> Of course a technology centered around avoiding governance and banking failures will be centered in the countries with the most governance and banking failures!
The issue that I have with this perspective is that it doesn't actually solve the underlying problem - it just kicks it down the road. As soon as crypto becomes big in a country with failed governments and banks, it's going to become the primary target of those same governments and banks.
In the article Scott anticipates this response and writes
>Governments can take lots of actions against crypto. They can ban it. They can prevent banks from accepting it. They can search the blockchain to hunt down users. But governments take lots of actions against protests, tax evasion, and drugs, and those things still often succeed. The point isn’t that governments can’t ban a thing and send police after anyone who does it. The point is that there are only so many officers and detectives. If you make something too annoying to crush, the government will put in a half-hearted effort but mostly redirect resources elsewhere.
I guess I'm curious: what levers do you figure Western societies could deploy that'd be more effective than the Chinese approach? From my perspective, this state of affairs is a decent existence proof that fully eliminating cryptocurrency use is difficult even with access to authoritarian methods.
nb: above links don't include 2022 data and I couldn't quickly find that, so if that data affects the quality of the above argument I'd appreciate the correction
I like a lot of Scott 's writings, but this is a bad habit of his. If there's a point that contradicts his own, he'll pretend to address it while actually just skipping over it/downplay it's relevance.
"Governments can ban things but it frequently doesn't work" works directly against the idea that crypto is providing any value - because the argument it does starts with "governments can ban X but cryptocurrency will save us!"
You can't have it both ways: if cryptocurrency is the be all and end all of avoiding government censure of other activities, why would it not be a high priority to crush it compared to those other things? If it is not, then is it all that useful?
That's making a specific argument (which you are doing without supporting it in anyway).
I am saying you don't get to hedge your argument like this: crypto cannot be both an important part of evading government censure, and too small to be worth government effort to censure.
If someone wants to make the middle ground argument, make it, but you're starting from the position of government already engaging in significant regulatory interest in the use of cryptocurrencies.
as for hypothetical crypto underground economy, nobody has really explained how exactly you are supposed to convert those liberating coins into physical goods (that makes all retail illegal?). Which makes it not an argument but a very fuzzy dream.
The issue is it’s reliance on the somewhat centralized internet access which is controllable by governments.
Mesh and satellites might reduce this. Maybe even ham radio. You don’t need to send much data to send a crypto transaction so sending it using an audio modem on a low frequency is probably fine.
There are also crypto notes being developed which is an interesting development.
If you're in SV-adjacent circles, lots of people are throatily anti-crypto, to the point where they start seeing red when you mention crypto, and pelt crypto with the same anti arguments repeated ad nauseum. There are influencers who have sprung up whose entire claim to fame has been their negative coverage of crypto (a mirror to the shady crypto influencers shilling their shitcoins). It's not a big leap to see that as "infinitely hostile". So the title is just "I'm not 'infinitely hostile'".
Also, "bullish" is generally a financial term, and in this case may refer to "price go up" which doesn't seem to be the intent of the article. The article is stressing usecases not price.
I have not observed this “seeing red” at all. What I have observed, many times over, is “one side” needing to feel like the “other side” is seeing red. “Triggered.” “Tilted.” “Trolled.” “Got ‘em.” Etc. Very common, not limited to any one subculture.
Indeed. It’s very easy to project upon text comments whatever emotion you interpret. Another well-known phenomenon. It’s why so many people find things like Slack to be so problematic for nuanced conversation.
> If you're in SV-adjacent circles, lots of people are throatily anti-crypto, to the point where they start seeing red when you mention crypto, and pelt crypto with the same anti arguments repeated ad nauseum.
Oh I know just the type you mean. Of course, a type of person that is infinitely more annoying is the crypto evangelist explaining to you why they are making the world better because their startup is making it easy for grandma get in on the crypto revolution with her retirement fund.
Part of human behavior is rounding things off to the nearest whole value. Something is either good or bad. Either wrong or right. While recognizing the utility of that approach and conceding it's often a good strategy, rationalists look for ways where resisting that very human tendency can help us out. I think this is most true when talking about an issue of policy that will affect millions/billions of people, like whether crypto should be encouraged or discouraged. That's the origin of the extra phraseology you're noticing in my opinion: to distinguish between supporting something, kind of supporting it, being bullish on it, being certain of it, being skeptical, being mildly skeptical, etc.
To my ear, saying "I'm still bullish" rather than "I'm less than infinitely certain about X" is the weird sounding one, like someone's trying really hard to signal to me they know and care about stocks and investments and stuff. To be honest I don't and still get confused on which is which between "bearish" and "bullish".
Makes sort of sense, but "less than infinitely" doesn't really mean anything. You could be extremely opposed to crypto for all practical purposes and still be "less than infinitely" hostile.
The other phrases are also vague enough that they are not really helpful. If you're "mildly opinionated" enough about something to write a blog post about it, I'm starting to how much degree is actually meant with "mild". If to people are mildly opinionated about somthing, who does have the stronger opinion?
I agree that things are often complex and not clear-cut, but I don't see how trying to mush everything into featureless grey would help here to gain insight.
It's cool that the author is in this thread commenting too. I read the article before reading his comments in here, and "infinitely hostile" resonated with me on a personal level. I've been berated by certain friends for entertaining opinions different from theirs. It's hostility that felt unworkable to me, I don't feel like I can actually engage these individuals in conversation about topics such as cryptocurrency. I entered these conversations with some platonic notion of friendly debate where we'd share our perspectives, maybe point out where we disagree with each other, then walk away with better understanding of each others views. Instead, I felt like I got yelled at and interrupted before finishing 2 sentences, and overall I just want to avoid such an interaction again.
"Less than infinitely" to me made sense too, it's what I would've liked out of my friend on the topic of crypto or really anything where we don't see eye to eye. I don't want an "omg you're right what have I been thinking", but maybe "I don't know about your conclusions, but I'll consider what you said and maybe they'll change my mind or maybe they'll help me better form my own arguments."
I searched the article and comments for all three of those phrases, and the only time it pops up is in the title or in reference to it, so I'm not entirely sure what you're talking about.
My impression of the title is that the essay is a response to the largely maximally hostile stance many take towards cryptocurrency projects, and his attempt at moderation of that stance.
It's really not, you're just not part of the culture so you don't understand the lexicon, but since the lexicon still uses english words it's confusing to you.
It's the same thing with any sufficiently divergent dialect, you lack the context so you fill in meaning from your own context which is incorrect leading you to these conclusions. It's just linguistic compression focused on a cluster of common avenues of thought to make communication faster, easier and more precise when in those realms.
Presumably because the author feels that simply characterizing the anti-crypto position as bearish doesn't do justice to the animosity many people hold towards crypto. He's also not saying he is bullish on crypto currency, just that he doesn't think the frothing at the mouth hatred of it is justified.
It is just incredibly weird to be pushing a financial instrument where you think the key problem is "people are being mean about it on the internet".
Which is to say, this is just a propaganda rhetoric strategy: the opposition don't have valid points, they're just crazed by their hatred. Don't try to understand what they're saying because they're crazy and can be ignored.
It's rhetoric that's as old as arguing on the internet c.f. "DEC didn't fail because the products were bad, it was the MARKETING".
Which is...not true. The fact that not enough people wanted DEC products might be a marketing issue, but more likely is that other companies made stuff that they wanted more.
It's like a last, desperate grab that's deployed when the argument has exhausted itself.
> Why not just say "why I'm still bullish on crypto even though everyone says the opposite"?
The author's view is tangential to bull/bear in the financial sense. From the article:
> This post is emphatically not intended as a claim that crypto will go up more, or that it won’t go down a lot, or that there won’t be any more disasters or scams7. It’s a claim that aside from its going-up ability, crypto is still a set of interesting technological solutions to regulatory problems.
These terms make perfect sense to use if your audience is someone like the HN crowd. Show a hint of direct support for crypto around here, and it starts to sound like a Twitter thread against an antivaxxer.
It's group lingo like any other group. Probably initially develops as a useful shorthand for them to discuss things they discuss proportionally more frequently than the general population, but also quickly becomes a signal for who's in the group and who's an outsider.
> “Please explain how someone can be similar to a bovine in their relationship to crypto”
Oh, that's easy. When looking at the carbon footprint per unit calorie, bovine flesh, is much larger than vegetarian options. Same with water and land use as well. It's actually significantly worse for your health as well. There are practically no up sides to consuming beef, except the taste.
That's what it means when somebody is bullish on crypto: they want a currency that has little upside and is horrible for environment.
"Bullish" is a terrible word to describe his position, for one thing. Scott doesn't claim crypto will appreciate in price, which is the standard meaning of the word. Nor does he make the weaker claim that crypto is net good for society. He merely claims that crypto is sometimes genuinely good, without saying much about how the pros compare to the cons. So all he is really saying is "I hate crypto less than some other people, who see literally zero redeeming qualities", and his title gets that point across fairly well.
Definitely an in group vocabulary. This article is actually quite light on the lingo, but a couple other big ones are “a priori” and “update your priors”.
Basically an attempt at applying statistical reasoning to reasoning in everyday life. I don’t have a problem with the vocabulary as much as the way this group speaks: upspeak, overuse of “kind of” when they don’t mean “kind of” and a peculiar sort of thinking stutter when formulating a statement. It’s amazing how prevalent it is.
I think it's a kind of tone adjustment. Looked at charitably, it's a way to "soften the blow" of disagreement by phrasing one's contradiction in a less less absolute or certain way. Looked at less charitably, it's a way to disagree and still leave room to walk away (accusing one's interlocutor of unjustified hostility) if backing up that disagreement becomes too inconvenient. Either way it's a bit of a hedge, kind of like "it seems to me" or "some might say" in slightly fancier clothes. Personally I find it a bit smug and tiresome.
Having done some amount of business in Ukraine, I can attest to how hard it is to move money into that country. Crypto really solves that use case, provided that there's some trading inside the country as well as flowing in.
I wasn't super involved, but they (the office in Ukraine) liked getting USD and people who visited would often carry an envelope with cash in it when traveling for business trips from the US to there.
There was some other thing with using US based debit cards over there, apparently it was an easier flow to fill up the US accounts and have them use it over there than to do a bank to bank transfer.
Yeah, paper currency. It was important for the bills to be crisp, otherwise they'd trade at a ~10% discount. I don't know how crypto has changed things, I don't do anything related to Ukraine anymore.
That was the same in monte negro with euros. They only accepted crisp euros even though I had brought those from an actual EU country - they wouldn’t accept them. And that was their “official” currency
Fantastic piece. The space program analogy is particularly apt. People say crypto is a worse way to replace functions that already exist, like the space program inventing a pen, say. But the fact the pen can work in space is actually rather important. The fact that decentralized systems can't be shut down or centrally manipulated, is also rather important.
Other people covered it, but I happen to have a Fischer Space Pen on my desk right now so I'll take a shot. You don't want a pencil because bits can break off and make a mess, so you want a pen. The story with the Space Pen is that it has a pressurized cartridge so it works in space (I can't confirm whether other types of pens don't work).
Somewhat off topic, the Space Pen was researched 100% with private funds and both the US and USSR space programs bought them retail, in contrast to some of the stories floating around the internet.
I was reading with an open mind until I got to the section header
> Big Crypto Projects Are Very Rarely Scams
I mean, seriously? This is a month after the fallout of FTX, we have seen crypto projects in their net worths in Billions to get revealed as ponzi schemes in their purest meaning, and that's the best SA can offer up?
> If you split $1000 and invested it equally in all the top crypto projects of 2015, you would now have $25,400. If you invested it in the biggest cryptocurrencies by market cap of 2020, you would have $2,700. Stablecoins aren’t really an investment, but if you put it in the top stablecoins of 2020 anyway, you would have $964.30. Exchanges definitely aren’t an investment, but if you put your $1000 in the best crypto exchanges of 2020, I think it would all still be there (FTX wasn’t on the list; maybe it’s too new).
This is tired shill-speak (consider what happened if you "invested" in 2021 instead), to the point where I doubt if Scott Alexander himself wrote this or if someone offered him a large but undisclosed sum to write it for him. Probably as a damage control to the EA circles, who have undoubtedly lost a lot of faith in crypto as a follow up to the FTX fallout.
> If you split $1000 and invested it equally in all the top crypto projects of 2015, you would now have $25,400. If you invested it in the biggest cryptocurrencies by market cap of 2020, you would have $2,700. Stablecoins aren’t really an investment, but if you put it in the top stablecoins of 2020 anyway, you would have $964.30. Exchanges definitely aren’t an investment, but if you put your $1000 in the best crypto exchanges of 2020, I think it would all still be there (FTX wasn’t on the list; maybe it’s too new).
Footnote 4:
> The one big exception was FTX - I think people did think of it as one of the good ones, and would have included it in lists like these if it had been around a little earlier. But this is why I disagree with people who said it should have been “obvious” it was a scam - it was in a reference class where scams are actually very rare!
Your point being? If you search for the same query in 2021 as he does in 2020, you come up with FTX and Binance, both of which were decried to be sketchy at that time by skeptics. [1]
My point is, you can always pick your time frames arbitrarily to make any case that you want, and I can make the opposite case by picking my favorite time frame. Seems really sketchy that ACX is committing to this level of fallacy.
I’ve seen FTX being retroactively removed from review articles (Top exchange lists) and similarly for stuff like Luna. Crypto isn’t a space where you can afford to assume good faith.
This is almost point for point the evaluations Golumbria makes in "the politics of bitcoin" except reframed positively and with some distance from the "cyberlibertarian" vocabulary he uses. Probably because alexander is a cyberlibertarian.
> everyone around you will chant in unison “PONZIS 100% SCAMS ZERO-LEGITIMATE-USE-CASES SPEEDRUNNING-THE-HISTORY-OF-FINANCIAL-FRAUD!” It’s really quite impressive.
I didn't realise it had finally gotten to this point, I guess FTX was the final wake up call? I hope it's true because once hype is out of the picture so are the millions of vultures and it is once again possible to discern new and interesting ideas from the noise that saps our attention in this area.
The worst thing that happened to crypto is that the line went up too much before it was ready. I’m sure there are a few legitimate business ideas in there but it’s still 99.9% hyped up garbage that everyone treats as a get rich scheme
A significant fraction of crypto applications cannot work at scale without privacy-protected transactions, and the first major privacy smart contract on Ethereum - Tornado Cash - was just made illegal to use for Americans by the OFAC. The criminalization of privacy-protected financial transactions is the biggest risk that crypto faces AFAICS.
The need for law enforcement authorities to achieve Total Information Awareness over all private financial transactions stands opposed to a vision of ubiquitous electronic cash, with decentralized and peer-to-peer electronic transactions.
There is GNU Taler but whenever you see it being talked about on hacker news you will find comments that border on conspiracy theory even though when you look at the technical design of GNU Taler it offers more privacy than Bitcoin or Ethereum.
Apparently providing both privacy to buyers and following AML and income reporting laws at the same time is crossing some line because "the government is always wrong".
It is kind of like following the law is frowned upon in the cryptocurrency space which is why any competitor that can actually follow the law must be nipped in the bud.
I don't believe crypto users care about privacy except maybe when they use Montero.
You cannot comply with AML and income tax reporting, and protect privacy. If society is serious about privacy, it needs to abolish both the warrantless financial surveillance approach to crime fighting, i.e. AML, and the income tax that necessitates it. Otherwise, both cash, and its electronic corollaries, need to be banned to have the laws consistently and effectively enforced.
Those ideas should in theory be pretty easy to find:
It's the intersection of the sets of uses that (1) benefit from no government oversight, (2) absolutely need to have their ledger distributed and (3) perform better than whatever solution is currently used.
A lot smarter people than me have already concluded that the only use cases in that intersection are illegal.
You might argue that "it smells like tyranny then" and cite the transfer of value in and out of oppressive or failing countries, but that seems to be the single and only (and still illegal) use of crypto currencies.
The crypto defenders whose only argument is "JUST WAIT YA DIDN'T WAIT LONG ENOUGH FOR THE PROPER USES TO EMERGE WTFBBQ" - we've waited long enough I think.
The smart money is in crypto because autonomous smart contracts, subject to automated validation by software run by thousands of different people, are more reliable than humans acting on their own discretion, subject to their own integrity.
FTX, through its acquisitions, was technically "highly regulated", yet it collapsed. Several other centralized financial services, including Celsius and Genesis, collapsed.
In contrast, in this latest cycle, no leading DeFi applications collapsed or lost any customer funds. They operated flawlessly through all of the market turmoil.
They are all built on top of Ethereum. They operate without human intervention, providing exchange facilities, lending, decentralized staking, stablecoins... The basic primitives of an automated financial system.
I felt like I was in crazy town, trying to tell people that crypto is actually something that helps many people, always getting shot down with absurd dogma like "crypto has no use cases" or "gordon goner racist NFTs". People believed everything they heard from a blog (you know the one) set up specifically to discredit this entire class of technology by associating every dumb thing with its image as a whole. I've been Bitcoin-literate since I was a pre-teen (I'm early 20s now) and felt trapped. Bitcoin maximalists made me hopeful that at least Bitcoin specifically would be socially acceptable, but honestly they've got it wrong too. I was very delighted today to see Scott stick up for the concrete use cases that are out there. Vitalik Buterin seems fairly respected in the same space as ACX.
It's the curse of influencers and it's not specific to crypto. Influencers identify a vibe that works with their followers and lean into it, exploiting it for views and shares. Most of the time the vibe is only tangentially related to a much more complicated reality. But complicated reality is boring and vibes are fun, so influencers convince their followers that the vibe is true and the followers become galvanized along the vibe.
I've seen so many people quote a Youtuber as their source for a belief that it's crazy. Even when the primary sources are available. But that's the age we live in.
Realistically I think you're right; I probably have my conspiracy cap on too tight, but it's too perfect to me that the group of people who will soon need crypto the most are being socially incentivized to reject it now. I might have struck a nerve with the anti-crypto vibe enjoyers.
Yes, there's a lot of propaganda pushing this narrative with the ultimate objetive of completely prohibiting any sort of alternative currency:
- Conflating crypto with exchanges, or Bitcoin in particular with oportunistic scams.
- The complete nonsense about PoW being 'detrimental to the environment'. It's sad that even technical audiences fall for this at all.
- Speculating on its price has nothing to do with the use case, which is to transfer money without an intermediary. You certainly can, but it has nothing to do with the objective so any criticism about this is disingenous.
Bitcoin (and some others such as Ethereum or Monero) just work, and and has worked extremely well for over a decade. I was able to pay for hosting and plenty other services anonymously, to circumvent local restrictions when nothing else worked, transfer money to family abroad, etcetera.
And yes HN is extremely vulnerable to propaganda due to a mixture of lack of common sense, lack of life experience and snobbery.
Wtf is this graph where countries are rated between 0 and 1? This seems lying with statistics territory.
That said, i agree with the author that original bitcoin works well enough in places where modern banking is dysfunctional. Its everything in the crypto world after that point i have a problem with.
I also agree that most crypto projects more err on the side of really really stupid and not outright steal your money (although that exists too).
Basically, i agree with all the authors premises and still think crypto is on the whole terrible. I suppose the issue is that the author is arguing against a very weak strawman - nobody is literally infinitely against crypto.
It's explained in the graph text. It's per capita, adjusted for purchasing power parity, scaled so the country with the most usage by that metric is 1.
So, like individual Indians use 37% as much cryptocurrency as individual Vietnamese (adjusted for PPP).
It's a good way to show comparatively where cryptocurrencies seem to have some utility as measured by the fraction of an individual's financial power.
But that is potentially wildly misleading given the author's position. You have no sense of magnitude.
For example if vietnam had a single crypto user, and nobody else in the world used it at all, you would have a similar skewed graph, but clearly it wouldn't demonstrate utility.
Such a graph could be misleading, and I agree that there's no information about magnitude.
But I don't think it's actually misleading in this case, and we have other information available that clarifies that there is not a single Vietnamese cryptocurrency user in the world (and, I guess, 0.37 of an Indian user...?).
There is a measurably large amount of cryptocurrency activity in the world, but most of our (or at least my) awareness of it is as a western techno-futurist/financial/cryptobro phenomenon. This graph is really useful in demonstrating that that's not a very accurate view.
It would be very bad if it were the only datum on cryptocurrency the reader had. But that's not the audience of this article.
Particularly since the New York Times article he links to talks about crypto expats flocking to Ukraine because of lack of regulation:
> Ukraine has already lured some Americans and Brits in the crypto industry, and they didn’t come because they’re sticklers about the rule of law. Instead, they rhapsodize about everything from affordable restaurants to unhinged raves. Better yet, the government has not a clue about what they are doing or how much they earn.
> “There are no rules,” says Mr. Chobanian, with an odd kind of civic pride. “Well, there are rules, but you can break them. It’s the perfect balance between absolute anarchy and possibilities.”
**
> Even without another revolution, Steven Hanke, a professor of applied economics at Johns Hopkins University and a vocal Bitcoin skeptic, argues that the combination of Ukraine and crypto sounds like a fiasco in the making. Most studies he’s seen have found that roughly half of all Bitcoin transactions are for some illegal purpose. To him, this is not an industry that Kyiv should target with enticements.
**
> “I like that it’s corrupt here,” says Mr. Sawhney. “Here, we get to play the game that only elites in the U.S. play. I don’t need a lobbyist. I need to pay someone at the border, I can. I need to pay politicians, I can.”
Framing it as just being about people trying to escape a broken financial system and nothing more ("Do Vietnamese people love trading monkey gifs? Are Ukrainians especially susceptible to Ponzi schemes? Is Venezuela laden with techbros?") is extremely misleading.
1) The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams. Most skeptics would say that the use cases are overstated and the incentives to pump-and-dump are so high that an unacceptable rate of scams was inevitable. If you're going to write an article to refute skeptics, refute the actual argument.
2) The author strongly implies that skeptics are skeptical because they have fallen for scams (by "clicking on spam emails"). Insulting the intelligence of your opponent is also not a compelling way to refute an argument. I have always been skeptical, I have never been scammed, and I don't think I'm unique.
3) The author's research found that the scam rate "seemed low." Molly White is probably the person working harder than any other to track this scam rate, and her "grift counter" currently reports losses of over $12 billion.
I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back.
We've just created 2 million dollars of daily trade volume, err, economic activity.
When looking at value stolen by scammers, what matters is not the daily trade volume, what matters is how much money was put into the ecosystem [1], and what fraction of it was stolen.
This is the rub. If you’re using mcap and mark-to-market rates for total value stolen, it’s completely reasonable to use the same rate to evaluate the size of the system.
To be clear, stolen crypto is true economic activity, right?
Edit to downvoters: I actually meant it unironically. Thiefs often want to "cash out" as soon as possible. I'm not saying it's a net good, but it feels "real and gritty" as opposed to many other crypto transactions.
>>I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back.
Uniswap liquidity providers charge a fee for every swap, proportional to the volume swapped, so faking volume like this would be prohibitively expensive.
I think the main difference here is that your dog/cat don't have markets that they can be traded in relatively easily. There aren't pools of liquidity for which they can be exchanged. Also, your dog and your friend's cat aren't like anything else. The example you constructed is superficially more similar to the NFT market anyway.
If dogs and cats were fungible, and there was a market for fractions of both that could be exchanged in and out of, and contained hundreds of thousands of USD in standing liquidity, and the value of your dog was $1 million, and the cat was also $1 million, then sure. Swapping the dog for the cat is approximated by $2 million to the same accuracy that many assets (houses, stocks, etc) are described in notional value.
Sure—the point is, $12 billion of transfers being attributable to exploits over several years is quite small considering crypto markets are slinging an order of magnitude more than that every 24 hours.
That‘s a bit like calling credit card payment fraud negligible by contrasting it with all monetary movements, including HFT trading volumes and interbank payment flows.
Re 1) That may be the case but opinions are often worded as absolutes (crypto is good/bad) so while the writers themselves may not be infinitely hostile the wording of their articles can be. At least, that’s what I suspect the point here is?
As recently as just a few days ago the European Central Bank did a look at where things currently stand with crypto and among many other issues they raised they mentioned that in their view: “cryptocurrency is rarely used for legal transactions”
"If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation)."
Well, I _might've_ used it for a few illegal transactions. Like purchases of prohibited substances.
(also some legal ones, tho)
It's a feature, obviously. Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons?
Ofc it's bad from the perspective of the people who want control over you. Good.
> Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons?
Because some illegal transactions are illegal for very non-dubious reasons, but crypto doesn't make this distinction. (Crypto made ransomware a profitable endeavor.)
Sure, but crypto allows these because it's not as easily controlled by the governments as other things.
Same with cash. Which governments increasingly constrain, for this reason.
Yet there are not as many people commenting enthusiastically about wanting cash to disappear / fail, or suggesting similar measures against it. (KYC, AML...)
Why is cash okay, but _digital equivalent_ is not? When physical transactions are less and less relevant? Why make the decision to basically leave these advantages in the past?
I don't think preventing ransomware attacks or financing terrorism is worth losing the capability to transact freely online. Potential totalitarianism is way more scary than 9/11.
Quote from a book, "Manna":
> With the arrival of robots, tens of millions of people lost their minimum wage jobs and the wealth concentrated so quickly. The rich controlled America’s bureaucracy, military, businesses and natural resources, and the unemployed masses lived in terrafoam, cut off from any opportunity to change their situation. There was the facade of “free elections,” but only candidates supported by the rich could ever get on the ballot. The government was completely controlled by the rich, as were the robotic security forces, the military and the intelligence organizations. American democracy had morphed into a third world dictatorship ruled by the wealthy elite.
> Ultimately, you would expect that there would be riots across America. But the people could not riot. The terrorist scares at the beginning of the century had caused a number of important changes. Eventually, there were video security cameras and microphones covering and recording nearly every square inch of public space in America. There were taps on all phone conversations and Internet messages sniffing for terrorist clues. If anyone thought about starting a protest rally or a riot, or discussed any form of civil disobedience with anyone else, he was branded a terrorist and preemptively put in jail. Combine that with robotic security forces, and riots are impossible.
> Why is cash okay, but _digital equivalent_ is not?
Because exchanging cash requires physical presence. The introduces friction and requires putative criminals to take risks that they don't have to take with crypto, which makes crime less lucrative.
>Same with cash. Which governments increasingly constrain, for this reason. Yet there are not as many people commenting enthusiastically about wanting cash to disappear / fail, or suggesting similar measures against it. (KYC, AML...) Why is cash okay, but _digital equivalent_ is not?
Crypto is not a digital equivalent to cash no matter how much you say it.
I can pay my tax organisation with cash. They explicitly list the acceptable forms of payment. I cannot send them any sort of crypto currency. Cash is also legal tender. There are times where not accepting cash could have legal consequences. I can reject crypto as much as I want.
I can't help but think these lines of argument are intentionally deceptive. If you just repeat it enough times, other people will as well.
> Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons?
Straw man based on a made-up quote. The article does not mention "useful for illegal transactions" anywhere. The article mentions legal transactions in only two occasions:
- "Bitcoin is rarely used for legal transactions"
- "Bitcoin has never been used to any significant extent for legal real-world transactions."
If you feel the need to refute what the ECB claimed, show where bitcoing is used in any significant extent for legal real-world transactions.
Not even El Salvador, with their push to adopt Bitcoin as the nation's official currency, Bitcoin transactions saw any significant uptake.
Buying drugs is not the only illegal thing you can do with Bitcoin though. People who do not understand what bitcoin even is, for instance, are frequently talked into using bitcoin "atms" to send money to scammers. It happens all the time. Those are not legal transactions.
Not being allowed to buy/possess drugs is a stupid law, but preventing illegal transactions in the public financial system is a feature, not a bug. If you want to buy drugs, do it the old fashioned way - you know, the way society did it for thousands of years prior to bitcoin.
i would not call a scam using the word "illegal", even tho it does describe it.
A scam transaction is one where one party would not have committed said transaction had they known the truth. It is an unwilling transaction (aka, scam).
An illegal transaction is one where both parties are willing, but the state deems said transaction is illegal under their purview. I argue that there should be no such a type of transaction - the state should allow _all_ transactions from _all_ parties that are willing. The illegal part should only apply to an action resulting from the transaction, such as hitman for hire.
e.g, The act of paying someone to kill someone else is legal, but the act of killing is illegal. The act of paying someone for an illicit drug is legal, but possession is illegal.
Why move the goal posts? An “unwilling transaction” is either theft, fraud, or coercion, pure and simple.
Why should it be legal to pay somebody to kill? That seems insane to me. Especially since the laws in many countries could/would hold financial institutions liable for any murder they inadvertently facilitated by processing that transaction. If it wasn’t disallowed by the state, the private institutions would prohibit it of their own accord. What’s the difference?
There are also many laws regarding incitement to violence and the like. Paying a hit man would be that, no?
“I don’t want the government to tell me what to do” is childish. Tell me why a society should tolerate the ability to pay for a hitman if we’ve already agreed that murder is wrong?
Assassins have existed way longer than bitcoin. It's emergent feature of free trade. I definately think the upsides of freetrade out weigh the downsides. On the contrary, if we lived in a society where all flow of money goes through some govement entity, we would be in reality some button presses away from Orwell style dystopia.
> I definately think the upsides of freetrade out weigh the downsides
Why? Why is it better to actively facilitate the act of paying an assassin than it is to not do that?
> if we lived in a society where all flow of money goes through some govement entity
Lovely strawman you've built there. However, I don't think I claimed that all money should flow through some government entity. For the record, I don't think it should. Making the act of paying for an assassination illegal != making some government entity responsible for the flow of all money. Holding both the assassin and the payer responsible for either killing somebody or conspiring to kill somebody doesn't seem unreasonable to me.
> we would be in reality some button presses away from Orwell style dystopia.
[citation needed] go work in government and then tell me that anything is "some button presses away" from anything else.
> Why is it better to actively facilitate the act of paying an assassin than it is to not do that?
for assassinations, may be we currently all agree that it isn't good to allow it to happen. However, that is only just an extreme example, for which it is something most people would agree should be illegal. But what about other actions?
Killing the ability to transact, regardless of the subject of a transaction, is detrimental to change, and entrenches existing powers/authority. These existing authority should not feel safe implementing new laws, if there are ways that could circumvent them. This makes the authority remain honest, and only implement laws that would have popular support.
today, yes, the transaction for paying the hitman is illegal, as is the act of the hitman.
What i'm saying is that bitcoins could be a method for which transactions can be made without interference with the state, regardless of the subject of the transaction.
The legality of the transaction's subject is a separate argument.
> A scam transaction is one where one party would not have committed said transaction had they known the truth. It is an unwilling transaction (aka, scam).
Yes - legally this is fraud.
> An illegal transaction is one where both parties are willing, but the state deems said transaction is illegal under their purview.
And in every single place I know of in the world, fraud is illegal.
In the context of this discussion, i want to make the distinction between scams, vs transactions that are willing between parties, but is deemed illegal by the state.
The discussion in this HN thread has been calling both of the above "illegal", and not distinguishing between them.
In the US, opium and cocaine were not regulated federally until the Harrison Act of 1914. So "a century".
The first opium war started in 1839, so even in China, "not quite two centuries" is much more accurate than "centuries at least".
A good argument could be made that these substances weren't really banned in the US until the Controlled Substances Act of 1970. The word "decades" is pretty reasonable.
Do you think this is an unbiased source? Considering Central Banks have a monopoly on the issuance of currency and cryptocurrencies directly subvert this?
The current head of the ECB, Christine Lagarde, stated this year that "inflation came from nowhere". And this is your source of information on this topic?
It's like referencing a study on climate change by a fossil fuel producer in the 80s.
I think what you wrote is a reasonable position, but it t seems to me that there is least a portion of the population who is basically "infinitely hostile" in the sense that they have made it part of their identity to hate crypto and become zealots.
These are people that will boycott people and products remotely associated with crypto.
I don't think the author is trying to argue against the type of skeptic you describe. In fact, they seem to mostly agree.
In short I think you are misconstruing the argument.
$12 billion sounds like a lot, but Madoff's ponzi scheme was $50 billion, and that's just one instance, not a whole market aggregate like the $12 billion.
Also, if you want to talk about fraud rate, you need a denominator. A big sounding number by itself is meaningless.
You could use agnostics vs atheists as an analog here. Most effectively atheist individuals are most likely technically agnostic because they are open to receive new information in order to have their opinions on the matter changed. A hard Atheist would make their decision based on no evidence at all, and I think you'll find most atheists are at least open to be effectively sold on deism if it came out incontrovertibly (still waiting).
All of this is the same with a crypto sceptic. I don't think you can assume crypto has to be a scam or more aptly a speculative investment scheme searching for a purpose. Some day, we could be convinced that crypto is super valuable for solving X, and the day it happens is the day I look to it with interest (still waiting).
No, an atheist is one whose current Bayesian prior on the existence of God is close to zero. An agnostic is one whose current prior is close to 0.5. A theist's prior is close to one.
That's not how I see it, but I think it raises the interesting question. What is the need or value in coming to a definitive conclusion on something when it doesn't impact your daily life or choices.
My personal opinion and observation is that many people choose to take a stance on topics despite having no need to do so.
I think they would be better served remaining agnostic on most topics despite their priors leaning one way or another.
> when it doesn't impact your daily life or choices
I don't think this is correct.
Theism vs atheism has pretty drastic impacts on how you live your life. If you believe that you are going to hell unless you do X, Y and Z, you are going to make sacrifices to accomplish those requirements.
The point was more general, about peoples need to eliminating uncertainty in favor of belief, but we can talk about religion too.
I agree theism vs atheism might make a big difference, but I don't see a meaningful difference between agnosticism and atheism in how I would approach life.
Even when it comes to ruling out theism and Gods, it only really matters if you rule out vengeful gods that might punish you for not worshiping them.
If I were 90% certain that a god did not exist, What would I stand to gain by committing to atheism and holding it to be, absolute truth.
I think a more mundane topics are a better example, e.g. the political or social topic of the day.
Well, there's the Pascal-style argument. If you think there's a 10% chance that a Christian God who will send you to hell if you do xyz exists, then, well, that seems like a very significant risk (compare to a "10% chance of death") and worth taking pains to avoid.
On the other hand, if you think it's more like 1 in a million, and furthermore that there's a similar chance of other versions of God or other gods existing who have completely different demands on your behavior, then it's a lot more sensible to say "fuck it, I'm going to ignore such possibilities". Which is a practical difference.
I do agree that lots of people would probably do better if they were more comfortable maintaining uncertainty in general.
> What would I stand to gain by committing to atheism and holding it to be, absolute truth.
It might motivate you to more actively oppose policies motivated by religion which are harmful to society.
It might motivate you to openly express your views and thus provide emotional support to other non-believers who are trapped in situations where they cannot express those views without risking physical harm. In Saudi Arabia, for example, being an atheist is a capital offense. And even in the U.S. there are many people in situations where coming out as an atheist puts them at risk of ostracism and destitution.
Absurd. Gnosticism isn't some assumptive middle ground, it's a confidence interval. People can be agnostic about a countless number of gods, that doesn't mean they have some combined total belief in half the number of those gods actually existing.
No. This is a category error. Confidence intervals apply to things that can be quantified. God (with a capital G) either exists or He does not. There can be no confidence interval associated with that, only an assessment of belief.
A polytheist could have a confidence interval on the number of gods (lower case g) that exist (e.g. "I am 90% sure that the number of gods is between 10 and 20"). But that is not typically what one is referring to when speaking of atheists and agnostics.
>The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams
This looks like the sanewashing[1] anti-pattern. Numerous comments say exactly this, every time it comes up. It's great that you personally have a nuanced opinion on the matter, but you should be careful about speaking for others, or saying what skeptics believe.
From a quick search of HN of "all crypto scam", filtering out ones that aren't endorsing the view, or are throwaway accounts:
1) Large numbers of people on this site regularly argue that the entire conceptual foundation of crypto is fraudulent and/or without merit, not simply overstated.
2) I don't think he's arguing that everyone who thinks crypto is a scam is that sort of person, he was saying that most people who have been scammed are.
3) Molly White's number's agree with OP's. $12 billion vs a market cap of $858B is roughly the same percentage identified in the article. And before you complain about the use of market cap as denominator, market cap is also the numerator being used by Molly White's analysis, so it's the correct denominator.
This seems to be one of the better responses to my comment. Thanks. Some thoughts in reply:
1) People should be more hesitant to speak in absolutes. Unfortunately it’s possible that having a nuanced take is inversely correlated with the tendency to post noisy comments online. Maybe, regardless of the underlying stance of “most” skeptics, some more honest dialogue is warranted. Point conceded.
2. Hm. If that’s the case, the author’s assertion that most people who have been scammed are the kinds of people who fall for scams is fair, but not going to change many minds.
3. This is discussed ad nauseam below, so I’ll just add a reminder that we’re debating the author’s statement that “big crypto projects are very rarely scams” as evidenced by his google search. He goes on to say that “Crypto is a few hundred interesting projects, plus a long tail of thousands of scams.” So, most crypto projects are safe if you just ignore most crypto projects and only consider the most dominant. Realized losses vs unrealized market cap aside, the dynamics that incentivize that long tail of scams are worth worrying about in my view.
For 3, I think his statement as written "big crypto projects are very rarely scams" is clearly not literally true in a meaningful sense, and it's right to criticize him for that. However, I think a weaker statement like "The people that complain that crypto projects are scams are overstating how dense the space is with scams" is probably more accurate.
It's sort of hard to determine how to weight an analysis of the density of scams in a space. Certainly if you weight by project count, it'll be quite high. If you weight by market cap, it'll be considerably lower. But to your actual point, I agree worrying about scams in crypto is very important, and I read the OP as (admittedly, somewhat carelessly) trying to argue against the view that "all" or "nearly all" crypto projects are scams.
I think a better way to state it might be something like: Post dotcom bubble pop a lot of people were saying "those internet companies were all scams", and they were right in some kind of media-attention-weighted sense, and maybe even some other senses. But there were certainly a lot of real and important companies there, and even a lot of near-real-and-important companies that were just a little ahead of their time and didn't make it, and I don't think it's fair to dismiss most of them as scams.
I'd definitely say crypto is still in the pre-making-it stage of its lifecycle, and it remains to be seen whether any of these projects will end up being say, the Google or Amazon of this space, that survives the winter and goes on to do meaningful things. However, even if they all die, I think it's fair to say that e.g. Ethereum and Bitcoin were sincere attempts at building novel technology.
> the dynamics that incentivize that long tail of scams are worth worrying about in my view.
Is this any different from the stock market? There are about 6000 companies listed on the NYSE and NASDAQ. According to [1] there are about 10,000 penny stocks traded OTC. Not every NYSE/NASDAQ company is legit and not every penny stock is a scam, but we're still looking at an awful lot of fraud out there.
Seems like the incentives for financial fraud are obvious and eternal.
There's definitely skepticism around here. A lot of people here were around when the Satoshi paper came out. The hype began almost instantly - let's disrupt governments with a utopian free-market! Everyone will have an equal say! And, people rolled their eyes because they knew that these systems follow power laws, and eventually the utopia will resemble the status quo.
Around the same time, some people realized that bitcoin was deflationary. And, you had two groups: One started hoarding coins and pumping it, and the other group realized it was a pyramid and had too good a conscious to participate. And, the pumping continued until today. And, maybe some people are sour?
Then, for 14 years, tons of money was dumped into it, and not much happened. It's still mainly used for black market goods. It still has terrible user interface. The transaction rate is still low. The transaction fees are high. And, it's too easy to have your coins stolen.
This seems to be the exact line of thought that Scott is challenging. He agrees with you, "Yes, The Crypto Financial System Is Just Reinventing The Regular Financial System Except Worse In Every Way, And That’s Fine".
If you live in a stable economy with good governance and a trustworthy financial system, you don't need crypto. Unfortunately, that does not describe everyone in the world. It may not even describe half of the world.
If what you're saying is correct wouldn't the transaction costs / volume reflect increased usage for those "unserved" by a trustworthy financial system?
I guess SA's opinion is close enough to my own that I'm willing to defend it in public. However, I don't understand your question/statement - can you restate it?
> Then, for 14 years, tons of money was dumped into it, and not much happened. It's still mainly used for black market goods. It still has terrible user interface. The transaction rate is still low. The transaction fees are high. And, it's too easy to have your coins stolen.
I agree that, in the case of Bitcoin specifically, it's still primarily used for black market goods (excluding speculation, of course), among relatively wealthy developed market users. However, there are a non-trivial number of genuine users among economies with less stable banking systems, as the OP points out. And it isn't true that fees are still high and tx rate is still low, the lightning network solves that problem. It hasn't seen super widespread adoption yet, but the technical problem, as far as fees and transaction rates, is essentially solved. What you are correct about though is that the UX is still pretty terrible for the average person. However, in some places, that UX is a better alternative than the one they have access to locally.
> 1) The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams. Most skeptics would say that the use cases are overstated and the incentives to pump-and-dump are so high that an unacceptable rate of scams was inevitable. If you're going to write an article to refute skeptics, refute the actual argument.
The more aggressive skeptical argument is that cryptocurrencies can be looked at as a banking system with no government backstop at all, which are vulnerable to a systemic bank panic and run the system -- creating contagion effects that will ultimately knock down all the dominoes. Financial systems are all vulnerable to the fact that they are not stable systems and so they all need circuit breakers and need automatic measures in place to backstop the system in the event of a panic (critics of the argument that I'm making will point out that doesn't produce any certainty of stability, but they miss the point that those measures do make the system more stable). Without those, they'll definitely hit a systemic panic and will unravel sooner rather than later.
It's true that inefficient code can get the job done, and if that code is getting the job done where nothing else is that's great. But the strange disconnect among crypto apologists is that somehow the massive inherent inefficiencies are a good thing and central to its effectiveness. Novelty-mania derived popularity is central to its uptake but that's a far cry from "the tech is the source of value."
I came into this article expecting to disagree with it... but the author actually makes a lot of good points. It's nice to see an acknowledgment that crypto is simultaneously useful (and actually pretty cool) but also not a magic solution to all the world's problems. (It does get a bit annoying hearing "we're going to reinvent the wheel BUT WITH CRYPTO!" for the 10th time.)
This was pretty well encapsulated in two paragraphs:
> In the same way, everything about the crypto economy is worse than the regular economy. The only excuse is that it’s decentralized. This means you can use it for all of those cool things - sending remittances, circumventing corrupt banking systems, resisting authoritarian governments - that are hard to do with regular money. Of course subjecting yourself to a difficult constraint is going to be harder than not doing that!
> If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation).
Speaking as a Kenyan, I see it pretty high in the list of users of cryptocurrency, but it has one of the most accessible and inclusive financial systems in the world (mobile (fiat) money). Everyone I know/interact with has a mobile money wallet and uses it from day to day for real financial transactions. Everyone I do know that is active in the crypto world is speculating in search of out-sized investment return.
One country (Trinidad and Tobago) where I speak to a friend who is often complaining about dollar shortages and government-imposed forex controls is not on the list.
I don't think cryptocurrencies are currently being used to solve the problems the article is assuming it does as much as the article's thesis suggests.
Very good point. And frankly, when some Argentinean uses crypto to circumvent capital controls and get a better rate for his incoming payments than his fellow law-abiding citizens, that doesn't strike me as a use case "solving a problem" either.
A lot of the "oh you're only anti-crypto because you're so financially privileged" inclusion is pretty disingenuous, if not predatory.
I don't understand why you don't think that's solving a problem. The Argentine government stealing people's money and forcing them to use a currency it deliberately destroyed is a huge problem. Allowing more people to escape the government's exploitation is good. You are either privileged enough to not live in Argentina or privileged enough to belong to the political elite who are exploiting the rest of the population if you don't think that's a problem. Even if you have no money to circumvent capital controls with, you are still harmed by their existence and benefit from the system being undermined.
I’m surprised how little I hate this piece; cryptocurrency is much more palatable when it’s claiming to be the tor of money and not the future of money. But I think it downplays the extent to which the latter claim is harmful, and just how inescapable it was over the past few years.
Lots of average Joes saw a superbowl ad, put their money into a large, well-respected exchange that didn’t promise impossible returns, and lost everything! I had a nontechy relative call and ask me how she should go about selling her (literal traditional paint-on-canvas) paintings as NFTs! For a little bit there it seemed like there might be enough momentum for cryptocurrency to become too-big-to-fail before skeptics even had time to object.
It also underplays the extent to which the kind of cryptocurrency stuff techies react negatively to is still explicitly or implicitly boosting that vision. Cryptocurrency as the tor of money is reasonable but also not something that for-profit companies have much incentive to be involved with. But next
time I see a project whose target market are those living in countries with completely nonfunctional financial systems, people trying to escape authoritarian governments, or sex workers, I’ll think twice before being negative.
If blockchain bulls were only claiming it to be the future of money, that would already be a huge improvement to the full claim implied by “web3” — which is that it will be the future of the entire internet
My local NPR station aired a story a few months ago about a local "NFT museum" that was 100% uncritical boosterism. IIRC, it featured a conversation with people affiliated with the NFT org (and nobody to provide counterpoints, and nobody with any significant amount of technical nous to point out the clear bullshit a la Moxie's thing[1]) that painted NFTs as the future of all art. The combination of the apparent veracity of the source with the absolute lack of nuance in the story was pretty striking; I think that was the only time in a lifetime of listening to public radio that I submitted a complaint about something I'd heard. It really felt like journalistic malpractice, although I guess I'm not sure how much blame to apportion to evil lying techbros vs. credulous underinformed journalists.
Anyway, a few days later I had to explain the whole situation to an artist friend who'd heard the story and wanted in. Argh.
This is one of the really gross things about it. It felt like finance assholes disguising themselves in t-shirts and jeans in order to cash out on two decades of breathless techno-optimism being regurgitated by the press, in order to get regular people to buy into what amounts to an unregulated online casino. (Not that the tech industry needed the help cashing out on hype.)
To me it feels of a kind with the sports betting sites you see advertised everywhere nowadays and those CSGO skin betting sites that steamers were (and still are! See the People Make Games video on this) advertising to twelve year olds.
> Lots of average Joes saw a superbowl ad, put their money into a large, well-respected exchange that didn’t promise impossible returns, and lost everything!
Happens in everything. Corporations can fail. Trad-finance institutions can fail. Sovereign currencies can fail.
I still think that beats centralized finance, where I'm barred from investing in, say, startups. Because I'm not ~~rich~~ accredited investor, lol. Ofc that's for my safety, because apparently reducing opportunities of non-rich people is 'protecting' them.
For some bizarre reason one doesn't need to be an 'accredited' to start their own business. I wonder what's the logic here? Government should clearly fix that issue - after all, if investing into sth like OpenAI (for example) is considered risky, then starting your own business is straight up delusional.
> I had a nontechy relative call and ask me how she should go about selling her (literal traditional paint-on-canvas) paintings as NFTs!
What's wrong with that? Is selling physical merchandise bad too? Or digital goods in general? Commissioned digital art? Why is it illegitimate and, say, autographs aren't? Frankly, I find it to be a more elegant system than these other approaches. It would be nice if it caught on someday.
> For a little bit there it seemed like there might be enough momentum for cryptocurrency to become too-big-to-fail before skeptics even had time to object.
How great! "Skeptics" are a bit of a weird name for this. Tech innovation doomers is more fitting, I think. Narratively, I'll admit, you guys are currently on top somehow. VR, Metaverse, AI, whatever Musk ever does... (well, AI doomerism isn't quite universal yet, maybe).
Truly amazing, let's not ever do anything different or new, it's all shit after all.
(also, maybe I'm delusionally optimistic, but I don't think it's quite over yet)
> Happens in everything. Corporations can fail. Trad-finance institutions can fail. Sovereign currencies can fail.
Corporations can also succeed. Circular perpetual motion machines leveraged against their own bullshit to claim ever-higher valuations while telling folks "you don't need to know about crypto, just give us your money" on TV? That's never gonna work out. It's fundamentally broken.
You try to equate crypto skeptisicm with general anti-innovation thinking but... what was the innovation in FTX or Luna or [insert other implosions here]? Seeing hype as innovation is hardly sound thinking.
Show me some actual "future of investment" innovation and see if I'm as critical about it. Or any non-fintech innovation for that part. Lots of interesting technological developments happening, they just mostly aren't in the crypto hype bubble.
My objection to her minting her art as an NFT was that she was going to lose money on it! She was about to become a bagholder in a market she probably didn’t even realize was a market!
The fundamental value of physical artworks is getting something pretty to put on your wall. The fundamental value of a digital commission is the existence of an image that otherwise would not exist. The NFT-theoretic concept of digital ownership isn’t inherently invalid or meaningless, but it’s not something that most regular people were ever going to find valuable, and it was being used as a smokescreen to obscure the fact that most of the value of NFTs came from speculation.
That call really soured me on the whole thing because it was firsthand evidence that cryptocurrency boosters were scamming ordinary people by convincing them that they were opening an Etsy store when they were actually buying casino chips.
The part that's confusing to me is why this is even controversial or interesting. It seems like a huge number of people who are educated enough to know better really struggle to come to any viewpoint between it's 100% a scam and it's the solution to all of mankind's problems.
When scams and manias become widespread, it doesn't matter if you personally don't fall for them, if enough of the people around you and pension fund managers fall for them.
I'm also not saying "ban all crypto", but make it a lot harder to pump in money from the clueless masses. When my Uber driver is shilling shitcoins, crypto is in need of more regulation, and then we can figure out what to do next.
> Remember the story of that special astronaut pen that cost $1 million? We already have pens on earth, for like $0.10, and they work better!
This is a myth. Those pens were not that expensive, they were made for use-cases on Earth and happened to be used in space, and they actually work better than the $0.10.
> In the same way, everything about the crypto economy is worse than the regular economy.
Good that they realize that.
> The only excuse is that it’s decentralized.
Except it's not. Not really.
I'm surprised they did not go on with "the other excuse is that it removes trust", to which I would have answered: "Nope, it doesn't".
So yeah, it's worse, except in countries that have bigger problems (corruption, unstable political system, no banks). Ever thought that maybe it would be worth fixing the bigger problem, rather than trying something that is worse?
Ok, let's pretend that cryptocurrencies are a quick and cheap solution for those countries: after all, we only invested 15 years and trillions into them, that would clearly not be remotely enough to help some of the world's dysfunctional governments. /s
We agree on that. Throwing cryptocurrency solutions at those problems doesn't seem to solve them either, though. But they create other problems that crypto-enthusiasts like to ignore.
One use-case is a HUGE success for cryptocurrencies: ransomware.
But sure, let's defend a system that is "worse than traditional finance", because it's "sort of decentralised" (traditional banks are sort of decentralised too, to be honest), even though that creates big problems like ransomware.
Precisely. So one could ask whether finance is the root problem in those countries or not (e.g. if the problem is a corrupt government, maybe fix that first) and if it is, one may wonder why it should be replaced by cryptocurrencies (which until now haven't fixed much) instead of improving the traditional finance.
You can't just snap your fingers and tada, government corruption solved, utopia achieved. Imperfect solution now > perfect solution in the infinitely far future
> You can't just snap your fingers and tada, government corruption solved, utopia achieved.
No, but you could legitimately wonder what 15 years and the money that was invested in cryptocurrencies could have done to help solve the root problems, instead of marginally helping a few people while enabling scam and ransomware.
Do you have an idea how much money could be stolen from governments thanks to cryptocurrencies? North Korea is pretty good at this. Counter-productive solution now < perfect solution in the infinitely far future, IMO.
Can anyone link to a clean writeup of one crypto app or use case (ex speculation/laundering) with strong PMF, on track to win a decent market? Honest question.
This writeup cites remittances, but last time I looked into it, crypto was a) a minor player in remittance markets, and b) is growing slower than many incumbents and new entrants, so that feels like a weak example. I haven't looked into banking in Vietnam, but I would guess there is a similar story (ie crypto is a niche, not on track to serve any sizable portion of unbanked Vietnamese customers, weaker success than several non-crypto mobile apps). I'm in the market for a nice writeup on some market where crypto is actually winning.
Not related to money/finances, but I wrote about Farcaster here which uses blockchain as a decentralized namespace registry for a social media protocol:
American who spent 2016-2020 in Vietnam. Banking is atrocious there. Imagine only having about $1500 worth of FDIC insurance and the banks regularly go belly up because of corruption and making bad investments in property.
Crypto is big in Vietnam, entirely as a cultural thing. They love games and they love finding creative ways to make money. They really got scammed well in the ICO days. DeFi didn't get big because they were still butt hurt from ICO days and because well, they don't understand the concepts in DeFi. Collateralized loans and providing liquidity just went over most people's heads.
That said, there are a lot of unbanked people there. Women in the north still put gold fillings in their teeth to store wealth "safely". They also have great inexpensive 4/5G everywhere and smart phones. There is a huge younger generation. Most people use cash and the largest paper(plastic) note there is about $22, which makes larger purchases a struggle.
It is ripe for innovation and digital P2P payments. The huge blocker is the government, which will need to be in control of all of this. Otherwise it'll all be black market dealing.
I think the large reason so many SV types are hostile to it is because it's making their jobs much more complex with little evident payoff. And they're also probably tired of hearing those guys in the office give them advice only to begin going through a divorce over money issues a year later.
> And a lot of them say things like “our democracy is in danger” or “this could be our last free election ever”. If you really think January 6 was a close call, where do you think we’d be if Trump had succeeded? ... If Nancy Pelosi’s text messages are any guide, Democrats have joined libertarians in the “actually pretty worried about the government becoming an oppressive dictatorship” club. I don’t think they can say with a straight face that there’s no chance that we ever get fascists who use financial repression as a tool of control.
This is a very, very good point. It's like the "you don't need a gun you have the police... The police are killing people for fun" thing, it's always the same people saying both these things. If you really believe that America is on the precipice of fascism, you should want a way out of that repression. In most cases I believe it is cognitive dissonance, but in cases where I'm being asked for donations I'm convinced that this disconnect is deliberate and malicious.
Global Crypto Adoption Index. Normalized to the interval zero to one. The linked source, not a single absolute number. And even the relative numbers are all change over time or difference between countries. Nothing remotely useful like a fraction of GDP or whatever would be a useful reference. All people in Vietnam together could transact one dollar in crypto currencies per year or they could do everything in crypto currencies and not use old school money at all, you could not tell the difference from the charts and tables.
I find it weird when westerners used developing world in SEA countries as a use case for cryptocurrency due to terrible banking systems or poor access to bank.
We have instantaneous online banking systems and for the unbanked they can simply register for an e-wallets.
201 comments
[ 3.2 ms ] story [ 232 ms ] threadThe issue that I have with this perspective is that it doesn't actually solve the underlying problem - it just kicks it down the road. As soon as crypto becomes big in a country with failed governments and banks, it's going to become the primary target of those same governments and banks.
>Governments can take lots of actions against crypto. They can ban it. They can prevent banks from accepting it. They can search the blockchain to hunt down users. But governments take lots of actions against protests, tax evasion, and drugs, and those things still often succeed. The point isn’t that governments can’t ban a thing and send police after anyone who does it. The point is that there are only so many officers and detectives. If you make something too annoying to crush, the government will put in a half-hearted effort but mostly redirect resources elsewhere.
Editorialized: https://cointelegraph.com/news/china-returns-as-2nd-top-bitc...
Even a fairly authoritarian society with strong incentives to crush cryptocurrencies (https://www.marketplace.org/2021/05/20/chinas-crackdown-on-c...) wasn't able to get hashrate, much less usage, to anywhere close to zero.
I guess I'm curious: what levers do you figure Western societies could deploy that'd be more effective than the Chinese approach? From my perspective, this state of affairs is a decent existence proof that fully eliminating cryptocurrency use is difficult even with access to authoritarian methods.
nb: above links don't include 2022 data and I couldn't quickly find that, so if that data affects the quality of the above argument I'd appreciate the correction
You can't have it both ways: if cryptocurrency is the be all and end all of avoiding government censure of other activities, why would it not be a high priority to crush it compared to those other things? If it is not, then is it all that useful?
Cash and banks are easier for the government to control than crypto
That is all that there is to the argument!
Maybe the difference won't be significant, but I see no reason to think (nor to think the opposite) as of now. Do you have one?
I am saying you don't get to hedge your argument like this: crypto cannot be both an important part of evading government censure, and too small to be worth government effort to censure.
If someone wants to make the middle ground argument, make it, but you're starting from the position of government already engaging in significant regulatory interest in the use of cryptocurrencies.
as for hypothetical crypto underground economy, nobody has really explained how exactly you are supposed to convert those liberating coins into physical goods (that makes all retail illegal?). Which makes it not an argument but a very fuzzy dream.
Mesh and satellites might reduce this. Maybe even ham radio. You don’t need to send much data to send a crypto transaction so sending it using an audio modem on a low frequency is probably fine.
There are also crypto notes being developed which is an interesting development.
https://www.thefreedictionary.com/garnishing
You pretty much know you're reading a rationalist if they use phrases like "less wrong", "mildly opinionated" or now "less than infinite".
Is there some reasoning behind those phrases? Rejecting the null hypothesis as a way of life?
Why not just say "why I'm still bullish on crypto even though everyone says the opposite"?
Also, "bullish" is generally a financial term, and in this case may refer to "price go up" which doesn't seem to be the intent of the article. The article is stressing usecases not price.
Oh I know just the type you mean. Of course, a type of person that is infinitely more annoying is the crypto evangelist explaining to you why they are making the world better because their startup is making it easy for grandma get in on the crypto revolution with her retirement fund.
This is ironic understatement. It's not a rationalist thing, it's a joke!
To my ear, saying "I'm still bullish" rather than "I'm less than infinitely certain about X" is the weird sounding one, like someone's trying really hard to signal to me they know and care about stocks and investments and stuff. To be honest I don't and still get confused on which is which between "bearish" and "bullish".
The other phrases are also vague enough that they are not really helpful. If you're "mildly opinionated" enough about something to write a blog post about it, I'm starting to how much degree is actually meant with "mild". If to people are mildly opinionated about somthing, who does have the stronger opinion?
I agree that things are often complex and not clear-cut, but I don't see how trying to mush everything into featureless grey would help here to gain insight.
"Less than infinitely" to me made sense too, it's what I would've liked out of my friend on the topic of crypto or really anything where we don't see eye to eye. I don't want an "omg you're right what have I been thinking", but maybe "I don't know about your conclusions, but I'll consider what you said and maybe they'll change my mind or maybe they'll help me better form my own arguments."
[1] https://wallpapercave.com/wall-street-bull-wallpapers
My impression of the title is that the essay is a response to the largely maximally hostile stance many take towards cryptocurrency projects, and his attempt at moderation of that stance.
It's the same thing with any sufficiently divergent dialect, you lack the context so you fill in meaning from your own context which is incorrect leading you to these conclusions. It's just linguistic compression focused on a cluster of common avenues of thought to make communication faster, easier and more precise when in those realms.
Which is to say, this is just a propaganda rhetoric strategy: the opposition don't have valid points, they're just crazed by their hatred. Don't try to understand what they're saying because they're crazy and can be ignored.
Which is...not true. The fact that not enough people wanted DEC products might be a marketing issue, but more likely is that other companies made stuff that they wanted more.
It's like a last, desperate grab that's deployed when the argument has exhausted itself.
The author's view is tangential to bull/bear in the financial sense. From the article:
> This post is emphatically not intended as a claim that crypto will go up more, or that it won’t go down a lot, or that there won’t be any more disasters or scams7. It’s a claim that aside from its going-up ability, crypto is still a set of interesting technological solutions to regulatory problems.
Read a bunch of papers in computational complexity theory (or any other subject) and you will see similar phrases pop up.
Heck, compare hacker news comments with some other forum website and you will probably notice subtle language differences.
If you would like to understand why they use weird vocabulary, here is a request which I expect will induce frustration and then clarity:
“Please explain how someone can be similar to a bovine in their relationship to crypto”
Oh, that's easy. When looking at the carbon footprint per unit calorie, bovine flesh, is much larger than vegetarian options. Same with water and land use as well. It's actually significantly worse for your health as well. There are practically no up sides to consuming beef, except the taste.
That's what it means when somebody is bullish on crypto: they want a currency that has little upside and is horrible for environment.
> Is there some reasoning behind those phrases? Rejecting the null hypothesis as a way of life?
Not being snarky, but perhaps dumb: of all expressions above, "null hypothesis" is the one I understood the least.
Basically an attempt at applying statistical reasoning to reasoning in everyday life. I don’t have a problem with the vocabulary as much as the way this group speaks: upspeak, overuse of “kind of” when they don’t mean “kind of” and a peculiar sort of thinking stutter when formulating a statement. It’s amazing how prevalent it is.
There was some other thing with using US based debit cards over there, apparently it was an easier flow to fill up the US accounts and have them use it over there than to do a bank to bank transfer.
What about the crypto side of it?
Somewhat off topic, the Space Pen was researched 100% with private funds and both the US and USSR space programs bought them retail, in contrast to some of the stories floating around the internet.
> Big Crypto Projects Are Very Rarely Scams
I mean, seriously? This is a month after the fallout of FTX, we have seen crypto projects in their net worths in Billions to get revealed as ponzi schemes in their purest meaning, and that's the best SA can offer up?
> If you split $1000 and invested it equally in all the top crypto projects of 2015, you would now have $25,400. If you invested it in the biggest cryptocurrencies by market cap of 2020, you would have $2,700. Stablecoins aren’t really an investment, but if you put it in the top stablecoins of 2020 anyway, you would have $964.30. Exchanges definitely aren’t an investment, but if you put your $1000 in the best crypto exchanges of 2020, I think it would all still be there (FTX wasn’t on the list; maybe it’s too new).
This is tired shill-speak (consider what happened if you "invested" in 2021 instead), to the point where I doubt if Scott Alexander himself wrote this or if someone offered him a large but undisclosed sum to write it for him. Probably as a damage control to the EA circles, who have undoubtedly lost a lot of faith in crypto as a follow up to the FTX fallout.
From the article:
> If you split $1000 and invested it equally in all the top crypto projects of 2015, you would now have $25,400. If you invested it in the biggest cryptocurrencies by market cap of 2020, you would have $2,700. Stablecoins aren’t really an investment, but if you put it in the top stablecoins of 2020 anyway, you would have $964.30. Exchanges definitely aren’t an investment, but if you put your $1000 in the best crypto exchanges of 2020, I think it would all still be there (FTX wasn’t on the list; maybe it’s too new).
Footnote 4:
> The one big exception was FTX - I think people did think of it as one of the good ones, and would have included it in lists like these if it had been around a little earlier. But this is why I disagree with people who said it should have been “obvious” it was a scam - it was in a reference class where scams are actually very rare!
My point is, you can always pick your time frames arbitrarily to make any case that you want, and I can make the opposite case by picking my favorite time frame. Seems really sketchy that ACX is committing to this level of fallacy.
[1] https://finance.yahoo.com/news/robinhood-coinbase-ftx-heres-...
https://www.upress.umn.edu/book-division/books/the-politics-...
I didn't realise it had finally gotten to this point, I guess FTX was the final wake up call? I hope it's true because once hype is out of the picture so are the millions of vultures and it is once again possible to discern new and interesting ideas from the noise that saps our attention in this area.
The need for law enforcement authorities to achieve Total Information Awareness over all private financial transactions stands opposed to a vision of ubiquitous electronic cash, with decentralized and peer-to-peer electronic transactions.
Apparently providing both privacy to buyers and following AML and income reporting laws at the same time is crossing some line because "the government is always wrong".
It is kind of like following the law is frowned upon in the cryptocurrency space which is why any competitor that can actually follow the law must be nipped in the bud.
I don't believe crypto users care about privacy except maybe when they use Montero.
It's the intersection of the sets of uses that (1) benefit from no government oversight, (2) absolutely need to have their ledger distributed and (3) perform better than whatever solution is currently used.
A lot smarter people than me have already concluded that the only use cases in that intersection are illegal.
You might argue that "it smells like tyranny then" and cite the transfer of value in and out of oppressive or failing countries, but that seems to be the single and only (and still illegal) use of crypto currencies.
The crypto defenders whose only argument is "JUST WAIT YA DIDN'T WAIT LONG ENOUGH FOR THE PROPER USES TO EMERGE WTFBBQ" - we've waited long enough I think.
FTX, through its acquisitions, was technically "highly regulated", yet it collapsed. Several other centralized financial services, including Celsius and Genesis, collapsed.
In contrast, in this latest cycle, no leading DeFi applications collapsed or lost any customer funds. They operated flawlessly through all of the market turmoil.
Are there some examples you can point to? This seems like an interesting space.
> leading DeFi applications collapsed or lost any customer funds
What DeFi applications do you consider leading?
They are all built on top of Ethereum. They operate without human intervention, providing exchange facilities, lending, decentralized staking, stablecoins... The basic primitives of an automated financial system.
I've seen so many people quote a Youtuber as their source for a belief that it's crazy. Even when the primary sources are available. But that's the age we live in.
And who might that be?
- Conflating crypto with exchanges, or Bitcoin in particular with oportunistic scams.
- The complete nonsense about PoW being 'detrimental to the environment'. It's sad that even technical audiences fall for this at all.
- Speculating on its price has nothing to do with the use case, which is to transfer money without an intermediary. You certainly can, but it has nothing to do with the objective so any criticism about this is disingenous.
Bitcoin (and some others such as Ethereum or Monero) just work, and and has worked extremely well for over a decade. I was able to pay for hosting and plenty other services anonymously, to circumvent local restrictions when nothing else worked, transfer money to family abroad, etcetera.
And yes HN is extremely vulnerable to propaganda due to a mixture of lack of common sense, lack of life experience and snobbery.
That said, i agree with the author that original bitcoin works well enough in places where modern banking is dysfunctional. Its everything in the crypto world after that point i have a problem with.
I also agree that most crypto projects more err on the side of really really stupid and not outright steal your money (although that exists too).
Basically, i agree with all the authors premises and still think crypto is on the whole terrible. I suppose the issue is that the author is arguing against a very weak strawman - nobody is literally infinitely against crypto.
So, like individual Indians use 37% as much cryptocurrency as individual Vietnamese (adjusted for PPP).
It's a good way to show comparatively where cryptocurrencies seem to have some utility as measured by the fraction of an individual's financial power.
For example if vietnam had a single crypto user, and nobody else in the world used it at all, you would have a similar skewed graph, but clearly it wouldn't demonstrate utility.
But I don't think it's actually misleading in this case, and we have other information available that clarifies that there is not a single Vietnamese cryptocurrency user in the world (and, I guess, 0.37 of an Indian user...?).
There is a measurably large amount of cryptocurrency activity in the world, but most of our (or at least my) awareness of it is as a western techno-futurist/financial/cryptobro phenomenon. This graph is really useful in demonstrating that that's not a very accurate view.
It would be very bad if it were the only datum on cryptocurrency the reader had. But that's not the audience of this article.
> Ukraine has already lured some Americans and Brits in the crypto industry, and they didn’t come because they’re sticklers about the rule of law. Instead, they rhapsodize about everything from affordable restaurants to unhinged raves. Better yet, the government has not a clue about what they are doing or how much they earn.
> “There are no rules,” says Mr. Chobanian, with an odd kind of civic pride. “Well, there are rules, but you can break them. It’s the perfect balance between absolute anarchy and possibilities.” ** > Even without another revolution, Steven Hanke, a professor of applied economics at Johns Hopkins University and a vocal Bitcoin skeptic, argues that the combination of Ukraine and crypto sounds like a fiasco in the making. Most studies he’s seen have found that roughly half of all Bitcoin transactions are for some illegal purpose. To him, this is not an industry that Kyiv should target with enticements. ** > “I like that it’s corrupt here,” says Mr. Sawhney. “Here, we get to play the game that only elites in the U.S. play. I don’t need a lobbyist. I need to pay someone at the border, I can. I need to pay politicians, I can.”
Framing it as just being about people trying to escape a broken financial system and nothing more ("Do Vietnamese people love trading monkey gifs? Are Ukrainians especially susceptible to Ponzi schemes? Is Venezuela laden with techbros?") is extremely misleading.
2) The author strongly implies that skeptics are skeptical because they have fallen for scams (by "clicking on spam emails"). Insulting the intelligence of your opponent is also not a compelling way to refute an argument. I have always been skeptical, I have never been scammed, and I don't think I'm unique.
3) The author's research found that the scam rate "seemed low." Molly White is probably the person working harder than any other to track this scam rate, and her "grift counter" currently reports losses of over $12 billion.
https://web3isgoinggreat.com
https://www.statista.com/statistics/1272903/cryptocurrency-t...
I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back.
We've just created 2 million dollars of daily trade volume, err, economic activity.
When looking at value stolen by scammers, what matters is not the daily trade volume, what matters is how much money was put into the ecosystem [1], and what fraction of it was stolen.
[1] Which is a lot less than 180B/day.
This is the rub. If you’re using mcap and mark-to-market rates for total value stolen, it’s completely reasonable to use the same rate to evaluate the size of the system.
https://dune.com/hagaetc/stablecoins
I guess you could argue the billions in daily transfers are wash trading, unless the transfer is part of an exploit, and then it’s not wash trading?
Edit to downvoters: I actually meant it unironically. Thiefs often want to "cash out" as soon as possible. I'm not saying it's a net good, but it feels "real and gritty" as opposed to many other crypto transactions.
Uniswap liquidity providers charge a fee for every swap, proportional to the volume swapped, so faking volume like this would be prohibitively expensive.
If dogs and cats were fungible, and there was a market for fractions of both that could be exchanged in and out of, and contained hundreds of thousands of USD in standing liquidity, and the value of your dog was $1 million, and the cat was also $1 million, then sure. Swapping the dog for the cat is approximated by $2 million to the same accuracy that many assets (houses, stocks, etc) are described in notional value.
So to what degree is trade volume indicative of anything in other things?
Seems like an apples to oranges comparison there.
Source: https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog...
"If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation)."
(also some legal ones, tho)
It's a feature, obviously. Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons?
Ofc it's bad from the perspective of the people who want control over you. Good.
Because some illegal transactions are illegal for very non-dubious reasons, but crypto doesn't make this distinction. (Crypto made ransomware a profitable endeavor.)
Same with cash. Which governments increasingly constrain, for this reason.
Yet there are not as many people commenting enthusiastically about wanting cash to disappear / fail, or suggesting similar measures against it. (KYC, AML...)
Why is cash okay, but _digital equivalent_ is not? When physical transactions are less and less relevant? Why make the decision to basically leave these advantages in the past?
I don't think preventing ransomware attacks or financing terrorism is worth losing the capability to transact freely online. Potential totalitarianism is way more scary than 9/11.
Quote from a book, "Manna":
> With the arrival of robots, tens of millions of people lost their minimum wage jobs and the wealth concentrated so quickly. The rich controlled America’s bureaucracy, military, businesses and natural resources, and the unemployed masses lived in terrafoam, cut off from any opportunity to change their situation. There was the facade of “free elections,” but only candidates supported by the rich could ever get on the ballot. The government was completely controlled by the rich, as were the robotic security forces, the military and the intelligence organizations. American democracy had morphed into a third world dictatorship ruled by the wealthy elite.
> Ultimately, you would expect that there would be riots across America. But the people could not riot. The terrorist scares at the beginning of the century had caused a number of important changes. Eventually, there were video security cameras and microphones covering and recording nearly every square inch of public space in America. There were taps on all phone conversations and Internet messages sniffing for terrorist clues. If anyone thought about starting a protest rally or a riot, or discussed any form of civil disobedience with anyone else, he was branded a terrorist and preemptively put in jail. Combine that with robotic security forces, and riots are impossible.
Because exchanging cash requires physical presence. The introduces friction and requires putative criminals to take risks that they don't have to take with crypto, which makes crime less lucrative.
Crypto is not a digital equivalent to cash no matter how much you say it.
I can pay my tax organisation with cash. They explicitly list the acceptable forms of payment. I cannot send them any sort of crypto currency. Cash is also legal tender. There are times where not accepting cash could have legal consequences. I can reject crypto as much as I want.
I can't help but think these lines of argument are intentionally deceptive. If you just repeat it enough times, other people will as well.
Straw man based on a made-up quote. The article does not mention "useful for illegal transactions" anywhere. The article mentions legal transactions in only two occasions:
- "Bitcoin is rarely used for legal transactions"
- "Bitcoin has never been used to any significant extent for legal real-world transactions."
If you feel the need to refute what the ECB claimed, show where bitcoing is used in any significant extent for legal real-world transactions.
Not even El Salvador, with their push to adopt Bitcoin as the nation's official currency, Bitcoin transactions saw any significant uptake.
Not being allowed to buy/possess drugs is a stupid law, but preventing illegal transactions in the public financial system is a feature, not a bug. If you want to buy drugs, do it the old fashioned way - you know, the way society did it for thousands of years prior to bitcoin.
A scam transaction is one where one party would not have committed said transaction had they known the truth. It is an unwilling transaction (aka, scam).
An illegal transaction is one where both parties are willing, but the state deems said transaction is illegal under their purview. I argue that there should be no such a type of transaction - the state should allow _all_ transactions from _all_ parties that are willing. The illegal part should only apply to an action resulting from the transaction, such as hitman for hire.
e.g, The act of paying someone to kill someone else is legal, but the act of killing is illegal. The act of paying someone for an illicit drug is legal, but possession is illegal.
Why should it be legal to pay somebody to kill? That seems insane to me. Especially since the laws in many countries could/would hold financial institutions liable for any murder they inadvertently facilitated by processing that transaction. If it wasn’t disallowed by the state, the private institutions would prohibit it of their own accord. What’s the difference?
There are also many laws regarding incitement to violence and the like. Paying a hit man would be that, no?
“I don’t want the government to tell me what to do” is childish. Tell me why a society should tolerate the ability to pay for a hitman if we’ve already agreed that murder is wrong?
Why? Why is it better to actively facilitate the act of paying an assassin than it is to not do that?
> if we lived in a society where all flow of money goes through some govement entity
Lovely strawman you've built there. However, I don't think I claimed that all money should flow through some government entity. For the record, I don't think it should. Making the act of paying for an assassination illegal != making some government entity responsible for the flow of all money. Holding both the assassin and the payer responsible for either killing somebody or conspiring to kill somebody doesn't seem unreasonable to me.
> we would be in reality some button presses away from Orwell style dystopia.
[citation needed] go work in government and then tell me that anything is "some button presses away" from anything else.
for assassinations, may be we currently all agree that it isn't good to allow it to happen. However, that is only just an extreme example, for which it is something most people would agree should be illegal. But what about other actions?
Killing the ability to transact, regardless of the subject of a transaction, is detrimental to change, and entrenches existing powers/authority. These existing authority should not feel safe implementing new laws, if there are ways that could circumvent them. This makes the authority remain honest, and only implement laws that would have popular support.
You have successfully convinced me that you’re either a parody account or GPT-4 in training. This is insane.
IANAL but paying someone to kill someone else is definitely illegal, even if they don't kill them. Isn't that what they got the silk road guy on?
today, yes, the transaction for paying the hitman is illegal, as is the act of the hitman.
What i'm saying is that bitcoins could be a method for which transactions can be made without interference with the state, regardless of the subject of the transaction.
The legality of the transaction's subject is a separate argument.
Yes - legally this is fraud.
> An illegal transaction is one where both parties are willing, but the state deems said transaction is illegal under their purview.
And in every single place I know of in the world, fraud is illegal.
Don't waste our time with this.
The discussion in this HN thread has been calling both of the above "illegal", and not distinguishing between them.
Is this parody?
https://en.wikipedia.org/wiki/Opium_Wars
The first opium war started in 1839, so even in China, "not quite two centuries" is much more accurate than "centuries at least".
A good argument could be made that these substances weren't really banned in the US until the Controlled Substances Act of 1970. The word "decades" is pretty reasonable.
> If you want to buy drugs, do it the old fashioned way - you know, the way society did it for thousands of years prior to bitcoin.
I’m more making the case that you should just go buy drugs with cash instead of pretending that bitcoin is the only way to do it.
The current head of the ECB, Christine Lagarde, stated this year that "inflation came from nowhere". And this is your source of information on this topic?
It's like referencing a study on climate change by a fossil fuel producer in the 80s.
These are people that will boycott people and products remotely associated with crypto.
I don't think the author is trying to argue against the type of skeptic you describe. In fact, they seem to mostly agree.
In short I think you are misconstruing the argument.
Also, if you want to talk about fraud rate, you need a denominator. A big sounding number by itself is meaningless.
All of this is the same with a crypto sceptic. I don't think you can assume crypto has to be a scam or more aptly a speculative investment scheme searching for a purpose. Some day, we could be convinced that crypto is super valuable for solving X, and the day it happens is the day I look to it with interest (still waiting).
P ~= 0.3
> and agnostic theists
P ~= 0.7
My personal opinion and observation is that many people choose to take a stance on topics despite having no need to do so.
I think they would be better served remaining agnostic on most topics despite their priors leaning one way or another.
I don't think this is correct.
Theism vs atheism has pretty drastic impacts on how you live your life. If you believe that you are going to hell unless you do X, Y and Z, you are going to make sacrifices to accomplish those requirements.
I agree theism vs atheism might make a big difference, but I don't see a meaningful difference between agnosticism and atheism in how I would approach life.
Even when it comes to ruling out theism and Gods, it only really matters if you rule out vengeful gods that might punish you for not worshiping them.
If I were 90% certain that a god did not exist, What would I stand to gain by committing to atheism and holding it to be, absolute truth.
I think a more mundane topics are a better example, e.g. the political or social topic of the day.
On the other hand, if you think it's more like 1 in a million, and furthermore that there's a similar chance of other versions of God or other gods existing who have completely different demands on your behavior, then it's a lot more sensible to say "fuck it, I'm going to ignore such possibilities". Which is a practical difference.
I do agree that lots of people would probably do better if they were more comfortable maintaining uncertainty in general.
It might motivate you to more actively oppose policies motivated by religion which are harmful to society.
It might motivate you to openly express your views and thus provide emotional support to other non-believers who are trapped in situations where they cannot express those views without risking physical harm. In Saudi Arabia, for example, being an atheist is a capital offense. And even in the U.S. there are many people in situations where coming out as an atheist puts them at risk of ostracism and destitution.
A polytheist could have a confidence interval on the number of gods (lower case g) that exist (e.g. "I am 90% sure that the number of gods is between 10 and 20"). But that is not typically what one is referring to when speaking of atheists and agnostics.
This looks like the sanewashing[1] anti-pattern. Numerous comments say exactly this, every time it comes up. It's great that you personally have a nuanced opinion on the matter, but you should be careful about speaking for others, or saying what skeptics believe.
From a quick search of HN of "all crypto scam", filtering out ones that aren't endorsing the view, or are throwaway accounts:
https://news.ycombinator.com/item?id=33566892
https://news.ycombinator.com/item?id=31012827
https://news.ycombinator.com/item?id=33524215
https://news.ycombinator.com/item?id=33654880
[1] https://andrewaustin.blog/2022/02/14/sanewashing-its-more-wi...
2) I don't think he's arguing that everyone who thinks crypto is a scam is that sort of person, he was saying that most people who have been scammed are.
3) Molly White's number's agree with OP's. $12 billion vs a market cap of $858B is roughly the same percentage identified in the article. And before you complain about the use of market cap as denominator, market cap is also the numerator being used by Molly White's analysis, so it's the correct denominator.
1) People should be more hesitant to speak in absolutes. Unfortunately it’s possible that having a nuanced take is inversely correlated with the tendency to post noisy comments online. Maybe, regardless of the underlying stance of “most” skeptics, some more honest dialogue is warranted. Point conceded.
2. Hm. If that’s the case, the author’s assertion that most people who have been scammed are the kinds of people who fall for scams is fair, but not going to change many minds.
3. This is discussed ad nauseam below, so I’ll just add a reminder that we’re debating the author’s statement that “big crypto projects are very rarely scams” as evidenced by his google search. He goes on to say that “Crypto is a few hundred interesting projects, plus a long tail of thousands of scams.” So, most crypto projects are safe if you just ignore most crypto projects and only consider the most dominant. Realized losses vs unrealized market cap aside, the dynamics that incentivize that long tail of scams are worth worrying about in my view.
For 3, I think his statement as written "big crypto projects are very rarely scams" is clearly not literally true in a meaningful sense, and it's right to criticize him for that. However, I think a weaker statement like "The people that complain that crypto projects are scams are overstating how dense the space is with scams" is probably more accurate.
It's sort of hard to determine how to weight an analysis of the density of scams in a space. Certainly if you weight by project count, it'll be quite high. If you weight by market cap, it'll be considerably lower. But to your actual point, I agree worrying about scams in crypto is very important, and I read the OP as (admittedly, somewhat carelessly) trying to argue against the view that "all" or "nearly all" crypto projects are scams.
I think a better way to state it might be something like: Post dotcom bubble pop a lot of people were saying "those internet companies were all scams", and they were right in some kind of media-attention-weighted sense, and maybe even some other senses. But there were certainly a lot of real and important companies there, and even a lot of near-real-and-important companies that were just a little ahead of their time and didn't make it, and I don't think it's fair to dismiss most of them as scams.
I'd definitely say crypto is still in the pre-making-it stage of its lifecycle, and it remains to be seen whether any of these projects will end up being say, the Google or Amazon of this space, that survives the winter and goes on to do meaningful things. However, even if they all die, I think it's fair to say that e.g. Ethereum and Bitcoin were sincere attempts at building novel technology.
Is this any different from the stock market? There are about 6000 companies listed on the NYSE and NASDAQ. According to [1] there are about 10,000 penny stocks traded OTC. Not every NYSE/NASDAQ company is legit and not every penny stock is a scam, but we're still looking at an awful lot of fraud out there.
Seems like the incentives for financial fraud are obvious and eternal.
[1] https://www.nytimes.com/2021/03/18/business/penny-stocks-tra...
Around the same time, some people realized that bitcoin was deflationary. And, you had two groups: One started hoarding coins and pumping it, and the other group realized it was a pyramid and had too good a conscious to participate. And, the pumping continued until today. And, maybe some people are sour?
Then, for 14 years, tons of money was dumped into it, and not much happened. It's still mainly used for black market goods. It still has terrible user interface. The transaction rate is still low. The transaction fees are high. And, it's too easy to have your coins stolen.
If you live in a stable economy with good governance and a trustworthy financial system, you don't need crypto. Unfortunately, that does not describe everyone in the world. It may not even describe half of the world.
ie, it's not fine.
I agree that, in the case of Bitcoin specifically, it's still primarily used for black market goods (excluding speculation, of course), among relatively wealthy developed market users. However, there are a non-trivial number of genuine users among economies with less stable banking systems, as the OP points out. And it isn't true that fees are still high and tx rate is still low, the lightning network solves that problem. It hasn't seen super widespread adoption yet, but the technical problem, as far as fees and transaction rates, is essentially solved. What you are correct about though is that the UX is still pretty terrible for the average person. However, in some places, that UX is a better alternative than the one they have access to locally.
1) Fiat is controlled by government --- we don't trust it.
2) I know --- let's build de-centralized, trustless money without government.
3) Yikes! Government must save us from the fraud hellscape we have naively created.
4) But wait --- isn't crypto with government oversight and control basically just fiat all over again?
5) Crypto isn't trustworthy, I think we'll just stick with fiat --- the unwashed masses.
6) Wait, without the masses on board, crypto can never be a real functioning currency.
7) I think we'll just stick with fiat --- cryptobros.
I think we're currently at about step 4 or 5.
The more aggressive skeptical argument is that cryptocurrencies can be looked at as a banking system with no government backstop at all, which are vulnerable to a systemic bank panic and run the system -- creating contagion effects that will ultimately knock down all the dominoes. Financial systems are all vulnerable to the fact that they are not stable systems and so they all need circuit breakers and need automatic measures in place to backstop the system in the event of a panic (critics of the argument that I'm making will point out that doesn't produce any certainty of stability, but they miss the point that those measures do make the system more stable). Without those, they'll definitely hit a systemic panic and will unravel sooner rather than later.
This was pretty well encapsulated in two paragraphs:
> In the same way, everything about the crypto economy is worse than the regular economy. The only excuse is that it’s decentralized. This means you can use it for all of those cool things - sending remittances, circumventing corrupt banking systems, resisting authoritarian governments - that are hard to do with regular money. Of course subjecting yourself to a difficult constraint is going to be harder than not doing that!
> If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation).
I still think NFTs are silly though.
One country (Trinidad and Tobago) where I speak to a friend who is often complaining about dollar shortages and government-imposed forex controls is not on the list.
I don't think cryptocurrencies are currently being used to solve the problems the article is assuming it does as much as the article's thesis suggests.
A lot of the "oh you're only anti-crypto because you're so financially privileged" inclusion is pretty disingenuous, if not predatory.
Lots of average Joes saw a superbowl ad, put their money into a large, well-respected exchange that didn’t promise impossible returns, and lost everything! I had a nontechy relative call and ask me how she should go about selling her (literal traditional paint-on-canvas) paintings as NFTs! For a little bit there it seemed like there might be enough momentum for cryptocurrency to become too-big-to-fail before skeptics even had time to object.
It also underplays the extent to which the kind of cryptocurrency stuff techies react negatively to is still explicitly or implicitly boosting that vision. Cryptocurrency as the tor of money is reasonable but also not something that for-profit companies have much incentive to be involved with. But next time I see a project whose target market are those living in countries with completely nonfunctional financial systems, people trying to escape authoritarian governments, or sex workers, I’ll think twice before being negative.
Anyway, a few days later I had to explain the whole situation to an artist friend who'd heard the story and wanted in. Argh.
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[1] https://moxie.org/2022/01/07/web3-first-impressions.html
To me it feels of a kind with the sports betting sites you see advertised everywhere nowadays and those CSGO skin betting sites that steamers were (and still are! See the People Make Games video on this) advertising to twelve year olds.
Happens in everything. Corporations can fail. Trad-finance institutions can fail. Sovereign currencies can fail.
I still think that beats centralized finance, where I'm barred from investing in, say, startups. Because I'm not ~~rich~~ accredited investor, lol. Ofc that's for my safety, because apparently reducing opportunities of non-rich people is 'protecting' them.
For some bizarre reason one doesn't need to be an 'accredited' to start their own business. I wonder what's the logic here? Government should clearly fix that issue - after all, if investing into sth like OpenAI (for example) is considered risky, then starting your own business is straight up delusional.
> I had a nontechy relative call and ask me how she should go about selling her (literal traditional paint-on-canvas) paintings as NFTs!
What's wrong with that? Is selling physical merchandise bad too? Or digital goods in general? Commissioned digital art? Why is it illegitimate and, say, autographs aren't? Frankly, I find it to be a more elegant system than these other approaches. It would be nice if it caught on someday.
> For a little bit there it seemed like there might be enough momentum for cryptocurrency to become too-big-to-fail before skeptics even had time to object.
How great! "Skeptics" are a bit of a weird name for this. Tech innovation doomers is more fitting, I think. Narratively, I'll admit, you guys are currently on top somehow. VR, Metaverse, AI, whatever Musk ever does... (well, AI doomerism isn't quite universal yet, maybe).
Truly amazing, let's not ever do anything different or new, it's all shit after all.
(also, maybe I'm delusionally optimistic, but I don't think it's quite over yet)
Corporations can also succeed. Circular perpetual motion machines leveraged against their own bullshit to claim ever-higher valuations while telling folks "you don't need to know about crypto, just give us your money" on TV? That's never gonna work out. It's fundamentally broken.
You try to equate crypto skeptisicm with general anti-innovation thinking but... what was the innovation in FTX or Luna or [insert other implosions here]? Seeing hype as innovation is hardly sound thinking.
Show me some actual "future of investment" innovation and see if I'm as critical about it. Or any non-fintech innovation for that part. Lots of interesting technological developments happening, they just mostly aren't in the crypto hype bubble.
The fundamental value of physical artworks is getting something pretty to put on your wall. The fundamental value of a digital commission is the existence of an image that otherwise would not exist. The NFT-theoretic concept of digital ownership isn’t inherently invalid or meaningless, but it’s not something that most regular people were ever going to find valuable, and it was being used as a smokescreen to obscure the fact that most of the value of NFTs came from speculation.
That call really soured me on the whole thing because it was firsthand evidence that cryptocurrency boosters were scamming ordinary people by convincing them that they were opening an Etsy store when they were actually buying casino chips.
I'm also not saying "ban all crypto", but make it a lot harder to pump in money from the clueless masses. When my Uber driver is shilling shitcoins, crypto is in need of more regulation, and then we can figure out what to do next.
This is a myth. Those pens were not that expensive, they were made for use-cases on Earth and happened to be used in space, and they actually work better than the $0.10.
> In the same way, everything about the crypto economy is worse than the regular economy.
Good that they realize that.
> The only excuse is that it’s decentralized.
Except it's not. Not really.
I'm surprised they did not go on with "the other excuse is that it removes trust", to which I would have answered: "Nope, it doesn't".
So yeah, it's worse, except in countries that have bigger problems (corruption, unstable political system, no banks). Ever thought that maybe it would be worth fixing the bigger problem, rather than trying something that is worse?
But sure, let's defend a system that is "worse than traditional finance", because it's "sort of decentralised" (traditional banks are sort of decentralised too, to be honest), even though that creates big problems like ransomware.
No, but you could legitimately wonder what 15 years and the money that was invested in cryptocurrencies could have done to help solve the root problems, instead of marginally helping a few people while enabling scam and ransomware.
Do you have an idea how much money could be stolen from governments thanks to cryptocurrencies? North Korea is pretty good at this. Counter-productive solution now < perfect solution in the infinitely far future, IMO.
This writeup cites remittances, but last time I looked into it, crypto was a) a minor player in remittance markets, and b) is growing slower than many incumbents and new entrants, so that feels like a weak example. I haven't looked into banking in Vietnam, but I would guess there is a similar story (ie crypto is a niche, not on track to serve any sizable portion of unbanked Vietnamese customers, weaker success than several non-crypto mobile apps). I'm in the market for a nice writeup on some market where crypto is actually winning.
https://mirror.xyz/mattdesl.eth/_F9vQAUeeBB9AJNwMNaE_G5kTcl1...
Crypto is big in Vietnam, entirely as a cultural thing. They love games and they love finding creative ways to make money. They really got scammed well in the ICO days. DeFi didn't get big because they were still butt hurt from ICO days and because well, they don't understand the concepts in DeFi. Collateralized loans and providing liquidity just went over most people's heads.
That said, there are a lot of unbanked people there. Women in the north still put gold fillings in their teeth to store wealth "safely". They also have great inexpensive 4/5G everywhere and smart phones. There is a huge younger generation. Most people use cash and the largest paper(plastic) note there is about $22, which makes larger purchases a struggle.
It is ripe for innovation and digital P2P payments. The huge blocker is the government, which will need to be in control of all of this. Otherwise it'll all be black market dealing.
> And a lot of them say things like “our democracy is in danger” or “this could be our last free election ever”. If you really think January 6 was a close call, where do you think we’d be if Trump had succeeded? ... If Nancy Pelosi’s text messages are any guide, Democrats have joined libertarians in the “actually pretty worried about the government becoming an oppressive dictatorship” club. I don’t think they can say with a straight face that there’s no chance that we ever get fascists who use financial repression as a tool of control.
This is a very, very good point. It's like the "you don't need a gun you have the police... The police are killing people for fun" thing, it's always the same people saying both these things. If you really believe that America is on the precipice of fascism, you should want a way out of that repression. In most cases I believe it is cognitive dissonance, but in cases where I'm being asked for donations I'm convinced that this disconnect is deliberate and malicious.
We have instantaneous online banking systems and for the unbanked they can simply register for an e-wallets.