usage. The idea behind PoW is to make it too costly (and a large part of the cost is power usage) to find an alternative longer chain. And for an individual miner, the incentive is to use more power than the competition, so that a larger fraction of the fixed amount of reward goes to that miner.
Ironically though the best chance bitcoin has at being the currency of the future is if it stops being an investors plaything, which would involve btc being severly devauled over what it is now and therefore making the people that hold it "poorer" in a sense (unless they seriously believe that the currency of the future will deal in denominations of 0.000001 for everday transactions)
one of the best use cases is that it reduces the control state actors have using the banking system. Crypto can bypass arbitrary governmental walls for moving money across country borders. It can allow transactions that are banned or heavily discouraged (taxed) by govts.
This will be illegal behavior, but not all things that are illegal are immoral.
International wire transfers and even stock purchases require days to clear between entities. With blockchain those transactions are essentially instantaneous.
> but not all things that are illegal are immoral.
It's fine to believe that but at this point the scams, tax-evasion, social-darwinism, techno-libertarian grift, and criminal enterprises are NOT the exception. They're very much the rule and dominate the way crypto works.
Of course, somewhere buried deep in all that funny-money, there's genuine innovation begging to be used for a legit purpose. It doesn't look good for the future. I fear that the worst thing that could happen would be for crypto to continue along its current path and actually "replace" real currency retaining all it numerous dysfunctional and unethical properties. All it would take is for enough people to "get-rich" so they could F the rest.
Crypto is essentially the modern equivalent of the pre-Federal Reserve era of US banking, commonly known as the "Free Banking" era or "Wildcat banking".
Back then, states chartered their own banks, there was little cooperation between banking outfits and banks could issue their own currency. Financial crime targeting consumers was everywhere and currency stability was a major problem, two major issues that crypto faces today.
Historians largely attribute the failure of the Free Banking era as a catalyst of the creation of the Federal Reserve. We need to be able to at least have a nuanced conversation about how we've seen these patterns in history, it didn't go well then, and there's not a lot of evidence that these age-old problems have gone away with this new technology.
I feel like this argument isn’t stated enough. I’m not financially savvy and can’t determine if crypto is just re-inventing abstractions in which we’ll ultimately see the same societal patterns develop.
Yet this era was also known as the "Gilded Age". Literally covered in gold.
I'm not detecting nuance in this take. The Fed has created boom bust cycles and is hardly a bastion of price stability. The great depression and the continued interventions which prolonged it come to mind.
Boom and bust cycles are inherent to capitalist markets, you can't have capitalism without it. Blaming it all on the Fed isn't accurate. Markets boomed and busted long before the Fed existed.
> hardly a bastion of price stability
Relative to BTC, USD is much, much more stable. This is what I don't get about these kinds of arguments. What are you comparing the Fed to in this case?
I'd go even further than that. The mismanagement of markets by central planners set the stage for cryptocurrencies. We're living in an era of speculative mania. Savings accounts have a negative real interest rate. This currency must go somewhere.
Centralized payment services are vulnerable to regulators, see eGold and Liberty Reserve. Note that BTC emerged shortly after these services were destroyed. Anti-terror legislation was used.
Of course there are always price fluctuations, but attempting to fix prices (i.e. interest rates) results in greater imbalances.
> Centralized payment services are vulnerable to regulators, see eGold and Liberty Reserve. Note that BTC emerged shortly after these services were destroyed. Anti-terror legislation was used.
According to Wikipedia, Liberty Reserve was used to launder over $6B stolen from offshore banks. That sounds like a pretty legitimate reason to shut a service like that down to me. You argue that central banks are incompetent and need to be disrupted, yet you don't hold services like these to the same standard. Instead, you argue that they're victims of regulatory overreach and that we should create that allow this kind of activity to thrive. Where's the anti-money laundering mechanism in crypto? It doesn't exist.
I truly do not believe that the full anonymity provided by crypto does anything but benefit those with the most resources in the system. As long as that remains true, how do we expect it result in a more fair system than what we already have?
>a pretty legitimate reason to shut a service like that down to me
Meanwhile physical cash is preferred for criminal acts. Would you similarly blame the issuer of cash for these crimes? What about footwear? Most criminals wear shoes or boots. Running shoes can be used to evade capture. Should we hold Nike accountable?
>does anything but benefit those with the most resources in the system. As long as that remains true, how do we expect it result in a more fair system than what we already have?
If fairness is the virtue we are seeking, then how does the plunge protection team protect fairness?
If fairness is the virtue we are seeking, then how do Cantillon effects factor into your argument?
If fairness is the virtue we are seeking, then how does a central bank formed by the blue-blood oligarchy advance this cause?
If fairness is the virtue we are seeking, then why does the central bank protect financial markets at the cost of all participants in the market?
(Pseudo?) Anonymity is what protects individuals from regulatory overreach and confiscations of wealth. True to the form described by regulatory capture, the IRS disproportionately attacks the income of small business owners vs. the super rich, who can afford to keep a small army of tax accountants, lawyers and lobbyists on retainer. Meanwhile the tax code grows ever more byzantine by the year.
>Meanwhile physical cash is preferred for criminal acts. Would you similarly blame the issuer of cash for these crimes?
Authorities (at least in the US) try to strike a balance between crime prevention and seamless use of cash. Depositing or withdrawing large sums in cash will attract regulatory attention. Currency entering the banking system is checked against a list of serial numbers known to have been used in or obtained through criminal activity. Crossing borders with large sums of cash requires a customs declaration. When cash denominations or cash-like instruments are shown to primarily enable criminal activity, their issue is discontinued (hence why we no longer have $1K bills or bearer bonds).
> What about footwear? Most criminals wear shoes or boots. Running shoes can be used to evade capture. Should we hold Nike accountable?
I mean, if there were some kind of shoe that primarily or uniquely enabled criminal activity, I'm pretty sure it would get banned? Or Nike would get pressured into no longer making them.
"The book is remarkable for two reasons—it is the only novel Twain wrote with a collaborator, and its title very quickly became synonymous with graft, materialism, and corruption in public life."
It only took me 2 seconds to find out that the term was ironic.
It was an era of unprecedented wealth creation and upward mobility. There were also robber barons, who preyed upon government largess.
The irony here is that the Fed was created at the behest of one of the greatest robber barons of them all, John Pierpont Morgan. To this day the institution still protects the interests of Wall Street at the expense of holders of USD.
Corruption is still with us. If we are to be real as you say, we should also acknowledge that history is largely written by the victors. Not mentioned are the other two central banks the US fought to extricate itself from. It shouldn't be surprising at all that a two second glimpse of into the subject results in a superficial reading of history. I think the above poster mentioned something about nuance.
If the Federal Reserve Notes issued by the central bank were sufficient to meet our monetary needs, there would be no interest in cryptocurrencies.
Clearly, "Something is rotten in Denmark", or NW DC more accurately.
I think the one feature of Bitcoin that makes it interesting is its inherent scarcity. It mirrors gold in this sense, but it is a lot more flexible in that you do not have to deal with physical material.
I owned a pretty decent amount of crypto back in 2012, but sold all of it and own essentially none now. I think what you’re missing here is that there is actually potential in the space and that there are a decent amount of people trying to solve real problems that exist today.
The two big ones I can think of are payments and ownership.
Payments has always been a difficult part of the web. Multi billion dollar companies have been created around this difficulty. Wouldn’t it be nice if there was a native, protocol level way to handle payment?
Similarly, digital ownership is totally fragmented. Wouldn’t it be nice if there were a way that I could take my digital things with me between different services? I own a number of videos on Amazon, but why can’t I take that ownership right with me to view them on Hulu, or some other service.
As I explained in another comment in the same thread, it's a far cry from ensuring interoperability. The term "open ledger" is also misguiding since it's just an open ledger of whatever you want to put there, it doesn't necessarily reflect even a representative part of a whole system that would provide some kind of financial service.
As another commenter explained regarding video ownership, there's also no incentive to move any old and non-interoperable system there to begin with.
I probably agree with a chunk of this, but there is a level at which blockchains, specifically smart contract platforms help enormously with interoperability - they force those using them to provide standard, transactionally interoperable APIs to their services. If someone provides a financial service on ethereum for example, then it will have an api that can be used by other services on ethereum. This is a shocking level of interoperability compared to what we had before, where even with government stepping in and making things like OpenBanking mandatory, it's still surprisingly painful for a normal developer to create services that interoperate with their own bank accounts.
> If someone provides a financial service on ethereum for example, then it will have an api that can be used by other services on ethereum.
Not necessarily. You can have a smart contract that's completely controlled by one address, such that you need manual interaction with an external system to interact with the smart contract. You can even avoid transparency by storing information elsewhere, via an oracle. Nothing ensures that somebody providing a financial service on Ethereum will provide anything that could be considered an API.
Other than that, for the same financial service, the same regulations will apply to both the Ethereum and traditional version. If it's legally possible to offer some kind of API on Ethereum and it does bring value, the same could be achieved outside of Ethereum. But IMHO the real reasons for the absence of such APIs are regulations and incentives, for which Ethereum doesn't help.
> IMHO the real reasons for the absence of such APIs are regulations and incentives
Sure, but smart contracts have totally different incentives and costs for creating interoperable services than e.g. mobile apps. I would say that Ethereum does help here.
> Sure, but smart contracts have totally different incentives and costs for creating interoperable services than e.g. mobile apps. I would say that Ethereum does help here.
Why would you say that? For what reasons?
To engage with your comment a bit more, regarding costs, it's very expensive to:
* write secure smart contracts (if possible at all)
* maintain a smart contract infrastructure (transaction fees)
It's very expensive to write secure smart contracts, true, but it's also surprisingly expensive to write secure systems using more traditional technologies too.
I'm not sure exactly what you mean by it being expensive to maintain a smart contract infrastructure, because if your application suits it, you can literally deploy your smart contract and forget it, and people can use it into the future without you ever having to pay server costs - i.e. for the person deploying the smart contract it can be much cheaper. To the extent that it would be reasonable to hope people would deploy public infrastructure as smart contracts, even if they wouldn't want to deploy public infrastructure as cloud services. If you're worried about overall costs like transaction fees, it's not at all true that there's no solution in sight for them. There are minority cryptocurrencies now with no transaction fees, and even if you are skeptical about their promises, the largest smart contract ecosystem around (ethereum) has a plausible roadmap for dramatically reducing transaction fees. You can checkout the first few that are deployed here https://l2fees.info/ but significant improvements in this area are still expected over the next few years on ethereum.
The point about the incentives is that if you are asked to create a mobile app for a bank to manage mortgages, it is possible but extremely unlikely that you will put the effort in to make this accessible via API to the users or the rest of the ecosystem who might want to create tools that create visualisations, aggregate data for the user, certify that someone in the real world is prepared to lend them significant amounts of data, etc.
If on the other hand you create a blockchain solution to manage mortgages, it is extremely unlikely that you wouldn't create a reasonable externally accessible API - it's the default way of writing blockchain applications.
> without you ever having to pay server costs - i.e. for the person deploying the smart contract it can be much cheaper
That's just offloading the costs (or passing the costs down to the users), that's not a solution.
> it's the default way of writing blockchain applications
There's no default way of writing smart contracts, where does that come from? I've seen my share of smart contracts (tokens, stablecoins, NFTs) where one single address control everything, or where external approval is required for any interaction to happen. There's no "default" there.
Even if you manage to convince a bank or other financial institution to use a blockchain, they won't relinquish control over what they deploy there. There's just no incentive in favor of that, and so many against (regulations, complexity). But more to the point: "using blockchain" as a constraint doesn't change the incentives when it comes to interoperability.
> I own a number of videos on Amazon, but why can’t I take that ownership right with me to view them on Hulu, or some other service.
Do you? Terms probably state you bought a license. The incentive is for producers and platforms to silo content to maximize sales. Why would they agree to use a less centralized platform unless forced by law or coordinated market demand?
Just a side note about your digital movies: You can connect your various accounts and share your library across services with Movies Anyhwhere: https://moviesanywhere.com
The way that blockchain tech is implemented, in many cases, does suck. But an immutable, distributed, permissionless public ledger system enables technology that can eliminate the need for many frictions and cost centers, reducing a host of parasitic costs is worth perusing. Blockchain can reduce or eliminate costs associated with enforcement, state sponsored violence and more, replacing them with a monetary system that can automatically enact taxation, insurance, social welfare and more without extraction of value, and without the possibility of corruption.
Whether or not Bitcoin is going to become the "currency of the future" is certainly highly debatable (debatable in the sense that, is it likely to happen, or is it even a good idea for society), but the argument against it, is not going to boil down to "digital beanie babies"... Retail and retail adoption is not going to shape the future of Bitcoin, not past this point in history.
Do you remember seeing institutional-grade analysts and advisers issuing guidance about beanie babies? Pointing out that corporate treasuries or sovereign nations might consider a small allocation to beanie babies as a hedge against future-whatever? This is hardly the only such report, though it's a recent one looking at 2021 trends in review: https://www.fidelitydigitalassets.com/articles/2021-trends-i...
I am not saying Bitcoin is destined to win or to make anyone rich, but clearly this has moved far beyond the realm of beanie baby speculation. I mean, good or bad, it's at least reached the level of institutional speculation (see exhibits: dot-com crash, 2008 financial crisis, etc.), and at least it should be taken proportionally as seriously as other institutional financial instruments (i.e. do you take bonds seriously? gold as a financial commodity to be traded? well Bitcoin is X% of those by marketcap, so maybe deserves X% of your attention).
Just like leaving the gold standard, moving to crypto currencies will also be very controversial. But it's needed. You just can't look at the past 10 years and say that the banking system is working.
> There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast.
What is this even talking about? People have wanted trustless digital cash for a long time. Bitcoin is a solution for that. Why does it have to be a solution for other things too? Are binary trees useless because they only work for sorting and searching?
The problem with Bitcoin is, people don't even understand the problem it's trying to solve. Most people have no idea what money actually is. A big part of that is many people are positively afraid of money. They don't even want to think about it.
People who aren't afraid of money have been taking advantage of this situation for hundreds of years and most of them are not doing it for public good. Bitcoin itself doesn't appear to work, but it has got the ball rolling on monetary reform like nothing before. I'm now quite optimistic that we will be able to take the control of money away from private banks.
For Bitcoin, or its successor, I think there will always be a place. Massive instability should be a signal of how big of a shake up this is. But it will stabilise and I think become viable as a minor international currency.
For those who still don't get it, I urge you to learn about how banking works and why Bitcoin was created. Learn about why the 2008 financial crisis happened, what fractional reserve banking is (or was, as it doesn't really exist any more), and most importantly what money is. Here's a clue: it's not cash. There is no cash sitting in a safe somewhere collecting dust for that 99% of your money that you never withdraw as cash.
- Accepted by all the places I would like to buy things
- Stable price
- Easy to use
- My job pays me in this currency
- Easy to transfer
Every single one is already satisfied by current currencies. Cryptocurrencies bring nothing, "except anonymity" which isn't true (the blockchain is literally a public leger of all transactions, yes you can open a wallet anonymously but you can do that for a bank account too if you have to)
If somebody is seriously trying to suggest that people in hyperinflationary economies would prefer bitcoin, hyperdeflationary economies are just as bad, and worse than both is wildly unpredictable economies.
The article talks about trust but doesn't even mention the insane amount of trust blockchain solutions are expecting you to put on the cryptography that it utilizes. This idea that crypto is some impenetrable fortress is ridiculous. At best it's a well fortified castle that should provide a reasonable assurance that it will keep attackers at bay for long enough that you feel secure. They expect to put all the worlds money on there, insurance contracts, land records and when there's a weakness found in the crypto it all just goes poof?
Yeah, as if perpetually rising housing prices, subsidized petrol, shoving the cost of climate change over onto poor countries and responding to migration crises by interning and torturing people is a great vision for the future..
I have never made a single penny of off crypto, but I wholeheartedly appreciate it as a transactional currency in a country with extremely draconian drug laws, the highest overdose numbers and of course the inevitable resulting rise of criminal organizations primarily funded by the governments refusal to take responsibility for the drug trade in their country.
How sheltered do you really have to be to consider bloody fucking cryptocoins a bigger problem than any of this?
I dont think anyone is saying that crypto is a bigger problem than those things. Just that its also not the solution to those things that we keep being promised it is (or will be).
Maybe in time, crypto will die out as a fad and come back again, and then it might stand a chance. I highly doubt it'll fix all those problems, but it could be a legitimate decentralised currency (for good or for bad, thats up to you to decide). But right now, its seen pretty much seen as a vehicle for investment, a get-rich-quick scheme, which is completely at odds with its use as a legitimate currency
Of course it won’t solve those problems, it simply does one useful thing, allows untrusted transfer of a representation of “money”..
I’m just fed up with people demonizing crypto while our society is far more dependent on the destruction of the environment.
Ban using cheap electricity to fuel crypto, sure, and pay “miners” with transaction fees. And ofc fuck the speculators and the get-rich-quick morons. I guess the problem is that it would easily tank the whole ecosystem if it got reduced to something more reasonable.
Ofc the same is true for the world economy, hence my comment.
> I guess the problem is that it would easily tank the whole ecosystem if it got reduced to something more reasonable.
This is the problem with crypto as it currently stands, its hype pretty much relies on the opposite of it being a stable, realistic currency, hence my pessimism.
201 comments
[ 3.3 ms ] story [ 237 ms ] threadIs the author really unaware of the horror stories of Venmo and PayPal freezing customer accounts?
Articles like this want a return to serfdom, under the control of officialdom. There is no other conceivable reason why someone would not want people to have at least the option of taking custody over their own money, in a form more useful than physical cash.
Ironic thing to state given the reality of hash power distribution and supply of bitcoin that actually moves compared to the total
>in a form more useful than physical cash.
Something that is never used equivalently to physical cash cannot be more useful than it. Basically nothing is priced in bitcoin or crypto
Both can be resolved without blockchain.
No, it isn't: https://web.archive.org/web/20160221002005/http://minifree.o....
Can as example coinbase do the same?
> want a return to serfdom
From my point of view serfdom is the (block)chain. Only people with enough stake or those who pays are in control.
I disagree with this but even if one assumes this to be the case, I'd much rather prefer a monetary system subject to the control of free market forces rather than the modern monetary system which is subject to a small group of unelected and unaccountable technocrats operating under the feeble assumption of central bank independence and whose power is extended through coercion and not voluntary association.
https://www.alt-m.org/2021/07/06/the-fable-of-the-cats/
Lots more examples in the article.
Also they regularly kick off sex workers [1]
[0] https://www.buzzfeednews.com/article/leticiamiranda/people-a...
[1] https://www.aclu.org/news/lgbtq-rights/paypal-and-venmo-are-...
If you think taking your wallet (the key) and running away with it is an option, then how is it better than using cash?
Cryptocurrency also solves the problem of charge-backs. Venmo and PayPal gives a sense of finality, but it actually takes days to transfer the funds. That's why there are so many paypal scams on craigslist
Charge-backs aren't there to purely annoy/scam sellers, you know.
> difficulty getting a payment provider
Because there are too many money laundering attempts via transactions in that industry. If you want to deal with the stuff Paypal/Venmo/etc doesn't want to deal with, go ahead.
You're attacking a straw man here. The author doesn't argue for eliminating the blockchain or crypto assets.
His thesis is that blockchain hasn't gained significant traction (for anything other than speculation, especially as people panic about USD inflation) because people don't want to decentralize trust. They inherently like institutions and want institutions they can trust.
> in a form more useful than physical cash
Literally the whole point of the article is to argue that Bitcoin (and other crypto "currency") is less useful than cash and less appealing to consumers. He is also arguing that this is inherent to the technology itself and will never change.
Nothing is ever going to replace fiat if it's deflationary, and no one is going to "invest" (i.e. buy and keep) a digital fiat replacement unless it's deflationary. It's a catch-22 that digital assets can't solve.
yet suddenly because of the actions of a couple private companies, we're going to suddenly go back to serfdom? This makes no sense.
it's impossible to go back to serfdom - the economy is too large and diverse and people are too literate.
sorry, but this is just a doomer fantasy at best
The institutions created since the creation of the Federal Reserve, like a vast regulatory apparatus that closes off economic opportunities for the masses, and income taxation that abolishes privacy rights while seriously diminishing private property rights, have taken society toward serfdom.
Perhaps there is no other reason you can (or are willing to) conceive, but that does not make it fact.
A major issue with cryptocurrency and blockchain discussions is that vocal proponents speak as if they’re arbiters of truth with perfect knowledge of the the world and everyone who doesn’t subscribe to their view is an envious dunce. They speak in insults and talking points and seem to be more interested in sounding superior than having a conversation.
Humility and openness to be wrong are sorely lacking, but both are needed for a good-faith dialogue.
So yes, I maintain people opposed to blockchain on principle - as opposed to problematic elements within the contemporary blockchain space - oppose individual liberty, which I characterize as desiring for the population to be under a technocratic form of serfdom.
The problems are impossible to decouple from "blockchain on principle" because the problems are intrinsic to the data structure itself, not "contemporary" approaches to the data structure implementation.
I am probably aligned with you politically (if not more radical in my libertarian sentiments), and I can sympathize with the stated goals of the crypto space/bitcoin whitepaper. The problem is that the technology and computer science behind it fails completely to deliver on these goals from both an abstract and practical perspective.
If that is indeed the belief, then I concede that is an example of someone opposed to blockchains in principle, for a reason that is not an illiberal political agenda.
In any case, I like to think I am pretty well informed on blockchain technology, and I can't think of a single problem that currently afflicts the space, that cannot be solved through engineering a solution that does not involve moving away from the general blockchain architecture, or more generally, a solution that does not involve moving away from autonomous ledgers that use cryptoeconomics to maintain consensus.
What are your proposed solutions to identified problems then?
In the case of layered solutions, you're no longer using blockchain. If we want to count uncomitted transactions on a second layer as "reversible", that comes with a host of its own issues, and points out another intrinsic flaw of blockchain: incapable of fulfilling its philosophical purpose, and requires secondary solutions that violate the very core philosophy of the data structure in hopes of overcoming just one of its many issues.
https://cryptowhale.medium.com/why-the-bitcoin-lightning-net...
https://github.com/davidshares/Lightning-Network
You can have a smart contract that writes reversible transactions to the blockchain. This would mean that the smart contract imposes a delay for withdrawals, to allow time for any possible requests for reversals. There could optionally be an expedited wirhdrawal upon some set of authorities deeming the balance as finalized and not subject to any reversals.
>>requires secondary solutions that violate the very core philosophy of the data structure in hopes of overcoming just one of its many issues.
Even when you lose some of the benefits of blockchains, via secondary solutions like a reversible transaction smart contract, you retain some benefits, like:
* optionality, e.g. those who are fine with irreversible transactions are free to use them,
* permissionless market entry, e.g. any party is free to deploy their own 'reversible transaction' smart contract, giving payment consumers maximum choice
* stronger guarantees of the integrity of transaction processing, with transparency into any tampering, given the code that executes the transactions, along with the transaction itself, is publicly auditible
* debundling the provision of the different services that are required for transaction processing, by allowing transactions to be processed by immutably open smart contracts that no third party can later close off access to.
No you can't. Once a smart contract is included in a block, it has finished executing and is irreversible. The transaction is irreversible, again, by definition.
>>Even when you lose some of the benefits of blockchains
So you're no longer using a blockchain.
I'm not interested in endless goalpost shifting.
The transaction is irreversible, in the sense that it can't be removed from the blockchain, but the transfer from person A to person B can be made reversible, via a smart contract that doesn't allow person B to withdraw from the smart contract for a duration, during which time person A can effect a reversal transaction that would effectively undo the transfer.
>>So you're no longer using a blockchain.
In my example, you are using the blockchain in all cases. You are just using smart contracts in a way that reduces some of disadvantages of naive blockchain use (e.g. allowing a consumer to dispute a fraudulent charge) while giving up some of its advantages (e.g. reduced risk of charge backs for honest merchants).
The fact that the author is comparing to services like Venmo or PayPal really goes to show how much they don't understand about what Bitcoin was built to achieve.
Also goes to show that people like the author should also check their financial privilege: https://bitcoinmagazine.com/culture/check-your-financial-pri...
FYI the author of this ^ article is the Chief Strategy Officer at the Human Rights Foundation. All his articles on that site are worth reading to gain a more global perspective of what Bitcoin is doing outside of the western hemisphere.
I'm a refugee from Wallachia. My government has collapsed, my currency is destroyed by hyperinflation. How do I use Bitcoin for payments?
I'm a poor peasant from Wallachia, I barely know how to use a smartphone. ELI10.
1. How do I buy the Bitcoin in the first place? My government or bank aren't selling them to me.
2. How do I actually transfer that money?
That doesn't mean Bitcoin isn't already helping millions of people in these types of countries that have unstable currencies, governments, or both, but also have wide spread internet and smartphone adoption.
Read the Alex Gladstein articles I mentioned above.
As I mentioned, Alex Gladstein has lots of good articles outlining how people in countries that are affected by war, authoritarianism, hyperinflation, or all of the above, use Bitcoin. These are the best articles for that:
https://bitcoinmagazine.com/culture/bitcoin-financial-freedo...
https://bitcoinmagazine.com/culture/cubas-bitcoin-revolution
https://bitcoinmagazine.com/culture/can-bitcoin-bring-palest...
https://bitcoinmagazine.com/culture/bitcoin-a-currency-of-de...
Why doesn’t someone, then, who actually understands their almighty blockchain god, illuminate us, mere mortals, on the wonders of blockchain and how it can be good for society in the foreseeable future.
You know what’s really tiresome? Having the promises of blockchain sold to us for years now without a single, useful purpose for it in sight other than, well, cryptobros.
From the article:
> Let’s start with this: Venmo is a free service to transfer dollars, and bitcoin transfers are not free. Yet after I wrote an article last December saying bitcoin had no use, someone responded that Venmo and Paypal are raking in consumers’ money and people should switch to bitcoin.
Not everyone has access to Venmo or PayPal. For instance, sex workers are routinely booted off the platform in the US with their funds being frozen. People in developing countries also may not have access.
> In fact, I would assert that there is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast.
How about people that want to hold western stable coins and they are legally prevented from holding dollars or similarly stable currency?
Is it drug trafficking?
so your company either has to set up its own KYC/AML compliance department (noting that this is often a regulated profession) or it is probably breaking the law.
International bank payments are slow, but they are also reversible and compliance is not your problem.
All it takes is to turn one participant, and the threads can be followed to trace the money.
If I hold something in a digital wallet, I can never be sure I've eliminated all the ways to take it remotely and anonymously.
https://www.wsj.com/articles/turks-pile-into-bitcoin-and-tet...
[0] https://www.washingtonpost.com/politics/2019/09/06/argentina...
> Turkey had an 80% foreign currency surrender requirement in place from September 2018 to late 2019 during a previous iteration of a currency crisis and has also used other “soft” capital controls including changing fees charged on currency conversions and adjusting the requirements for currency hedging.
There are financial assets I cannot hold due to the accident of geography. For instance, I can't hold Chinese stocks. I cannot easily and safely send money to family in Cuba, Iran or North Korea. There are a lot of places I cannot hold real estate.
Capital controls and monetary debasement are very much the rule on a long enough timespan.
[0] https://worldview.stratfor.com/article/turkey-takes-first-st...
I bet we agree on many issues including, let people move freely between countries, have less rules, have smaller countries. But there is nothing wrong with the idea of a government backed currency even if you can point to failures like Turkey, Venezuela and many more.
Also are you seriously saying that because you can't rent seek land in Liberia there is a problem with the global economic order?
Something has existed for tens of thousands of years and in the last 50 years has been supplanted by something else. Which would I bet on surviving 1,000 years from now? Hard currency.
1. The earliest known currency was the shekel and it was more of a accounting instrument and it was used ~5000 years ago.
2. Fiat was invented in the 7th century https://en.wikipedia.org/wiki/Fiat_money#China
Regarding your claim that hard money is good.
We are talking about a system that completely floundered under pressure from economic expansion (hard money) vs a system that has been presiding over the largest economic booms in history and is currently adopted by every government in the world (fiat) and your argument is "well look which is older".
2. I never claimed fiat was invested 50 years ago. I stated that the global monetary system switched over from predominately hard money with fiat
> We are talking about a system that completely floundered under pressure from economic expansion (hard money) vs a system that has been presiding over the largest economic booms in history and is currently adopted by every government in the world (fiat) and your argument is "well look which is older".
It floundered because it was routinely debased and not adhered to. That was my whole point. I would also say that fiat has failed a lot. You google list of hyperinflation to get a sense of how bad it has been over time. Even today you have people living in countries in which they have to watch their wealth disintegrate every year by double digit amounts
Civilization didn't begin with Bretton Woods...
[0] https://bebusinessed.com/history/the-history-of-gold/
Amongst the complicated math and crypto posts that nobody can understand, Vitalik has covered several use cases on his blog.
The entire point of voting is to provide a way to pick something that virtually everyone can agree was fair. Blockchains are too complex for virtually everyone to understand, and so most people can't agree that they're a fair way to decide on things. They require trust in the programmers and cryptographers, *and most people don't have that trust*. And with good reason, programmers are notorious for making buggy, unreliable, confusing software.
Vitalik entirely ignores this argument against blockchains for voting, and pretends that the most important objections are the technical ones.
Almost nobody understands any of the complex systems in their life (e.g. banking, software) but it doesn't stop people trusting them. People have trust in these systems because they reliably produce the desired output not because they understand how they work.
the issue is that we show the things being made and hn calls them all scams and ponzis and fraud.
we show the rates adoption, and the growth in use and hn says its all speculation and fraud and needs to be made illegal.
we point out that crypto is in many ways doing better than other industries to represent marginalized communities and we all get labelled cryptobros and any of us who arent that get erased from the picture.
if we post anything positive linking to a twitter account that account starts getting endless abuse.
there are very few people who bother coming to hn anymore, pretty much everyone working in the space has given up on it.
We have automated stable currencies, permission-less loans and lending, streaming payments, UBI experiments, co-ops governing land use, automated taxation and public goods funding experiments, sybil resistance mechanisms for 1p1v governance, resilient p2p infrastructure that people are using every day to pay each other and run their businesses. Composability for all of these things to quickly build your own business logic on top of it. Standards for tokenising royalties/payments/tickets... All running on p2p infrastructure anyone can participate in. Thats pretty amazing imo.
At what point will what we've been building be considered useful? If you took any of these things and wrap it in a saas startup connected to stripe hn would eat it up and claim its the greatest startup of the decade. but because its built on crypto it can only ever be world destroying disaster capitalist alt-right incubating cartoon villain fraudulent vc led scammers right? its just so tiring.
Can you share some of the numbers you're citing? Who is using what to run their businesses daily? What's the number of transactions relative to current financial systems? How many actual users do you have for these things? The problem is anyone digging deeper sees it's all marketing and bullshit.
It starts being useful when it's not motivated by VCs and others with a financial stake trying to get higher exists hyping up products with no utility and no users.
This is the part that confuses me. What is the theory of value here? If you don't like it don't buy it. If you're not interested, don't buy it. If you don't see the benefits, don't develop cryptocurrency applications.
Nobody is compelling developers or users to use this technology. Meanwhile state run currencies are forced upon us. Walled gardens and browsers force tech choices on developers.
Isn't it enough to dislike something and avoid it entirely? Why advocate for limiting the choices of others? How is this not authoritarian paternalism?
Ummm.. have you seen the mountains of hype and cash poured from the cryptocurrency community onto regular folks?
> Isn't it enough to dislike something and avoid it entirely?
I would, but the cryptocurrency community isn't letting me do that.
Credit cards were "invented" in 1951. By 1970 51% of US households had at least one. All happening well before the internet. Even with all of the hype an estimated 13% of American households even traded crypto last year. Want to guess how many households used it to purchase a good or service?
Globally we're more connected than ever. It's been 13 years - if bitcoin was actually superior for anything other than speculative trading people would be using it for something other than speculative trading.
Regarding the abuse here on HN - tweet something negative about blockchain and I think your perspective on the "abuse" coming from the HN community will change. By nature "cryptobros" and other people pumping these things are doing so for their own financial gain. People that are negative about crypto typically don't have any skin in the game and even if they do (somehow) their ferocity pales in comparison to the portions of the population that are expecting to retire with it.
Source for this?
Also, all of these transaction numbers are for on-chain transactions. They don't include layer 2 solutions like the Lightning Network. Given that the Lightning Network is built for micro-transactions, where sats can literally be streamed to a creator, while someone listens to a podcast for example, it's possible (though impossible to definitively confirm?) that on-chain AND off-chain transactions already exceed credit card services.
You have to understand that Bitcoin (the blockchain network) isn't trying to be a credit card network. It's a settlement layer/clearing house. Traditionally for a transaction to occur with finality would take days, perhaps weeks to occur. When you make a purchase with a credit card that payment isn't occurring with finality in the banking system. It takes days to "lock in". On Bitcoin it takes 10 minutes and is completely automated and trustless.
The Lightning Network (enabled by the SegWit upgrade) allows for payments to occur instantly, with low fees, and can be used for micro-transactions. The tradeoff to that convenience is it's less secure. This is why you would have a Lightning wallet for your day to day usage, and your "savings account" in cold storage on-chain. You would only use on-chain transactions for big purchases, or to open a Lightning channel.
> Globally we're more connected than ever. It's been 13 years - if bitcoin was actually superior for anything other than speculative trading people would be using it for something other than speculative trading.
It literally is, you're just not paying attention. As already mentioned it is being used to stream payments in podcasts as your listen, it is being used in competitive video games, there are gift card services like Bitrefill,
The Lightning Labs blog does a good job of summarizing the state of the Lightning Network.
https://lightninglabs.substack.com/p/the-flywheel-is-startin...
https://lightninglabs.substack.com/p/the-summer-of-lightning...
Generally speaking, L2s are interesting because they all make compromises from the principals of blockchain (as you mention - but that's for another day). It's been interesting, to say the least, to watch some of the fundamental definitions and principals such as "decentralized" and "secure" get redefined over the years.
I use statistics for Bitcoin transaction volume in these comments for several reasons:
1) Bitcoin is more widely known than any other blockchain based technology.
2) It's (essentially) only used for payments so transaction volume is more easily directly compared to other uses. For example, Ethereum has roughly double the daily transaction rate of Bitcoin but it's not clear to me how to easily breakout payments for direct comparison to Bitcoin, Visa, etc.
3) I'd use Lightning transaction volumes if I could find them. Anywhere. I've researched this quite a bit and all I can find are posts like the ones you provided (from Lightning Labs themselves) or from places like the Dailyhodl, etc talking about how big all of the markets Lightning is going to take over are, how much potential there is, etc. The typical "by 2030 we'll be doing (insert astronomical number)".
If you have a reputable/reliable source for the number of transactions on the Lightning Network I'd love to see it. The amount of bitcoin on it, the number of channels, the number of nodes, etc make for some impressive looking graphs but I suspect the transaction volume (to me the only real number that matters in terms of adoption) is still extremely low. If it wasn't everyone in the blockchain sphere would be hyping that too.
Let's circle back - I use blockchain at my current startup. I had 200 GPUs mining Ethereum in 2017. I'm not anti-blockchain by any means. I bring up what I consider to be valid criticisms because the bubble inside a bubble wrapped in an echo chamber present in blockchain today isn't doing anyone any favors. The reality is that (zooming out) after 10 years blockchain is still a toy. If it has any chance of ever living up to the promise and hype at least some people need to step out of the bubble and ask themselves why it's actually been one of the most slowly adopted technologies in the last 100 years.
That doesn't agree with the data I've seen for Bitcoin: https://twitter.com/woonomic/status/1356310219215699968?s=19
And "blockchain" is pointless outside of Bitcoin, which might explain why its adoption has been slow as a more general technology. The blockchain was created to solve a very specific problem related to Bitcoin's mission statement (as defined by Satoshi). With that problem solved by Bitcoin, what else is there to use "blockchain" as a technology on exactly? Ok, there might be some very niche use cases that are applicable, but those aren't going to see the technology widely adopted.
> If you have a reputable/reliable source for the number of transactions on the Lightning Network I'd love to see it.
I don't think it's actually possible to determine this. There's no way to see transactions that occur across the entire network. Nodes are only aware of the transactions that route through them. Maybe some clever people have determined a way to infer it, but I'm not aware of any. The metric most people use to judge growth of the Lightning Network is btc capacity i.e. how many bitcoin are "held" in channels between nodes, which is open information.
Bitcoin launched 1/2009 - as of now there are 100M users (your graph says 135M, which seems to be a very high estimate but lets go with that).
World Wide Web was released 4/1993 - 13 years later there were at least 700M users (very conservative estimate). Mind you this growth depended on everything from having a computer (22.9% of US households had a computer in 1993) to laying untold miles of fiber optics, undersea cables, building out physical datacenters, etc. Literally people digging ditches and ships circling the globe - many thousands of miles over.
By being essentially just another internet application (most people consider WWW = internet) taking advantage of all of this infrastructure Bitcoin/blockchain had/has a HUGE advantage over the WWW. To be a bitcoin user in 2009 you had to have a computer and install a program. To be a bitcoin user for the vast majority of its life you could/can hear about bitcoin at a bar, pull your phone out, and install an app on your smartphone to be a "bitcoin user" for next to nothing in under five minutes.
To be a WWW user in 1993 you had to have a computer that could handle it (Windows? Trumpet Winsock?, CPU, RAM, modem, etc) and a local ISP, etc. I remember in 1994 having to install a modem, a second phone line, and dial into an ISP that was LONG DISTANCE... It literally took weeks to get on the internet in 1994 and especially in my case, it was very expensive and very technically challenging (Hayes commands anyone? Chat scripts? PPP/SLIP?).
Then a little later America Online (still crazy expensive), maybe have it at work or university, or in the later years get lucky and have broadband in your area. I couldn't get DSL until 2004, for example (and it was still very expensive).
Even with all of these monumental challenges the WWW grew at least 5x faster than bitcoin (and it's really probably closer to 10x).
I suspected that was the case with Lightning. I'll keep digging into this because as I'm sure you can tell I'm fascinated with this. Overall I'm really trying to ask:
Why has adoption in the "cryptosphere" been so terrible (arguably the worst rate of any recent technology)? This is a question every honest blockchain advocate needs to ask themselves because there are clearly significant issues impeding mass adoption. Whatever these issues are need to be identified and rectified to the extent they can. I truly hope it's not the obvious answer - "It doesn't provide anything most people want or need".
They were frank enough to tell me that their business could have done the same thing in a centralized fashion, but they wouldn't have gotten funding.
Cryptocurrencies don't have a "killer app". Something for the common person.
I suspect that even when they do, it will be incidental. Something that could have been developed as part of a centralized architecture, but built with cryptocurrencies because the financial support was there.
> permission-less loans and lending
What does this mean?
Any application where you need an immutable ledger is a good application for blockchain. Just because crypto enthuisiasts are trying to shoe horn this technology into anything and everything doesn't mean the above isn't true.
What's your definition of good? An immutable ledger is a good idea and useful. An immutable ledger where every write costs 50-200 USD isn't as useful, for example.
1. You can't trust any single known party, or group of parties, to attest the integrity of the ledger (otherwise, you could just use plain old digital signatures)
2. You need infinite pseudonymous accounts in this ledger.
3. You need it so badly that you're willing to forgo a significant share of whatever value having this ledger creates, regularly, forever (mining fees).
There have been attempts to rebrand blockchain as anything containing a chain of digital signatures, no mining needed. In which case it's old technology - but in that case I also agree that it has a use.
Artists are by their nature known parties, as are factors in a supply chain. They may have a use for digital signatures, but they have no use for a scheme including mining.
1. That currency is going to be heavily speculated because it's unregulated by design.
2. That currency is going to be used to bypass regulations that do in fact protect people.
3. That currency will be used to bypass an international system that is designed to allow nations to punish other bad national actors without resorting to war.
If you want to foster anarchy and to create an expectation that any individual is on their own and are actually prevented from getting assistance when they lose everything then a cryptocurrency is an ideal ideological fit. If you want something more balanced then merkle trees might be a useful tool but leave the currency aspect out of it.
but since bitcoin doesn't have any central authority it's not really fair to conflate the purpose/value of btc, blockchain tech with idea of cryptobros/scams/ponzis.
Today there are many transactions that take days to clear. For example if you buy stock, it appears instantaneous to you, but the scenes your brokerage, the other brokerage, and the clearing house have to make sure all the money is there, the stock is there, etc
Clearinghouses make a lot of money just guaranteeing transactions. That is friction in the system.
Wire transfers, ACH, cashiers checks, etc all have the same issues.
Even things like title insurance, transfer of title, deeds of trust etc have those issues.
Instead of NFT for a gorilla picture, think of NFT for your house that essentially represents your deed. Transferring your deed is a very complicated process.
Think about how social media or app stores are essentially controlled by the choices of a few CEOs. Imagine a distributed social media will allow everyone to ignore you, but no party can censor you. You own your data instead of an entity like facebook.
Wait, aren't blockchain transactions hilariously slow and depend on an internet connection?
> Clearinghouses make a lot of money just guaranteeing transactions. That is friction in the system.
Aren't popular blockchains using transaction fees to pay for validation?
> Wire transfers, ACH, cashiers checks, etc all have the same issues.
Seems to also apply to bitcoin.
For regulatory reasons, not for technical ones. You're using the word "transaction", but you should distinguish between legal transactions and what is essentially a database transaction.
Not knowing the purpose of cryptocurrency is its purpose. There's nothing wrong with having a general purpose technology, like computer programming, that is adaptable to specific purposes on demand.
> People are never allowed to criticize it without the same, repeated feedback “If that’s what you think blockchain is, then you don’t understand it.”
That's because the criticisms are always the same talking points, all of which have been addressed multiple times ad nauseam. If Bitcoin advocates appear dismissive or opaque it may be that they're exhausted of debunking the same criticisms over and over again, particularly when there's a wealth of information out there to find. Though you have to be willing to leave the anti-Bitcoin media bubble. Perhaps all us Bitcoiners are sufferring from delusions reinforced by confirmation bias, but perhaps you are too?
> Why doesn’t someone, then, who actually understands their almighty blockchain god, illuminate us, mere mortals, on the wonders of blockchain and how it can be good for society in the foreseeable future.
This kind of snark also doesn't help with the above. But if you're actually curious I thought this did a decent job of explaining Bitcoin's blockchain, decentralisation, and trustlessness: https://dergigi.com/2021/01/14/bitcoin-is-time/
> You know what’s really tiresome? Having the promises of blockchain sold to us for years now without a single, useful purpose for it in sight other than, well, cryptobros.
Perhaps you should stop listening to the promises of "blockchain" and "crypto" and instead focus your learning efforts on Bitcoin only... cryptobros be damned. Bitcoiners probably dislike them more than regular folk.
...therefore we need bitcoin? Is this the new spin? People don't see it's a tech that was invented without a use case?
Many people don't have electricity too, what are you talking about?
If I'm wrong about crypto helping the unbanked, please provide any context or numbers to back up this claim.
P.S. Let the poor countries solve their own problems, if you want to help donate money directly.
Have you read a single quote from Satoshi Nakamoto? He's very clear about the use case... many times.
“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” — Satoshi Nakamoto
That was fun, thank you.
Do you know why the majority of those people don't have bank accounts? Because they have no fucking use for it! They either have no money (how does crypto help those people?) or they use banking services through their family/friends.
Do you know what 3.7 billion people don't have? Access to internet.
Everyone has use for a way to store their wealth, no matter how small. Economies that use money, in whatever form, are much more efficient than those based on barter.
> Do you know what 3.7 billion people don't have? Access to internet.
Yes, Bitcoin won't help people without access to the internet. There are still hundreds of millions (maybe billions?) of people that DO have access to the internet, but don't have a reliable way to store their wealth, either because of irresponsible governments or central banks.
You know what governments and central banks can do to the security and issuance of Bitcoin? Nothing. Absolutely nothing.
And that's very valuable to some people.
Oh ffs, what are you talking about? Do you think that the poorest people on earth are poor because they choose not to deal with money? Will they store their blanket and cup on the blockchain? My god.
> You know what governments and central banks can do to the security and issuance of Bitcoin? Nothing. Absolutely nothing.
What is preventing a government from getting >51% of mining power and just wrecking havoc on the chain? Afraid of governments but can't think of the possibility of them taking over mining operations or just fucking up the internet to take it down. Is it wilful ignorance or naivety?
At that point, why not just bank with the legal regime you're already implicitly trusting?
https://www.crunchbase.com/organization/true-link-financial
most of his complaints about crypto being hard to use could easily be applied to the internet, cell phones, and computers in their early days. Almost all technology starts off with a niche community that is often mocked before it improves and becomes mainstream. Crypto gets even more hate because people who think they are smart are seething about missing the train and the cognitive dissonance demands that they write off the entire industry as useless
On what basis? Certainly not on the basis of volume of transactions used to purchase goods and services in the real economy. Nor on the basis of adoption of other use cases for smart contracts, supply chain provenance tracking, etc. I assume you mean on the basis of trading volumes and market caps, which are completely irrelevant.
- 1721 Mississippi bubble (https://en.wikipedia.org/wiki/Mississippi_Company)
- 1813-1836 Second Bank of the United States (https://en.wikipedia.org/wiki/Second_Bank_of_the_United_Stat...)
- 1933 FDR gold confiscation (https://en.wikipedia.org/wiki/Executive_Order_6102)
- 1939 UK gold confiscation under guise of national security (https://en.wikipedia.org/wiki/Operation_Fish)
- 1971 unilateral termination of gold convertibility (https://en.wikipedia.org/wiki/Nixon_shock)
- 2008-present ECB/Fed/BoJ/BoE/global QE (https://en.wikipedia.org/wiki/Quantitative_easing)
I don't know about the author but I have a feeling that the track record of central banks isn't exactly stellar, and I'd much rather trust a decentralised system with zero ability for sustained debasement than trust a small centralised group of people who have time and time again abused that trust.
Every one of these charges happens every day and in some of them to a much greater scale in fiat, especially climate destruction due to inflationary monetary policy, which encourages consumption and waste and punishes thrift and savings.
I can rephrase as a question: Should we stop using groundbreaking and individual-empowering technologies just because some criminals benefit? Every single technology is exploted by criminals. I fail to see how that is an argument for its disavowal. If anything, we need to normalise privacy and encryption among virtuous everyday individuals.
Criminals and wrongdoers will always exist. Statists and financiers are just another category of them, who have a system that conveniently covers their crimes. I will put all my weight behind anything that weakens their power over me: I.e cryptography and cryptocurrency.
It's a political stance first, the technological "solution" is selected just because it fits the ideology.
No one that knows what they are talking about can possibly think we were better off without central banks. It is a childish and clueless view.
House Of Morgan, History of Interest Rates from Wiley. Try reading some books instead of looking up things on wiki to back up your already nonsense beliefs. You can not read those books and come away thinking getting rid of central banks is a good idea.
You are just making the old clueless gold bug argument repacked in digital form.
Financial crises have been more severe, longer, and more sustained since the introduction of central banking. Let us also not forget that the industrial revolution and the extraordinary growth of Western economies in the late 1800s were mostly conducted under free banking without a central buyer and lender of last resort, and in some jurisdictions where a central bank existed it was regulated to follow a strict gold standard.
I admit that I'm not willing to even look into your argument too deeply, although I have severe doubts about its validity. The reason is you omit one order-of-magnitudes factor: The economy has increased exponentially beginning with the industrial revolution, and world population similarly. So of course any disaster, including natural ones, without anything else impacts ever more people and is ever more complex to solve.
This is the major factor that you have to address before any other, but you simply ignore it. Like all the pro-crypto arguments, they always leave out extremely easily accessible points that are not hard to find, which I find strange, and which makes these discussions so tiresome.
And by the way, when it was new I looked into blockchains to the point of even taking programming courses for it, so it's not like I'm completely "armchair" about it. I rejected it only after doing active research.
The current state is:
* Bitcoin (BTC) development is driven by a very small development team.
* Main discussion spaces (eg, /r/bitcoin) are owned by a small team.
* NFTs are almost exclusively sold on centralized marketplaces with the capability of banning a NFT from it if they don't like it.
* Miners aggregated into something like a dozen relevant mining pools.
* The main way of obtaining BTC is at large, centralized exchanges. Who often hold your balance in a database and not in the blockchain, because BTC transactions are expensive.
Yup, he completely fixed it. Rather than trusting an elected government in BTC people put their trust in whoever now gets to commit to the github repo.
Trust is required to make cryptos work too. Yes, a blockchain is "immutable", as long as the network isn't hacked w/ e.g., a 51% attack in Bitcoin's case. However, the price of Bitcoin isn't really anchored to anything, i.e., there's no natural demand for it like there is for fiat currencies (since people must pay their taxes in fiat), so basically, only the collective trust and hope of people is making it valuable.
In addition to that, current cryptos are lacking in either decentralization, efficiency, or both, nevermind the various decentralized applications that operate like any traditional company, which you'll have to trust in order to use the app. So as of now, a truly decentralized and efficient blockchain network is only a dream.
I'm not saying fiat currencies are without problems though -- they very much aren't. The regulation is problematic, but the bigger underlying issue stems from the expectation of infinite growth. Money in the modern economy is basically debt, whose interests are paid off with newly created debt. This cycle works only if the loan money is, on average, invested profitably, i.e., (in very rough terms) the GDP rises along with the money supply. This is difficult to begin with, but since compounding interests grow exponentially, it means that the GDP should rise exponentially too, which, since exponentially growing curves approach infinity relatively fast, means that the planet is fucked due to exponentially growing demand of energy and natural resources.
I hate it because from everything I see it's 1% useful idiots/fellow travelers (otherwise very smart folks, just like the original fellow travelers were!) swamped by 99% crooks that want to con simple people.
But hey, I hope they prove me wrong. I could use better financial tech, that's for sure.
This is one of the problems crypto has to solve before becoming mainstream. It should be possible to "get in" at any moment, without being insulted at all times that you only fail to benefit from it because you were too late.
A blockchain is a specific data structure: a linear transaction log, typically replicated by computers whose owners (called miners) are rewarded for logging new transactions.
There are two things that are cool about this particular data structure. One is that a change in any block invalidates every block after it, which means that you can’t tamper with historical transactions. The second is that you only get rewarded if you’re working on the same chain as everyone else, so each participant has an incentive to go with the consensus.
The end result is a shared definitive historical record. And, what’s more, because consensus is formed by each person acting in their own interest, adding a false transaction or working from a different history just means you’re not getting paid and everyone else is. Following the rules is mathematically enforced—no government or police force need come in and tell you the transaction you’ve logged is false (or extort bribes or bully the participants).
Then use a cryptocurrency that has 0 (or very tiny) transaction fees?
>in case this e-book author has hidden a recursion bug in their version to drain your ethereum wallet of all your life savings
An ethereum smart contract can't take ethereum from anyone. It can only take what you've sent it. Also I'm not sure why the author didn't add in that you still have to trust the author to serve you the ebook. The smart contract would only give you an NFT that the site would check.
>yet is your Afghan villager going to download the blockchain from a broadcast node and decrypt the Merkle root from his Linux command line to independently verify that his vote has been counted? Or will he rely on the mobile app of a trusted third party — like the nonprofit or open-source consortium administering the election or providing the software?
What's the problem of making it convenient?
We are now many years past not only the creation of Bitcoin but also past it going "mainstream". Everyone who is going to hear about it has hear about it and yet in real terms it is a joke. It's a digital beanie baby, it being is used as described by BTC boosters as something resembling a currency only in a tiny fractional handful of edge cases. All the interest in Bitcoin is in the price going up. Even people who "accept Bitcoin payments" denominate their prices in US dollars and merely run the transactions using Bitcoin.
For years I have been interested in blockchain and cryptocurrency technologies for what they are technically and what they could enable, not what profit I can make. There are certainly others like me.
There's some really fascinating stuff being worked on in the cryptocurrency community, things like ZK-SNARKS or automated market makers. The original bitcoin paper is at the very least an interesting and novel solution to the double spend problem.
I think I could make a similar argument to yours about how the vast majority of people in the hackernews community are just there because they want to become rich. Or perhaps how the vast majority of anti-cryptocurrency arguments break down to soemthing like "I didn't buy bitcoin, so I don't want it to become the currency of the future since I will have missed out on being rich". There are elements of truth to both of those, but they're both pretty uninteresting takes on an interesting topic.
Edit: Scrap that, you are right, cryptography is a necessary building block of crypto-currencies. What you are actually saying is: Fascinating bricks exist without brick-houses, the reverse is not true. Which is logical.
It's like saying we shouldn't be pleased that pharmaceutical research is giving us greater insights into genetics because genetic science would exist even without pharmaceutical research. It's true that genetic science would exist, it's false that therefore pharmaceutical research adds no value to it.
Meanwhile we suffer from a hugely incompetent global payment network that is horrible to deal with and makes some creators actually opt out of receiving donations because of the sheer annoyance and complexity of the system.
Yeah, we all want it to use less energy and perhaps we'll get there. But not by banning blockchain tech.
The fact that Venmo is free, is the problem, how can you deliver value for free... Because it's not free, the value is extracted elsewhere. I thought we were past this.
Incompetence is a cop-out argument because you could argue any organization or community suffers from it given a sufficient amount of time in existence. Plus, it's not like crypto companies have a perfect record either. Look at mt gox, or more currently, the accusations against Tether. If it comes out that they've been lying about their capitalization, which many have argued that they are, it could cause major problems for the crypto industry.
True decentralization has not been achieved by the crypto industry, it's merely shifting the rent-seeking from one set of parties to another.
With proper regulation, banks can have maximum terms on holding money mid-transfer, limits (or even abolition!) of transfer and withdrawal fees, etc.
It is possible to designate a product as an essential service or utility. It's just that the US government has chosen to not apply that kind of regulation to a lot of essential products like banking and telecoms, much like it hasn't chosen to enforce anti-trust laws, remove tax avoidance provisions, deal with corporate capture or reform the healthcare, education and electoral systems.
In essence, it's a people problem all the way down. Technology is incapable of solving those, which is why blockchain is a solution looking for a problem.
So who exactly is limiting your freedom? If a random dude can limit your freedom with a mediocre Medium article, then I'm afraid you don't really have much freedom to start with.
Satoshi is not limiting my freedom because I can opt not to use his work. Net Freedom would be lost if I would force Satoshi to make BTC according to my vision.
I transfered some BTC around back in the day, order sushi, pay a fried, order Raspberry Pi stuff at the Pi Hut. It feels like magic so I'm a believer.
Chesterton's fence. Have you ever wondered why the financial systems is the way it is?
All that regulation is because of fraud. People REALLY, REALLY want to steal money and they will get INCREDIBLY creative to do it.
So someone stole a coin one way, we added a rule to stop it. They stole a coin another way, we added another rule. Another coin, another rule. Repeat a million times.
What do you expect will happen with a shiny, pristine, tech system once it faces the real world??? It's going to suffer the same fate.
We need iterative improvements to existing systems, not burn-the-world-pseudo-solutions.
The real argument is a bit more subtle: with gaming (and most other uses of power), the incentive is to lower the power usage for a given level of functionality. With cryptocurrency, the incentives are to increase the power usage. The idea behind PoW is to make it too costly (and a large part of the cost is power usage) to find an alternative longer chain. And for an individual miner, the incentive is to use more power than the competition, so that a larger fraction of the fixed amount of reward goes to that miner.
This will be illegal behavior, but not all things that are illegal are immoral.
International wire transfers and even stock purchases require days to clear between entities. With blockchain those transactions are essentially instantaneous.
It's fine to believe that but at this point the scams, tax-evasion, social-darwinism, techno-libertarian grift, and criminal enterprises are NOT the exception. They're very much the rule and dominate the way crypto works.
Of course, somewhere buried deep in all that funny-money, there's genuine innovation begging to be used for a legit purpose. It doesn't look good for the future. I fear that the worst thing that could happen would be for crypto to continue along its current path and actually "replace" real currency retaining all it numerous dysfunctional and unethical properties. All it would take is for enough people to "get-rich" so they could F the rest.
Back then, states chartered their own banks, there was little cooperation between banking outfits and banks could issue their own currency. Financial crime targeting consumers was everywhere and currency stability was a major problem, two major issues that crypto faces today.
Historians largely attribute the failure of the Free Banking era as a catalyst of the creation of the Federal Reserve. We need to be able to at least have a nuanced conversation about how we've seen these patterns in history, it didn't go well then, and there's not a lot of evidence that these age-old problems have gone away with this new technology.
I'm not detecting nuance in this take. The Fed has created boom bust cycles and is hardly a bastion of price stability. The great depression and the continued interventions which prolonged it come to mind.
> hardly a bastion of price stability
Relative to BTC, USD is much, much more stable. This is what I don't get about these kinds of arguments. What are you comparing the Fed to in this case?
Centralized payment services are vulnerable to regulators, see eGold and Liberty Reserve. Note that BTC emerged shortly after these services were destroyed. Anti-terror legislation was used.
Of course there are always price fluctuations, but attempting to fix prices (i.e. interest rates) results in greater imbalances.
https://en.wikipedia.org/wiki/Causes_of_the_Great_Depression....
According to Wikipedia, Liberty Reserve was used to launder over $6B stolen from offshore banks. That sounds like a pretty legitimate reason to shut a service like that down to me. You argue that central banks are incompetent and need to be disrupted, yet you don't hold services like these to the same standard. Instead, you argue that they're victims of regulatory overreach and that we should create that allow this kind of activity to thrive. Where's the anti-money laundering mechanism in crypto? It doesn't exist.
I truly do not believe that the full anonymity provided by crypto does anything but benefit those with the most resources in the system. As long as that remains true, how do we expect it result in a more fair system than what we already have?
Meanwhile physical cash is preferred for criminal acts. Would you similarly blame the issuer of cash for these crimes? What about footwear? Most criminals wear shoes or boots. Running shoes can be used to evade capture. Should we hold Nike accountable?
>does anything but benefit those with the most resources in the system. As long as that remains true, how do we expect it result in a more fair system than what we already have?
If fairness is the virtue we are seeking, then how does the plunge protection team protect fairness?
If fairness is the virtue we are seeking, then how do Cantillon effects factor into your argument?
If fairness is the virtue we are seeking, then how does a central bank formed by the blue-blood oligarchy advance this cause?
If fairness is the virtue we are seeking, then why does the central bank protect financial markets at the cost of all participants in the market?
(Pseudo?) Anonymity is what protects individuals from regulatory overreach and confiscations of wealth. True to the form described by regulatory capture, the IRS disproportionately attacks the income of small business owners vs. the super rich, who can afford to keep a small army of tax accountants, lawyers and lobbyists on retainer. Meanwhile the tax code grows ever more byzantine by the year.
https://en.wikipedia.org/wiki/Richard_Cantillon#:~:text=Furt....
https://www.mdtaxattorney.com/resources/irs-targeting-small-....
https://en.wikipedia.org/wiki/Working_Group_on_Financial_Mar...
https://en.wikipedia.org/wiki/Laffer_curve#:~:text=In%20econ....
https://www.marketplace.org/2015/10/20/how-secret-meeting-je....
Authorities (at least in the US) try to strike a balance between crime prevention and seamless use of cash. Depositing or withdrawing large sums in cash will attract regulatory attention. Currency entering the banking system is checked against a list of serial numbers known to have been used in or obtained through criminal activity. Crossing borders with large sums of cash requires a customs declaration. When cash denominations or cash-like instruments are shown to primarily enable criminal activity, their issue is discontinued (hence why we no longer have $1K bills or bearer bonds).
> What about footwear? Most criminals wear shoes or boots. Running shoes can be used to evade capture. Should we hold Nike accountable?
I mean, if there were some kind of shoe that primarily or uniquely enabled criminal activity, I'm pretty sure it would get banned? Or Nike would get pressured into no longer making them.
Let's be real here.
https://en.wikipedia.org/wiki/Gilded_Age
> which satirized an era of serious social problems masked by a thin gold gilding.
https://en.wikipedia.org/wiki/The_Gilded_Age:_A_Tale_of_Toda...
"The book is remarkable for two reasons—it is the only novel Twain wrote with a collaborator, and its title very quickly became synonymous with graft, materialism, and corruption in public life."
It only took me 2 seconds to find out that the term was ironic.
The irony here is that the Fed was created at the behest of one of the greatest robber barons of them all, John Pierpont Morgan. To this day the institution still protects the interests of Wall Street at the expense of holders of USD.
Corruption is still with us. If we are to be real as you say, we should also acknowledge that history is largely written by the victors. Not mentioned are the other two central banks the US fought to extricate itself from. It shouldn't be surprising at all that a two second glimpse of into the subject results in a superficial reading of history. I think the above poster mentioned something about nuance.
If the Federal Reserve Notes issued by the central bank were sufficient to meet our monetary needs, there would be no interest in cryptocurrencies.
Clearly, "Something is rotten in Denmark", or NW DC more accurately.
> If the Federal Reserve Notes issued by the central bank were sufficient to meet our monetary needs, there would be no interest in cryptocurrencies.
2. The cynical interpretation would that a large part of that ton of monetary needs that need meeting are criminal activities.
The two big ones I can think of are payments and ownership.
Payments has always been a difficult part of the web. Multi billion dollar companies have been created around this difficulty. Wouldn’t it be nice if there was a native, protocol level way to handle payment?
Similarly, digital ownership is totally fragmented. Wouldn’t it be nice if there were a way that I could take my digital things with me between different services? I own a number of videos on Amazon, but why can’t I take that ownership right with me to view them on Hulu, or some other service.
I think of blockchain like I do JavaScript / JSON.
Are the perfect? No. But there’s a lot of time and energy being put into them and sometimes that’s all you really need to get things going.
As I explained in another comment in the same thread, it's a far cry from ensuring interoperability. The term "open ledger" is also misguiding since it's just an open ledger of whatever you want to put there, it doesn't necessarily reflect even a representative part of a whole system that would provide some kind of financial service.
As another commenter explained regarding video ownership, there's also no incentive to move any old and non-interoperable system there to begin with.
Not necessarily. You can have a smart contract that's completely controlled by one address, such that you need manual interaction with an external system to interact with the smart contract. You can even avoid transparency by storing information elsewhere, via an oracle. Nothing ensures that somebody providing a financial service on Ethereum will provide anything that could be considered an API.
Other than that, for the same financial service, the same regulations will apply to both the Ethereum and traditional version. If it's legally possible to offer some kind of API on Ethereum and it does bring value, the same could be achieved outside of Ethereum. But IMHO the real reasons for the absence of such APIs are regulations and incentives, for which Ethereum doesn't help.
Sure, but smart contracts have totally different incentives and costs for creating interoperable services than e.g. mobile apps. I would say that Ethereum does help here.
Why would you say that? For what reasons?
To engage with your comment a bit more, regarding costs, it's very expensive to:
* write secure smart contracts (if possible at all)
* maintain a smart contract infrastructure (transaction fees)
There's no solution in sight for either of these.
I'm not sure exactly what you mean by it being expensive to maintain a smart contract infrastructure, because if your application suits it, you can literally deploy your smart contract and forget it, and people can use it into the future without you ever having to pay server costs - i.e. for the person deploying the smart contract it can be much cheaper. To the extent that it would be reasonable to hope people would deploy public infrastructure as smart contracts, even if they wouldn't want to deploy public infrastructure as cloud services. If you're worried about overall costs like transaction fees, it's not at all true that there's no solution in sight for them. There are minority cryptocurrencies now with no transaction fees, and even if you are skeptical about their promises, the largest smart contract ecosystem around (ethereum) has a plausible roadmap for dramatically reducing transaction fees. You can checkout the first few that are deployed here https://l2fees.info/ but significant improvements in this area are still expected over the next few years on ethereum.
The point about the incentives is that if you are asked to create a mobile app for a bank to manage mortgages, it is possible but extremely unlikely that you will put the effort in to make this accessible via API to the users or the rest of the ecosystem who might want to create tools that create visualisations, aggregate data for the user, certify that someone in the real world is prepared to lend them significant amounts of data, etc.
If on the other hand you create a blockchain solution to manage mortgages, it is extremely unlikely that you wouldn't create a reasonable externally accessible API - it's the default way of writing blockchain applications.
That's just offloading the costs (or passing the costs down to the users), that's not a solution.
> it's the default way of writing blockchain applications
There's no default way of writing smart contracts, where does that come from? I've seen my share of smart contracts (tokens, stablecoins, NFTs) where one single address control everything, or where external approval is required for any interaction to happen. There's no "default" there.
Even if you manage to convince a bank or other financial institution to use a blockchain, they won't relinquish control over what they deploy there. There's just no incentive in favor of that, and so many against (regulations, complexity). But more to the point: "using blockchain" as a constraint doesn't change the incentives when it comes to interoperability.
Do you? Terms probably state you bought a license. The incentive is for producers and platforms to silo content to maximize sales. Why would they agree to use a less centralized platform unless forced by law or coordinated market demand?
Do you remember seeing institutional-grade analysts and advisers issuing guidance about beanie babies? Pointing out that corporate treasuries or sovereign nations might consider a small allocation to beanie babies as a hedge against future-whatever? This is hardly the only such report, though it's a recent one looking at 2021 trends in review: https://www.fidelitydigitalassets.com/articles/2021-trends-i...
I am not saying Bitcoin is destined to win or to make anyone rich, but clearly this has moved far beyond the realm of beanie baby speculation. I mean, good or bad, it's at least reached the level of institutional speculation (see exhibits: dot-com crash, 2008 financial crisis, etc.), and at least it should be taken proportionally as seriously as other institutional financial instruments (i.e. do you take bonds seriously? gold as a financial commodity to be traded? well Bitcoin is X% of those by marketcap, so maybe deserves X% of your attention).
Read this instead. This is good.
https://medium.com/humanizing-the-singularity/why-global-tra...
What is this even talking about? People have wanted trustless digital cash for a long time. Bitcoin is a solution for that. Why does it have to be a solution for other things too? Are binary trees useless because they only work for sorting and searching?
The problem with Bitcoin is, people don't even understand the problem it's trying to solve. Most people have no idea what money actually is. A big part of that is many people are positively afraid of money. They don't even want to think about it.
People who aren't afraid of money have been taking advantage of this situation for hundreds of years and most of them are not doing it for public good. Bitcoin itself doesn't appear to work, but it has got the ball rolling on monetary reform like nothing before. I'm now quite optimistic that we will be able to take the control of money away from private banks.
For Bitcoin, or its successor, I think there will always be a place. Massive instability should be a signal of how big of a shake up this is. But it will stabilise and I think become viable as a minor international currency.
For those who still don't get it, I urge you to learn about how banking works and why Bitcoin was created. Learn about why the 2008 financial crisis happened, what fractional reserve banking is (or was, as it doesn't really exist any more), and most importantly what money is. Here's a clue: it's not cash. There is no cash sitting in a safe somewhere collecting dust for that 99% of your money that you never withdraw as cash.
- Accepted by my government to pay taxes in
- Accepted by all the places I would like to buy things
- Stable price
- Easy to use
- My job pays me in this currency
- Easy to transfer
Every single one is already satisfied by current currencies. Cryptocurrencies bring nothing, "except anonymity" which isn't true (the blockchain is literally a public leger of all transactions, yes you can open a wallet anonymously but you can do that for a bank account too if you have to)
If somebody is seriously trying to suggest that people in hyperinflationary economies would prefer bitcoin, hyperdeflationary economies are just as bad, and worse than both is wildly unpredictable economies.
How do I have recourse in case of a fraud, as a buyer, for example, if I don't know who you are?
This would exceed Tyler Durden's wildest dreams.
I have never made a single penny of off crypto, but I wholeheartedly appreciate it as a transactional currency in a country with extremely draconian drug laws, the highest overdose numbers and of course the inevitable resulting rise of criminal organizations primarily funded by the governments refusal to take responsibility for the drug trade in their country.
How sheltered do you really have to be to consider bloody fucking cryptocoins a bigger problem than any of this?
Maybe in time, crypto will die out as a fad and come back again, and then it might stand a chance. I highly doubt it'll fix all those problems, but it could be a legitimate decentralised currency (for good or for bad, thats up to you to decide). But right now, its seen pretty much seen as a vehicle for investment, a get-rich-quick scheme, which is completely at odds with its use as a legitimate currency
I’m just fed up with people demonizing crypto while our society is far more dependent on the destruction of the environment.
Ban using cheap electricity to fuel crypto, sure, and pay “miners” with transaction fees. And ofc fuck the speculators and the get-rich-quick morons. I guess the problem is that it would easily tank the whole ecosystem if it got reduced to something more reasonable.
Ofc the same is true for the world economy, hence my comment.
This is the problem with crypto as it currently stands, its hype pretty much relies on the opposite of it being a stable, realistic currency, hence my pessimism.