> They aren’t as stable as they claim to be, and the stability they do have arises from free-riding on the US banking system and monetary policy – and as we’ll come back to, if stablecoins are able to keep gaining market share, these parasites might eventually endanger their hosts.
> people are either still too afraid of looking like they don’t understand, still too deferential to Silicon Valley’s supposed technological expertise, or still too busy doing other things, to voice any skepticism about blockchain-based solutions
I'm not afraid of looking like I don't understand - I simply don't understand. I've tried reading a few "yellow papers" for crypto projects and they are so abstract and full of jargon that I never come away knowing more than when I started reading.
If anyone has a good resource for getting into the technical details of crypto please let me know. I would like to gain a full enough understanding that I can finally decide for myself if it's revolutionary or overhyped.
> Home ownership and the rest of the American dream seem out of reach for many people, and there’s very little safety net available when it comes to healthcare expenses, retirement, or just bad luck.
I empathize with the author, I really do, but you can't care about someone more than they care about themselves. If anyone has had the supremely unpleasant experience of trying to get loved ones to work out, they know. The last time someone (democrats) tried to tackle healthcare, they lost scores of seats all down the ballot.
The funniest thing is why crypto bros talk about the Venezuelan taxi driver who has to pay Western Union $10 to send money home, and that is most of the justification for minting trillions of dollars of riches. Yeah OK Visa/MC have a monopoly but even they are worth less than most bros think.
I was in relatively early in the web as a developer, I was in early on the crypto movement, also as a developer.
These technologies didn't fix the problems. There is too much regulation, you can't do anything without a license. The only solutions are political, not technological.
Everything feels like a scam within a scam. I feel dizzy just thinking about it. I'm completely demoralised. Everything related to career feels pointless, sisyphean because of the bureaucracy and monopolization. Any work that pays well is useless at best, harmful at worst.
It's either illegal or impossible to do anything which might provide value to people. Even if all the hurdles could be removed, I'm not even sure I want to contribute... For whose benefit? And I feel totally disconnected from the broader society around me.
I basically completely checked out career-wise. I'm good at faking though so I just fake it. I just started bullshitting my way through life. I hate it but everyone is just eating it up and loving it. What can I do? Just give the people more of what they want I guess. Value creation doesn't pay, bullshitting pays... People are living a lie and they love it when you build on top of it. If you just say the right words, they will deny their own eyes; this is what COVID taught me and I can see this in my day-to-day life. It's depressing, they are good people, that's why they assume good faith. I was just like them before, living in a bubble, I understand, I'm no better than them, just less fortunate. If they saw what I saw, they would probably do what I do. Many would do worse.
I feel like I need therapy from being this way. I have bills to pay though. I think I did everything approximately right but I've been ridiculously unlucky. I was operating on limited info and incorrect assumptions. Now, I'm stuck between a rock and a hard place.
It's illegal to be homeless in my country. It's illegal to live in a tent on 'your own' property, you are not allowed to build your own house without some expensive license and approvals... You can't do shit within your means. All the things which seemed unimportant to me before are now the centre of my life and on that plane of existence, I see scams all around.
The third paragraph hits too close to home for me.
You want to be a good person doing good things for other people and getting along peacefully? Sorry, but happy planet is that way. Don't come to earth.
It is truly baffling to look at the issues in tech, your alienation with your own work and point at regulations. This field has been almost completely unrestrained and egged on by every opportunist and schemer holding political office.
You blame regulations and then mention that everything is pointless because everything is: "sisyphean because of the bureaucracy and monopolization".
The tech industry is lousy with scams, hell the entire model of the global economy is exit scamming everyone. No one builds anything because it is meant to last, everyone is fighting for the next IPO or buyout. You have pointed your ire in the wrong direction... because you were unable to scam first? Confusing...
I guess it's possible that most people who turned out to be scammers had good intentions initially. Still, I had a real plan to drive adoption and create something positive in crypto. I did implement something positive on the tech side which largely fell on deaf ears but I sometimes think that it's precisely because I wasn't a scammer, that people sensed I wouldn't bend, that I wasn't 'allowed' to make it in that industry.
There is definitely a belief in this industry that its primary intent was to demoralise those fleeing the traditional system... Almost as a way to scare them back towards papa fiat.
Crypto, as it turned out, was likely a case of the fiat system playing good cop bad cop with the world's nerds. To push them around and demoralise them into apathy and compliance.
The other half of technology is the people using it. If that other half is stupid, the technology side will have to overcompensate or will maliciously abuse them. Neither is good.
And I am talking about myself here. My only excuse is that I simply don't use my money. Which is not necessarily a good thing either.
A lot of tech is very weird, as the author suggests. It often seems like there's good ideas but everything must go through a hype wave. Unfortunately, the hype wave makes it difficult to distinguish good actors from bad ones. Consequently the bad ones win because it's easier. It's like we've designed everything to be a lemon market. It's like we're not trying to build tech to make life better and make money along the way but to find the most exciting looking or sounding thing and figuring out how much money we can make with it.
I mean look at something like the Rabbit R1. I'm an AI researcher and I saw my peers get fucking excited about it because it was a leap ahead of all the state of the art research we knew. Sorry, but what? It takes time for research to get into a product, sometimes years, even in tech, even in the fast pace AI world. Like you think they put what normally takes at least one $10k GPU and put that into a $200 device? That they could leverage GPT and not have a subscription fee? You're not going to beat ChatGPT by using ChatGPT lol.
Somehow stuff like this keeps happening and we never learn our lesson. Author is right, they're just chasing. And the irony is that that chase is actually preventing us from getting what we're really chasing
This is a really fun well-written and on point set of articles. Thank you for sharing.
I feel like at this point there isn't anybody defending stablecoins who isn't using them primarily speculative investment/trading. There has yet to be a usecase for distributed ledger that isn't solved better by a centralised ledger other than niche counter-culture solutions whose users are typically blinkered to the fact that they are already a self-selected techno-elite who can't bring their utopia to the commons. That ended a bit more nasty sounding that I intended, apologies.
> There has yet to be a usecase for distributed ledger that isn't solved better by a centralised ledger
As I understand it, many countries in the European Union use distributed ledgers for elections. Essentially it lets you cross reference votes and store that database across servers in multiple countries. It also prevents post-election data tampering by the state holding the election.
My understanding is this this system is not an open to every random Joe who wants to have a server (like bitcoin is). I think you still need to be a state actor to be part of the distributed database (so it's not a zero trust environment).
(Unfortunately, I don't have any good links to back this claim up)
I think people here on HN keep underestimating the relevance of crypto for four reasons:
What crypto is already useful for is not to replace the cash in your pocket and your savings account. It is useful to replace SWIFT and Fort Knox.
What crypto will be useful for in the future is uncertain. But uncertainty does not mean pie in the sky. How the internet would be used was uncertain in the 70s.
Yes, nerds were already excited about the internet in the 70s. Have a look ath the "Mother of all demos": https://en.wikipedia.org/wiki/The_Mother_of_All_Demos
It takes decades to iron out the details of how to use fundamentally new technology.
Fear of change. Is there any new technology that HN is in favour of?
I don't buy it, crypto doesn't bring anything to the table that improve either SWIFT or the gold reserve that we actually need, but I understand crypto product developers see an advantage in switching from something they don't make any money on to something they do. As a consumer, or in this case as a citizen, crypto presents no advantage.
From a brief skim, this series seems too much "let me tell you my opinions" and not enough "let me tell you a story." I recommend reading Matt Levine and Patrick McKenzie instead.
I think the biggest problem with fintech is that the financial system is already decentralized, and full of tech. It really just seems like it involves using unregulated technology, which allows the skipping of restrictive regulations. This might actually be a good thing, but once a path has been proven to be non destructive the banks can just take over the market by begging the government for deregulation.
I looked at crypto a little for a startup - the thing that isn't usually mentioned is the huge downside of custody. Not your keys, not your coin - and holding those keys securely, think fire, theft, hacks, backdoored hardware wallets, etc - is really really hard to get correct. And if you mess up once anywhere - poof - all your money is gone and there's nothing you can do to get it back.
Exactly. Crypto is like having all of your money as cash that thieves can teleport out of your safe. It must be incredibly stressful to have most of your wealth in crypto knowing this.
The use case for crypto (eth) and stables (dai) at least for me is clear as day 1) to be able to save money
2) to be able to freely take it with me anywhere (on a vacation for example)
Having no other way to do these simple things, from my point of view, it is not a problem of hundred thousand people in Venezuela, it's a valid problem of tens (if not hundreds) of million people around the world.
IMO The author significantly underestimates how limited and inaccessible the current financial system in the world is.
so much japing, so little substance and to make a point LETS JUST SWITCH TO CAPS and round it off with a reddit comment - this is capitalism baby!
Also, what is this headline even about? Why the bashing on fintech? I worked for 4 fintechs and communicated with many more, not a single one was blockchain related.
Why is this even on hn?
If you want to read proper criticism of blockchain, read Molly White's essays instead
As someone working with African companies (legitimate businesses, mid-sized transactions), the key use case is payments in stablecoins—their banking infrastructure doesn’t allow for reliable and consistent foreign remittances.
These deals would be practically impossible without stablecoins.
(And to be clear, I’m someone who has never been particularly enthusiastic about crypto or blockchain.)
E.g."Stablecoins won’t bank the unbanked, because people get stablecoins by purchasing them on a crypto exchange, and no crypto exchange will open an account for a customer unless they have a bank account."
Well, I understand that US has dystopia level of financial surveillance, but in many places in the world you can change cash in person to crypto without many issues. And you don't need to use any major exchange for that, that defeats the whole point.
And yes, Russians, Iranians, Palestinians are known to use crypto, for example. And the majority of them don't have US bank accounts.
One of the core features of crypto that it's not an American (or anyone else) thing, like paypal, stripe, or any other system and American laws can be easily ignored if both parties are outside of the US. That's already a very liberating feature for at least a billion of people of nations hostile to the US and potentially to 8+ billions of people more.
At the end of the day, most crypto has a built in way to turn fossil fuels into significantly less money than you paid for them, so it doesn't even apply to the US unless they've started requiring KYC for ASICs and GPUs.
I am not convinced this carbon-intensive form of money laundering is a good thing, but it certainly exists.
> And yes, Russians, Iranians, Palestinians are known to use crypto, for example
Yes and mostly (as in 99% by amount of crypto moved) it's their governments
For example Russia it is not legal to pay with crypto, and to cash it out allowed crypto exchanges must submit your transactions to the government etc otherwise they get blocked.
But the bandit state is free of course to use it to trade with its friends like NK (which basically runs its nuclear program on ransomwared crypto) or Hamas;)
recently i made a cash withdrawal from my personal account ahead of a trip abroad (they asked me why) and within days received a FinCEN notice in the mail warning me about “ structured transactions”… having made no other cash transactions days or even check cashing or writing days before or days after.
> Actually improving people’s financial wellbeing, for example, will require us to pursue real, slow, piecemeal, democratic solutions.
Democratic solutions are, imho, doomed to failure. In order for them to work a significant portion of "take back control" and "make my country great" brigade will need to have some kind of revelation about the direction of society as a whole. Given the amount of resources pumped into keeping people separate and fighting one-another, this seems like naive optimism.
I consider this to be a woefully inadequate response to a vast, complex and thoroughly embedded set of interconnected issues. Appropriate solutions will require a deep appreciation of complexity science, radically better system design and, frankly, a level of imagination, determination and competence that simply doesn't exist as a social norm, and will not emerge for at least a generation (or three), given that educational and political institutions are so deeply rooted in the current mode.
I don't think Bitcoin is revolutionary - it's just algorithmic scarcity - but I do think that distributed ledgers are an important piece of a future puzzle, as they provide transparency where previously it didn't exist. That said, there are no silver-bullets and not everything should necessarily be held on one.
My position is that, until we actually address the misconception of infinite growth within economic system design (i.e. not by external constraints, such as taxation), we haven't even started. Some may say that Bitcoin already does this, but its capture by the financial sector demonstrates that it is, at best, another asset class.
My anticipation is that this won't happen, so I am fully expecting a kind of looney tunes moment as we race off the side of the cliff. I am interested, not in preventing that from happening, since I think it is inevitable, but rather on planting bushes on the side of the cliff that might give us things to grab as we fall. Feel free to accuse me of either pessimism or optimism.
45 comments
[ 4.2 ms ] story [ 66.3 ms ] threadI'm not afraid of looking like I don't understand - I simply don't understand. I've tried reading a few "yellow papers" for crypto projects and they are so abstract and full of jargon that I never come away knowing more than when I started reading.
If anyone has a good resource for getting into the technical details of crypto please let me know. I would like to gain a full enough understanding that I can finally decide for myself if it's revolutionary or overhyped.
I empathize with the author, I really do, but you can't care about someone more than they care about themselves. If anyone has had the supremely unpleasant experience of trying to get loved ones to work out, they know. The last time someone (democrats) tried to tackle healthcare, they lost scores of seats all down the ballot.
https://www.quorum.us/data-driven-insights/under-obama-democ...
These technologies didn't fix the problems. There is too much regulation, you can't do anything without a license. The only solutions are political, not technological.
Everything feels like a scam within a scam. I feel dizzy just thinking about it. I'm completely demoralised. Everything related to career feels pointless, sisyphean because of the bureaucracy and monopolization. Any work that pays well is useless at best, harmful at worst. It's either illegal or impossible to do anything which might provide value to people. Even if all the hurdles could be removed, I'm not even sure I want to contribute... For whose benefit? And I feel totally disconnected from the broader society around me.
I basically completely checked out career-wise. I'm good at faking though so I just fake it. I just started bullshitting my way through life. I hate it but everyone is just eating it up and loving it. What can I do? Just give the people more of what they want I guess. Value creation doesn't pay, bullshitting pays... People are living a lie and they love it when you build on top of it. If you just say the right words, they will deny their own eyes; this is what COVID taught me and I can see this in my day-to-day life. It's depressing, they are good people, that's why they assume good faith. I was just like them before, living in a bubble, I understand, I'm no better than them, just less fortunate. If they saw what I saw, they would probably do what I do. Many would do worse.
I feel like I need therapy from being this way. I have bills to pay though. I think I did everything approximately right but I've been ridiculously unlucky. I was operating on limited info and incorrect assumptions. Now, I'm stuck between a rock and a hard place.
It's illegal to be homeless in my country. It's illegal to live in a tent on 'your own' property, you are not allowed to build your own house without some expensive license and approvals... You can't do shit within your means. All the things which seemed unimportant to me before are now the centre of my life and on that plane of existence, I see scams all around.
want to elaborate which country this is?
You want to be a good person doing good things for other people and getting along peacefully? Sorry, but happy planet is that way. Don't come to earth.
You blame regulations and then mention that everything is pointless because everything is: "sisyphean because of the bureaucracy and monopolization".
The tech industry is lousy with scams, hell the entire model of the global economy is exit scamming everyone. No one builds anything because it is meant to last, everyone is fighting for the next IPO or buyout. You have pointed your ire in the wrong direction... because you were unable to scam first? Confusing...
There is definitely a belief in this industry that its primary intent was to demoralise those fleeing the traditional system... Almost as a way to scare them back towards papa fiat.
Crypto, as it turned out, was likely a case of the fiat system playing good cop bad cop with the world's nerds. To push them around and demoralise them into apathy and compliance.
And I am talking about myself here. My only excuse is that I simply don't use my money. Which is not necessarily a good thing either.
I mean look at something like the Rabbit R1. I'm an AI researcher and I saw my peers get fucking excited about it because it was a leap ahead of all the state of the art research we knew. Sorry, but what? It takes time for research to get into a product, sometimes years, even in tech, even in the fast pace AI world. Like you think they put what normally takes at least one $10k GPU and put that into a $200 device? That they could leverage GPT and not have a subscription fee? You're not going to beat ChatGPT by using ChatGPT lol.
Somehow stuff like this keeps happening and we never learn our lesson. Author is right, they're just chasing. And the irony is that that chase is actually preventing us from getting what we're really chasing
I think this is successful in its goals
Liquidity providing on concentrated liquidity pools is something I would like to see in the high volume US equities market
But will realistically only exist on tokenized platforms that trade their surrogates
It’s extremely lucrative and was only in the domain of market making firms before this technology
I feel like at this point there isn't anybody defending stablecoins who isn't using them primarily speculative investment/trading. There has yet to be a usecase for distributed ledger that isn't solved better by a centralised ledger other than niche counter-culture solutions whose users are typically blinkered to the fact that they are already a self-selected techno-elite who can't bring their utopia to the commons. That ended a bit more nasty sounding that I intended, apologies.
As I understand it, many countries in the European Union use distributed ledgers for elections. Essentially it lets you cross reference votes and store that database across servers in multiple countries. It also prevents post-election data tampering by the state holding the election.
My understanding is this this system is not an open to every random Joe who wants to have a server (like bitcoin is). I think you still need to be a state actor to be part of the distributed database (so it's not a zero trust environment).
(Unfortunately, I don't have any good links to back this claim up)
Stablecoins are not speculative or investments at all - their price stays the same. That's where stable in stablecoin comes from.
You see crypto and think day trading
What crypto is already useful for is not to replace the cash in your pocket and your savings account. It is useful to replace SWIFT and Fort Knox.
What crypto will be useful for in the future is uncertain. But uncertainty does not mean pie in the sky. How the internet would be used was uncertain in the 70s.
Yes, nerds were already excited about the internet in the 70s. Have a look ath the "Mother of all demos": https://en.wikipedia.org/wiki/The_Mother_of_All_Demos It takes decades to iron out the details of how to use fundamentally new technology.
Fear of change. Is there any new technology that HN is in favour of?
Having no other way to do these simple things, from my point of view, it is not a problem of hundred thousand people in Venezuela, it's a valid problem of tens (if not hundreds) of million people around the world.
IMO The author significantly underestimates how limited and inaccessible the current financial system in the world is.
Also, what is this headline even about? Why the bashing on fintech? I worked for 4 fintechs and communicated with many more, not a single one was blockchain related.
Why is this even on hn?
If you want to read proper criticism of blockchain, read Molly White's essays instead
https://blog.mollywhite.net/blockchain/
(And to be clear, I’m someone who has never been particularly enthusiastic about crypto or blockchain.)
E.g."Stablecoins won’t bank the unbanked, because people get stablecoins by purchasing them on a crypto exchange, and no crypto exchange will open an account for a customer unless they have a bank account."
Well, I understand that US has dystopia level of financial surveillance, but in many places in the world you can change cash in person to crypto without many issues. And you don't need to use any major exchange for that, that defeats the whole point.
And yes, Russians, Iranians, Palestinians are known to use crypto, for example. And the majority of them don't have US bank accounts.
One of the core features of crypto that it's not an American (or anyone else) thing, like paypal, stripe, or any other system and American laws can be easily ignored if both parties are outside of the US. That's already a very liberating feature for at least a billion of people of nations hostile to the US and potentially to 8+ billions of people more.
I am not convinced this carbon-intensive form of money laundering is a good thing, but it certainly exists.
Yes and mostly (as in 99% by amount of crypto moved) it's their governments
For example Russia it is not legal to pay with crypto, and to cash it out allowed crypto exchanges must submit your transactions to the government etc otherwise they get blocked.
But the bandit state is free of course to use it to trade with its friends like NK (which basically runs its nuclear program on ransomwared crypto) or Hamas;)
“dystopia level of financial surveillance,”
these days…
recently i made a cash withdrawal from my personal account ahead of a trip abroad (they asked me why) and within days received a FinCEN notice in the mail warning me about “ structured transactions”… having made no other cash transactions days or even check cashing or writing days before or days after.
Democratic solutions are, imho, doomed to failure. In order for them to work a significant portion of "take back control" and "make my country great" brigade will need to have some kind of revelation about the direction of society as a whole. Given the amount of resources pumped into keeping people separate and fighting one-another, this seems like naive optimism.
I consider this to be a woefully inadequate response to a vast, complex and thoroughly embedded set of interconnected issues. Appropriate solutions will require a deep appreciation of complexity science, radically better system design and, frankly, a level of imagination, determination and competence that simply doesn't exist as a social norm, and will not emerge for at least a generation (or three), given that educational and political institutions are so deeply rooted in the current mode.
I don't think Bitcoin is revolutionary - it's just algorithmic scarcity - but I do think that distributed ledgers are an important piece of a future puzzle, as they provide transparency where previously it didn't exist. That said, there are no silver-bullets and not everything should necessarily be held on one.
My position is that, until we actually address the misconception of infinite growth within economic system design (i.e. not by external constraints, such as taxation), we haven't even started. Some may say that Bitcoin already does this, but its capture by the financial sector demonstrates that it is, at best, another asset class.
My anticipation is that this won't happen, so I am fully expecting a kind of looney tunes moment as we race off the side of the cliff. I am interested, not in preventing that from happening, since I think it is inevitable, but rather on planting bushes on the side of the cliff that might give us things to grab as we fall. Feel free to accuse me of either pessimism or optimism.
That worked in the U.S.
European banking regulators saw through this ploy and forced them to seek a banking license.