Excellent editing. I’m an otherwise fervent defender of the NYT (even through its many mistakes), but the lack of basic critical analysis and obvious conflicts of interest in this piece were a bridge too far for even me.
Yeah I'm generally open-minded to NYT articles (I'm still a subscriber, but at the please-dont-cancel-your-subscription-yet discount rate). When I read their "Crypto 101" guide last week, I only made it about halfway before quitting. I know a few things about crypto, but I just could not imagine how the NYT's explainer would clarify things for absolute beginners. Glad I wasn't totally off when thinking it felt a bit too upbeat and abstract.
The stat that suggests 20% of adults own crypto was a stunning inclusion, considering there was nothing on the methodology used in the survey, other than the sample size ("2,200 people").
If it was online, how we even know it was that many people?
I agree this piece was embarrassingly lazy. But what were the conflicts of interest? Just a quick check and I can't exactly find him having ties to any crypto company.
From one of the footnotes: it sounds like Roose used his position at the NYT to boost an otherwise obscure NFT. He's also publicly advocated[1] for a loosening of the rules that newspapers have typically imposed for financial reporting (no ownership in/positions against the companies/assets being reported on.)
Re-reading my original comment, I think I was too forward in asserting that there's a conflict of interest. But I find his public positions around becoming an interested party concerning and a potential risk to his objectivity.
Yup that statement is factually incorrect, many silicon valley engineers are jumping to web2 tech companies bc the pay is so damn high right now, very few engineers in crypto at the moment.
Not to mention that anytime I see extremely high pay in crypto companies I think the salary is overinflated because they are paying a large portion in tokens.
I don’t think that’s quite equivalent unless all bloggers are somehow furthering a scam whereby they make the currently ultra-wealthy more ultra-wealthy at the expense of late-comers while also fueling the destruction of the environment through the intentional wasting of resources (proof of work).
In the Hacker News bubble, working for anywhere is a negative on your CV. Amazon treats its warehouse employees badly, Google creates a surveillance state and bows to authoritarians, Facebook drives engagement with hate/dissent, AirBnB is causing a housing crisis by turning long term rentals into short term rentals, Apple has Chinese sweatshops, Netflix and Spotify run controversial content, Uber/Doordash/Lyft/Instacart exploit gig workers, etc.
In reality, practically nobody cares and most employers are more than happy to hire experienced engineers who happened to work at some employers who did sketchy things.
But, if we're going to drill down into the ethics of crypto startups, I think they come out looking pretty good in comparison.
It's worth noting that the author of this post works at Hubspot which literally had an entire book written about how its workplace culture was highly discriminatory, particularly against older workers.("Disrupted: My Misadventure in the Start-Up Bubble ")
The "hackernews bubble" is full of people literally working at all these companies, so I very much doubt that's in any way an accurate representation of the average communities opinions.
I’m basically a Stalinist relative to the community here, but among those listed, only Uber and Facebook would fall into don’t-work-for-them-territory.
The others are regularly criticised to varying degrees, but that doesn’t mean it’s impossible to work there for people somewhat conscious of their conscience. It comes down to the question “can you honestly expect to have an impact on the organisation, or is it more likely to hollow you out and make you into another one of their cynical libertarian defenders?”
This happens to be exactly the same misunderstanding as calling all criticism “cancel culture”.
How much do engineers really have to do with the (bad) business of a company? Facebook has a high technical standard even if you question their societal impact, for Amazon I'd be concerned about the cliche backstabbing culture.
People reacted to this pretty strongly so I'll elaborate what I mean.
I have multiple friends that have worked for major bitcoin/eth companies. You definitely know the names of these companies. My friends found themselves in exactly the situation I describe. Neither of them were "true believers" in the advocate sense. They just thought the technology was interesting, the team was good, etc.
But the problem is the loudest advocates in the crypto space are frankly, so insane, that even a vague signal you might be part of that group is a huge red flag for any business that is not all in on crypto. Hiring one of these people could be incredibly destructive to a team.
Interestingly this isn't just for engineers. I know someone who was looking at a role offered by a crypto exchange for a company secretary but they were having a hard time attracting people from the traditional finance industry into the realm of crypto.
Yeah when I was job hunting recently I didn’t even consider any crypto jobs even though there were a lot of listed openings using Rust and I would like to have a chance to work on a real Rust codebase.
> No they do not. I am an engineer in a technology heavily used by crypto projects and they have a really hard time recruiting.
Absolutely not true and this is very typical HN bubble-speak. Been helping with hiring engineers for a stealth crypto startup for the past 6 months, and getting some of the best applicants I've ever seen, most coming from FAANG. To add to this anecdote, one of my friends (FB product manager) was telling me ~Oct last year that a lot of engineers are leaving her team or churning for either TikTok or crypto startups.
Token offers (which a lot of crypto companies give), often have more upside than RSUs (especially if you're bullish on crypto as a whole), and definitely have more upside than early "traditional" startup equity (which is basically worthless).
In both crypto tokens and startup equity, you are literally gambling that there will be a liquid market for your asset.
Tokens _are_ worthless if no one wants to buy them, and pretending that is somehow different than startup equity is ignorant at best and downright predatory in the worst cases.
Crypto growth overall does not mean _your_ token is going to gain value anymore than the general growth of the economy means that startup equity is going to grow in value.
> Tokens _are_ worthless if no one wants to buy them, and pretending that is somehow different than startup equity is ignorant at best and downright predatory in the worst cases.
Fundamentally not true. Unlike traditional markets, crypto exchanges work by leveraging AMM liquidity pools. Obviously, a token can go up/down based on supply and demand, but if there's liquidity you can literally always sell. Confusing early-stage startup equity is by far more predatory than giving someone some shitcoin with a vesting schedule. Any argument to the contrary is either disingenuous or misinformed.
With traditional equity offerings, you need to worry about: what class of stock did you get, what's the vesting preference, will you get diluted, what if you get fired, etc. I'm hardly a crypto bro, but imo startup equity is one of the biggest scams around that often takes advantage of young and inexperienced engineers that don't quite understand its financial underpinnings.
The definition of liquidity is something like "the ease with which buyers and sellers can transact at transparent, stable prices".
If no-one wants to buy a thing at any price, it is - by definition - illiquid. The notion that something for which there is no demand can be liquid is strange.
Actually, AMMs (automated market makers) work by ensuring that there's always a buyer (hence, "automated") as long as there's liquidity -- by automatically adjusting prices based on supply/demand.
(Sorry for late reply, HN time-limits nested comment replies.) Basically, if you were to issue N tokens into an AMM, you would also need to provide the counter-party liquidity. So let's say you're sending 100 MESC to a pool, and the initial price is 0.01 USD (to keep it simple), you would also have to seed the pool with 1 USD. Once that's done, people start trading -- some other people might even provide liquidity (and buy LP -- liquidity pool -- tokens) which they can earn interest on.
This whole discussion starts from your response to a comment that "[t]okens _are_ worthless if no one wants to buy them", asserting that this was "[f]undamentally not true".
But it seems very much that it is true. Did you mean to make a different point?
I'm not sure if we disagree, my point was a technical one: traditional markets are "order book" markets where for every buyer, there's a seller. Crypto exchanges use AMMs, where there does not need to be a buyer for every seller, as the AMM handles that automatically.
If your point is that tokens without liquidity are worthless, then that's true (that's why initial decentralized exchange offerings always involve seeding liquidity pools, as mentioned). If your point is that tokens can get arbitrarily close to zero if everyone sells, that's also true.
But if you get a token that's being actively traded on exchanges and has healthy liquidity pools and a healthy market cap, that certainly is a better deal than some percentage "equity" an early-stage startup dangles in front of you.
Indeed. It's the old quip about monopoly money. Personally, I would not be willing to accept tokens as a large part of my compensation full stop. I haven't dug into crypto offers though so I'm not sure how true that is. That said, unlike options, tokens almost always have liquidity immediately, so an engineer could (probably) trade their tokens for fiat value if needed where an individual with options would be tied down through the exercise process.
there are some very important differences that we can focus on, while you can stick with the similarities:
1 - token vesting contracts are often much quicker than startup grants, and public company RSUs. A few months to a year, compared to 4 years.
2 - tokens achieve liquidity much faster and more reliably, in comparison to startup companies of a similar age. this allows new organizations to compete in hiring against FAANGs, where employees also are receiving liquid things to sell.
3 - token grants can be alongside startup equity. so its an additional part of the compensation package. As such there is no compromise to rant about.
and just to acknowledge the “issue” you care about, correct a market may never occur or form for the tokens, no different than the equity, there you go, a tiny disclaimer on page 34. I agree that every employee should be objective about that, this is the same standard with every kind of organization aiming to compensate partially in non-cash, which puts us right back at square one: pick the one thats both interesting and compensates well.
Facebook is a huge employer, it makes it hard to believe that if they're losing folks to crypto companies that it's somehow localized to Facebook. What does this have to do with Facebook and the "type of people it attracts"? Are you arguing somehow that Facebook hires a very particular type of engineer despite common knowledge that the folks that work at one FAANG will usually be willing to work on other FAANG companies? Or do you deny that FAANG companies have the number of people to make the original statement true?
Yes and? The original statement was that crypto is having a hard time hiring, the GP rebutted that saying they're seeing FAANG engineers leave. You then try to make an ethical argument. So? What does that have to do with the reality that FAANG, who employes lots of engineers, is losing engineers to crypto? Or do we need to move the goalposts and scope this discussion to "ethically-approved" (TM) companies?
Facebook literally made a cryptocurrency, a crypto wallet, and a number of associated products.
Following regulatory response, they have been downsizing it to a tiny speck of its former size.
Them losing folks to crypto companies is the most obvious result of the past five years, but it has more to do with their strategy struggles than the overall mindset of the engineering population.
This hasn't been my experience at all. I feel like this is just pandering to group sentiment. My work (household name so we work with a lot of companies) has been seeing increased spend from crypto companies and so we've talked with a few folks from these companies and they've been hiring headcount like crazy. We've had lots of our own engineers churn to crypto companies also. Yeah they won't get the anti-crypto-bubble engineer or Stephen Diehl (who's been astroturfing crypto because he works on his own blockchain company), but there's no need to project your personal biases into the entire industry. It is a gold rush though, so there's a high likelihood it will all go bust soon. Let them fail if you hate them but stop spreading inaccurate statements.
> Thus the only people allowed to discuss crypto are seemingly those with a financial interest in token prices going up. Funny how that works.
> Funny how that works.
This rhetorical device is tiring and divisive, please stop. I have no interest in crypto other than some coins I bought years ago that constitute a negligible portion of my portfolio and a passing interest in IPFS. I think the space is full of fraud and it would take a full-time enthusiast to find what's not. But there's no need to spread FUD like the person I responded to, nor is there any reason to say silly things like "funny how that works" and wink derisively at some cryptobro conspiracy. If crypto fails it will fail, and then you can laugh at it all day like everyone does to Theranos and WeWork. Until then stick to factual statements. The GP claims that nobody wants to work on crypto. I have no idea how your "funny how that works" sneer has anything to do with the original claim. Stop moving the goalposts to score internet points in an anti-crypto echo chamber.
> Astroturfing is the practice of masking the sponsors of a message or organization (e.g., political, advertising, religious or public relations) to make it appear as though it originates from and is supported by grassroots participants. It is a practice intended to give the statements or organizations credibility by withholding information about the source's financial connection.
I was surprised by the claim about Stephen Diehl so I did a little googling. I don't think it's correct to say he "works on his own blockchain company". However, relatively recently he was working on smart contracts with a company called Adjoint.
He seems to have been interested in smart contracts but found the current implementations appalling. He wanted to use functional programming, particularly Haskell, to create something like a smart contract with better guarantees. But he is also careful to say that a smart contract doesn't imply a blockchain; he's talking more generally about code that executes over distributed databases.
This stuff is scrubbed from his website, and Adjoint doesn't even appear on his LinkedIn profile. But I can easily see why that might be the case if he's decided the whole field is rubbish and left the industry, or if his work is being misconstrued.
That said, having examined blockchains in depth gives him more credibility, not less. And it would be a rather bizarre business model to continually decry blockchains if he was actually working on one.
I think it's fair to say the guy is not an indiscriminate hater. On the other hand, I also personally was already convinced that crypto "currencies" are terrible but IPFS and decentralized organizations might be cool, so I guess I like him more now.
I appreciate your reply. You dug into a claim I made and lay out your criticisms dispassionately, thanks. This is the kind of discourse I'd like to see more of.
> This stuff is scrubbed from his website, and Adjoint doesn't even appear on his LinkedIn profile. But I can easily see why that might be the case if he's decided the whole field is rubbish and left the industry, or if his work is being misconstrued.
Gives his passionate publishing against Blockchains I'd prefer he not hide this aspect of his past and actually talk about it. I guess I didn't know that he had moved on from Adjoint so that does add more credibility to his beliefs. But removing it from his website, removing it from LI, and neglecting to talk about it in public can certainly cast some doubt. I'm sympathetic to your view as well though.
Thank you for a response in the spirit of good discourse.
Anyway, I don't even know if he has moved on from Adjoint.
I agree there's something odd about this, but I've also seen how people who are vocal critics on the internet have to be less public about their associations. Not sure what to think about it.
just to clarify this a little, stephen is/was (the status of adjoint is unclear but from what i can see it is now defunct) the CTO and co-founder of adjoint and he blocks anyone who raises this in public. https://twitter.com/billywhizz1970/status/146927786616050074...
he now seems to be a full-time anti-crypto propagandist. i'm not sure how he makes a living from that, but he seems to spend all day every day talking about it for at least the last 6 months and has gained a large following on twitter due to it. personally, i find it hard to trust anyone on either side of the debate who is this invested in their extreme position and unwilling to engage in any meaningful debate with anyone who critiques their positions.
here are some more links about adjoint for anyone interested in some more background.
How is OP spreading inaccurate statements? He/she shared their perspective, just as you have shared yours. And my personal experience as a tech employee in SF mirrors the OP - a lot of my friends and colleagues have been job hopping over the past couple of years, but very few to crypto. None of us can make broad generalizations based on our own rather limited points of view.
Maybe you have a better view, but I don't understand what you mean here:
"My work (household name so we work with a lot of companies) has been seeing increased spend from crypto companies and so we've talked with a few folks from these companies and they've been hiring headcount like crazy."
What is seen most often is NYC or equivalent finance traders and executives bolting into crypto.
It seems hard for firms below the Coinbase/Kraken/heavy hitter trading shop bar to pull serious resume hires out of SV, but quite a few Managing Director+ level hires moved over into crypto.
My sense is the NYC finance realize a core aspect of crypto - you might not think it's money, but enough people do, and there's an active market for it, so there is quite a bit of money to be made.
There's an important nuance to this: enough unsophisticated people think it's money, so there's lots of opportunity for finance people to make money.
Traditional finance is well-trodden, every arbitrage opportunity has been tried decades ago. But crypto is full of doe-eyed innocents who think they're reinventing finance. Of course experienced traders want to take advantage of them. It must be more fun than ye olde eurodollar bonds, or whatever.
Well, sophisticated people also think it's money, but they entered '12-'17 and stopped talking about it. A more recent example though is Neuberger Berman's entrance.
The tragedy of the crypto moment is serious folks who didn't come from crypto made up their minds about it and did it a while ago, but articles like OP run interference against "everyone else" doing the same.
https://en.wikipedia.org/wiki/Wences_Casares
> Casares was the entrepreneur to convince Bill Gates, Reid Hoffman, and other tech veterans in Silicon Valley to invest in bitcoin
There are financial mechanics that exist only in the scope of DeFi and not in traditional finance. It actually IS new in a lot of ways and skilled folks are teaming up to make a killing, not just experienced traders. Take a look at what's happening in the "MEV" space. None of this existed in traditional finance.
Ya this is more my point. Taking traditional algorithmic trading skills into a place specifically designed for it and with new market mechanisms.
Whoever spends some time building DeFi/L1 protocols is going to make a killing jumping over to Jump/Jane Street/HRT in a few years with that knowledge.
Sure it does. Front-running is not new. Payment for order flow is not new. Altering the recent transaction history (the thing blockchains are supposed to prevent) is a criminal offense in other markets.
you're mistaking the mempool with tx history unless you believe they're essentially the same? Issue there if so is the mempool isn't consistent from node-to-node so can't call it a tx history.
It's more like pending TXs which end up landing in a certain order that's possibly different once confirmed (which current banks do with checking/debit TXs and isn't a criminal offense).
There's money to be made in trading even when the asset trades at prices that are fundamentally wrong; as long as people are buying and selling, you will find market makers taking the spread. There's also money to be made in asset management for the same basic set of reasons.
Opposite anecdote, I would be happy to take a 30% paycut to work on (some) crypto projects and actually do 60+ hours of work (I do like 10 hours in my cushy job now). Unfortunately, I am not in SV and don't have a padded a resume, and they are flooded with better applicants - so I can't even compete.
Quoting a 2017 book about how thinly traded bitcoin is? I appreciate the concept but it doesn't always feel like it rounds out the takes. (FTR, I appreciate it's thin enough to make market cap misleading, but up-to-date liquidity figures would be helpful if we're trying to criticize market cap)
Most bitcoin have never been sold. Bitcoin is a commodity that is intended to serve as a store of value, and other commodities like gold and silver do their work as a store of value without an appreciable fraction of them ever being sold. So using the term market cap is not a misleading measure in relation to bitcoin; it is simply used by analogy to how it would be used for a company; it's not literally implying that all bitcoin is the equivalent of shareholder value.
Bitcoin is a failed currency - see the original paper. After around a decade of failing to find demand the big holders started to market it as a commodity but since there’s no inherent value to it unless it’s actively traded it doesn’t really fit the usual meaning of that term.
The only thing that has evolved over time, that is peoples time preference. There will always be demand for BTC. The software works as it was designed, and grows stronger every year. Gresham’s law might be the key to understanding this.
The original goal was to be a currency but over a decade later, statistically nobody uses it for normal transactions. If it shut down tomorrow, the few businesses which accept it would remove that option from the others they accept and that'd be it. Nobody other than speculators would care because it's never given them a reason to use it.
I realize you need to say there will be demand for it but your desire to sell your random numbers at a profit doesn't make that true. Demand has to come from somewhere and something which has many competing alternatives which are generally cheaper, faster, and easier to use does not have much lock-in potential.
A little more than a decade to bootstrap an idea worth nothing to almost a trillion USD... Did you expect it to be valued at two-trillion USD instead? I can reach out to you when it gets there if you like.
How about you let me know when ordinary people use it for anything other than speculation? When a business would care about it shutting down because their customers can’t trivially switch to an alternative?
That’s the problem with multiplying the number of coins by the last sale price: it assumes a larger pool of buyers than we’ve ever seen. The number of people treating it as anything other than a lotto ticket isn’t anywhere near enough to support a valuation in the range of trillions of USD.
Parent never claimed it failed to make money, only that it failed as a _currency_.
If you think failure is only synonymous with making money then certainly Bitcoin hasn’t failed, but at the same time it has hardly had much affect on the world outside of being a speculative asset for people to get rich off of.
Exactly: when it first launched, places like HN were full of optimism that it’d kill off things like PayPal, force credit card companies to offer better transaction pricing, etc. That sounds great to me but it definitely didn’t happen, and the design in combination with volatility makes that even less likely since it’s more like trading stock shares to buy a toaster.
Today, there is 1.7M unspent coinbase tx out of a emitted 19M coins. Once moved from a coinbase-tx, 4.3M are older than 5y, with 2.4M at >10y.
Most Bitcoin have been sold many times in their life, but they do typically sleep for a long time, given the switch of time preference. MtGox alone would have cycled a majority of the coins in its short lifetime.
Bitcoin liquidity is about the same as the typical FAANG stock - which is pretty good. This a commentary by skeptics for skeptics - It is as factual as a reddit post on r/bitcoin.
If people actually want facts, then that's the wrong place to look.
author of said book here. Nothing in the quoted statement has changed in the past five years. You don't appear to be disputing the claim, but casting about for a spurious reason to play "gotcha." Are you in fact disputing the claim?
This format is interesting at first but when it starts getting to 5 paragraphs of dissecting each phrase, it gets too much. Reminds me of the someone-is-wrong-on-the-internet, point-by-point-repliers in internet forums circa 2006.
True. It made me feel like microanalyzing one of their comments. Here goes:
On:
> What I couldn’t find was a sober, dispassionate explanation of what crypto actually is — how it works, who it’s for, what’s at stake, where the battle lines are drawn — along with answers to some of the most common questions it raises.
They left this comment:
> No technology is "sober" or "dispassionate" in its creation, nor is it neutral or apolitical, and thus anyone who is claiming to view it from that perspective is DEFINITELY selling you something.
First of all, no one said anything was sober or dispassionate in its creation. And it's trivial to come up with a sober and dispassionate explanation of many technologies, even political ones. I'm certain I can find a sober and dispassionate explanation of how Israel's Iron Dome functions if I really wanted to. And second, if you have a definition of "political" that's so broad that it includes literally every technology, it's not really a very interesting statement to say that some technology is political, right?
You can explain on a technical level how the Iron Dome fulfills it's functions. You cannot explain it's social and economic ramifications without talking politics.
Most of the arguments in favour of cryptocurrencies and blockchains focus on these economic and social factors (decentralised economy, NFTs for selling ones art).
The technical merit of blockchain gets discussed so often, the outcome is always either "existing technologies solve this problem better" (which makes discussing the technical merit outside of a academic context futile) or "look at these economic and social improvements this technology provides" (which puts you squarely back into the political discussion).
Yeah, they probably should've left out the more nitpicky points to make the whole thing stronger. "It's interesting that he uses the word 'the' here - the definite article. Are things really so definite?"
Another aspect of the same point: After a while it should become obvious to them that they're not critiquing a Faulkner or a Dostoyevsky here. Once you've fired your shotgun into the barrel a couple of times, the fish are probably all dead!
Cynical take: They're all mad that they weren't asked to write for the glorious Times.
Does anyone know if there is a tool or platform that makes it easy to make/publish this type of "leave footnotes on an article"? The UX here is nice and simple, and I think there is utility in sharing feedback this way (vs. blockquotes in email, or Google Docs comments, etc).
Hypothesis is a really interesting platform, but in my mind it's kind of too community-focused. Hypothesis's restricted groups (https://web.hypothes.is/help/annotating-with-groups/) are closer to what I think people would want, but to get them you'll have to self-host.
Not trying to throw shade at them, but I feel like their push for annotations is hampered a little bit by how much their specific implementation of accounts and permissions feels like yet another social network, with all of the negatives that entails. There are other issues as well, but that's the big one that kept me using the platform.
That being said, there is also an Open standard for this stuff that I remember at the time it came out being pretty excited about. But I haven't seen much if any adoption of it, so it again makes me wonder if there's something wrong with it or if it's just that nobody has made anything super-attractive yet to take advantage of it.
Which standard is that? ePubs, for example, use canonical fragment identifiers, which could also work on HTML. I think hypothes.is uses them too but adds fuzzy matching fields so that they can match up after document changes. At least from what I remember
I'm working on an annotation project myself, though not really related to what the parent commenter is looking for. A generic solution to the highlight/annotation problem is quite difficult, especially if you allow for document changes.
I read through the docs when they first came out but I don't remember all of the details anymore. Fragment identifiers are part of it though. I've gone back and forth on how much I like them, allowing for document changes is always going to make stuff really complicated, fuzzy/fragment matching is about the best you can do I think without the cooperation of the source you're annotating.
It feels like annotations probably should be tied to specific document versions, but I also get the reasoning why they're not in this proposal. Unless you're self-hosting everything or forcing everything to go through the Internet Archive... it's just kind of difficult.
I've been curious about trying to get annotations to work before using something like Matrix to handle accounts/groups, but not curious enough to actually try to build a working example.
Oh yeah, the same Kevin Roose who years ago claimed that early stage startup CEOs made a million (maybe half a million?) a year in cash or something absurd along those lines.
I don't have anything against the guy, but he seems completely disconnected from reality when it comes to his writing. It gets clicks, but it also shows either no interest in doing real research, or the desire the create a one-sided narrative.
This format of critique is so snarky and tribalistic. I enjoy it sometimes, particularly John Gruber's "translations from corporate bullshit" articles, but there's no point in denying that this format works best for preaching to the choir, not nuanced analysis. Original NYT article was very biased; so is this one.
If you're getting frustrated at how thin the commentary column is, make your screen width less than 1800px wide; there's a bug in their CSS for wider breakpoints!
While I agree with it overall, endlessly nitpicking every line of an article, even unimportant throwaway ones, means people aren't going to stick around long enough to read your real arguments.
Until someone has built a crypto product that creates values (for the purpose of this discussion it can be a good or a service would be willing to spend USD on even if it wasn't a crypto) crypto is a negative-sum game. Any USD taken out of the system someone else has to have put in, plus whatever the miners take out. Fortunes aren't created, they are redistributed.
Miners are paid some $40m/day, through 1) creating more BTC (called "coinbase" here, "Seigniorage" more generally, leading to inflation) and 2) fees.
For now, the $100 miners siphon off per transaction are predominantly from 1), so those costs are not very visible.
And then of course the exchanges charging 20 to 120 bp (or more) for a roundtrip against money you can actually use. Coinbase (the exchange) alone takes around 0.4% of the entire crypto market cap per annum into its pockets.
1. Stripe has revenue of $bn 8, Visa $bn 25, and Coinbase $bn 8. Are you suggesting that Coinbase provides as much utility as Stripe?
2. The equity market cap is about $tr 100, so Stripe and Visa together take about 0.03% of that per annum.
Mind you: That is way too much. Credit cards are an inefficient oligopoly, and they've been fined by regulators for their extravagant fees. That's a whole topic in itself. But: Crypto is 10x worse.
The real stuff is the waste of resources. Not just the carbon footprint, the staggering amount of silicon wasted on those. Though that sure makes GPU prices go up…
A lot of miners have access to free electricity, often through corrupt officials on some unsavory countries... or even US Army folk who are abusing their home's utility bills (Uncle Sam pays for that electricity).
Under these conditions, the utility company has to pay for say $100 in electricity to make $80 of cryptocoin. But since the miner has "free electricity" and doesn't see these costs, they only see the $80 of cryptocoin that they sold off.
That's like saying the USD is a negative sum game because "any CNY taken out of the system someone else has to have put in, plus whatever the government takes out. Fortunes aren't created, they are redistributed."
The transference, redistribution, and storage of wealth is itself the value of monetary networks. The more circular trade that doesn't need to exit the network happens, the more valuable the network becomes.
The ultimate point of projects like bitcoin isn't to build a system that makes everyone rich. That would obviously an absurd ponzi like scheme. The point is to build an open monetary system for the whole planet that emerges out of distributed consensus rather than dictated to us by a global superpower, and is therefore not fragile and subject to failure when the superpower declines. Early investors of the network will get rich if it succeeds, just like early investors of any tech giant did. That mechanism of rewarding those who take a risk with their money when the future is uncertain is a huge part of what's driving its continued growth and success. If you didn't have that to bootstrap the network, bitcoin would likely be a forgotten oddity of a cypherpunk project that nobody ever cared about. But now, it's a global money that nation states are adopting.
I do agree that most crypto projects will fail and end up looking like nothing more than pump and dumps to scalp investor money, whether from dumb VCs or retail.
A rational actor would never spend a deflationary currency since it would gain value as deflation happens. If everyone was rational, no money would ever change hands. You can’t have a functional monetary system without liquidity or exchanging of currency.
You could equivalently say that a rational actor would never sell any equity or property that was appreciating faster than inflation.
A deflationary currency would only be one of many different investments, and people will buy and sell based on their expected gains and risks of other holdings.
So that's why retirees who have their money in investments that constantly increase in value over time never spend money?
Come on man. This argument is patently absurd. I expect better from the HN community.
The only thing an inflationary currency does is wipe out the savings of the poor who don't have knowledge or the privilege to invest in harder and/or income generating assets.
A rational actor will exchange money for food rather than starve to death, regardless of whether the currency they are using is deflationary or not. Your argument is nonsense.
That rational actor doesn't need to be a human. In fact, the concept of rational actor makes more sense in the context of corporations. Now, imagine a corporation hoards a trillion dollars worth of a deflationary currency. Will it invest it back to the economy as eagerly as it would an inflationary currency?
A corporation has fixed costs to continue existing, even if it's not directly food. Any possible rational actor you can come up with will have some need to trade with external actors.
I find a lot of DeFi projects to be very useful, but you have a logical fallacy -
If I buy 1% of Apple stock at $100, and later it's worth $1000 based on the last trading price, money didn't change hands to make me have more USD, it's my paper wealth.
If Bitcoin goes from $1 to $50k, and I never sell, I didn't take any money - the wealth simply grew.
The point is that holding Apple stock is a claim of ownership of the assets of Apple as well as the future income of Apple, either in the form of dividends or stock buybacks.
The activity of Apple is economically meaningful; and the price of Apple stock reflects that.
The activity on Ethereum is economically meaningful, whether you believe it is or not. And let's be honest, Netflix or Facebook could disappear off the face of the earth tomorrow and productivity would arguably increase, so is that a negative sum game?
The activity on Ethereum has the potential to be economically meaningful (there's a separate discussion on whether or not it's the best way to do it) but I don't think it currently is.
What is people extracting from the Ethereum ecosystem that isn't USD?
Applying this argument to the US dollar when it was gaining value relative to many other currencies before the current inflationary spat is illustrative. Probably all of us held USD during that time, but that act in itself wasn't productive. The increase in value came from the underlying institution of the US Treasury being perceived as more trustworthy than other similar international institutions. The distinction to make is between the minor deflation of USD and the absolutely massive deflation of BTC over the same time period. I think everyone would agree there is some value to a decentralized proof of work transaction ledger, but $50k USD is clearly the result of some mania (rational or otherwise). That "some value" should therefore be reflected in a positive price, even if that number is orders of magnitude less than the current astronomical price.
While partly true, that is true of any asset (dollars in/dollars out). However your statement that fortunes are not created, they are redistributed is incorrect. The value is not a 1 to 1 relationship with inflows. The value is based on supply/demand. If demand outstrips supply, value goes up regardless of how much $ is flowing in or out. You can see large price swings even on days with low volume.
No, when I invested 100k₹ in my brother's shop, it was able to turn a profit in a few years and pay me back with interest. The money came from selling products and generating revenue. With Bitcoin there is no revenue. The only way you can turn a profit is if you get some other greater fool to buy it from you. This is how most ponzi schemes work.
I find it very scary that the people investing in crypto don't even understand the basics of investment. They genuinely think that all investment follows ponzinomics.
I'm curious if this comment is a usual fare of shallow dismissal or if you are aware of current applications of crypto in the wild and consider them to be useless nonetheless.
One example that comes to mind is that Docusign offers a product that uses Ethereum for storing evidence of contracts in a decentralized medium. That seems like a fairly legitimate application for the technology. Another example (albeit possibly more dubious) is BitTorrent tokens as a "currency" for "buying" download speed by incentivizing people to keep nodes running within its P2P network.
Do you consider these types of applications to be negative sums? If so, why? Not trying to be antagonistic here, I'm actually curious.
Every large company (including my own) jumped on the crypto bandwagon when the tech started gaining mainstream popularity, but it was mostly to give their salespeople more content for their pitch decks instead of building features people would actually utilize.
For the case you mentioned, is anyone actually using this tech for their contracts? No Docusign (or any other) document I have ever signed was written to any blockchain. Have any real legal disputes ever been resolved by looking up a public ledger?
Those applications are not negative sum. My impression is that the total revenue for services like that is minuscule, I would be very interested if you have data showing something else.
My impression has been similar to the comment sibling to yours, that a lot of attempts at crypto-related applications were somewhat hype based. However, despite the huge amount of noise, some do seem - at least in principle - valuable.
I certainly share a certain level of cynicism towards many crypto applications, but even the likes of OpenSea currently employ people and presumably pay them actual money that they can spend on stuff, in exchange for their time and effort pushing the platform forward as a digital marketplace. That, to me, looks more like creating traditional business value than hype and pyramid schemes.
I'm ambivalent on whether I should consider NFTs "value". On the one hand, the NFT mania has generated quite a bit of commercially-oriented artistic output that likely would not have been created otherwise. But on the other hand, whether "artistic output" is valuable at all in the first place is kinda in the eye of the beholder, I suppose.
If I'm not misunderstanding you you're saying there could be value, which I've never argued against. I'm asking if you have any evidence that there's currently any significant value created.
I mean, if by value, we mean a "good or a service [someone] would be willing to spend USD on", then yes, all the things I mentioned are things that people have spent money on in one way or another, presumably because they felt that they were getting something in return by parting with their money. From an economic perspective, the crypto product incentivized labor of some sort, so it would arguably qualify as "creating value".
My reservation for whether to call those products "value" is more along the lines of the argument about whether cigarettes are "creating value" (i.e. if one buys a "feeling" from literal puffs of smoke and punts the costs of externalities onto others, is that a net positive?)
> Does it not make sense that a reporter on web3/crypto should be entitled to practice owning an ENS domain, in order to better write about the experience from a first hand perspective? It would be like banning a reporter from purchasing their own personal domain name, out of fear it may skew their bias on how they write about HTTP and web protocols.
It absolutely does not. This is what a research budget is for from an organization--and you can shred it/render it nonfunctional afterwards to avoid a personally biasing stake.
As for "personal identities": I know of about half of the folks cited in those articles and all of them, even crypto's scariest nemesis (one David Gerard), have plenty of other things that they do and that they are interested in. Perhaps what you read as a "personal vendetta" is a deep understanding of what a rotgut industry they criticize, and that morality is not fully dead.
I feel a journalist should be entitled to own their own personal ENS domain just like they might secure their own .com domain with their own personal funds. Seems wild to suggest that Kevin should sell his ENS domain to avoid any potential bias, considering it means he will have to later buy it back at a premium either when/if he retires (or changes jobs), or when/if the NYT changes their policy. (I am assuming (1) he actually wants to keep the ENS domain, and (2) he bought it with his own funds, rather than company dime.)
I am sure they all have fulfilling lives outside of what they project online; but the single-track attitude and constant crypto snark is as tiring as the laser eyed BTC bros.
Edit: just to add, if the ENS were solely to practice buying “nytdomaintest1234.eth” and using it, then sure I agree with you. I am asking this question in the context of Kevin owning a personal domain linked to his real life name and identity.
The article (or, rather, the commentary in the link above on the article) talks about the fallacious notion of "market cap" in regards to cryptocurrencies. That is to say, e.g., multiplying the number of bitcoins in existence times the current market price is a silly metric because the entire market would never be able to cash-out at that maximum price.
What I was wondering was: is there a better number? e.g., is there a way to calculate the amount of USD put into a cryptocurrency across a timeframe? What I'm imagining is a metric like (sum of all bitcoins bought by USD purchase price) - (sum of all bitcoins sold by USD sale price) = amount of USD that has been put "into" bitcoin. That first glance, one might expect this number to equal zero, but it should be greater than zero because of the new coins created by mining.
The market cap metric may seem silly to you, but it's the same metric used by publicly traded corporations. And there is nothing silly about it. All shareholders would never be able to cash out at the current share price, but this isn't a reason to disregard the market cap metric.
There’s a key difference: corporate shares have a value anchored in the company’s assets and revenue. The market cap can still fluctuate, of course, because different people will have different assessments of the future profitability but the floor is going to be based on the company’s assets, contracts and sales predictions, obligations, etc.
In contrast, cryptocurrencies have no floor because there’s no inherent value to a random number and nobody has a need to pay for a specific token. If something falls out of favor, there’s no reason to expect to find a buyer at any price.
Value is anchored in the equilibrium between supply and demand, that's it.
Maybe the things you mention do drive that equilibrium. But I'd bet you'd have a hard time developing a profitable trading strategy based on those metrics alone. I know I have tried with little success.
Corporations can still very much "fall out of flavor", driving their revenues and assets to zero. This criticism isn't only applicable to crypto.
And cryptocurrencies' intrinsic value is this: they are payment networks that work even where traditional systems fail. No denied transactions. No limits. No "account" to open. Works for the underbanked. Send money truly anytime anywhere. No other system does this. That's the value.
In the end, there is no fundamental difference between a service provided by a corporation vs a service provided by cryptocurrencies. Both services can and do have value.
> Corporations can still very much "fall out of flavor", driving their revenues and assets to zero. This criticism isn't only applicable to crypto.
That's technically correct but missing the point: cryptocurrencies are an extreme outlier in that they have literally nothing other than social consensus backing them. If you look at examples of failing companies you will find a few cases of Theranos-level fraud but far more cases where a company was mismanaged into the ground but shareholders received _something_ and it's not common for this to happen so quickly that nobody had time to react. The more common trajectory is something like Sears or RIM where the writing was on the wall for years while the PE guys strip-mined the corpse or someone buys it to go patent-trolling, where a savvy investor has plenty of time to exit before the end and the people at the end still receive a fractional payout.
> And cryptocurrencies' intrinsic value is this: they are payment networks that work even where traditional systems fail. No denied transactions. No limits. No "account" to open. Works for the underbanked. Send money truly anytime anywhere. No other system does this. That's the value.
This is a good example of the problem: those claims are either completely untrue or significantly overstated but you have a significant financial interest in repeating them because being honest will imperil your ability to find someone willing to pay more for your random numbers than you paid originally.
I would extend this concept to all non-cash financial assets. All of what you wrote above applies to Tesla shares, or Ukrainian real estate, or anything that's not currency. It would still be incredibly useful, but it's also based so much on psychology, I don't know if there's a mathematical way to calculate it, like there was Black-Sholes for futures.
A concrete calculation for this would revolutionize finance.
Agree, but, mind bender... this relationship also applies to currencies.
A useful statistic is the volume transactions required to shift the price 2%, looking at an open order book. It gives you a notion of the available liquidity.
It is liquidity that matters, as it allows influx and efflux without causing inelastic price movements.
Overall, I enjoyed the analysis of the piece, but I disagree with their take on market cap.
Amy Castor - "Yeah, market cap is a meaningless number. It assumes everyone bought at the current price and could cash out at the current price."
We could just as easily apply that basic logic to any security. Amazon(AMZN) is ~3275 a share with a market cap of ~1.668T. That also assumes everyone could cash out at ~3275, but the reality is if selling pressure is higher than the buy side demand that selling shares will drive the price down as buyers would be able to continually bid lower. Eventually it would reach ~0 share price and effectively a 0 market cap.
So in that sense token market cap is a fair equivalency. What makes a dollar worth a dollar? Crypto value at any given point in time is just an exchange value against fiat currencies. This isn't much different than an exchange value between USD and the Ruble; it will fluctuate.
> We could just as easily apply that basic logic to any security.
Not quite. An Amazon share is a claim on future residual cash flows, whose net present value constitutes the (unknown) "true value" of the share. If Amazon falls to 1/10th of its current price because of some tweet by Elon or whatever other (extraneous, fluke) reason, lots of people would be lining up to buy it, because they get a stake in an actual business that would repay them their investment within a few years. So, no, it would not reach 0 share price.
(So, while the argument in the article needs some refinement, its broad thrust is true: market cap for a publicly traded company is much more meaningful than market cap for a crypto currency.)
Is it though? Have you actually tried to apply this in practice to a trading strategy? I think once you start trying to predict prices based on NPV of future cash flows this quickly falls apart, even with large behemoths like Microsoft, Apple, etc...
I am not suggesting that you or I can compute the NPV of future cash flows and then value the share, certainly not easily. But that was not the point. The point was to distinguish shares (and other securities) from coins: the price of the former is (softly) constrained to be within the vicinity of their intrinsic value. Cryptos have zero intrinsic value.
The distinction is meaningless to me. There were companies in the dot com bubble which had extremely high valuations which went bust as just one example among many. These stocks were not softly constrained at all. It was pure speculation and it happens all the time.
I don't think it is right to call growth speculation "intrinsic value". The only thing that is truly intrinsic in my opinion is profits. But profits aren't a good way to measure value of an asset. Because the asset (stock in this case) is separate from the company itself. A company could generate slim profits and not grow each year. That has intrinsic value to the employees and customers. But that does little for the stock.
Crypto have intrinsic value: they are payment networks that work even where traditional systems fail. No denied transactions. No limits. No "account" to open. Works for the underbanked. Send money truly anytime anywhere. No other system does this. That's the value.
First of all, money or value is a purely memetic construct. It's a grand illusion that only exists in our collective network of consciousnesses and operates as an abstraction to efficiently keep track of favors owed.
Therefore, value or money doesn't just transfer with explicit trades, as in trading $40,000 for 1 bitcoin adds $40,000 of value to bitcoin. Value also transfers memetically and invisibly, as in many people suddenly start to believe that asset B has 20% more value than asset A than it did yesterday. No explicit trade took place to create that transference of value. It's just that lots of people suddenly started believing that asset B was worth more favors that asset A. Sometimes that value is fairly easy to define, like by projected earnings of a company over the holding period of a stock. More often it's a nebulous and decentralized calculation of the market.
> Eventually it would reach ~0 share price and effectively a 0 market cap.
This is the misunderstanding breaking your argument: AMZN shares are fractional ownership of a company with assets and ongoing revenue. In the event of a business downturn, those will go down but they’re not going to zero in any plausible scenario - even bankruptcies usually return some fraction of value to shareholders.
This is important to understand because cryptocurrencies are the weakest form of a fiat currency: unlike those AMZN shares they have no value except for social consensus and unlike a sovereign currency they have no pressure creating demand — nobody must have them to pay taxes, there are no government contracts or salaries, etc. and there’s no inherent value to a random number so there’s nothing to keep that floor above zero.
They represent the same value prop as any stock. Any company could go to 0 and the floor of the exchange is littered with delisted companies.
Amazon is big and the chances it goes to 0 are less than a company still making vcrs. The same can be applied to bitcoin.
Government and other contracts could be cancelled. The value of assets can be lower the debt. Bitcoin has no debt while a company like Amazon can have billions of dollars of debt.
> They represent the same value prop as any stock.
Try thinking about this a bit more: what do you have if you buy a share of stock? What does that company own, what is its ongoing cash flow, etc. Now repeat the same thing for Bitcoin and notice how the answer is “nothing” except for the possibility of getting someone else to buy your coins.
That's the difference: there's no plausible reason to think that people are suddenly going to stop shopping online or using cloud computing. The price isn't going to suddenly tank because other people will buy into a popular company which has shown it can reliably run profitable businesses.
In contrast, nobody needs Bitcoin for any reason — we all have alternatives for currency, value storage, etc. which are cheaper, faster, and easier to use and almost nobody as a requirement that they buy Bitcoin. If some web3 play actually comes up with something normal people want and they all switch to Ethereum, there's no floor on the price. Unlike Amazon, there's no revenue stream which can be used to pay dividends or buy shares back when the price falls.
Another way to think about it is to ask who'd notice if it's gone. Amazon disappearing would disrupt business all over the world in multiple industries, and that cost of switching provides a lot of inertia. Bitcoin is mostly used for speculation and the vast majority of the fraction of transactions representing real economic value have easy replacements. When the switching cost is that low, there's little pressure to stay. Even if you really believe cryptocurrencies are the future, there's no law of the universe saying it's going to be this one rather than the many drop-in replacements.
True, but it also burns many TWHrs of electricity everyday. Also I doesn't have any revenue.
If you look at it like you would look at a normal company, then it would be a terrible purchase. A company that just burns cash for no reason and generates 0 revenue
> even bankruptcies usually return some fraction of value to shareholders.
The three issues with that are 1) liquidation preferences, 2) the fact that normal people can only afford to hold an infinitesimal amount of Amazon stock, and 3) (basically) only common stock is available for purchase by normal people. This means while that's technically true, unless you're, eg Jeff Blackburn, you ain't getting shit if Amazon were to close shop and return the money to investors.
Let's say you're holding 100,000 shares of AMZN. At ~$3k per share, that's some $300mm in shares, but with 508.84M shares outstanding, that's a grand total of... 0.02% stake in the company. In an unlikely fire-sale of the company and returning value to shareholders, that could still be worth something, but it's a unreassuringly small number.
AMZN had $8B of shares traded today. Just under $2B of BTC traded hands across the major exchanges on Wednesday.
AMZN is a single ticker, there’s several orders of magnitude more liquidity in equities alone than all cryptocurrency combined. $34B of SPY shares traded today, and that’s a single ETF.
> That also assumes everyone could cash out at ~3275, but the reality is if selling pressure is higher than the buy side demand that selling shares will drive the price down as buyers would be able to continually bid lower. Eventually it would reach ~0 share price and effectively a 0 market cap.
> We could just as easily apply that basic logic to any security.
People do, uh, buy whole companies from time to time. When they do, the price is at least close to the current market cap of the company.
Barnes and Noble had been publicly traded, but was taken private in 2019. The private equity firm paid about 140% of the market cap at the time the deal was announced.
No. "Market cap" of an equity stock is a useful number that tells you something. "Market cap" of a cryptocurrency tells you no useful information about it.
What you care about is liquidity (can be roughly estimated from exchange data) and trade volume (much harder to estimate, in the face of endemic wash trading everywhere in crypto) - you care about movement of the asset and the movement of the money for it.
> What I was wondering was: is there a better number? e.g., is there a way to calculate the amount of USD put into a cryptocurrency across a timeframe?
Velocity is a very important factor that critics of asset-wealth ignore.
When it comes to criticizing crypto-assets specifically, people just turn their brain off or are completely ignorant to how assets they respect work in order to hold crypto-assets up to a fictional higher standard. but even when articulating their standard its like "do they even know what they're talking about?"
for example, when comparing crypto assets to currencies, due to the "cryptocurrency" misnomer and skeumorph in the name, the illiquidity and relative few transactions in comparison to the marketcap seems like an important area to focus on, to them, while completely missing that currencies are broken down into 4 segments for this exact same reason. M1 being that tiny sliver used for transactions with M2 and beyond being illiquid allocations of the currency, the similarity of behavior ironically bolsters the currency aspect of crypto in what was supposed to be a criticism.
Many of these criticisms focus on the conversion to a fiat currency, and neglect the ability and reality of acquiring goods and services and investments directly with the crypto.
I see something like this over and over again.
These all factor into how one would go about valuing any particular asset. If a replacement for marketcap was sought after. But "dollars in over time" is not good enough, as it misses how liquidity can change at any moment, and misses the velocity of activity within any one crypto economy.
It's a good number to use if you are comparing different coins by value though. You need to know the circulating supply if you want to compare the price of each token.
Presumably one could multiply the mining effort put in so far by the energy prices at that time, to calculate total... uh... watt-dollars or something.
> What I was wondering was: is there a better number? e.g., is there a way to calculate the amount of USD put into a cryptocurrency across a timeframe?
For PoW coins there is. For every day in the coin's price history, multiply
said price by the number of newly mined coins that day, and sum over all days.
Sadly, I don't know of any site that publishes such a metric, although the column "PoW Produced (24h)" of [1] shows the product of today's price and mined coins.
That one seems to correspond less to "money put in" though. As they note, just having Satoshi move his one million bitcoin would increase Realized Capitalization enormously, even though no new money is put in.
Sum of daily price times daily emission on the other hand represents the total miner revenue; how much they would have made if they sold their mined coins as soon as possible (ignoring coinbase maturity for simplicity), which presumably upperbounds the total amount of money spent by miners on hardware and electricity.
Good point, although your algorithm sounds more like it measures a lower bound on miner revenue, since it doesn’t account for miners who avoid selling their proceeds when they perceive the exchange rate to be too low. It also doesn’t account for future transactions of the same coins, so it doesn’t really address the entire market, only mining revenue.
Realized Cap isn’t perfect but it seems like one of the most useful attempts at measuring market cap so far. Of course “usefulness” depends on the question you’re trying to answer. Other factors can be taken into account, like the Free Float Supply: https://coinmetrics.io/introducing-free-float-supply/
Also keep in mind most of these calculations only consider on-chain transactions. Funds could be sitting unmoved on chain for years while being transacted many times per day on a second layer: Lightning Network, “wrapped” on another chain like Ethereum, or traded between participants on the same exchange.
I am late to this question but there is actually a method that really only works for cryptos. Its called realized cap. Multiply the each coin by the price at which it last moved and sum it all together. This gives a closer estimation of how much money is really in the system. It is not perfect but neither is mcap and this gets a bit closer.
The really important metric isn't how much money has gone in, but how much money you can get out. You can actually calculate something related to this: take the order books of the large exchanges and add up the USD values of all the buy orders. Of course there's spoofing and dark pools and all sorts of other reasons why this is not exact, but as a first approximation it's better than market cap.
The number that would actually tell you anything is movement of actual dollars in and out of an exchange and into and out of a XXX/USD trading pair that day. You're interested in flows, not specious headline-friendly marketing numbers. The trouble is that that information is basically not available.
> Bitcoin, which emerged out of the ashes of the 2008 financial crisis, first caught on among libertarians and anti-establishment activists who saw it as the cornerstone of a new, incorruptible monetary system
> you’ll find a bottomless well of weird, interesting and thought-provoking projects
I hope comment-think pieces like this aren't a norm going forward, as that was pretty brutal to read... "Molly White: so brave." This comes off as Twitter-zens getting together to criticize an insular, tribal world not too different from their own. The worst part of online culture is the snark. For what it is worth, much of the debate on crypto comes from people new to the space, and the long standing critics. For a lot of folks in it for longer, they've given up on the debate as the same arguments get recycled every several years.
That aside, those two quotes "get it," and I was surprised to see them. Crypto has turned into meme culture by and large. But, the tech and design considerations behind btc comes out of one of the most impactful techno-ideological groups out there - the cypherpunks, with a strong helping of post-2008 anger included. btc and notable other parts of crypto, and supporting technology codifies that group's view of the world: permissionless, trustless, private digital action. This is the area to understand when studying crypto.
They viewed it as critical to build three capabilities in digital interactions: private browsing, private comms, private spending. Well, they slowly built all three - Tor, PGP/consumer encryption, and then BTC. Tor and consumer access to encryption has had a tremendous effect, even beyond intense privacy circles. BTC is newer, but what are the odds it won't do the same? Judging by history and cypherpunk movement, it seems silly to ignore it. '08 wasn't too long ago, and not much has changed in the practices that caused the crash. BTC still remains a/the only warts-and-all viable way out of that system.
For what it's worth, here is how I place a value crypto[0]
This is off-topic for this thread, but I didn't know how else to reply— thanks for this [1] comment. I'm going to dig into McChrystal's book at your recommendation.
Molly provides a great service to skeptics like me. She concise, easy to read, articulate and funny.
I feel like I live in a world where a huge train wreck is getting set up. I would like to follow along but it has gotten to the point where I can't get myself to read many of these 'News' stories about a new crypto adventure. I only have a little news reading time in a day and the typical article about NFTs or whatever leaves me feeling assaulted by a hype machine. But I can peruse web3isgoinggreat and stay abreast of what is going on.
Molly obviously has an opinion about the future of blockchain money but her comments all seem factual and fair to me. I'm pretty sure I would read her site even if I were on the other side of the argument.
> I would read her site even if I were on the other side of the argument
It's been a great resource to confirm that I'm not falling for the most obvious scams (like NFTs or BNB chain scams which constitute a majority of web3isgoinggreat posts) nor investing in easily exploited projects. She perhaps inadvertently helps the cryptocurrency space by pointing out scam artists to avoid working with. There is a world of good going on outside of the typical bored ape garbage in the cryptocurrency space. You would be getting a raw deal if relying solely on her for cryptocurrency information.
It’s a brilliant site, but definitely cherry-picked for entertainment value. It’s only a small part of the whole picture and provides a very distorted view
People shilling crypto are heavily incentivised to cover up the negatives or pretend they don't exist. Every crypto news site is basically paid news. Even when they publish negative articles, it's usually because they are shilling an alternative. The journalism quality is terrible.
The site is probably the most neutral crypto view out there, just because the author has no perverse incentive
>The site is probably the most neutral crypto view out there, just because the author has no perverse incentive
"Most neutral" is a weasel word and incentives aren't solely monetary. The author not having any obvious incentives is not the same as having no perverse incentives.
When they start grappling with someone in the same "weight class" (rather than some NYT author who has a journalist's level of understanding) and open themselves up to rebuttal, then "most neutral" might start to make sense. As it stands now, it's just preaching to a choir of crypto skeptics.
What other incentives could there be? They aren't doing it for money or fame. Maybe you could come up with some irrational reasons.
I am not saying that she is perfectly neutral. That is not possible. I am just saying that the most neutral source of information on crypto that you can find often comes from sceptics, just because they aren't the ones being paid to lie.
The issue with crypto is that reasonable use cases are early, and don’t attract attention except for niche communities.
There’s a few big ones, for example, filecoin right now has created a commodity market for storage that is currently 10,000 cheaper than S3 in some instances. (See file.app for stats)
But realistically, the interesting projects are very small and hard to find.
However, scams and ponzi schemes, by their nature are very public, easy to find, and have lots of people talking about them (often for financial gain).
Everyone building anything sane is so tired of having to explain that their thing isn’t a ponzi, isn’t an nft thing, and isn’t shilling proof of work, that they don’t post to hacker news, and so they exist outside of your bubble.
Crypto is like the story of the blind scientists studying an elephant. The first one touches its trunk and says “it’s a snake!”, the next one touches its tusk and says “it’s a spear!”, the next one touches its side and says “it’s a wall!”. None have the correct answer, because no single party has a full view.
The crypto skeptics are as irrational as the crypto optimists: firm believers in their own view, based on an incomplete information.
Yeah, it sucks. Monero for example is an actual privacy coin that's usable as currency but nobody seems to care. Very demoralizing.
Bitcoin is obsolete technology at this point. It's continued existence does more harm than good to the cryptocurrency space because everyone gravitates towards it instead of better projects.
Not exacly posix isn't 100 times slower and 100 more expensive that other is more inconvenient standard, becouse is simply old standard, bitcoing is a product in itself not a protocol,and this product don't fulfill the need for fiat currency becouse is expensive to transact, and slow te best you can say is that is difficult to make changes but bitcoin isn't exactly the one of 10 years ago, protocol change to acomodate for more transactions and most votes are concentrated in few minority of big stakeholder, making kmposiblw to reduce comitions or change significantlythe protocol.
Systems such as Linux, MacOS and windows? All terribly broken and unusable. Seriously you need better sources or more experience. POSIX is alive and doing better than ever.
Now we're splitting hairs, Linux is POSIX compliant, but not certified as certification costs money. Windows is also compliant through Linux subsystem. On Linux side there are also distributions which are POSIX certified which then makes Linux certified as well. It's just the windows, which also was certified at one point, early 1990s and air force. So that makes me right?
Yes Monero is great as private digital cash… as long as its usage level remains relatively low-profile so that governments keep allowing sites like Kraken to legally act as fiat on and off ramps, voluntarily handicapping their ability to track money laundering.
This is why Monero today is useful for tech-savvy people and motivated black-market buyers/sellers, but we will never see a user-friendly Monero market for the masses.
>There’s a few big ones, for example, filecoin right now has created a commodity market for storage that is currently 10,000 cheaper than S3 in some instances. (See file.app for stats)
First of all, 63 PB is nothing in terms of cloud storage, so I wouldn't exactly call it a commodity market. Also, I doubt that Amazon is making 99.9% profit margins, so it's more likely that miners are just subsidizing the cost of storage to speculate.
> First of all, 63 PB is nothing in terms of cloud storage
Not sure why you would compare it to cloud storage, because it's not. Storing files in Filecoin is more like making deals with people who offer space on their hard drives (which as far as I know, doesn't exists besides Filecoin). It also doesn't make sense to compare it to something like S3 as again, it is not cloud storage.
I do think Filecoin is closer to cloud storage than 'free hard drive space'. The hardware requirements for miners (storage providers) are pretty significant and pretty much guarantee that miners are running dedicated hardware. While I'm sure some storage providers operate out of data centers, I don't think a server needs to be located in a data center to be called cloud storage.
> I do think Filecoin is closer to cloud storage than 'free hard drive space'.
But I never said it was "free hard drive space", I explicitly mentioned "deals with people who offer space".
No matter where the data is ultimately stored (in a data center or not), the method for you getting your files to X is not the same in Filecoin as in S3. With S3 you simply upload your file to S3 and you're done. With Filecoin you need to first make a deal with a miner, then you use that deal to store files within the deal you've made, which is vastly different.
What do you think cloud storage is? Its not literally storing things in a "cloud"; a cloud is just someone elses computer.
I suppose its the difference between going to a garage sale vs corporate dept store, but at the end of the day what is the difference in the product you are getting?
> What do you think cloud storage is? Its not literally storing things in a "cloud"; a cloud is just someone elses computer.
Yeah, of course, everyone knows this, no one thinks it's some magic storage. That's not what I'm talking about.
The difference is in the interface on how you get your files to some place. With S3 you simply upload the file, and Amazon stores it for you. With Filecoin, it's simply a protocol that allows you to browse everyone who is compatible with the Filecoin protocol, then you make a deal, then you use that deal to upload files. It's like there are many operators like Amazon providing a S3 interface, but first you need to find one you like, then strike a deal.
Vs a cloud provider where there are many companies offering such services, you pick one you like, make a deal, and then upload your file via some standardized protocol (http, ftp, scp, etc)
"Making a deal" here refers to two people interacting in the terms of "Make a offer" -> Waiting time -> "Other party accepts offer" -> Waiting time -> "Upload files" while companies offering file storage is more like "Make subscription service people can sign up to" -> "Someone subscribes" -> "Upload files".
Ok, if you don't realize the difference between subscribing to a service (S3) and making deals (Filecoin), then that's up to you. No one can say I didn't try. In the end, it doesn't even matter, people use whatever fits their use case, including you and me. I'll stick with subscribing to services, and you can continue striking deals, or whatever.
I think you've never used cloud providers at scale.
You don't just subscribe. You negotiate and haggle. Contracts exchange hands. Humans are involved on both sids. Its not like there is a fixed price you just pay.
This. The comparisons to S3 are specious. Filecoin is doing some interesting things such as their proof of storage and collateralized contracts, but there are significant differences between S3 and Filecoin:
- Filecoin is 'cold storage' similar to AWS Glacier. Retrieval times can be really long and certainly aren't web time.
- Redundancy is left up to the user (or the user's client). Sure, you can store your files with multiple providers, but good luck determining the reliability of your hand-rolled storage logic.
- Retrieval prices are known up front with S3 and other cloud providers. Given that retrieval prices aren't part of storage contracts, costs of retrieval can vary widely (and change). A user's only defense against usurious retrieval pricing is to store with multiple providers.
- Bandwidth available to users is largely unknown and likely pretty variable
- Miners serve a 'dumb box interface' that will serve anyone any data that they are holding.
In the end, users are still writing contracts with individual storage providers, each of which has their own degree of experience, expertise and proven service history.
Obviously, the Filecoin community is working on improving many of these, but costs will certainly change as Filecoin evolves closer in functionality to s3 and other cloud providers.
The only 'NFT' that has a use-case so far is ENS [0] and domain names on the blockchain. The JPEG NFTs (which don't have a use-case) have captured the hype of the critics and that will likely collapse in the long term and those NFTs are what the critics will just keep talking about.
There is a product that is using it for identities already: [1][2] I can see businesses using ENS or similar solutions as a way to replace those long hexadecimal names into something readable, so that say; merchants can use it for users to donate / pay towards verified names e.g: (myshopname.eth) and not accidentally pay to a random address like 0x123..cdef.
I won't be surprised to see even reputable payment services like Stripe, BitPay and Coinbase Commerce use something like ENS for the verification part and do the same thing in the future.
Using NFTs for generating concert tickets or supply chain logistics & tracking seems like it could be economically viable. I'd bet the biggest use case for NFTs at present is money laundering. It's hard to imagine someone having the talent to acquire $800,000 yet still being gullible enough to spend it all on a hyperlink of a hand drawn monkey with the expectation that they bought an appreciable asset.
There are people starting to use NFTs for tickets precisely to circumvent scalpers and allow a legitimate secondary market to exist in which the primary artist benefits from resales. There are real reasons for a secondary market to exist (eg you've got concert tickets and suddenly get sick and can't go or something) the problem right now is that the existing secondary market is broken so prices are insane for the real fans and the artist themselves don't see any of the revenue.
Additionally, with NFT tickets you can add utility to them after the event. "You went to my concert, now you can get into a special channel on my discord/get early access to my album etc". These are things which are easy to do with NFTs that are operationally complex or expensive to do with conventional tickets.
> You went to my concert, now you can get into a special channel on my discord/get early access to my album etc
This is one of those use cases which sounds super cool but when you think about it, doesn’t really make any sense. I mean, maybe I’m just an antisocial person, but why would I want to be put in essentially a group chat for every person attending the Screaming Monkeys Band Tampa 11/23 concert? Early access for an album? You mean, the album you already presumably just heard… at the concert?
Lots of people really like this - you're in a fan community where it's ok to be a fan and people aren't going to criticise the fact you like this particular band. The artist can do AMAs direct with their fans without the trolling etc that infect a lot of social media because everyone in that channel is in the same community.
As for buying an album you heard at the concert, yes. If you like what you heard at the concert, why wouldn't you want to hear it again? People listen to music more than once per tune.
You may not see these things as a benefit but a lot of people do.
You reduced my argument to stupidity by removing the early access part. You said early access to an album, meaning because you bought X token-ticket, you get access to an album which is not released yet, or else it wouldn’t be early access. Of course if the album is already out, then yeah most people at the concert are going to have had bought already. But then you don’t need early access via token-ticket.
Unless you are meaning that the artist performed a new album at this concert, now I get to buy it ahead of its actual release because I attended a concert. This makes more sense logically and is probably what you meant, but it seems like a very specific and even one-off use case. Not to mention that, due to torrents, once this “early access” album is unlocked with a token, it’s practically going to be unlocked for everyone because other people aren’t going to wait and at least one of those token-ticket holders is going to seed it.
> you're in a fan community where it's ok to be a fan and people aren't going to criticise the fact you like this particular band
I suppose this is similar to a forum but membership is gated via purchase of a token-ticket. It’s an interesting use case for sure, but in my opinion is unnecessarily financialized because now I have to buy a ticket to the artist to join a forum/subreddit?
This doesn’t even solve the fact that if the artist doesn’t offer concerts in your area or even country (eg South America), it doesn’t really matter that you have all of this decentralized and distributed technology gating things up because the actual point of centralization, the artist, isn’t touring where you live.
“No not all forums, this would just be an extra VIP forum.”
I guess, sure, this is a technology which enables a VIP forum. I am not sure how useful, popular, appreciated, etc. those are, not to mention the fact that you can already implement that without tokens by requiring unique ticket serial numbers and then you don’t have the problem of everyone’s membership to this VIP forum being public knowledge (as is the nature of the blockchain), but fair enough.
Email is more operationally complex that setting up an NFT? Fan buys ticket, fan gets an email with a link to "members only club" Discord, fan goes on with their life.
How do NFTs circumvent scalpers? Scalpers can still buy the supply of tickets and just sell the private keys directly entirely bypassing any resale fee. And before you say people wouldn't buy private keys because of the risk of the seller giving it to multiple people: that's the same as the current situation.
If you want to resell an NFT with a contract that takes a cut on transfers, you can wrap the NFT in another NFT that owns the original. Now you've created a tradeable derivative. Ownership is verifiable, and the derivative is tradeable without a cut to the original creator. The owner of the derivative can, if they want, unwrap the item and get back the original NFT. This is like taking physical delivery of a commodity.
NFT wrapping as a service already exists.[1][2] In beta.
I know several who found out at the ticket gate of the college fb national championship that they had purchased counterfeit tickets @ $800 a pop, NFTs might be able to offer increased protection against that sort of thing.
The whole point of NFTs is that they are decentralised. If you are going to a concert, you are by definition centralizing power in the hands of the organizer, making NFTs entirely pointless for this. You might as well have the concert organizer send out emails with ticket numbers.
Supply chain I am not even sure why you would want it. NFTs don't prevent false data being input into the system. it only "protects" against falsification after the entry is made, which email does as well.
Except in your concert example, the number of tickets is not verifiably public with a centralised entity. There is nothing that stops the organizer from printing more tickets than there exists capacity for. On the flip side, a NFT ticket can be demonstratably unique (no counterfeiting or luck of the draw from scalpers), and only a certain number can be printed (otherwise everyone will know that the organizer is not acting legitimately).
As digital entities, a door is also opened for various interactive / programatic ways of using said tickets that are not possible with a private database and lack of incentive to improve the status quo (Most of the established incumbents have had years to improve, but don't until threatened by an emerging technology).
Another example off the top of my head:
* An anti-scalper lottery where a portion of the tickets are reserved for accounts that have owned a previous ticket for an event in the last twelve months during the run-time of said event. Let's say 80% of the ticket pool, and the remaining 20% is the free-for-all and any unsold tickets are sold free-for-all as well for the last week before the event starts.
Again, none of this matters because the whole thing is ultimately centralized in the hands of the organizer. Nothing stops him from printing 100 tickets on VET, and then turning around and printing 10000 tickets normally.
> otherwise everyone will know that the organizer is not acting legitimately
Because this has clearly stopped serial rugpullers like Jake Paul. People no longer invest in the NFT projects that he shills right?
And also there is nothing wrong with overbooking, because at least a few people are going to no-show. If the organizer is not able to accommodate you, you are given a refund.
This anti scalping tech is not even related to crypto currency. It can be implemented even more easily in a normal ticketing system with KYC. The fact that people don't do it is proof that it is easily defeated. With non KYC crypto accounts, the accounts themselves could be traded, making any account based tech pointless.
Finally, most of this is so niche that I have doubts that even if all this was true, it still wouldn't result in something successful.
Yes, this is also the only nft use case I've been able to understand so far.
I'm a fan of Handshake [0]. The project raised ten million of venture capital money and gave it away to free software developers [1].
It's an attempt at a decentralised DNS root zone, a replacement for icann. It would also obsolete certificate authorities: certificates would be guaranteed by the blockchain, under direct control of the respective domain owners.
I’m curious about handshake vs ens. The thing I like about ens is that it’s on ethereum which should make it harder to 51% than handshake (which is a relatively small PoW chain iirc). Of course with ethereum you need to pay gas fees which are out of this world (I paid $55 gas for my ens name). I’m hopeful that in the coming years ens will be able to reduce fees by partially transitioning to an L2 once zk-L2s mature, but we’ll see
People always say the same thing when someone is critical of crypto.
Its too early!
I mean after all, we are only 13 years in.
Or: there is a lot of bullshit but the interesting things are outside of your echo chamber.
But then never link to such counter examples. At best people talk about filecoin, which does pass the bar of not being a literal scam, but still makes no sense from a product-market fit (storage has 3 metrics to judge by: price, retrieval latency, reliability. Filecoin is order of magnitudes worse than competitiors on all metrics).
I don't think i am irrationally biased against bitcoin & friends, i actually think the original paper was quite ingenious. However its been over a decade - we're well past the "benefit of the doubt" stage and into the "put up or shut up" stage when it comes to cryptocurrency.
It obviously isn't cash, it isn't even money - that's the reason the amount received is stated in something else, namely dollars, which this has to be exchanged into to be useful.
What happened here is a wire transfer, not different from me sending money from my bank account to someone else bank account. Just with two additional transformation steps (make money into whatever crypto, make whatever crypto back into money).
It is very different than you sending money via an intermediary bank.
I dare you to describe a method of wire transfer to Kyiv that works in that quantity and timescale and is practically usable by the recipient that quickly and cannot be blocked by your local government's policies.
There simply isn't anything close to that. People that think that this is the same as a wire via a regulated bank are ignorant of the specifics of each type of payment.
Cryptocurrency is indeed cash, and is useful the same way cash is useful.
Society has banned the consumption of illegal drugs (!). How is that ban going vis a vis shutting the market down? Ditto copyright infringement. Some things the government cannot ban.
Without the ability to create and control chokepoints like banking institution, it may be impossible to stop people voting with their feet when it comes to international crypto transfers. Especially once people figure out what privacy preserving designs work in practice.
Given the whispers around unbanking political protesters, at some point it may become necessary to deal in crypto to have a political opinion. They can't arrest everyone.
As the parent said, if Crypto ever became a threat to government control of their economies it will be regulated. In fact the blockchain protocol provides the audit trail to enable the regulation.
Any anonymous chains like Monero will be blacklisted and only exist in an island where its economy is limited to certain illegal commodities, with the off ramp to wash it clean complex.
I don't want some unknown group of Crypto Bros completely outside my control running the economy of my country. At least in a democracy the people have some control.
> more than $60 million of the $100 million was received in the main fund run by Kuna, the Ukrainian crypto exchange.
So the majority of crypto donations were from Ukrainians on Kuna exchange; hardly a prime example of global crypto's good will. Also $100M is kind of small when you consider it next to the $14B congress has promissed to Ukraine. Then consider the total $1.5T sticker price of the congressional spending bill that $14B was a part of and it all seems insignificant.
The $14B is slow and probably won't make it to individual Ukrainians. So, like in the original charge, you're stuck in the position of having to trivialize $100M in aid because ... well, other modes are helping too, and this isn't a "prime example".
>In short we can and should give more to Ukraine.
And this is a way to give direct aid, something you ostensibly want, and yet you're stuck saying crypto doesn't count, somehow.
It seems a less epicyclic approach is to just accept that this is a valid use case rather than finding a way to out-argue it.
PayPal and bank wire transfers still work in Ukraine, so this not a particularly good example of a crypto use case.
Russian hackers demanding ransom payments in bitcoin—thereby circumventing economic sanctions—now that is a legitimately illegitimate use case for crypto.
Ukraine is not short of donations, they don't need money from the country currently destroying their cities and committing war crimes.
What they are asking for is more sanctions (which the Crypto utoptia is supposed to make impossible) to try and force the hand of a mad dictator without ushering in WW3.
Fair enough - I actually do think bitcoin is the only use case of this crypto stuff that remotely makes sense. Its not without issue, but its passed the proof of concept stage into something sort of useful for some people.
I think most critics of crypto come into the conversation with a "crypto is bad, and so I must find ways to reinforce this belief", and it's relatively obvious that the critic doesn't have the perquisite knowledge to craft a critique that can be responded to easily.
Specifically, a critic might say "the set A is bad". The critic is under the assumption that the set A is small, perhaps a few items, and they've seen the majority of them. But the "defender" knows that the set is hundreds of thousands of items, but still has only seen a few of them.
The critic operates under the assumption of maybe 4/5 items are bad, and the defender is operating under the assumption that 4/100,000,000 are bad.
So when a critic asks you to link to projects, there's a problem: even if the defender shows 100 projects, and the critic rejects all of them, then it doesn't change the defender's position, because 104/100,000,000 is still a small survey.
Sane "defenders" don't need to disagree with the critics on their points. They can differ primarily in seeing a much, much larger, unexplored search space.
If you assume the space has been fully searched, then its safe to stand back and critique. However, many folks conducting the search see much farther than you do, and see the entirely unexplored space as quite large. And so, it’s reasonable for the defender to not want to engage in your risky position, that assumes snake eyes for the next 100,000 dice rolls.
If you see how large the unexplored search space is, then it sounds ridiculous to declare the entire thing “done and bad”. It’s the same reason why you may choose not to engage with the flat earther. It’s hard to engage with a position so disconnected from rationality.
That said, there’s plenty of people in crypto who are equally disconnected from reality, either because they too only see a small search space, and have declared the contents “good” with little examination, or because they see the large search space and assume all dice rolls will come up as 6’s.
Those folks tend to create a cycle. Folks with no opinion see crazy crypto person, and develop into their own crazy anti crypto person. Neither party is acting rational, because both have claimed certainty with extremely little working information.
That said, there's other projects that are worth while, here's some to add to your N:
> still makes no sense from a product-market fit (storage has 3 metrics to judge by: price, retrieval latency, reliability. Filecoin is order of magnitudes worse than competitiors on all metrics)
We use Filecoin and IPFS and have found solutions to these issues typically, and are happy "customers". It's also worth noting that we _can't_ use S3, or traditional cloud hosting, which therefore adds a new metric for us to judge storage on: decentralization.
> it's relatively obvious that the critic doesn't have the perquisite knowledge to craft a critique that can be responded to easily.
Funny. My usual assumption is that if someone makes an argument that i don't have a comeback to, its that i am wrong. Typically lack of knowledge makes it easier, not harder to respond.
Hell, its things like this that make crypto sound like a cult. I.e. that the primary failure of doubters is that they haven't been suficiently indoctrinated and if they just let our lord and saviour satoshi into their heart they would see the light.
> The critic operates under the assumption of maybe 4/5 items are bad, and the defender is operating under the assumption that 4/100,000,000 are bad.
This isn't a numbers game. To show "crypto" is a good approach, you have to show some generic ideas that are useful in multiple contexts. Nobody cares how many failed projects there are. Its the successes that matter.
Right now you basically have "currencies" if i am being generous. Everything else is stuff that doesn't make sense and would have zero adoption if not for the massive hype train.
> If you assume the space has been fully searched, then its safe to stand back and critique. However, many folks conducting the search see much farther than you do, and see the entirely unexplored space as quite large.
I don't think anyone believes this.
If your position is that the crypto space is currently useless, but its possible that someone at some point may make a breakthrough which changes things, i think most critics would agree.
The breakthroughs that are needed to make things interesting are even pretty obvious. E.g. Efficient (much beyond the current generation) general purpose zero knowledge proofs of computation, efficient fully homomorphic encryption. If these things happen, i would find the space a much more interesting one. However these are hard problems - progress is being made but we are still nowhere close. Until then its not an interesting space.
Its sort of like if someone was doing things that required fast solutions to np complete problems, and countered criticism by saying we dont know that np!=p, maybe someone will find an algorithm. They are not wrong, but they aren't compelling either.
> a bunch of examples
Seem mostly about doing things you could just as easily do without blockchain. Except maybe helium which does sound like it has a story for why it needs to use these technologies.
> It's also worth noting that we _can't_ use S3, or traditional cloud hosting, which therefore adds a new metric for us to judge storage on: decentralization.
Genuinely curious - why not? Is it just for ideological reasons or is there an actual use case preventing you?
> Genuinely curious - why not? Is it just for ideological reasons or is there an actual use case preventing you?
Ownership requires decentralization.
In our case, we can't make a "Steam that's owned by game developers" if the listing information (the screenshots, the titles, the descriptions, the game files, and so on) are hosted on AWS.
Ownership means that, if the original creators were to walk away, the asset would still exist without the need for the original creator.
This is (maybe) a new business model: take something that was previously a service, turn it into an asset instead.
In a "service", the original creator operates the product. In an "asset", the original creator does not typically operate or control the product. So to turn a service into an asset, you "decentralize" the operation of the product; typically via a commodity market which drives the price down and disconnects the creator from the original product.
As a real world example, take cars. Imagine if, when you purchased a car, you paid a subscription for your car service. Then someone came along and said "hey, you should just be able to buy a car and own it". Critics argue "but then who would fix it when it breaks? who will fuel it? There's no way anyone could provide you these services better than Ford. This 'car ownership' must be a scam." And sure enough, many people come along selling you a pink slip for a car, claim there's only so many to go around, and people speculate on the pink slips. The critic then argues "see, all this 'ownership' stuff is just a scam! Everyone's just buying the pink slip to sell to the next sucker." In fact, the pink slip sellers never made the car, and disappeared with the money. The speculators and scammers are indeed speculators and scammers; but they don't change the underlying point: it's not unreasonable to try and sell the car. In order to make the car an asset, you must "decentralize the car"; by ensuring anyone can become a mechanic and anyone can sell fuel to the car.
In Strangemood's case, we make a decentralized marketplace for software licenses, that's owned primarily by the sellers (ie: decentralized Steam). If Strangemood stored files on S3, then whoever owns the the AWS account is the only operator, and so the product is a traditional service, rather than an asset.
> In Strangemood's case, we make a decentralized marketplace for software licenses, that's owned primarily by the sellers (ie: decentralized Steam). If Strangemood stored files on S3, then whoever owns the the AWS account is the only operator, and so the product is a traditional service, rather than an asset.
I'm a but confused here on the ownership - if its the purchaser or the seller who is in control. Filecoin isn't free so i assume one of these groups has to be footing the bill.
Wouldn't this goal be equally served by just hosting it in the sellers s3 bucket (or webserver, or torrent, etc)? Someone still has to pay for and be in control of the filecoin "instance" (probably not the right word), what's the difference between that person doing that vs running their own server.
Of course! Feel free to send me an email if you'd like to grab virtual coffee and talk more. I'm evan [at] strangemood [dot] org.
> I'm a but confused here on the ownership - if its the purchaser or the seller who is in control. Filecoin isn't free so i assume one of these groups has to be footing the bill.
Ah! This is what DAOs are for.
A percentage of every sale goes to a community treasury (a wallet). That wallet is collectively controlled by a token. That token is minted to sellers upon purchase, so the sellers control the treasury.
The treasury acts as a "payer of last resort". It pays for Filecoin deals basically. It also can pay maintainers of open source tooling through decentralized Quadratic funding grants (see https://wtfisqf.com/).
Rebase (the company that makes Strangemood) peer's the store's small-file metadata (titles, descriptions, etc) as an additional backup. We don't have to do this, but it costs us about $0.15 per year to do so, and it makes the network faster and safer.
Realistically, DAOs might be a janky solution. I'd love to see payment of file store be included within the protocol itself.
But there's a few quirks of Solana that made this difficult. Specifically, you can't use more than 1024 bytes in a single instruction, which limits the scope of the program. This might be fixed in the future though.
Doesn’t something like strangemood dot org, with a logo and a website and a name and a foundation contradict Vitalik’s original idea behind Ethereum i.e. that people kept trying to build Swiss army knives on top of different protocols and it made the whole thing brittle?
Why, as a counter example, can’t a game developer/studio deploy a contract which allows people to mint a token in order to purchase the game?
> The crypto skeptics are as irrational as the crypto optimists: firm believers in their own view, based on an incomplete information.
Please don't discount that a large number of us do in fact understand what the elephant is, in every inch, and shape our views as a result. It's extremely patronizing to have informed criticism dismissed this way.
Many of the points brought up are completely valid but they're also heavily biased and often lack critical examination. Meaning, they take a stance of skeptic to the article but don't use the same bar for themselves.
They purposefully take ungenerous interpretations of statements to build straw man arguments then accuse the article of making straw man arguments. They bring up studies and articles contradicting claims in the piece then dismiss the studies brought up in the piece as being ambiguous because they don't have more rigor. Often, the comments are nothing more than snide remarks deriding the claims without any citations while at the same time writing "citation needed" for various other parts of the article.
As I said, there are many fair points in this criticism but this critique, and other pieces like it, are, in my opinion, not really trying to pursue the truth, they're written to cater to an audience that wants to dismiss cryptocurrency outright.
Precisely. Most of the points about where it doesn't make sense to use blockchains are valid (Social media, storing images on-chain, etc) but the critics themselves like to filter, dismiss and scream ALL of it as an entire scam, which is quite a dangerous assumption for them in the long term, but we'll see.
Who knows if the larger cryptocurrencies will still be around in 10 years time due to those criticisms or will they just adapt and fit in to better use cases? I also dislike the hype around NFTs as them being a marketplace for JPEGs but not all of them are like this. Perhaps 90% of NFTs will crumble with only 10% of them still being around that have a use case.
Due to a few of them having some utility, I certainly won't dismiss the whole thing or the technologies behind them. Otherwise we will see yet another HN crypto post with the same comments and dismissals attached to them.
I expect for them to easily ignore it since they are convinced it will completely collapse in the future. I'm not sure why they find it very difficult to do this but even I also think the majority of the hype will collapse too due to regulations, but the technologies (including blockchain) will still live on.
I wrote the same two points in the comments of the article when it was published. I'm really disappointed with the NYT, having subscribed just a week before.
> there's some kind of market for front page real estate
Absolutely there is. If you want an even clearer example, take a look at the front page of the Wall Street Journal under the “Editorial Staff” section. The “reporting” there is almost always some rich, more conservative guy who basically paid to get his post on the front page of a relatively dry, and even somewhat activist-oriented (eg Facebook Files) paper.
Note that non-clownshoes financial outlets, e.g. Financial Times or Bloomberg, expressly forbid journalists from writing about an asset they hold, except under appropriate editorial supervision.
Roose's present article is best viewed as his appeal to his bosses to be allowed to become a hodler.
I read the NYT article and wondered how that got in there.
The article mentions a "Let's Go Brandon" coin, personally promoted by Trump. Here are its current statistics.[1]
There's a huge incentive to hype crypto products. They're mostly zero-sum games, which means you need a growing supply of suckers to keep the thing going.
I'm into 3D virtual worlds, and the NFT clown car is destroying the potential of the metaverse. The 3D NFT worlds range from weak to very poor to nonexistent to total scam. Nobody in the NFT world is even trying to get to Ready Player One level.
There is now someone selling virtual land in a 2D sidescroller.
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[ 3.0 ms ] story [ 319 ms ] threadIf it was online, how we even know it was that many people?
Re-reading my original comment, I think I was too forward in asserting that there's a conflict of interest. But I find his public positions around becoming an interested party concerning and a potential risk to his objectivity.
[1]: https://web.archive.org/web/20220219172535/https://twitter.c...
>>> And in Silicon Valley, engineers and executives are bolting from cushy jobs in droves to join the crypto gold rush.
No they do not. I am an engineer in a technology heavily used by crypto projects and they have a really hard time recruiting.
Engineers slam the door in their face the moment you tell them the opening is for this industry.
Base: $300k Token-options: $450k
In reality, practically nobody cares and most employers are more than happy to hire experienced engineers who happened to work at some employers who did sketchy things.
But, if we're going to drill down into the ethics of crypto startups, I think they come out looking pretty good in comparison.
It's worth noting that the author of this post works at Hubspot which literally had an entire book written about how its workplace culture was highly discriminatory, particularly against older workers.("Disrupted: My Misadventure in the Start-Up Bubble ")
Engineers in glass houses....
The others are regularly criticised to varying degrees, but that doesn’t mean it’s impossible to work there for people somewhat conscious of their conscience. It comes down to the question “can you honestly expect to have an impact on the organisation, or is it more likely to hollow you out and make you into another one of their cynical libertarian defenders?”
This happens to be exactly the same misunderstanding as calling all criticism “cancel culture”.
Disclaimer: I worked at Uber in the past
I have multiple friends that have worked for major bitcoin/eth companies. You definitely know the names of these companies. My friends found themselves in exactly the situation I describe. Neither of them were "true believers" in the advocate sense. They just thought the technology was interesting, the team was good, etc.
But the problem is the loudest advocates in the crypto space are frankly, so insane, that even a vague signal you might be part of that group is a huge red flag for any business that is not all in on crypto. Hiring one of these people could be incredibly destructive to a team.
Absolutely not true and this is very typical HN bubble-speak. Been helping with hiring engineers for a stealth crypto startup for the past 6 months, and getting some of the best applicants I've ever seen, most coming from FAANG. To add to this anecdote, one of my friends (FB product manager) was telling me ~Oct last year that a lot of engineers are leaving her team or churning for either TikTok or crypto startups.
Tokens _are_ worthless if no one wants to buy them, and pretending that is somehow different than startup equity is ignorant at best and downright predatory in the worst cases.
Crypto growth overall does not mean _your_ token is going to gain value anymore than the general growth of the economy means that startup equity is going to grow in value.
Fundamentally not true. Unlike traditional markets, crypto exchanges work by leveraging AMM liquidity pools. Obviously, a token can go up/down based on supply and demand, but if there's liquidity you can literally always sell. Confusing early-stage startup equity is by far more predatory than giving someone some shitcoin with a vesting schedule. Any argument to the contrary is either disingenuous or misinformed.
With traditional equity offerings, you need to worry about: what class of stock did you get, what's the vesting preference, will you get diluted, what if you get fired, etc. I'm hardly a crypto bro, but imo startup equity is one of the biggest scams around that often takes advantage of young and inexperienced engineers that don't quite understand its financial underpinnings.
If no-one wants to buy a thing at any price, it is - by definition - illiquid. The notion that something for which there is no demand can be liquid is strange.
But it seems very much that it is true. Did you mean to make a different point?
If your point is that tokens without liquidity are worthless, then that's true (that's why initial decentralized exchange offerings always involve seeding liquidity pools, as mentioned). If your point is that tokens can get arbitrarily close to zero if everyone sells, that's also true.
But if you get a token that's being actively traded on exchanges and has healthy liquidity pools and a healthy market cap, that certainly is a better deal than some percentage "equity" an early-stage startup dangles in front of you.
1 - token vesting contracts are often much quicker than startup grants, and public company RSUs. A few months to a year, compared to 4 years.
2 - tokens achieve liquidity much faster and more reliably, in comparison to startup companies of a similar age. this allows new organizations to compete in hiring against FAANGs, where employees also are receiving liquid things to sell.
3 - token grants can be alongside startup equity. so its an additional part of the compensation package. As such there is no compromise to rant about.
and just to acknowledge the “issue” you care about, correct a market may never occur or form for the tokens, no different than the equity, there you go, a tiny disclaimer on page 34. I agree that every employee should be objective about that, this is the same standard with every kind of organization aiming to compensate partially in non-cash, which puts us right back at square one: pick the one thats both interesting and compensates well.
But they just lost 37% on the "too good" money.
So where do you think these people are going next?
Following regulatory response, they have been downsizing it to a tiny speck of its former size.
Them losing folks to crypto companies is the most obvious result of the past five years, but it has more to do with their strategy struggles than the overall mindset of the engineering population.
If you criticise crypto based on general software engineering experience, the cryptobros say: "You don't know what you're talking about!"
If you criticise crypto based on experience trying to actually use it, the cryptobros say: "You're astroturfing!"
Thus the only people allowed to discuss crypto are seemingly those with a financial interest in token prices going up. Funny how that works.
> Funny how that works.
This rhetorical device is tiring and divisive, please stop. I have no interest in crypto other than some coins I bought years ago that constitute a negligible portion of my portfolio and a passing interest in IPFS. I think the space is full of fraud and it would take a full-time enthusiast to find what's not. But there's no need to spread FUD like the person I responded to, nor is there any reason to say silly things like "funny how that works" and wink derisively at some cryptobro conspiracy. If crypto fails it will fail, and then you can laugh at it all day like everyone does to Theranos and WeWork. Until then stick to factual statements. The GP claims that nobody wants to work on crypto. I have no idea how your "funny how that works" sneer has anything to do with the original claim. Stop moving the goalposts to score internet points in an anti-crypto echo chamber.
That's a genuinely bizarre line of argument that I've only ever heard in crypto circles.
> Astroturfing is the practice of masking the sponsors of a message or organization (e.g., political, advertising, religious or public relations) to make it appear as though it originates from and is supported by grassroots participants. It is a practice intended to give the statements or organizations credibility by withholding information about the source's financial connection.
* "grass roots" support is an 'authentic' community response on an issue
* AstroTurf® is an artificial playing surface used in some sports facilities (especially indoor ones), instead of a one made from real grass
So "astroturfing" is the creation of an 'artificial community response'.
https://web.archive.org/web/20180220171955/https://www.steph...
https://www.youtube.com/watch?v=gFlu61wJe2Y
He seems to have been interested in smart contracts but found the current implementations appalling. He wanted to use functional programming, particularly Haskell, to create something like a smart contract with better guarantees. But he is also careful to say that a smart contract doesn't imply a blockchain; he's talking more generally about code that executes over distributed databases.
This stuff is scrubbed from his website, and Adjoint doesn't even appear on his LinkedIn profile. But I can easily see why that might be the case if he's decided the whole field is rubbish and left the industry, or if his work is being misconstrued.
That said, having examined blockchains in depth gives him more credibility, not less. And it would be a rather bizarre business model to continually decry blockchains if he was actually working on one.
---
EDIT: Found an interview where he distinguishes cryptocoins from other technologies sometimes labelled web3, like IPFS. https://www.coywolf.news/podcast/episode-12-stephen-diehl-in...
I think it's fair to say the guy is not an indiscriminate hater. On the other hand, I also personally was already convinced that crypto "currencies" are terrible but IPFS and decentralized organizations might be cool, so I guess I like him more now.
> This stuff is scrubbed from his website, and Adjoint doesn't even appear on his LinkedIn profile. But I can easily see why that might be the case if he's decided the whole field is rubbish and left the industry, or if his work is being misconstrued.
Gives his passionate publishing against Blockchains I'd prefer he not hide this aspect of his past and actually talk about it. I guess I didn't know that he had moved on from Adjoint so that does add more credibility to his beliefs. But removing it from his website, removing it from LI, and neglecting to talk about it in public can certainly cast some doubt. I'm sympathetic to your view as well though.
Anyway, I don't even know if he has moved on from Adjoint.
I agree there's something odd about this, but I've also seen how people who are vocal critics on the internet have to be less public about their associations. Not sure what to think about it.
he now seems to be a full-time anti-crypto propagandist. i'm not sure how he makes a living from that, but he seems to spend all day every day talking about it for at least the last 6 months and has gained a large following on twitter due to it. personally, i find it hard to trust anyone on either side of the debate who is this invested in their extreme position and unwilling to engage in any meaningful debate with anyone who critiques their positions.
here are some more links about adjoint for anyone interested in some more background.
http://internetofagreements.com/2017/12/18/stephen-diehl-adj...
https://medium.com/humanizing-the-singularity/adjoint-distri...
https://web.archive.org/web/20190513032812/https://www.adjoi... "Adjoint empowers enterprises to achieve new levels of efficiency and control by delivering blockchain technology built specifically for the needs of the financial industry"
https://medium.com/b2b-buzz/adjoints-interconnections-dd619e...
http://web.archive.org/web/20210316021048/https://www.forbes...
https://www.finextra.com/pressarticle/79619/tech-mahindra-pa...
https://medium.com/humanizing-the-singularity/adjoint-distri...
https://www.pymnts.com/news/b2b-payments/2019/treasury-manag...
https://www.youtube.com/watch?v=gFlu61wJe2Y
Maybe you have a better view, but I don't understand what you mean here: "My work (household name so we work with a lot of companies) has been seeing increased spend from crypto companies and so we've talked with a few folks from these companies and they've been hiring headcount like crazy."
It seems hard for firms below the Coinbase/Kraken/heavy hitter trading shop bar to pull serious resume hires out of SV, but quite a few Managing Director+ level hires moved over into crypto.
My sense is the NYC finance realize a core aspect of crypto - you might not think it's money, but enough people do, and there's an active market for it, so there is quite a bit of money to be made.
Traditional finance is well-trodden, every arbitrage opportunity has been tried decades ago. But crypto is full of doe-eyed innocents who think they're reinventing finance. Of course experienced traders want to take advantage of them. It must be more fun than ye olde eurodollar bonds, or whatever.
Well, sophisticated people also think it's money, but they entered '12-'17 and stopped talking about it. A more recent example though is Neuberger Berman's entrance.
The tragedy of the crypto moment is serious folks who didn't come from crypto made up their minds about it and did it a while ago, but articles like OP run interference against "everyone else" doing the same.
Some links:
https://medium.com/john-pfeffer/an-institutional-investors-t...
https://en.wikipedia.org/wiki/Wences_Casares > Casares was the entrepreneur to convince Bill Gates, Reid Hoffman, and other tech veterans in Silicon Valley to invest in bitcoin
https://en.wikipedia.org/wiki/Pantera_Capital - scope out Morehead's background.
Whoever spends some time building DeFi/L1 protocols is going to make a killing jumping over to Jump/Jane Street/HRT in a few years with that knowledge.
It's more like pending TXs which end up landing in a certain order that's possibly different once confirmed (which current banks do with checking/debit TXs and isn't a criminal offense).
https://careers.chain.link/
The only thing that has evolved over time, that is peoples time preference. There will always be demand for BTC. The software works as it was designed, and grows stronger every year. Gresham’s law might be the key to understanding this.
I realize you need to say there will be demand for it but your desire to sell your random numbers at a profit doesn't make that true. Demand has to come from somewhere and something which has many competing alternatives which are generally cheaper, faster, and easier to use does not have much lock-in potential.
That’s the problem with multiplying the number of coins by the last sale price: it assumes a larger pool of buyers than we’ve ever seen. The number of people treating it as anything other than a lotto ticket isn’t anywhere near enough to support a valuation in the range of trillions of USD.
If you think failure is only synonymous with making money then certainly Bitcoin hasn’t failed, but at the same time it has hardly had much affect on the world outside of being a speculative asset for people to get rich off of.
Today, there is 1.7M unspent coinbase tx out of a emitted 19M coins. Once moved from a coinbase-tx, 4.3M are older than 5y, with 2.4M at >10y.
Most Bitcoin have been sold many times in their life, but they do typically sleep for a long time, given the switch of time preference. MtGox alone would have cycled a majority of the coins in its short lifetime.
If people actually want facts, then that's the wrong place to look.
I agree.
> but when it starts getting to 5 paragraphs of dissecting each phrase, it gets too much.
Yeah, that's true.
> Reminds me of the someone-is-wrong-on-the-internet
Isn't there usually?
> point-by-point-repliers in internet forums
I still think it's a good format.
> circa 2006
What's wrong with 2006?
On:
> What I couldn’t find was a sober, dispassionate explanation of what crypto actually is — how it works, who it’s for, what’s at stake, where the battle lines are drawn — along with answers to some of the most common questions it raises.
They left this comment:
> No technology is "sober" or "dispassionate" in its creation, nor is it neutral or apolitical, and thus anyone who is claiming to view it from that perspective is DEFINITELY selling you something.
First of all, no one said anything was sober or dispassionate in its creation. And it's trivial to come up with a sober and dispassionate explanation of many technologies, even political ones. I'm certain I can find a sober and dispassionate explanation of how Israel's Iron Dome functions if I really wanted to. And second, if you have a definition of "political" that's so broad that it includes literally every technology, it's not really a very interesting statement to say that some technology is political, right?
Another aspect of the same point: After a while it should become obvious to them that they're not critiquing a Faulkner or a Dostoyevsky here. Once you've fired your shotgun into the barrel a couple of times, the fish are probably all dead!
Cynical take: They're all mad that they weren't asked to write for the glorious Times.
This made the post
https://github.com/molly/website-v2/blob/master/src/pug/page... https://github.com/molly/website-v2/blob/master/src/sass/rev... https://github.com/molly/website-v2/blob/master/src/js/revie...
It's all open-source, so by all means feel free to reuse it if you like!
Not trying to throw shade at them, but I feel like their push for annotations is hampered a little bit by how much their specific implementation of accounts and permissions feels like yet another social network, with all of the negatives that entails. There are other issues as well, but that's the big one that kept me using the platform.
That being said, there is also an Open standard for this stuff that I remember at the time it came out being pretty excited about. But I haven't seen much if any adoption of it, so it again makes me wonder if there's something wrong with it or if it's just that nobody has made anything super-attractive yet to take advantage of it.
I'm working on an annotation project myself, though not really related to what the parent commenter is looking for. A generic solution to the highlight/annotation problem is quite difficult, especially if you allow for document changes.
I read through the docs when they first came out but I don't remember all of the details anymore. Fragment identifiers are part of it though. I've gone back and forth on how much I like them, allowing for document changes is always going to make stuff really complicated, fuzzy/fragment matching is about the best you can do I think without the cooperation of the source you're annotating.
It feels like annotations probably should be tied to specific document versions, but I also get the reasoning why they're not in this proposal. Unless you're self-hosting everything or forcing everything to go through the Internet Archive... it's just kind of difficult.
I've been curious about trying to get annotations to work before using something like Matrix to handle accounts/groups, but not curious enough to actually try to build a working example.
I don't have anything against the guy, but he seems completely disconnected from reality when it comes to his writing. It gets clicks, but it also shows either no interest in doing real research, or the desire the create a one-sided narrative.
For now, the $100 miners siphon off per transaction are predominantly from 1), so those costs are not very visible.
And then of course the exchanges charging 20 to 120 bp (or more) for a roundtrip against money you can actually use. Coinbase (the exchange) alone takes around 0.4% of the entire crypto market cap per annum into its pockets.
1. Stripe has revenue of $bn 8, Visa $bn 25, and Coinbase $bn 8. Are you suggesting that Coinbase provides as much utility as Stripe?
2. The equity market cap is about $tr 100, so Stripe and Visa together take about 0.03% of that per annum.
Mind you: That is way too much. Credit cards are an inefficient oligopoly, and they've been fined by regulators for their extravagant fees. That's a whole topic in itself. But: Crypto is 10x worse.
Under these conditions, the utility company has to pay for say $100 in electricity to make $80 of cryptocoin. But since the miner has "free electricity" and doesn't see these costs, they only see the $80 of cryptocoin that they sold off.
The transference, redistribution, and storage of wealth is itself the value of monetary networks. The more circular trade that doesn't need to exit the network happens, the more valuable the network becomes.
The ultimate point of projects like bitcoin isn't to build a system that makes everyone rich. That would obviously an absurd ponzi like scheme. The point is to build an open monetary system for the whole planet that emerges out of distributed consensus rather than dictated to us by a global superpower, and is therefore not fragile and subject to failure when the superpower declines. Early investors of the network will get rich if it succeeds, just like early investors of any tech giant did. That mechanism of rewarding those who take a risk with their money when the future is uncertain is a huge part of what's driving its continued growth and success. If you didn't have that to bootstrap the network, bitcoin would likely be a forgotten oddity of a cypherpunk project that nobody ever cared about. But now, it's a global money that nation states are adopting.
I do agree that most crypto projects will fail and end up looking like nothing more than pump and dumps to scalp investor money, whether from dumb VCs or retail.
A structurally impossible goal when it is deflationary in nature.
Bitcoin is a deflationary currency (for now)
A deflationary currency would only be one of many different investments, and people will buy and sell based on their expected gains and risks of other holdings.
Come on man. This argument is patently absurd. I expect better from the HN community.
The only thing an inflationary currency does is wipe out the savings of the poor who don't have knowledge or the privilege to invest in harder and/or income generating assets.
If I buy 1% of Apple stock at $100, and later it's worth $1000 based on the last trading price, money didn't change hands to make me have more USD, it's my paper wealth.
If Bitcoin goes from $1 to $50k, and I never sell, I didn't take any money - the wealth simply grew.
The activity of Apple is economically meaningful; and the price of Apple stock reflects that.
What is people extracting from the Ethereum ecosystem that isn't USD?
I find it very scary that the people investing in crypto don't even understand the basics of investment. They genuinely think that all investment follows ponzinomics.
One example that comes to mind is that Docusign offers a product that uses Ethereum for storing evidence of contracts in a decentralized medium. That seems like a fairly legitimate application for the technology. Another example (albeit possibly more dubious) is BitTorrent tokens as a "currency" for "buying" download speed by incentivizing people to keep nodes running within its P2P network.
Do you consider these types of applications to be negative sums? If so, why? Not trying to be antagonistic here, I'm actually curious.
For the case you mentioned, is anyone actually using this tech for their contracts? No Docusign (or any other) document I have ever signed was written to any blockchain. Have any real legal disputes ever been resolved by looking up a public ledger?
I certainly share a certain level of cynicism towards many crypto applications, but even the likes of OpenSea currently employ people and presumably pay them actual money that they can spend on stuff, in exchange for their time and effort pushing the platform forward as a digital marketplace. That, to me, looks more like creating traditional business value than hype and pyramid schemes.
I'm ambivalent on whether I should consider NFTs "value". On the one hand, the NFT mania has generated quite a bit of commercially-oriented artistic output that likely would not have been created otherwise. But on the other hand, whether "artistic output" is valuable at all in the first place is kinda in the eye of the beholder, I suppose.
My reservation for whether to call those products "value" is more along the lines of the argument about whether cigarettes are "creating value" (i.e. if one buys a "feeling" from literal puffs of smoke and punts the costs of externalities onto others, is that a net positive?)
Yes, they "offer a profuct", but don't even use it themselves because it's too expensive.
> BitTorrent tokens as a "currency" for "buying" download speed by incentivizing people to keep nodes running within its P2P network
Incentivizing how?
> Do you consider these types of applications to be negative sums? If so, why?
If you "incentivize" people, it means that someone gains. If someone gains, someone loses. At best these are zero-sum games.
It absolutely does not. This is what a research budget is for from an organization--and you can shred it/render it nonfunctional afterwards to avoid a personally biasing stake.
As for "personal identities": I know of about half of the folks cited in those articles and all of them, even crypto's scariest nemesis (one David Gerard), have plenty of other things that they do and that they are interested in. Perhaps what you read as a "personal vendetta" is a deep understanding of what a rotgut industry they criticize, and that morality is not fully dead.
I am sure they all have fulfilling lives outside of what they project online; but the single-track attitude and constant crypto snark is as tiring as the laser eyed BTC bros.
Edit: just to add, if the ENS were solely to practice buying “nytdomaintest1234.eth” and using it, then sure I agree with you. I am asking this question in the context of Kevin owning a personal domain linked to his real life name and identity.
What I was wondering was: is there a better number? e.g., is there a way to calculate the amount of USD put into a cryptocurrency across a timeframe? What I'm imagining is a metric like (sum of all bitcoins bought by USD purchase price) - (sum of all bitcoins sold by USD sale price) = amount of USD that has been put "into" bitcoin. That first glance, one might expect this number to equal zero, but it should be greater than zero because of the new coins created by mining.
In contrast, cryptocurrencies have no floor because there’s no inherent value to a random number and nobody has a need to pay for a specific token. If something falls out of favor, there’s no reason to expect to find a buyer at any price.
Maybe the things you mention do drive that equilibrium. But I'd bet you'd have a hard time developing a profitable trading strategy based on those metrics alone. I know I have tried with little success.
And cryptocurrencies' intrinsic value is this: they are payment networks that work even where traditional systems fail. No denied transactions. No limits. No "account" to open. Works for the underbanked. Send money truly anytime anywhere. No other system does this. That's the value.
In the end, there is no fundamental difference between a service provided by a corporation vs a service provided by cryptocurrencies. Both services can and do have value.
That's technically correct but missing the point: cryptocurrencies are an extreme outlier in that they have literally nothing other than social consensus backing them. If you look at examples of failing companies you will find a few cases of Theranos-level fraud but far more cases where a company was mismanaged into the ground but shareholders received _something_ and it's not common for this to happen so quickly that nobody had time to react. The more common trajectory is something like Sears or RIM where the writing was on the wall for years while the PE guys strip-mined the corpse or someone buys it to go patent-trolling, where a savvy investor has plenty of time to exit before the end and the people at the end still receive a fractional payout.
> And cryptocurrencies' intrinsic value is this: they are payment networks that work even where traditional systems fail. No denied transactions. No limits. No "account" to open. Works for the underbanked. Send money truly anytime anywhere. No other system does this. That's the value.
This is a good example of the problem: those claims are either completely untrue or significantly overstated but you have a significant financial interest in repeating them because being honest will imperil your ability to find someone willing to pay more for your random numbers than you paid originally.
A concrete calculation for this would revolutionize finance.
Amy Castor - "Yeah, market cap is a meaningless number. It assumes everyone bought at the current price and could cash out at the current price."
We could just as easily apply that basic logic to any security. Amazon(AMZN) is ~3275 a share with a market cap of ~1.668T. That also assumes everyone could cash out at ~3275, but the reality is if selling pressure is higher than the buy side demand that selling shares will drive the price down as buyers would be able to continually bid lower. Eventually it would reach ~0 share price and effectively a 0 market cap.
So in that sense token market cap is a fair equivalency. What makes a dollar worth a dollar? Crypto value at any given point in time is just an exchange value against fiat currencies. This isn't much different than an exchange value between USD and the Ruble; it will fluctuate.
Not quite. An Amazon share is a claim on future residual cash flows, whose net present value constitutes the (unknown) "true value" of the share. If Amazon falls to 1/10th of its current price because of some tweet by Elon or whatever other (extraneous, fluke) reason, lots of people would be lining up to buy it, because they get a stake in an actual business that would repay them their investment within a few years. So, no, it would not reach 0 share price.
(So, while the argument in the article needs some refinement, its broad thrust is true: market cap for a publicly traded company is much more meaningful than market cap for a crypto currency.)
Is it though? Have you actually tried to apply this in practice to a trading strategy? I think once you start trying to predict prices based on NPV of future cash flows this quickly falls apart, even with large behemoths like Microsoft, Apple, etc...
I don't think it is right to call growth speculation "intrinsic value". The only thing that is truly intrinsic in my opinion is profits. But profits aren't a good way to measure value of an asset. Because the asset (stock in this case) is separate from the company itself. A company could generate slim profits and not grow each year. That has intrinsic value to the employees and customers. But that does little for the stock.
First of all, money or value is a purely memetic construct. It's a grand illusion that only exists in our collective network of consciousnesses and operates as an abstraction to efficiently keep track of favors owed.
Therefore, value or money doesn't just transfer with explicit trades, as in trading $40,000 for 1 bitcoin adds $40,000 of value to bitcoin. Value also transfers memetically and invisibly, as in many people suddenly start to believe that asset B has 20% more value than asset A than it did yesterday. No explicit trade took place to create that transference of value. It's just that lots of people suddenly started believing that asset B was worth more favors that asset A. Sometimes that value is fairly easy to define, like by projected earnings of a company over the holding period of a stock. More often it's a nebulous and decentralized calculation of the market.
This is the misunderstanding breaking your argument: AMZN shares are fractional ownership of a company with assets and ongoing revenue. In the event of a business downturn, those will go down but they’re not going to zero in any plausible scenario - even bankruptcies usually return some fraction of value to shareholders.
This is important to understand because cryptocurrencies are the weakest form of a fiat currency: unlike those AMZN shares they have no value except for social consensus and unlike a sovereign currency they have no pressure creating demand — nobody must have them to pay taxes, there are no government contracts or salaries, etc. and there’s no inherent value to a random number so there’s nothing to keep that floor above zero.
Amazon is big and the chances it goes to 0 are less than a company still making vcrs. The same can be applied to bitcoin.
Government and other contracts could be cancelled. The value of assets can be lower the debt. Bitcoin has no debt while a company like Amazon can have billions of dollars of debt.
Try thinking about this a bit more: what do you have if you buy a share of stock? What does that company own, what is its ongoing cash flow, etc. Now repeat the same thing for Bitcoin and notice how the answer is “nothing” except for the possibility of getting someone else to buy your coins.
That's the difference: there's no plausible reason to think that people are suddenly going to stop shopping online or using cloud computing. The price isn't going to suddenly tank because other people will buy into a popular company which has shown it can reliably run profitable businesses.
In contrast, nobody needs Bitcoin for any reason — we all have alternatives for currency, value storage, etc. which are cheaper, faster, and easier to use and almost nobody as a requirement that they buy Bitcoin. If some web3 play actually comes up with something normal people want and they all switch to Ethereum, there's no floor on the price. Unlike Amazon, there's no revenue stream which can be used to pay dividends or buy shares back when the price falls.
Another way to think about it is to ask who'd notice if it's gone. Amazon disappearing would disrupt business all over the world in multiple industries, and that cost of switching provides a lot of inertia. Bitcoin is mostly used for speculation and the vast majority of the fraction of transactions representing real economic value have easy replacements. When the switching cost is that low, there's little pressure to stay. Even if you really believe cryptocurrencies are the future, there's no law of the universe saying it's going to be this one rather than the many drop-in replacements.
True, but it also burns many TWHrs of electricity everyday. Also I doesn't have any revenue.
If you look at it like you would look at a normal company, then it would be a terrible purchase. A company that just burns cash for no reason and generates 0 revenue
The three issues with that are 1) liquidation preferences, 2) the fact that normal people can only afford to hold an infinitesimal amount of Amazon stock, and 3) (basically) only common stock is available for purchase by normal people. This means while that's technically true, unless you're, eg Jeff Blackburn, you ain't getting shit if Amazon were to close shop and return the money to investors.
Let's say you're holding 100,000 shares of AMZN. At ~$3k per share, that's some $300mm in shares, but with 508.84M shares outstanding, that's a grand total of... 0.02% stake in the company. In an unlikely fire-sale of the company and returning value to shareholders, that could still be worth something, but it's a unreassuringly small number.
AMZN is a single ticker, there’s several orders of magnitude more liquidity in equities alone than all cryptocurrency combined. $34B of SPY shares traded today, and that’s a single ETF.
> That also assumes everyone could cash out at ~3275, but the reality is if selling pressure is higher than the buy side demand that selling shares will drive the price down as buyers would be able to continually bid lower. Eventually it would reach ~0 share price and effectively a 0 market cap.
This is wildly inaccurate.
People do, uh, buy whole companies from time to time. When they do, the price is at least close to the current market cap of the company.
Barnes and Noble had been publicly traded, but was taken private in 2019. The private equity firm paid about 140% of the market cap at the time the deal was announced.
What you care about is liquidity (can be roughly estimated from exchange data) and trade volume (much harder to estimate, in the face of endemic wash trading everywhere in crypto) - you care about movement of the asset and the movement of the money for it.
Velocity is a very important factor that critics of asset-wealth ignore.
When it comes to criticizing crypto-assets specifically, people just turn their brain off or are completely ignorant to how assets they respect work in order to hold crypto-assets up to a fictional higher standard. but even when articulating their standard its like "do they even know what they're talking about?"
for example, when comparing crypto assets to currencies, due to the "cryptocurrency" misnomer and skeumorph in the name, the illiquidity and relative few transactions in comparison to the marketcap seems like an important area to focus on, to them, while completely missing that currencies are broken down into 4 segments for this exact same reason. M1 being that tiny sliver used for transactions with M2 and beyond being illiquid allocations of the currency, the similarity of behavior ironically bolsters the currency aspect of crypto in what was supposed to be a criticism.
Many of these criticisms focus on the conversion to a fiat currency, and neglect the ability and reality of acquiring goods and services and investments directly with the crypto.
I see something like this over and over again.
These all factor into how one would go about valuing any particular asset. If a replacement for marketcap was sought after. But "dollars in over time" is not good enough, as it misses how liquidity can change at any moment, and misses the velocity of activity within any one crypto economy.
On the other hand, you can't buy all coins even if you pay the market cap..
For PoW coins there is. For every day in the coin's price history, multiply said price by the number of newly mined coins that day, and sum over all days.
Sadly, I don't know of any site that publishes such a metric, although the column "PoW Produced (24h)" of [1] shows the product of today's price and mined coins.
[1] https://www.f2pool.com/coins
Sum of daily price times daily emission on the other hand represents the total miner revenue; how much they would have made if they sold their mined coins as soon as possible (ignoring coinbase maturity for simplicity), which presumably upperbounds the total amount of money spent by miners on hardware and electricity.
Realized Cap isn’t perfect but it seems like one of the most useful attempts at measuring market cap so far. Of course “usefulness” depends on the question you’re trying to answer. Other factors can be taken into account, like the Free Float Supply: https://coinmetrics.io/introducing-free-float-supply/
Also keep in mind most of these calculations only consider on-chain transactions. Funds could be sitting unmoved on chain for years while being transacted many times per day on a second layer: Lightning Network, “wrapped” on another chain like Ethereum, or traded between participants on the same exchange.
https://messari.io/charts/bitcoin/mcap-realized
> you’ll find a bottomless well of weird, interesting and thought-provoking projects
I hope comment-think pieces like this aren't a norm going forward, as that was pretty brutal to read... "Molly White: so brave." This comes off as Twitter-zens getting together to criticize an insular, tribal world not too different from their own. The worst part of online culture is the snark. For what it is worth, much of the debate on crypto comes from people new to the space, and the long standing critics. For a lot of folks in it for longer, they've given up on the debate as the same arguments get recycled every several years.
That aside, those two quotes "get it," and I was surprised to see them. Crypto has turned into meme culture by and large. But, the tech and design considerations behind btc comes out of one of the most impactful techno-ideological groups out there - the cypherpunks, with a strong helping of post-2008 anger included. btc and notable other parts of crypto, and supporting technology codifies that group's view of the world: permissionless, trustless, private digital action. This is the area to understand when studying crypto.
They viewed it as critical to build three capabilities in digital interactions: private browsing, private comms, private spending. Well, they slowly built all three - Tor, PGP/consumer encryption, and then BTC. Tor and consumer access to encryption has had a tremendous effect, even beyond intense privacy circles. BTC is newer, but what are the odds it won't do the same? Judging by history and cypherpunk movement, it seems silly to ignore it. '08 wasn't too long ago, and not much has changed in the practices that caused the crash. BTC still remains a/the only warts-and-all viable way out of that system.
For what it's worth, here is how I place a value crypto[0]
[0] https://news.ycombinator.com/item?id=30439891#30441946
[1] https://news.ycombinator.com/item?id=30599612#30602787
Can't blame them.
Crypto companies are overfunded right now and don't have that traditional big corp gatekeeping going on.
Also, many younger people never had that sweet dotcom experience.
So, why not grab a swash of nice investor money in a still crazy industry?
I feel like I live in a world where a huge train wreck is getting set up. I would like to follow along but it has gotten to the point where I can't get myself to read many of these 'News' stories about a new crypto adventure. I only have a little news reading time in a day and the typical article about NFTs or whatever leaves me feeling assaulted by a hype machine. But I can peruse web3isgoinggreat and stay abreast of what is going on.
Molly obviously has an opinion about the future of blockchain money but her comments all seem factual and fair to me. I'm pretty sure I would read her site even if I were on the other side of the argument.
It's been a great resource to confirm that I'm not falling for the most obvious scams (like NFTs or BNB chain scams which constitute a majority of web3isgoinggreat posts) nor investing in easily exploited projects. She perhaps inadvertently helps the cryptocurrency space by pointing out scam artists to avoid working with. There is a world of good going on outside of the typical bored ape garbage in the cryptocurrency space. You would be getting a raw deal if relying solely on her for cryptocurrency information.
The site is probably the most neutral crypto view out there, just because the author has no perverse incentive
"Most neutral" is a weasel word and incentives aren't solely monetary. The author not having any obvious incentives is not the same as having no perverse incentives.
When they start grappling with someone in the same "weight class" (rather than some NYT author who has a journalist's level of understanding) and open themselves up to rebuttal, then "most neutral" might start to make sense. As it stands now, it's just preaching to a choir of crypto skeptics.
I am not saying that she is perfectly neutral. That is not possible. I am just saying that the most neutral source of information on crypto that you can find often comes from sceptics, just because they aren't the ones being paid to lie.
re: https://en.wikipedia.org/wiki/Crypto_naming_controversy
and (of course) this: https://www.iacr.org/meetings/crypto/
I wish that lazy people did not overload this term.
You mean like how you just used the programming definition of "overload" that you won't find in the dictionary?
There’s a few big ones, for example, filecoin right now has created a commodity market for storage that is currently 10,000 cheaper than S3 in some instances. (See file.app for stats)
But realistically, the interesting projects are very small and hard to find.
However, scams and ponzi schemes, by their nature are very public, easy to find, and have lots of people talking about them (often for financial gain).
Everyone building anything sane is so tired of having to explain that their thing isn’t a ponzi, isn’t an nft thing, and isn’t shilling proof of work, that they don’t post to hacker news, and so they exist outside of your bubble.
Crypto is like the story of the blind scientists studying an elephant. The first one touches its trunk and says “it’s a snake!”, the next one touches its tusk and says “it’s a spear!”, the next one touches its side and says “it’s a wall!”. None have the correct answer, because no single party has a full view.
The crypto skeptics are as irrational as the crypto optimists: firm believers in their own view, based on an incomplete information.
Bitcoin is obsolete technology at this point. It's continued existence does more harm than good to the cryptocurrency space because everyone gravitates towards it instead of better projects.
Of them, only MacOS implements POSIX fully. Windows doesn't. Linux implements a subset.
Windows isn't compliant, and "compliant through WSL" doesn't really make it compliant.
So that makes me right. Your opinion may differ, of course.
This is why Monero today is useful for tech-savvy people and motivated black-market buyers/sellers, but we will never see a user-friendly Monero market for the masses.
First of all, 63 PB is nothing in terms of cloud storage, so I wouldn't exactly call it a commodity market. Also, I doubt that Amazon is making 99.9% profit margins, so it's more likely that miners are just subsidizing the cost of storage to speculate.
Not sure why you would compare it to cloud storage, because it's not. Storing files in Filecoin is more like making deals with people who offer space on their hard drives (which as far as I know, doesn't exists besides Filecoin). It also doesn't make sense to compare it to something like S3 as again, it is not cloud storage.
But I never said it was "free hard drive space", I explicitly mentioned "deals with people who offer space".
No matter where the data is ultimately stored (in a data center or not), the method for you getting your files to X is not the same in Filecoin as in S3. With S3 you simply upload your file to S3 and you're done. With Filecoin you need to first make a deal with a miner, then you use that deal to store files within the deal you've made, which is vastly different.
I suppose its the difference between going to a garage sale vs corporate dept store, but at the end of the day what is the difference in the product you are getting?
Yeah, of course, everyone knows this, no one thinks it's some magic storage. That's not what I'm talking about.
The difference is in the interface on how you get your files to some place. With S3 you simply upload the file, and Amazon stores it for you. With Filecoin, it's simply a protocol that allows you to browse everyone who is compatible with the Filecoin protocol, then you make a deal, then you use that deal to upload files. It's like there are many operators like Amazon providing a S3 interface, but first you need to find one you like, then strike a deal.
The workflow is vastly different.
Not seeing the difference.
The people who pay full cost are the customers who are so small that its not worth the cloud vendors time to care about.
You don't just subscribe. You negotiate and haggle. Contracts exchange hands. Humans are involved on both sids. Its not like there is a fixed price you just pay.
In the end, users are still writing contracts with individual storage providers, each of which has their own degree of experience, expertise and proven service history.
Obviously, the Filecoin community is working on improving many of these, but costs will certainly change as Filecoin evolves closer in functionality to s3 and other cloud providers.
There is a product that is using it for identities already: [1][2] I can see businesses using ENS or similar solutions as a way to replace those long hexadecimal names into something readable, so that say; merchants can use it for users to donate / pay towards verified names e.g: (myshopname.eth) and not accidentally pay to a random address like 0x123..cdef.
I won't be surprised to see even reputable payment services like Stripe, BitPay and Coinbase Commerce use something like ENS for the verification part and do the same thing in the future.
[0] https://ens.domains/
[1] https://www.skiff.org/
[2] https://www.skiff.org/updates/skiff-ens
Additionally, with NFT tickets you can add utility to them after the event. "You went to my concert, now you can get into a special channel on my discord/get early access to my album etc". These are things which are easy to do with NFTs that are operationally complex or expensive to do with conventional tickets.
This is one of those use cases which sounds super cool but when you think about it, doesn’t really make any sense. I mean, maybe I’m just an antisocial person, but why would I want to be put in essentially a group chat for every person attending the Screaming Monkeys Band Tampa 11/23 concert? Early access for an album? You mean, the album you already presumably just heard… at the concert?
As for buying an album you heard at the concert, yes. If you like what you heard at the concert, why wouldn't you want to hear it again? People listen to music more than once per tune.
You may not see these things as a benefit but a lot of people do.
Unless you are meaning that the artist performed a new album at this concert, now I get to buy it ahead of its actual release because I attended a concert. This makes more sense logically and is probably what you meant, but it seems like a very specific and even one-off use case. Not to mention that, due to torrents, once this “early access” album is unlocked with a token, it’s practically going to be unlocked for everyone because other people aren’t going to wait and at least one of those token-ticket holders is going to seed it.
> you're in a fan community where it's ok to be a fan and people aren't going to criticise the fact you like this particular band
I suppose this is similar to a forum but membership is gated via purchase of a token-ticket. It’s an interesting use case for sure, but in my opinion is unnecessarily financialized because now I have to buy a ticket to the artist to join a forum/subreddit?
This doesn’t even solve the fact that if the artist doesn’t offer concerts in your area or even country (eg South America), it doesn’t really matter that you have all of this decentralized and distributed technology gating things up because the actual point of centralization, the artist, isn’t touring where you live.
“No not all forums, this would just be an extra VIP forum.”
I guess, sure, this is a technology which enables a VIP forum. I am not sure how useful, popular, appreciated, etc. those are, not to mention the fact that you can already implement that without tokens by requiring unique ticket serial numbers and then you don’t have the problem of everyone’s membership to this VIP forum being public knowledge (as is the nature of the blockchain), but fair enough.
NFT wrapping as a service already exists.[1][2] In beta.
[1] https://toniqlabs.medium.com/wrapped-nfts-8c91fd3a4c1
[2] https://wrappednfts.com/
Your acquaintances could still be phished, scammed, funneled, whatever, into buying fake tickets and the takers at the gate would still refuse them.
Supply chain I am not even sure why you would want it. NFTs don't prevent false data being input into the system. it only "protects" against falsification after the entry is made, which email does as well.
> Seems like it would be economically viable
why?
As digital entities, a door is also opened for various interactive / programatic ways of using said tickets that are not possible with a private database and lack of incentive to improve the status quo (Most of the established incumbents have had years to improve, but don't until threatened by an emerging technology).
Another example off the top of my head:
* An anti-scalper lottery where a portion of the tickets are reserved for accounts that have owned a previous ticket for an event in the last twelve months during the run-time of said event. Let's say 80% of the ticket pool, and the remaining 20% is the free-for-all and any unsold tickets are sold free-for-all as well for the last week before the event starts.
> otherwise everyone will know that the organizer is not acting legitimately
Because this has clearly stopped serial rugpullers like Jake Paul. People no longer invest in the NFT projects that he shills right?
And also there is nothing wrong with overbooking, because at least a few people are going to no-show. If the organizer is not able to accommodate you, you are given a refund.
This anti scalping tech is not even related to crypto currency. It can be implemented even more easily in a normal ticketing system with KYC. The fact that people don't do it is proof that it is easily defeated. With non KYC crypto accounts, the accounts themselves could be traded, making any account based tech pointless.
Finally, most of this is so niche that I have doubts that even if all this was true, it still wouldn't result in something successful.
That's not a real problem.
Most businesses will have a problem with anyone being able to look them up on etherscan and see their entire transaction history and account balance.
I'm a fan of Handshake [0]. The project raised ten million of venture capital money and gave it away to free software developers [1].
It's an attempt at a decentralised DNS root zone, a replacement for icann. It would also obsolete certificate authorities: certificates would be guaranteed by the blockchain, under direct control of the respective domain owners.
[0]: https://handshake.org/
[1]: https://handshake.org/grant-sponsors/
Its too early!
I mean after all, we are only 13 years in.
Or: there is a lot of bullshit but the interesting things are outside of your echo chamber.
But then never link to such counter examples. At best people talk about filecoin, which does pass the bar of not being a literal scam, but still makes no sense from a product-market fit (storage has 3 metrics to judge by: price, retrieval latency, reliability. Filecoin is order of magnitudes worse than competitiors on all metrics).
I don't think i am irrationally biased against bitcoin & friends, i actually think the original paper was quite ingenious. However its been over a decade - we're well past the "benefit of the doubt" stage and into the "put up or shut up" stage when it comes to cryptocurrency.
This happened primarily in a matter of hours. In cash. Across borders. Without being subject to sanctions or restrictions by any country.
It may not be your use case, but it has definitely "put up".
What happened here is a wire transfer, not different from me sending money from my bank account to someone else bank account. Just with two additional transformation steps (make money into whatever crypto, make whatever crypto back into money).
I dare you to describe a method of wire transfer to Kyiv that works in that quantity and timescale and is practically usable by the recipient that quickly and cannot be blocked by your local government's policies.
There simply isn't anything close to that. People that think that this is the same as a wire via a regulated bank are ignorant of the specifics of each type of payment.
Cryptocurrency is indeed cash, and is useful the same way cash is useful.
The regulations exist for a reason. The reason crypto do not have them is because there is no quantity.
Not because it is magically immune to existing in societies
Without the ability to create and control chokepoints like banking institution, it may be impossible to stop people voting with their feet when it comes to international crypto transfers. Especially once people figure out what privacy preserving designs work in practice.
Given the whispers around unbanking political protesters, at some point it may become necessary to deal in crypto to have a political opinion. They can't arrest everyone.
Any anonymous chains like Monero will be blacklisted and only exist in an island where its economy is limited to certain illegal commodities, with the off ramp to wash it clean complex.
I don't want some unknown group of Crypto Bros completely outside my control running the economy of my country. At least in a democracy the people have some control.
'Yes it does, I got money to refugees when it was otherwise impossible.'
"Well... you shouldn't be able to do that."
So the majority of crypto donations were from Ukrainians on Kuna exchange; hardly a prime example of global crypto's good will. Also $100M is kind of small when you consider it next to the $14B congress has promissed to Ukraine. Then consider the total $1.5T sticker price of the congressional spending bill that $14B was a part of and it all seems insignificant.
In short we can and should give more to Ukraine.
>In short we can and should give more to Ukraine.
And this is a way to give direct aid, something you ostensibly want, and yet you're stuck saying crypto doesn't count, somehow.
It seems a less epicyclic approach is to just accept that this is a valid use case rather than finding a way to out-argue it.
Russian hackers demanding ransom payments in bitcoin—thereby circumventing economic sanctions—now that is a legitimately illegitimate use case for crypto.
PayPal requires identity and permission. I am barred from using it, for example.
No barriers to me donating to Ukraine via cryptocurrency.
What they are asking for is more sanctions (which the Crypto utoptia is supposed to make impossible) to try and force the hand of a mad dictator without ushering in WW3.
Crypto is barely a footnote.
I’m not sure why you are barred but if I sent you crypto you’d probably need verification to withdraw it to fiat as well.
Sounds like the real problem is having RUB.
> No barriers to me donating to Ukraine via cryptocurrency.
In this case you're not starting with RUB, so you're solving a different problem.
I think most critics of crypto come into the conversation with a "crypto is bad, and so I must find ways to reinforce this belief", and it's relatively obvious that the critic doesn't have the perquisite knowledge to craft a critique that can be responded to easily.
Specifically, a critic might say "the set A is bad". The critic is under the assumption that the set A is small, perhaps a few items, and they've seen the majority of them. But the "defender" knows that the set is hundreds of thousands of items, but still has only seen a few of them.
The critic operates under the assumption of maybe 4/5 items are bad, and the defender is operating under the assumption that 4/100,000,000 are bad.
So when a critic asks you to link to projects, there's a problem: even if the defender shows 100 projects, and the critic rejects all of them, then it doesn't change the defender's position, because 104/100,000,000 is still a small survey.
Sane "defenders" don't need to disagree with the critics on their points. They can differ primarily in seeing a much, much larger, unexplored search space.
If you assume the space has been fully searched, then its safe to stand back and critique. However, many folks conducting the search see much farther than you do, and see the entirely unexplored space as quite large. And so, it’s reasonable for the defender to not want to engage in your risky position, that assumes snake eyes for the next 100,000 dice rolls.
If you see how large the unexplored search space is, then it sounds ridiculous to declare the entire thing “done and bad”. It’s the same reason why you may choose not to engage with the flat earther. It’s hard to engage with a position so disconnected from rationality.
That said, there’s plenty of people in crypto who are equally disconnected from reality, either because they too only see a small search space, and have declared the contents “good” with little examination, or because they see the large search space and assume all dice rolls will come up as 6’s.
Those folks tend to create a cycle. Folks with no opinion see crazy crypto person, and develop into their own crazy anti crypto person. Neither party is acting rational, because both have claimed certainty with extremely little working information.
That said, there's other projects that are worth while, here's some to add to your N:
- https://strangemood.org (decentralized competitor to steam; this is what I work on)
- https://www.helium.com (incentive layer for the LoRaWAN network)
- https://tea.xyz (new homebrew)
- https://handshake.org/ ("really" decentralized DNS)
- (Compound / Aave / Solend) (decentralized loans)
> still makes no sense from a product-market fit (storage has 3 metrics to judge by: price, retrieval latency, reliability. Filecoin is order of magnitudes worse than competitiors on all metrics)
We use Filecoin and IPFS and have found solutions to these issues typically, and are happy "customers". It's also worth noting that we _can't_ use S3, or traditional cloud hosting, which therefore adds a new metric for us to judge storage on: decentralization.
Funny. My usual assumption is that if someone makes an argument that i don't have a comeback to, its that i am wrong. Typically lack of knowledge makes it easier, not harder to respond.
Hell, its things like this that make crypto sound like a cult. I.e. that the primary failure of doubters is that they haven't been suficiently indoctrinated and if they just let our lord and saviour satoshi into their heart they would see the light.
> The critic operates under the assumption of maybe 4/5 items are bad, and the defender is operating under the assumption that 4/100,000,000 are bad.
This isn't a numbers game. To show "crypto" is a good approach, you have to show some generic ideas that are useful in multiple contexts. Nobody cares how many failed projects there are. Its the successes that matter.
Right now you basically have "currencies" if i am being generous. Everything else is stuff that doesn't make sense and would have zero adoption if not for the massive hype train.
> If you assume the space has been fully searched, then its safe to stand back and critique. However, many folks conducting the search see much farther than you do, and see the entirely unexplored space as quite large.
I don't think anyone believes this.
If your position is that the crypto space is currently useless, but its possible that someone at some point may make a breakthrough which changes things, i think most critics would agree.
The breakthroughs that are needed to make things interesting are even pretty obvious. E.g. Efficient (much beyond the current generation) general purpose zero knowledge proofs of computation, efficient fully homomorphic encryption. If these things happen, i would find the space a much more interesting one. However these are hard problems - progress is being made but we are still nowhere close. Until then its not an interesting space.
Its sort of like if someone was doing things that required fast solutions to np complete problems, and countered criticism by saying we dont know that np!=p, maybe someone will find an algorithm. They are not wrong, but they aren't compelling either.
> a bunch of examples
Seem mostly about doing things you could just as easily do without blockchain. Except maybe helium which does sound like it has a story for why it needs to use these technologies.
> It's also worth noting that we _can't_ use S3, or traditional cloud hosting, which therefore adds a new metric for us to judge storage on: decentralization.
Genuinely curious - why not? Is it just for ideological reasons or is there an actual use case preventing you?
Ownership requires decentralization.
In our case, we can't make a "Steam that's owned by game developers" if the listing information (the screenshots, the titles, the descriptions, the game files, and so on) are hosted on AWS.
Ownership means that, if the original creators were to walk away, the asset would still exist without the need for the original creator.
This is (maybe) a new business model: take something that was previously a service, turn it into an asset instead.
In a "service", the original creator operates the product. In an "asset", the original creator does not typically operate or control the product. So to turn a service into an asset, you "decentralize" the operation of the product; typically via a commodity market which drives the price down and disconnects the creator from the original product.
As a real world example, take cars. Imagine if, when you purchased a car, you paid a subscription for your car service. Then someone came along and said "hey, you should just be able to buy a car and own it". Critics argue "but then who would fix it when it breaks? who will fuel it? There's no way anyone could provide you these services better than Ford. This 'car ownership' must be a scam." And sure enough, many people come along selling you a pink slip for a car, claim there's only so many to go around, and people speculate on the pink slips. The critic then argues "see, all this 'ownership' stuff is just a scam! Everyone's just buying the pink slip to sell to the next sucker." In fact, the pink slip sellers never made the car, and disappeared with the money. The speculators and scammers are indeed speculators and scammers; but they don't change the underlying point: it's not unreasonable to try and sell the car. In order to make the car an asset, you must "decentralize the car"; by ensuring anyone can become a mechanic and anyone can sell fuel to the car.
In Strangemood's case, we make a decentralized marketplace for software licenses, that's owned primarily by the sellers (ie: decentralized Steam). If Strangemood stored files on S3, then whoever owns the the AWS account is the only operator, and so the product is a traditional service, rather than an asset.
> In Strangemood's case, we make a decentralized marketplace for software licenses, that's owned primarily by the sellers (ie: decentralized Steam). If Strangemood stored files on S3, then whoever owns the the AWS account is the only operator, and so the product is a traditional service, rather than an asset.
I'm a but confused here on the ownership - if its the purchaser or the seller who is in control. Filecoin isn't free so i assume one of these groups has to be footing the bill.
Wouldn't this goal be equally served by just hosting it in the sellers s3 bucket (or webserver, or torrent, etc)? Someone still has to pay for and be in control of the filecoin "instance" (probably not the right word), what's the difference between that person doing that vs running their own server.
Of course! Feel free to send me an email if you'd like to grab virtual coffee and talk more. I'm evan [at] strangemood [dot] org.
> I'm a but confused here on the ownership - if its the purchaser or the seller who is in control. Filecoin isn't free so i assume one of these groups has to be footing the bill.
Ah! This is what DAOs are for.
A percentage of every sale goes to a community treasury (a wallet). That wallet is collectively controlled by a token. That token is minted to sellers upon purchase, so the sellers control the treasury.
The treasury acts as a "payer of last resort". It pays for Filecoin deals basically. It also can pay maintainers of open source tooling through decentralized Quadratic funding grants (see https://wtfisqf.com/).
Rebase (the company that makes Strangemood) peer's the store's small-file metadata (titles, descriptions, etc) as an additional backup. We don't have to do this, but it costs us about $0.15 per year to do so, and it makes the network faster and safer.
Realistically, DAOs might be a janky solution. I'd love to see payment of file store be included within the protocol itself.
But there's a few quirks of Solana that made this difficult. Specifically, you can't use more than 1024 bytes in a single instruction, which limits the scope of the program. This might be fixed in the future though.
Why, as a counter example, can’t a game developer/studio deploy a contract which allows people to mint a token in order to purchase the game?
This is roughly what Strangemood does.
But, Strangemood is built on Solana which has different primitives, and so operates a bit differently.
How long did it take for gold to become a store of value? I am guessing millenia.
This.
Please don't discount that a large number of us do in fact understand what the elephant is, in every inch, and shape our views as a result. It's extremely patronizing to have informed criticism dismissed this way.
They purposefully take ungenerous interpretations of statements to build straw man arguments then accuse the article of making straw man arguments. They bring up studies and articles contradicting claims in the piece then dismiss the studies brought up in the piece as being ambiguous because they don't have more rigor. Often, the comments are nothing more than snide remarks deriding the claims without any citations while at the same time writing "citation needed" for various other parts of the article.
As I said, there are many fair points in this criticism but this critique, and other pieces like it, are, in my opinion, not really trying to pursue the truth, they're written to cater to an audience that wants to dismiss cryptocurrency outright.
Who knows if the larger cryptocurrencies will still be around in 10 years time due to those criticisms or will they just adapt and fit in to better use cases? I also dislike the hype around NFTs as them being a marketplace for JPEGs but not all of them are like this. Perhaps 90% of NFTs will crumble with only 10% of them still being around that have a use case.
Due to a few of them having some utility, I certainly won't dismiss the whole thing or the technologies behind them. Otherwise we will see yet another HN crypto post with the same comments and dismissals attached to them.
I expect for them to easily ignore it since they are convinced it will completely collapse in the future. I'm not sure why they find it very difficult to do this but even I also think the majority of the hype will collapse too due to regulations, but the technologies (including blockchain) will still live on.
Really shameful to present the obviously pro crypto piece as neutral or informational and I have only two explanations:
- ancient editorial staff approved it because they really don't understand crypto or
- there's some kind of market for front page real estate
But for most actual news it’s still worth the money, IMO, if you’re trying to stay informed and your focus is the US.
Also, whenever I start feeling indignant and thinking about canceling I check out the archive. Lots of great, great stuff down that rabbit hole:
https://timesmachine.nytimes.com/browser
Let's brainstorm what interest the CIA might have in crypto.
Absolutely there is. If you want an even clearer example, take a look at the front page of the Wall Street Journal under the “Editorial Staff” section. The “reporting” there is almost always some rich, more conservative guy who basically paid to get his post on the front page of a relatively dry, and even somewhat activist-oriented (eg Facebook Files) paper.
https://web.archive.org/web/20220219172535/https://twitter.c...
Note that non-clownshoes financial outlets, e.g. Financial Times or Bloomberg, expressly forbid journalists from writing about an asset they hold, except under appropriate editorial supervision.
Roose's present article is best viewed as his appeal to his bosses to be allowed to become a hodler.
The article mentions a "Let's Go Brandon" coin, personally promoted by Trump. Here are its current statistics.[1]
There's a huge incentive to hype crypto products. They're mostly zero-sum games, which means you need a growing supply of suckers to keep the thing going.
I'm into 3D virtual worlds, and the NFT clown car is destroying the potential of the metaverse. The 3D NFT worlds range from weak to very poor to nonexistent to total scam. Nobody in the NFT world is even trying to get to Ready Player One level. There is now someone selling virtual land in a 2D sidescroller.
[1] https://coinmarketcap.com/currencies/lets-go-brandon/