Even as a cryptocurrency developer myself, I concur with most of the criticism. I detest all the cash grabbing, speculation, hype, and scams.
Where I diverge from most criticism is in PoW. In its early years, when Bitcoin was used as currency rather than for speculation, mining only consumed moderate amounts of energy, in line with the lower prices of a few dozen dollar per bitcoin at most. My hope is for Tether to crash, leading to a downward price spiral for Bitcoin, an end to rampant speculation, and a huge scaling down of mining. There should be no expectation of financial gain in cryptocurrency. It should just serve its original purpose of making convenient limited value purchases online.
I don't support PoS as it leads to huge wealth concentration with the founders owning 100% of all initial coins.
> A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
Now, if you want to say that it was badly designed for its purpose, that is a different matter.
"would allow online payments to be sent directly from one party to another without going through a financial institution"
And it successfully achieved this specific goal, however it never claimed it is a good solution for micro/small payments, which is a requirement for "normal currency". Payments of small amounts require small fees and quick settlement time, neither of which Bitcoin has by design.
Well this is where, as any good developer, you have to look at the requirement and ask "why?"
> ... without going through a financial institution.
Why? Why don't we want to go through a financial institution?
Well, honestly, the only REAL reasons are fees on large transactions, and the desire/preference to be able to conduct activities that are illegal by regulated financial institutions.
And that, if we all remember, was the only usecase for bitcoin before speculation - buying drugs and even more illegal things on TOR marketplaces.
> Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine.
This claim that Bitcoin was never meant to be a payment system for small payments is 100% historical revisionism.
PoW already brought us to huge wealth concentration so it is not the solution either. This is one of the hard-not-so-talked problems of cryptos at the moment, and I can't see how to solve it.
PoW tries to minimizes wealth concentration by imposing a competitive cost on obtaining coins. Of course it cannot reduce the wealth concentration already present in fiat. It can at best not make it much worse (as PoS does).
PoW still suffers from wealth concentration due to varying block subsidies over time, which is why I'm a strong supporter of uncapped emissions like 1 coin per second forever, which gives no advantage to early miners.
How does PoW minimise wealth concentration? Minimising wealth concentration would imply distributing the coins evenly among the network participants. That's not what PoW does.
Doesn’t “minimiz[ing] wealth concentration by imposing a competitive cost on obtaining coins”, basically translate to “only the wealthy can afford the compute resources needed to mine”? So, not really minimizing wealth concentration as practically gauranteeing that only those with a tremendous amount of resources to waste on PoW will see any return? In fact, the first link in the post [0] touches on this point very well in the first 30 min or so.
The problem is capitalism, but at least with Bitcoin there is no central authority to unilaterally alter monetary policy to benefit one specific group (those closest to supply of new money i.e. Gresham's Law).
Isn't there? If there are incentives in place that grant some group of people disproportionate power over others (early miners having essentially irrational amounts of coin to work with, or large pool operators owning a substantial amount of the hash rate), then it will trend towards centralization, because they end up being the main stakeholders.
Bitcoin has _mostly_ avoided it, but not fully, as evidenced by the coins claiming to be the One True Bitcoin, forks driven largely by a small group of people who want to force some policy onto the blockchain, and not entirely unsuccessfully.
Early miners have long since sold off their coins. Pool operators don't own any hashrate. Yes there is some fuckery they can engage in, but it would be obvious and miners can trivially switch pools.
Forks are evidence that there is no central authority in Bitcoin! They cannot change the rules for others so they go do their own thing. How can you not see this as an incredible feature?
There is no safe way to wind down mining. As mining becomes unprofitable, mining equipment will be shut down. But it will still exist, and it will be in the hands of people desperate for cash.
This means that the price of 51% attack will drop massively, and that completely undermines the safety that PoW provides.
A large drop in price followed by a large drop in mining completely destroys the security of bitcoin.
The price of a 51% relative to the total marketcap won't change drastically (only moderately due to wider availability of hardware), and that's what security is based on, not the absolute cost of a 51% attack.
No... a chain that costs $1M to attack with a mktcap of $100K is more secure than a chain that costs $10M to attack with a mktcap of $100B, as the latter has huge financial incentives for doublespending (after depositing say $100M at an exchange), while the former has none.
It's like how much you spend on a bike lock. A $100 lock on a $20 bike is probably quote secure, while a $200 lock on a $5000 bike is probably quite insecure.
No... an attacker that is able to successfully execute a 51% attack can crash the token price and make enormous profits in the derivatives market, so the market cap is irrelevant. Moreover, and attacker may have motivations other than financial gains, which again makes market cap irrelevant. If your security model only protects against financially motivated attackers it means it's basically rubbish.
Maybe crypto companies don't trust their employees, because there's a strong correlation between employees who have no qualms about working for a company that perpetrates scammy cryptocurrency get-rick-quick pyramid schemes, and employees who have no qualms about stealing from their employer either.
Every single one of those dollars came out of the pockets of somebody who lost money because they invested. You got lucky. The majority of people did not.
Markets are not zero sum in aggregate. Every trade is zero sum-- a buyer has to be matched with a seller at a price. However, the price of an asset can move without any trades. Your perspective would seem to imply that overall economic growth of all markets could not happen without an equivalent amount of loss somewhere else. Clearly this is not the case.
Cryptocurrency trading is not the same as a regular market. None of the things that make a regular stock market not a zero-sum game do not apply to cryptocurrency markets. And cryptocurrencies are actually negative sum, due to miners and fees.
> Cryptocurrency trading is not the same as a regular market.
Could you substantiate what you see here with a concrete difference? Particularly in terms of my argument that an asset price can move without actual trades being made. If positive news comes out about bitcoin, the price can immediately move without any trading, or at least without every bitcoin needing to realize a gain through trading. This would be an example of growth in value that is not zero sum. Stocks can do the same thing as well. This is actually very visible when a stock opens with a gap from prior closing price.
> And cryptocurrencies are actually negative sum, due to miners and fees.
I'm not sure how you reached that conclusion. Fees and miner inflation are a drag on the asset class, I agree. But stocks also have fees to trade and issue, and are subject to dilution through new issuing. The issue is whether the drag is larger or smaller than growth of the asset.
> If positive news comes out about bitcoin, the price can immediately move without any trading
I mean, it can't? The "price" is literally defined as the price of the latest trade.
The mistake you are making here is the assumption that there is a "value" in a bitcoin that can change. This is true for a stock - it represent a fraction of ownership of a company, and a company has real value. That value can go up and down for a number of reasons. The price of the stock may not be the same as its actual value for various reasons, but that value exists independently of the stock price.
This is not true for bitcoins. They do not represent anything, there is no ownership of anything but the bitcoin itself. It only has value inasmuch as it can be traded. Bitcoiners like to claim that the technology represented by bitcoin has "value", but a bitcoin itself does not represent a share of that value.
A bitcoin is a game token, that can be used to play a game where you win or lose money. The game is negative sum, because the only value you can gain is value being put in by other players, and there are cuts being taken by various parties for playing the game.
> I mean, it can't? The "price" is literally defined as the price of the latest trade.
Check out how an order book works: https://en.wikipedia.org/wiki/Order_book. I'm referring to the bid and the ask price. These often do differ substantially from the last trade price, and represent what someone is willing to pay to buy or receive to sell the asset right now. These can move without any trades actually being made. The price you are referring to is the last price.
But the broader point is that the market cap can move much faster or slower than the total traded value. It would not take exactly a 1 billion dollar buy order to move bitcoin price up 1 billion dollars in market cap, it would probably move much more than that. Same thing for stocks. So your assumption that the total cap of something represents exactly that many dollars being put in by investors is wrong, in general it will be far fewer dollars put in.
> The mistake you are making here is the assumption that there is a "value" in a bitcoin that can change.
I'm making the assumption that the value of a bitcoin is the price someone is willing to pay for it, which is supported by the evidence of what a market actually does pay for it. I tend to base my understanding of the world based on things that can actually be measured and that I can verify. You are asserting, may I add without any evidence, that its value is actually zero. I would challenge you to try to give a definition of "value" that is actually measurable, and that can lead to meaningful predictions about the world. Even if you had a perfect god's eye view of the "real value" of every asset, you'd still have to account for human behavior the irrationality of markets.
> This is not true for bitcoins. They do not represent anything, there is no ownership of anything but the bitcoin itself. It only has value inasmuch as it can be traded.
Your argument that value is only real if it represents "real" ownership would seem to imply that cash settled derivatives markets, which are some of the most liquid markets there are, also have zero value because they don't actually represent ownership of anything and are merely trading instruments. Similarly, cash itself, by your own logic, would have zero value, as it does not represent ownership in anything.
No, that is obviously not the only kind of value you can have. That is one. I am saying bitcoin has none of them.
And, again, mathematically, bitcoin trading is negative sum. This has nothing to do with what the price is. It can go up, down, or stay the same. The game is still negative sum in the end.
> No, that is obviously not the only kind of value you can have. That is one. I am saying bitcoin has none of them.
Please elucidate me on the "kind of value" that cash or cash settled derivatives have, and that that bitcoin would not have.
> And, again, mathematically, bitcoin trading is negative sum. This has nothing to do with what the price is. It can go up, down, or stay the same. The game is still negative sum in the end.
The price is absolutely relevant. If the price were to only increase no one would ever realize a loss on an investment on bitcoin. (I don't think this has any chance of happening, I'm just illustrating why price does matter "mathematically").
Would you please stop breaking the site guidelines, regardless of how wrong someone is or you feel they are? You've been doing it a lot, unfortunately, and we ban that sort of account. It's not what this site is for, and it destroys what it is for.
Would you please stop posting unsubstantive and/or flamebait comments to HN? You've been doing it a lot, unfortunately, and we ban that sort of account. It's not what this site is for, and it destroys what it is for.
Web3 has many reasons it could fail. I choose to be optimistic.
> The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.
The optimistic view is that it will all crash and burn tomorrow. The pessimistic view is that it will survive, and cause even more harm than it has already.
That they are worth 10x the annual wages of a skilled worker is preposterous.
At least they don’t churn through terawatts and terawatts.
Blockchains will exist. They’ll do stuff. Like tulips.
Anyone who bet on tulips continuing to be worth 10x the annual wages of a skilled worker was, in fact, the greater fool and discovered the hard way that there was no greater fool than them.
A user replied to you, then I asked him to expand on his doomsday prediction. He went made an analogy involving tulips and and flagged my rebuttal and now the conversation is gone.
The gist was, tulips are flowers, not distributed apps and ledgers. He has no specific criticism, just a doomsday prediction, fear mongering, and false equivalencies.
> What's missing from this electronic wonderland? Human contact. Discount the fawning techno-burble about virtual communities. Computers and networks isolate us from one another. A network chat line is a limp substitute for meeting friends over coffee. No interactive multimedia display comes close to the excitement of a live concert. And who'd prefer cybersex to the real thing? While the Internet beckons brightly, seductively flashing an icon of knowledge-as-power, this nonplace lures us to surrender our time on earth. A poor substitute it is, this virtual reality where frustration is legion and where—in the holy names of Education and Progress—important aspects of human interactions are relentlessly devalued.
This could have been written last week about the metaverse, or the experiences we faced with the pandemic. That article is quite on point in retrospect. What Clifford forgot is that replacing salespeople and customer support with nothing is valuable because it cuts costs. A CD-ROM (or or iPad app, to update the analogy) sucks as a replacement for a real teacher, but it is a hell of a lot cheaper...
For as worthless as Stephen Diehl says crypto is, he's spent an impressive amount of time obsessing over it. (Seems like there's a proof-of-work joke in there somewhere.)
I'm pretty poorly educated on the nuances of crypto/web3 but it seems every time it comes up in conversation only the benefits are discussed. Thanks for posting this and helping me educate myself a bit more on this
Yeah, no thank you, I don't come to Hacker News for crypto talk, the bias is comical and the talking points are recycled as a new article every week (scams!, speculation!, hype!, wasted electricity!, tether!)
All of those have rebuttals, but I don't want to get into the politics of it, there's plenty of that already. Can we please talk about the fucking tech here? I'm talking about what's made with it, not some sort of philosophical debate about how authoritarian we should be to protect people we deem gullible, or who can spend electricity on what, or who is allowed to speculate.
For those who actually are interested in the tech and not some faux moral crusade, here's better "awesome" lists, that are actually awesome, not toxic.
I wish I could be this positive and resourceful on this topic. It just gives me the urge to write a passive-aggressive tirade against the unfounded (almost manufactured) hate against this powerful technology. Nobody is putting it back in the box, no matter how many years they spend whining on their ironically named "dunning-kruger" blogs. Dammit, there I go again. I could go on for 12 more paragraphs but I'll cut it short here.
None of it is unfounded or manufactured. If you think it is, you are blinding yourself to some pretty obvious truth that you do not want to believe in.
This links is later duplicated, but is also mostly background and developer information. There is one section titled "deployed on Ethereum mainnet" which seems to be mostly dev tools again
- rarity, an MMO (example UI: https://raritymmo.com/). That's kind of cool, if unlikely to be monetizable.
- ronin, a sidechain implementation to support another game called "Axie Infinity".
Another giant linkfarm. Has a "DAPPS" section. Again mostly dev tools or tools for interacting with Ethereum itself, but a few things that look like applications:
- a decentralized crowdfunding platform: err, doesn't the money eventually go to a particular endpoint? What's the point of decentralizing this.
- zeronet decentralized websites: bitcoin doesn't provide compute infrastructure or a high-bandwidth distribution mechanism (bittorrent is used for this), so...what does this actually _do_? auth can be handled by TLS.
- augur: platform for prediction markets. interesting idea, but ... ultimately the actual result has to be certified?
I'm out of time but in general I haven't seen a simple example of what problems a decentralized ledger solves, ignoring all the technical issues like energy use and 51% attacks.
> That's kind of cool, if unlikely to be monetizable.
That's not a bad thing, but it isn't true anyway, you literally login with your wallet.
Virtual currencies are banned on Stripe, PayPal etc. MMOs are how I got into crypto in the first place.
> I am genuinely curious on useful applications.
I was sharing "awesome" lists related to "web3", not a list of apps to support some argument you want to have about "energy use" or "51% attacks". Since this is a forum that has developers on it, a list of resources and roadmap for developers interested in getting started in web3 is useful, is it not? And yes, awesome lists are "link dumps", nice connotation twist.
Here's more geared towards your "genuine curiosity" of web3 apps:
No, sorry, GP has a point. I think we have all seen lots of developer tools and concepts by now, but I’m also still waiting for actual applications we actually need ledgers for. Even in the additional three links you’ve posted, there’s nothing that isn’t a developer tool or demo and wouldn’t work with traditional technology.
Im genuinely curious, do you have any examples that do exist now, are remotely useful, and wouldn’t work without web3 tech?
I already linked apps directly above. The links above that were mainly dev tools.
If you're genuinely curious, explore the lists.
What you want is for me to list a small amount of apps so you can shit on them and we can have a subjective argument about whether they are useful, which can't be determined as it's an opinion.
Web3 doesn't do things Web2 can't, it does the same things differently that gives users more power over operators.
> That's not a bad thing, but it isn't true anyway, you literally login with your wallet.
> Here's more geared towards your "genuine curiosity" of web3 apps
I get that you weren't addressing my particular interest in your original post. I've put in a decent amount of time digging through the links you've shared; I'd appreciate if you accepted my curiosity in good faith.
Thanks for sharing more links, though they are not terribly digestible. The first link in particular seems to have many decentralized applications that don't use a blockchain (see below).
These are all cool decentralized web applications (many with real value, including bittorrent, mastodon, etc) -- but how many are built on a decentralized ledger / blockchain? Eight include "blockchain" in their description, and only three I would consider "apps":
- dtube [application]- decentralized video platform built on a blockchain ("STEEM")
- opentimestamps [dev tool?] - blockhain timestamping (not sure what this is for?)
- namecoin [application] - dns on blockchain
- steemit [application] - blogging/social networking on top of a blockchain db
- arcblock [dev tool] - tool for building "dapps, blockchains and websites"
I'm specifically curious about useful applications for decentralized ledgers, if that wasn't clear. The web/internet already runs on many decentralized protocols.
## STEEM
Both dtube and steemit are built on "STEEM", which seems to function as a form of social credit. Basically, whuffie (for the Doctorow fans out there). That's kinda cool[1].
IIUC:
- new users get 15 STEEM (where does this come from? is this not a spam vector?)
- posting costs STEEM
- upvoting content yields STEEM for the producer (content creation)
- early upvoters earn STEEM (curation)
The crypto part is mostly managing relationships and influence, not attempting to decentralize the actual shuffling of bits. Reasonable. Influence being portable across social networks is a cool idea too.
But how does the _business_ of this work, and is it an improvement over centralized social networks? Steemit, Inc, funds itself via the STEEM digital currency. The STEEM digital currency can be bought -- i.e., influence on the networks can be bought. Is this better than buying likes/comments/subscribers? Abstractly, it might keep the actual social signals cleaner -- except that IIUC you have to like/comment/etc to actually have your STEEM influence people! It's not clear to me that having the network funded by selling influence is an improvement. In ahttps://www.coindesk.com/markets/2020/05/20/steem-hard-fork-..., off-platform deals to leverage other people's influence will still be a reality.
So what are the benefits? Theoretically influence becomes decentralized, though the role that Steemit Inc plays is unclear to me. How are new participants funded? Who actually runs and pays for the social network infrastructure? And of course there are the usual risks like 51% attacks.
In practice: according to reddit.com/r/steemit, Steem has been forked because Steemit was acquired and the community didn't trust the new owners who had a majority share (STEEM used proof-of-stake, not proof-of-work). This was because of some drama involving "witnesses", presumably having to do with implementing the actual STEEM rewards/rate limiting. This happened in Apr 2020. The sticked p...
Why? People are doing it all the time, and you are rejecting them outright. Why should I bother to do the same when the last hundred times, you would not listen?
I have plenty of views. But you declared right from the start that you have chosen to blind yourself from the truth, and I know exactly how pointless it is to try to argue with someone in that position, so I simply will not.
SafeMarket - the getting started link says it's alpha, tells you to go to the subreddit, which is closed. The GitHub repo last had a commit in 2016.
Livepeer - a video streaming service that has no actual evidence on the website of anyone actually using it to stream any content. All the videos they have up on the Livepeer website about Livepeer... are hosted on YouTube. All the discussion I see of it on Twitter and their subreddit is about which exchanges the coin is listed on and the likelihood of it going to the moon etc. The actual utility in transcoding seems secondary to the speculative value of the token.
CryptoPunks - I hope the person who paid $23 million is happy with their purchase.
Thousand Ether Homepage - old school web nostalgia. Okay that's nice I guess.
"An open source sample iOS dApp that demonstrates a practical use-case in biomedical research: sharing location data by interacting with a smart contract deployed on the Oasis Devnet." Trusting a smart contract with your location data sure sounds like one of those ideas that'll end perfectly. Again, not an actual app, just some demoware.
Everything else on the awesome-dapps list are educational resources—books, tutorials, blog posts—not actual examples of functioning dapps.
If these are the awesome dapps, one dare not ask what the bad ones are like.
> There are no fundamentals to any crypto token and it’s discounted future cashflows are all strictly zero and thus its present value must be strictly zero.
This is demonstrably false.
Cash has no future cash flow, yet its value is clearly not zero.
The way I see it, the value of an asset depends on how desirable it is to market participants (demand), as well as on its supply.
If Bitcoin has a believable enough story ("there will only ever be 21M units"), and it draws people in, while national currencies inflate ceaselessly as economic growth stalls, the relative value of Bitcoin grows.
Other assets are far from better.
Current public companies' Shiller PE ratios are in the "ridiculous" area - it takes 35 years to recoup costs of an investment. https://www.multpl.com/shiller-pe
Current inflation is much higher than government bond yields. This is one definition of financial repression - the government sponsors itself with its own currency, in spite of the real negative return.
Well of course it will when enough people (globally) decide to have a literal revolution (including the crime and punishment that entails) after realizing that neo-libertarian ideals are _obviously_ the only plausible way to maintain a society. /s
I see an argument like this in every crypto thread. Come on. You should know that this is a political argument and that, in the US at least, we're pretty damn divided. Talk about stuff that you can plausibly predict at least. You can't predict worldwide economic failure _inevitably_ leading to increased use of crypto. Full stop.
From my perspective, that probably does a lot of damage and doing anything other than leading, governing, non-violent protesting (in person) will not help. The wild west of complete lack of regulation over the economy is a scary and probably dangerous thing. As someone who actually _enjoys_ government regulation (gasp!), I hope you realize that this turn isn't at all likely in the western world from my point of view. Further, if your arguments only apply to countries with authoritarian regimes, please say so.
You may say "well hey, but it's perfect for people living under authoritarian regimes tho!" to which I say, cool - let them get after it. Does it do _anything_ (other than lose/make me money) that I couldn't do with my current currency in the US? No? Okay, then that's a terrible idea.
My only issue is that investment in the traditional markets is subject to government-caused inflation.
This was only the case since Nixon. I would love to go back to stricter regulation such as the gold standard. It is a simple way to enforce financial sustainability.
The US never reverted the "temporarily" suspended convertibilty of the USD to gold. Bitcoin is a reaction to that - gold for a digital age. It IS a form of nonviolent protest. It is scarcity through complete accounting and messaging.
Bitcoin isn't a reaction to the loss of the gold standard, something which happened a very long time ago and is widely agreed to be have been a bad idea in the first place.
Really though my main point is that you seem tone-deaf. like - "money hasn't been real since we got off the gold standard" is just old libertarian rhetoric. Are you not aware that there are views on this, mainstream ones even, that disagree? Anyone taught Keynesian economics in high school is going to have a view on this and simply saying "oh yeah all the economists were wrong actually but the crypto people got it right" just isn't convincing anyone except for those who are entrenched and/or uneducated.
Diehl's argument is that the PV is zero, and the post to which you are replying is a response to that. So while you are quite correct that the arguments introduced are political, they are still convincing arguments to some degree, and that is publicly observable, so people will value these assets in the knowledge that there are a hardcore of 'strong hands'. You seem to be saying that these political arguments are more true in 'regimes' than in 'the western world'. This is even better. If the political thesis is true in some countries then the connected assets will be valued based on that, and even those of us who are blessed to live in managerial states will be able to hold assets with those prices – all thanks to Erdoğan, al-Sisi et al.
But this is not Diehl's argument. He's saying that crypto isn't worth anything no matter how many journalists MBS cuts into little pieces. His line (which appears to be a dumbed-down, unattributed version of what Nassim Nicholas Taleb says) is that an asset with no cash flow has zero present value. NNT's version is that an asset with no cash flow must be valued based on the price "at infinity". Diehl wants this to mean that any self-licking ice-cream cone has zero PV, but that is simply false, in that a self-sustaining process which never ceases really does have that "price at infinity". Most of gold's value comes from this, i.e. from the reasonable expectation that humans will value gold for as long as there are humans. There's a respectable theory of money which says that moneys arise in this way – a feedback loop of belief about others' beliefs about value, that ends up creating the common knowledge that something is valuable. To this extent Diehl is simply begging the question, by assuming that something isn't a potential money and valuing it as if it can never be one.
93 comments
[ 4.7 ms ] story [ 174 ms ] threadhttps://github.com/sindresorhus/awesome
While some of the critiques are valid, as system matures, there will be less and less of it. Crypto is here to stay.
> A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
Now, if you want to say that it was badly designed for its purpose, that is a different matter.
many of which guarantee the same security as their Layer 1.
And it successfully achieved this specific goal, however it never claimed it is a good solution for micro/small payments, which is a requirement for "normal currency". Payments of small amounts require small fees and quick settlement time, neither of which Bitcoin has by design.
> ... without going through a financial institution.
Why? Why don't we want to go through a financial institution?
Well, honestly, the only REAL reasons are fees on large transactions, and the desire/preference to be able to conduct activities that are illegal by regulated financial institutions.
And that, if we all remember, was the only usecase for bitcoin before speculation - buying drugs and even more illegal things on TOR marketplaces.
Well, that and money laundering.
I'd happily use and adopt crypto. I don't do anything illegal, I just don't want corrupted and evil people having control over my assets.
Have I got some news for you about the 51% of people who control all the most popular blockchains :(
> Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine.
This claim that Bitcoin was never meant to be a payment system for small payments is 100% historical revisionism.
[0] https://www.youtube.com/watch?v=YQ_xWvX1n9g
Bitcoin has _mostly_ avoided it, but not fully, as evidenced by the coins claiming to be the One True Bitcoin, forks driven largely by a small group of people who want to force some policy onto the blockchain, and not entirely unsuccessfully.
There isn't.
Early miners have long since sold off their coins. Pool operators don't own any hashrate. Yes there is some fuckery they can engage in, but it would be obvious and miners can trivially switch pools.
Forks are evidence that there is no central authority in Bitcoin! They cannot change the rules for others so they go do their own thing. How can you not see this as an incredible feature?
This means that the price of 51% attack will drop massively, and that completely undermines the safety that PoW provides.
A large drop in price followed by a large drop in mining completely destroys the security of bitcoin.
It's like how much you spend on a bike lock. A $100 lock on a $20 bike is probably quote secure, while a $200 lock on a $5000 bike is probably quite insecure.
I wouldn't call such a source an awesome critique.
I do think he did once (quite a few years ago) consult for a blockchain company. That's about the only factual basis I've discerned for it.
(Disclaimer/source: I met Stephen once or twice a while back, via the Haskell community.)
Do his arguments have merit or not?
Could you substantiate what you see here with a concrete difference? Particularly in terms of my argument that an asset price can move without actual trades being made. If positive news comes out about bitcoin, the price can immediately move without any trading, or at least without every bitcoin needing to realize a gain through trading. This would be an example of growth in value that is not zero sum. Stocks can do the same thing as well. This is actually very visible when a stock opens with a gap from prior closing price.
> And cryptocurrencies are actually negative sum, due to miners and fees.
I'm not sure how you reached that conclusion. Fees and miner inflation are a drag on the asset class, I agree. But stocks also have fees to trade and issue, and are subject to dilution through new issuing. The issue is whether the drag is larger or smaller than growth of the asset.
I mean, it can't? The "price" is literally defined as the price of the latest trade.
The mistake you are making here is the assumption that there is a "value" in a bitcoin that can change. This is true for a stock - it represent a fraction of ownership of a company, and a company has real value. That value can go up and down for a number of reasons. The price of the stock may not be the same as its actual value for various reasons, but that value exists independently of the stock price.
This is not true for bitcoins. They do not represent anything, there is no ownership of anything but the bitcoin itself. It only has value inasmuch as it can be traded. Bitcoiners like to claim that the technology represented by bitcoin has "value", but a bitcoin itself does not represent a share of that value.
A bitcoin is a game token, that can be used to play a game where you win or lose money. The game is negative sum, because the only value you can gain is value being put in by other players, and there are cuts being taken by various parties for playing the game.
Check out how an order book works: https://en.wikipedia.org/wiki/Order_book. I'm referring to the bid and the ask price. These often do differ substantially from the last trade price, and represent what someone is willing to pay to buy or receive to sell the asset right now. These can move without any trades actually being made. The price you are referring to is the last price.
But the broader point is that the market cap can move much faster or slower than the total traded value. It would not take exactly a 1 billion dollar buy order to move bitcoin price up 1 billion dollars in market cap, it would probably move much more than that. Same thing for stocks. So your assumption that the total cap of something represents exactly that many dollars being put in by investors is wrong, in general it will be far fewer dollars put in.
> The mistake you are making here is the assumption that there is a "value" in a bitcoin that can change.
I'm making the assumption that the value of a bitcoin is the price someone is willing to pay for it, which is supported by the evidence of what a market actually does pay for it. I tend to base my understanding of the world based on things that can actually be measured and that I can verify. You are asserting, may I add without any evidence, that its value is actually zero. I would challenge you to try to give a definition of "value" that is actually measurable, and that can lead to meaningful predictions about the world. Even if you had a perfect god's eye view of the "real value" of every asset, you'd still have to account for human behavior the irrationality of markets.
> This is not true for bitcoins. They do not represent anything, there is no ownership of anything but the bitcoin itself. It only has value inasmuch as it can be traded.
Your argument that value is only real if it represents "real" ownership would seem to imply that cash settled derivatives markets, which are some of the most liquid markets there are, also have zero value because they don't actually represent ownership of anything and are merely trading instruments. Similarly, cash itself, by your own logic, would have zero value, as it does not represent ownership in anything.
And, again, mathematically, bitcoin trading is negative sum. This has nothing to do with what the price is. It can go up, down, or stay the same. The game is still negative sum in the end.
Please elucidate me on the "kind of value" that cash or cash settled derivatives have, and that that bitcoin would not have.
> And, again, mathematically, bitcoin trading is negative sum. This has nothing to do with what the price is. It can go up, down, or stay the same. The game is still negative sum in the end.
The price is absolutely relevant. If the price were to only increase no one would ever realize a loss on an investment on bitcoin. (I don't think this has any chance of happening, I'm just illustrating why price does matter "mathematically").
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
> The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.
https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirv...
That they are worth 10x the annual wages of a skilled worker is preposterous.
At least they don’t churn through terawatts and terawatts.
Blockchains will exist. They’ll do stuff. Like tulips.
Anyone who bet on tulips continuing to be worth 10x the annual wages of a skilled worker was, in fact, the greater fool and discovered the hard way that there was no greater fool than them.
They are beautiful, though, tulips.
The gist was, tulips are flowers, not distributed apps and ledgers. He has no specific criticism, just a doomsday prediction, fear mongering, and false equivalencies.
> What's missing from this electronic wonderland? Human contact. Discount the fawning techno-burble about virtual communities. Computers and networks isolate us from one another. A network chat line is a limp substitute for meeting friends over coffee. No interactive multimedia display comes close to the excitement of a live concert. And who'd prefer cybersex to the real thing? While the Internet beckons brightly, seductively flashing an icon of knowledge-as-power, this nonplace lures us to surrender our time on earth. A poor substitute it is, this virtual reality where frustration is legion and where—in the holy names of Education and Progress—important aspects of human interactions are relentlessly devalued.
This could have been written last week about the metaverse, or the experiences we faced with the pandemic. That article is quite on point in retrospect. What Clifford forgot is that replacing salespeople and customer support with nothing is valuable because it cuts costs. A CD-ROM (or or iPad app, to update the analogy) sucks as a replacement for a real teacher, but it is a hell of a lot cheaper...
All of those have rebuttals, but I don't want to get into the politics of it, there's plenty of that already. Can we please talk about the fucking tech here? I'm talking about what's made with it, not some sort of philosophical debate about how authoritarian we should be to protect people we deem gullible, or who can spend electricity on what, or who is allowed to speculate.
For those who actually are interested in the tech and not some faux moral crusade, here's better "awesome" lists, that are actually awesome, not toxic.
https://github.com/OffcierCia/DeFi-Developer-Road-Map
https://github.com/bkrem/awesome-solidity
https://github.com/btomashvili/awesome-ethereum
https://github.com/bkrem/awesome-solidity
https://github.com/vinsgo/awesome-ethereum
https://github.com/toadkicker/awesome-ethereum
https://github.com/void4/awesome-ethereum
https://github.com/JoinColony/awesome-web3
> https://github.com/OffcierCia/DeFi-Developer-Road-Map
Background and development information, no applications. This link, by itself, has a massive number of links.
> https://github.com/bkrem/awesome-solidity
This links is later duplicated, but is also mostly background and developer information. There is one section titled "deployed on Ethereum mainnet" which seems to be mostly dev tools again
- rarity, an MMO (example UI: https://raritymmo.com/). That's kind of cool, if unlikely to be monetizable.
- ronin, a sidechain implementation to support another game called "Axie Infinity".
> https://github.com/bekatom/awesome-ethereum
Another giant linkfarm. Has a "DAPPS" section. Again mostly dev tools or tools for interacting with Ethereum itself, but a few things that look like applications:
- a decentralized crowdfunding platform: err, doesn't the money eventually go to a particular endpoint? What's the point of decentralizing this.
- zeronet decentralized websites: bitcoin doesn't provide compute infrastructure or a high-bandwidth distribution mechanism (bittorrent is used for this), so...what does this actually _do_? auth can be handled by TLS.
- augur: platform for prediction markets. interesting idea, but ... ultimately the actual result has to be certified?
I'm out of time but in general I haven't seen a simple example of what problems a decentralized ledger solves, ignoring all the technical issues like energy use and 51% attacks.
That's not a bad thing, but it isn't true anyway, you literally login with your wallet.
Virtual currencies are banned on Stripe, PayPal etc. MMOs are how I got into crypto in the first place.
> I am genuinely curious on useful applications.
I was sharing "awesome" lists related to "web3", not a list of apps to support some argument you want to have about "energy use" or "51% attacks". Since this is a forum that has developers on it, a list of resources and roadmap for developers interested in getting started in web3 is useful, is it not? And yes, awesome lists are "link dumps", nice connotation twist.
Here's more geared towards your "genuine curiosity" of web3 apps:
https://github.com/gdamdam/awesome-decentralized-web
https://github.com/redecentralize/alternative-internet
https://github.com/jasonwalsh/awesome-dapps
Im genuinely curious, do you have any examples that do exist now, are remotely useful, and wouldn’t work without web3 tech?
If you're genuinely curious, explore the lists.
What you want is for me to list a small amount of apps so you can shit on them and we can have a subjective argument about whether they are useful, which can't be determined as it's an opinion.
Web3 doesn't do things Web2 can't, it does the same things differently that gives users more power over operators.
> Here's more geared towards your "genuine curiosity" of web3 apps
I get that you weren't addressing my particular interest in your original post. I've put in a decent amount of time digging through the links you've shared; I'd appreciate if you accepted my curiosity in good faith.
Thanks for sharing more links, though they are not terribly digestible. The first link in particular seems to have many decentralized applications that don't use a blockchain (see below).
> https://github.com/gdamdam/awesome-decentralized-web
These are all cool decentralized web applications (many with real value, including bittorrent, mastodon, etc) -- but how many are built on a decentralized ledger / blockchain? Eight include "blockchain" in their description, and only three I would consider "apps":
- BigchainDB [dev tool] - a 'database'
- storj [dev tool] - blockchain-based object storage
- dtube [application]- decentralized video platform built on a blockchain ("STEEM")
- opentimestamps [dev tool?] - blockhain timestamping (not sure what this is for?)
- namecoin [application] - dns on blockchain
- steemit [application] - blogging/social networking on top of a blockchain db
- arcblock [dev tool] - tool for building "dapps, blockchains and websites"
I'm specifically curious about useful applications for decentralized ledgers, if that wasn't clear. The web/internet already runs on many decentralized protocols.
## STEEM
Both dtube and steemit are built on "STEEM", which seems to function as a form of social credit. Basically, whuffie (for the Doctorow fans out there). That's kinda cool[1].
IIUC:
- new users get 15 STEEM (where does this come from? is this not a spam vector?)
- posting costs STEEM
- upvoting content yields STEEM for the producer (content creation)
- early upvoters earn STEEM (curation)
The crypto part is mostly managing relationships and influence, not attempting to decentralize the actual shuffling of bits. Reasonable. Influence being portable across social networks is a cool idea too.
But how does the _business_ of this work, and is it an improvement over centralized social networks? Steemit, Inc, funds itself via the STEEM digital currency. The STEEM digital currency can be bought -- i.e., influence on the networks can be bought. Is this better than buying likes/comments/subscribers? Abstractly, it might keep the actual social signals cleaner -- except that IIUC you have to like/comment/etc to actually have your STEEM influence people! It's not clear to me that having the network funded by selling influence is an improvement. In ahttps://www.coindesk.com/markets/2020/05/20/steem-hard-fork-..., off-platform deals to leverage other people's influence will still be a reality.
So what are the benefits? Theoretically influence becomes decentralized, though the role that Steemit Inc plays is unclear to me. How are new participants funded? Who actually runs and pays for the social network infrastructure? And of course there are the usual risks like 51% attacks.
In practice: according to reddit.com/r/steemit, Steem has been forked because Steemit was acquired and the community didn't trust the new owners who had a majority share (STEEM used proof-of-stake, not proof-of-work). This was because of some drama involving "witnesses", presumably having to do with implementing the actual STEEM rewards/rate limiting. This happened in Apr 2020. The sticked p...
There is a very strong bias towards the truth, yes.
If you really want to argue this, please at least have something of substance.
I cannot prove a negative, or in this case an undefined, you need to present an issue to debate.
Clearly you don't want to share it so I guess we're done here.
OpenBazaar - Closed Jan 4, 2021. https://twitter.com/openbazaar/status/1346104369566121986
SafeMarket - the getting started link says it's alpha, tells you to go to the subreddit, which is closed. The GitHub repo last had a commit in 2016.
Livepeer - a video streaming service that has no actual evidence on the website of anyone actually using it to stream any content. All the videos they have up on the Livepeer website about Livepeer... are hosted on YouTube. All the discussion I see of it on Twitter and their subreddit is about which exchanges the coin is listed on and the likelihood of it going to the moon etc. The actual utility in transcoding seems secondary to the speculative value of the token.
CryptoPunks - I hope the person who paid $23 million is happy with their purchase.
Thousand Ether Homepage - old school web nostalgia. Okay that's nice I guess.
"An open source sample iOS dApp that demonstrates a practical use-case in biomedical research: sharing location data by interacting with a smart contract deployed on the Oasis Devnet." Trusting a smart contract with your location data sure sounds like one of those ideas that'll end perfectly. Again, not an actual app, just some demoware.
Everything else on the awesome-dapps list are educational resources—books, tutorials, blog posts—not actual examples of functioning dapps.
If these are the awesome dapps, one dare not ask what the bad ones are like.
awesome-dapps is the smallest list, check out the ones below since you seemed to miss them:
https://github.com/gdamdam/awesome-decentralized-web
https://github.com/redecentralize/alternative-internet
> There are no fundamentals to any crypto token and it’s discounted future cashflows are all strictly zero and thus its present value must be strictly zero.
This is demonstrably false.
Cash has no future cash flow, yet its value is clearly not zero.
The way I see it, the value of an asset depends on how desirable it is to market participants (demand), as well as on its supply.
If Bitcoin has a believable enough story ("there will only ever be 21M units"), and it draws people in, while national currencies inflate ceaselessly as economic growth stalls, the relative value of Bitcoin grows.
Other assets are far from better.
Current public companies' Shiller PE ratios are in the "ridiculous" area - it takes 35 years to recoup costs of an investment. https://www.multpl.com/shiller-pe
Current inflation is much higher than government bond yields. This is one definition of financial repression - the government sponsors itself with its own currency, in spite of the real negative return.
I see an argument like this in every crypto thread. Come on. You should know that this is a political argument and that, in the US at least, we're pretty damn divided. Talk about stuff that you can plausibly predict at least. You can't predict worldwide economic failure _inevitably_ leading to increased use of crypto. Full stop.
From my perspective, that probably does a lot of damage and doing anything other than leading, governing, non-violent protesting (in person) will not help. The wild west of complete lack of regulation over the economy is a scary and probably dangerous thing. As someone who actually _enjoys_ government regulation (gasp!), I hope you realize that this turn isn't at all likely in the western world from my point of view. Further, if your arguments only apply to countries with authoritarian regimes, please say so.
You may say "well hey, but it's perfect for people living under authoritarian regimes tho!" to which I say, cool - let them get after it. Does it do _anything_ (other than lose/make me money) that I couldn't do with my current currency in the US? No? Okay, then that's a terrible idea.
My only issue is that investment in the traditional markets is subject to government-caused inflation.
This was only the case since Nixon. I would love to go back to stricter regulation such as the gold standard. It is a simple way to enforce financial sustainability.
The US never reverted the "temporarily" suspended convertibilty of the USD to gold. Bitcoin is a reaction to that - gold for a digital age. It IS a form of nonviolent protest. It is scarcity through complete accounting and messaging.
Really though my main point is that you seem tone-deaf. like - "money hasn't been real since we got off the gold standard" is just old libertarian rhetoric. Are you not aware that there are views on this, mainstream ones even, that disagree? Anyone taught Keynesian economics in high school is going to have a view on this and simply saying "oh yeah all the economists were wrong actually but the crypto people got it right" just isn't convincing anyone except for those who are entrenched and/or uneducated.
But this is not Diehl's argument. He's saying that crypto isn't worth anything no matter how many journalists MBS cuts into little pieces. His line (which appears to be a dumbed-down, unattributed version of what Nassim Nicholas Taleb says) is that an asset with no cash flow has zero present value. NNT's version is that an asset with no cash flow must be valued based on the price "at infinity". Diehl wants this to mean that any self-licking ice-cream cone has zero PV, but that is simply false, in that a self-sustaining process which never ceases really does have that "price at infinity". Most of gold's value comes from this, i.e. from the reasonable expectation that humans will value gold for as long as there are humans. There's a respectable theory of money which says that moneys arise in this way – a feedback loop of belief about others' beliefs about value, that ends up creating the common knowledge that something is valuable. To this extent Diehl is simply begging the question, by assuming that something isn't a potential money and valuing it as if it can never be one.
Did I miss something, or hasn't the rest of the World Wide Web moved on to Web11 or so by now?
I seem to remember a little while after the Web2 craze, the Web was incrementing several times a year.
Am I misunderstanding it, or is "Web3" meant to sound charmingly retro?