Ask HN: Is crypto an unviable, tech-bubble delusion?
The industry is run by a cool kids club of crypto twitter thought leaders who seem to lack the experience and wisdom to realize that the threshold of UX required for mass adoption is currently wildly out of reach for the technology, no matter how pretty the UI is. Seed phrases, gas and fees, irreversibility of transactions, virtually no concept of customer support, etc etc.
Steve Jobs famously said "You've got to start with the customer experience and work backwards to the technology. You can't start with the technology and try to figure out where you're going to try to sell it." The entire crypto space seems to be guilty of the latter.
The longer that this space continues to focus on and struggles to get traction for novelty toy products – eg art experiments – the more pessimistic I am about the long term viability of the underlying technology. I say this with friends who work in the space who after years of pontificating about the disruptive implications of crypto, are still tweeting about the latest NFT collectible.
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[ 4.6 ms ] story [ 103 ms ] threadI have been thinking about the fedi lately and how it is missing single sign in which would enable all sorts of supporting services. I used to think “web3” was beneath contempt (scams) but the idea of “authentication first” is appealing to me now although fundamentally a decentralized auth system means being responsible for cryptographic keys which is just terrible from a UX perspective.
It seems the entire industry is filled with builders who are just dog-fooding janky products to each other under the guise of traction.
Look at how end-to-end encryption of email has not caught on although it was possible in the late 1990s, the horror of gpg, or how the NSA gave up on nerfing encryption algorithms because people will always screw up key management. (Che Guevara might have lived to lead another revolution if he hadn’t misused his ‘unbreakable’ one-time pads.)
Premining was a massive heist scam at the beginning of the ledger, available for all to see the evidence of it. Bitcoin's legitimacy hedges a lot on that promise that those early wallets are inaccessible. There's never any certainty on that promise, especially in the way Satoshi is a mythologized figure that maybe never existed or maybe is one of a handful of known scammers claiming to be him. It shouldn't be a shock how many ICOs were premining scams when that lies at the heart of Bitcoin.
I feel like even the name "blockchain" is a form of fraud at the center of cryptocurrencies. The data structure is clearly a Merkle tree. "Forks" in the chains aren't an accident or an aberration, they are a natural shape of the data structure and all the handwaving and "yeah, but Proof of Work and coalitions of miners and majority ownership" sociopolitical contrivances don't fix the technical fact that these things are trees, always have been, and always will be. (How many Bitcoin forks are we up to being tracked in the major exchanges now? 6 was the last I counted, months back. And at least 3 Ethereum forks. Those numbers aren't "accidents", that's not an aberration from the norm, that is clearly the norm and the earliest forks were all long ago enough now that most people have only known them as trees and never actually "singular chains".)
Again, I know I've got a very cynical view of all this, and I know not everyone agrees with my views on the above, but they say scammers can often recognize their own, and when so many scams have happened on top of cryptocurrencies, it is very hard not to wonder: When even the technology and terminology resemble scams and frauds, is it any real surprise how many scams and frauds keep getting run on top of them?
Blockchain will always have value when you need artificial scarcity on the Internet. The distributed ledger also has many uses outside of crypto currency.
Even just as a speculative bet that moves quicker than the stock market, it has value. Some people are seeing wealth they would never have had a chance at if they did it the traditional way of investing in stocks and bonds, and it's transforming their lives (and a bunch of other people, unfortunately, have lost money, sometimes a lot of money, on the other end as well).
I joined a video game startup that ultimately failed and probably lost out on at least $100k or more on money I could have made during that time at a larger corporation, especially since I didn't have a 401k then (I got paid, but a lot less than I would have elsewhere).
It was a speculative bet that I made and I failed. I don't really see how that's much different than someone making a poor bet on crypto (assuming they only spent what they could afford to lose, of course).
Even when 'created' via mining, that has a real world cost in electricity and what not that you paid for.
No money is ever created, even if 'price' goes up. If the 'price' goes up, and you cash out then that just means you got more of someone else's money than you otherwise would've.
You can never separate crypto from scams and grift, because that's what it is fundamentally. A scam and a grift.
I hope one day they are legally treated as such because of how harmful those things are.
Just look at this link on Quora asking about 'When someone makes money in the stock market, must someone else be losing money?'[1]. Almost every single answer there disagreeing with that question about stocks you could swap stocks for crypto and it'd apply equally.
Also anything a business creates also has a real world cost as well. If not with your cash (but it often is, with subsidies, tax breaks, loopholes, or other things), then with the business' impact on the environment, their effects on laws that affect you (i.e. Disney extending copyright law), or just consuming resources that you could have consumed for less if they weren't creating a higher demand for them. If everything was in homeostasis, then not a big deal, but we haven't been anywhere near that for a long time.
And yes, I'm aware bitcoin isn't great for the environment considering how much energy it currently consumes for mining. I don't like that either. That doesn't make it a scam or a grift though.
[1] https://www.quora.com/If-someone-is-making-money-is-someone-...
In the long term stocks reflect true growth in the economy. Dividends are not zero-sum.
> Steve Jobs famously said
Steve Jobs was a good marketer and a mediocre businessman. The fact that so many people here take him at face value is like if researchers from the future thought Charlie Chaplin was a drama actor. It's embarrassing that anyone with the gall to call something a "tech bubble illusion" would cite Steve "Reality Distortion Field" Jobs, but here we are. I gotta get off this site...
> The longer that this space continues to focus on and struggles to get traction for novelty toy products
The space is novelty toy products. What did you really expect, for the IMF to roll over and "give you one for free"? Have you not followed the past century of macroeconomics?
Centralized systems make wealth hard to unseat, but they also afford a level of UX – convenience, failsafes, oversight, etc – that is simply out of reach for decentralized products today.
QR codes don't ring a bell? Failing that, custodial wallets, escrow transactions, credit cards that turned crypto into fiat... these have been around for close to a decade now.
I don't like cryptocurrency; but I know what it looked like a decade ago and feel like the UX was often easier than paying with card.
> but they also afford a level of UX – convenience, failsafes, oversight, etc – that is simply out of reach for decentralized products today.
You should tell that to all the proprietary UNIX variants. I'm sure their graveyard is getting pretty lonely nowadays.
And banks can reverse fraudulent transactions, whereas with crypto there is the 'code is law' thing and once it's set in stone on the blockchain, there is no going back.
Also since modern computing is so leaky and insecure, crypto is being rampantly stolen all over the place. You could say the same about computing for banks, but the rate limiting, KYC, and anti-fraud measures are way ahead of crypto.
They think sending out a tweet alerting users of a scam is an adequate anti-fraud solution.
Well, that's only mostly true - chains have forked to avoid this very issue, as we saw with the DAO.
Which one of these is the greater crime or drawback will depend on who you ask!
Using the Steve Jobs quote - what other problem domains could you back into where blockchain might be a good fit?
A couple ideas:
* user identity - anonymous, verifiable identity not tied to a corp or gov. use cases could involve managing logins/2FA to platforms w/o relying on a google/whatever identity
* property management - tracking titles/deeds for real estate
The challenge with any ideas is typical SaaS CRUD also solves these problems fairly well.
* A wallet is just a secret random number, and all the identity-centered uses of it are "classic" cryptography, not needing the double-spend protection. The hard part is in the human side of key management, which blockchains aren't applicable for.
Blockchains have no concept of personhood, and can't prevent sockpuppetry. You can only have a plutocracy, not democracy. (Worldcoin has a central authority)
* If the blockchain state is final and no central authority is able to override it, then someone can hit you with a pipe until you give your private key, and become legal owner of your house. Police will evict you, coz the blockchain says so. Courts have no authority to reverse it. If you fix this problem, you just have an expensive gov database.
Lots of real-world applications can't work because of the oracle problem.
Money and finance are the strongest applications where these properties benefit most.
Writing and reading transactions on blockchains is a clunky UX, but worth learning if you want to secure/transmit a billion dollars through cyberspace with no intermediaries or authority saying you can't.
Experimentation and high rates of failure is the nature of software on new platforms. So many websites, apps, games, etc. created for computers will utterly fail, but the ones that succeed end up defining generations (Minecraft, Excel, Google)
There's probably less chance for you to get caught, but there's no difference between that and other 'normal' ways of avoiding taxation.
But if you're wondering about examples at that scale, nation states, central banks, etc. routinely handle that kind of volume.
The problem is thinking this is a useful way to represent fiscal value. Ain't.
It's also how I say that there isn't really a useful problem that decentralisation solves. After all, most git users use git in a centralised way.
https://www.stephendiehl.com/blog/against-crypto.html
Bitcoin and crypto have a solid use case, whitewashing ill-gotten black money through money laundering.
The corrupt and the criminals have ties with crypto whales, and they will pump and dump accordingly.
If a individual investor/gambler is patient, it is possible that they could realize serious profits.
Is it ethical? No.
Is it human nature? Yes.