I really struggle with this. I'm reminded so often of the Douglas Adams quote:
> Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
> Anything that's invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
> Anything invented after you're thirty-five is against the natural order of things.
Do I just not get crypto?
So, I started doing the Certified Blockchain Professional course to understand the technology and hear first hand from the proponents.
I've come to the conclusion that Crypto / Blockchain just isn't solving any interesting problems. It is the epitome of a solution looking for a problem.
There's a huge amount of money being spent to convince the technologically illiterate that this is the next big thing - and I think that's morally abhorrent.
The amount of energy the space takes up is nothing short of an ecological crime against humanity.
Fundamentally, there are a couple of niche computer science problems in there - muddled in with some semi-interesting philosophy - and that's about it.
Most people here, I suspect, have seen hype-cycles come and go. Blockchain seems identical to all the other failed scams in the past.
Completely agree - Technology is supposed to solve a problem, and the usual approach is to say "Here is a problem I have identified, here are the requirements I want it to meet, and considering that here is an array of technology choices I can choose from, and based on that X is the best fit".
With Crypto, it seems to go the opposite way, i.e. "Let's think of possible problems that Crypto could tenuously solve, and then build a blockchain".
Going the other way though leads to solving problems that might not exist, and a technology choice that isn't necessarily best-fit. I work in Supply Chain, and as an example, while Supply Chain Traceability has long been touted as a 'golden child' example of where the blockchain can help, in the last 15 years centralised solutions have had much more traction and success. My personal explanation? Starting with blockchain as the solution led to the problem statement focussing on decentralisation, which actually hasn't turned out to be that important compared to other NFR's.
Look at other technologies such as a REST APIs, which solved lots more propblems across the first 15 years of their life despite being much a more subtle improvement from a technology perspective. Despite this, REST API's didn't come with the same level of hype from the general public, because you couldn't sell REST-API-COINS and speculate on them.
Yeah. And it goes beyond solution-in-search-of-problem; money clearly makes things worse here.
Finding great solutions might sometimes need thinking outside of the box; I can see solutions in search of problems as being that kind of long shot that's rarely but sometimes spectacularly useful.
But crypto is particularly tricky for that, because it's not just a solution in search of a problem; it's also a Ponzi scheme. And it's really hard to disentangle the two.
Were "crypto" merely a bunch of clever algorithms allowing an ever broader set of zero-knowledge proofs... then perhaps we'd find actually useful problems to solve with that. But instead, it's already a huge market by virtue of its artificial scarcity. Any new cool thing these algorithms might do is overshadowed by the lure of the Ponzi scheme; even a tiny probability of turning that pyramid into something solid is easily worth more than a long-shot at some revolutionary technology you probably couldn't even control if you did think it up.
It's the combination of so much money that drowns out everything else with a dash of gambling, a sprinkling of a pyramid scheme, all lathered onto a solution in search of a problem that makes it particularly dispiriting.
> It is the epitome of a solution looking for a problem.
I can't entirely agree with this. Originally Bitcoin seemed it could be a solution to a problem (i.e. decentralized digital currency), and it turned out it became something a bit different: a kind of digital investment that is highly volatile but has some advantages over, say, traditional stock (and plenty of disadvantages, too). So for a few people, Bitcoin did solve some problems - and created many problems for others on the way.
Blockchain in general has proved to work for what it's been intended, that is not being able to forge transactions. Even though we don't have any really useful applications for it, it's good that it exists, because in 10, 50, or 100 years it will turn out it's a perfect missing puzzle piece for some invention we still don't have any idea about.
I think there's an in theory use for the "digital gold" aspect of something like bitcoin, and some use for something like a smart contract to eliminate the need for middlemen in some exchanges.
The issue of course being that there's a LOT of new and exciting issues with things like this, and more importantly, some ancient and critical issues....like mass scamming and inconsistent tech. Decentralization sounds great until all your money goes out the window, never to be seen again.
I do think there's a home for the tech, and I think there's a small chance some of this really explodes (in the understanding that i don't understand something about it, which is likely), but I do feel that it's impossible to find any reasonable discussion of the topic because it's COVERED in bullshit.
It seriously reminds me of marketing. No one would say that marketing doesn't work. There's plenty of evidence it does. But actually trying to learn about certain facets of the industry is a NIGHTMARE because it's just other marketing people marketing to you, and sifting the bullshit from the legit is hell.
If I'm reading a scientific white paper, have doubts about its validity and the only evidence offered by a Google search is marketing-focused or internet comments, I tend to err on the side of caution and just assume it's probably bad information.
I'm still in the "new and exciting" part of my life, but crypto just doesn't solve any interesting problems.
The decentralisation of crypto currencies is great (i.e. there's no central bank that can devalue its currency to prop up their national economy), but it's way too volatile to actually be useful as a currency. Would you agree to be paid your salary in bitcoin? Without adjustments if it drops relative to the dollar? Heck no. It's a speculative device, not a currency.
Smart contracts are cool too. Zero trust transactions etc. Conceptually I think these are really cool, but I see no practical need for them (for 99.99% of people).
Blockchain as a data structure, again for 99.99% of applications a DB and PGP do the trick. (And I'm still waiting on that 0.01% to show up.) I'm a software engineer by trade, and firmly believe you should pick the simplest way to solve a problem, not the coolest.
All of the different uses of crypto are "cool" but pretty useless. A solution in search of a problem indeed.
> The decentralisation of crypto currencies is great (i.e. there's no central bank that can devalue its currency to prop up their national economy
Why? The "economy" isn't something abstract, everyone participates in it. Yes, losing money through inflation sucks, but losing your job due to an economic crisis sucks even more. Some central banks are downright inept ( Turkey) but in those cases it's not just them, it's the whole government, which is ruining the economy through other means as well, so even having the money as independent from their influence wouldn't be of huge help because their ineptitude will show up in other places.
I mostly agree. I think the underlying technology for some of the social systems that have been in place for hundreds of years.
For example, a new country with a new government could set up their governing bodies on a blockchain for full transparency. Ditto with their financial and currency based systems
The real issue is that there's very limited _demand_ for any of these things at present, so the money sunk into it needs to look for something that siphons cash from the existing systems
It’s not really a technology. It can only compete with cash, in a way that’s worse by every conceivable notion.
Crypto losers will see people point out how wasteful it is, how few problems it actually solves and how many it creates, and they turn their blind eyes and wonder “Why is EVERYBODY so wrong?”
Grow up. Build something that matters. I volunteer at a soup kitchen and I’ve seen regulars disappear and come to find out, some of them get killed by gang violence. Some are hooked on dangerous drugs and can’t get access to effective programs to help them. Some turn to crime when they can’t come up with enough money from working to get off the streets. Why should ANYBODY care about crypto, when it doesn’t propose any solutions to these problems that are present as a result of the current economic system? Crypto would only make it worse, if it did anything at all!
100% of crypto is a shameless grift, and the afterlife will treat none of them very kindly.
I kinda have to agree, can anyone elaborate on the uses of crypto, what does it actually solve? I understand blockchains offer a decentralized system. but how about crypto?
During the trucker protest in Canada, the government froze the bank accounts of participants. That the government can do this, shut down movements it doesn't like with the click of a button, is a dangerous centralization of power. Crypto (at its best) safeguards democracy by serving as a check on such power. This still leaves the option of shutting down dangerous protests using the police which requires the cooperation of a lot of people - thus less dangerous, striking a better balance between freedom and safety.
So... I am not at all trying to advocate for crypto here, but the putative value is in having an anarchic currency that is easily exchangeable. That is, if you had money and wanted to convey it digitally outside of traditional regulated institutions, how would you do it? There's gold, art, etc but that's not easily movable.
Now, there's lots of issues here, like how you translate the crypto into other traditional regulated assets if need be, or traceability, or energy use, or security, but that's the putative value: easily moving value outside traditional governmental boundaries.
To be fair, if you've ever looked into buying something grey or black market online, I think the value of some sort of cryptocurrency in theory is apparent?
I'm not sure any crypto at the moment checks all the boxes, though, and some of the assumptions about use seem a little naive or disingenuous, but I can see the idealized use case value. I could in the abstract imagine some kind of decentralized accounting system taking on the role of currency, probably de facto, but I'm not sure current cryptocurrencies are that.
Nothing really. A nice vehicle to strip retail investors that don't understand money or tech, or the tech of money.
Funnily enough, the only thing I see any value in are NFTs. (Remember crypto currencies are essentially just the T in NFT). But not the url asset nonsense.
Rather as a distrubuted authentication system. Concert tickets, system access etc. are all viable.
I’m seeing the concert ticket thing around lately as something this space could “solve”.
But why would NFTs or a blockchain be good here? We have an identifiable central authority, the ticket issuer, so… why do we need a decentralised record for that?
I mean, you could issue tickets to an event as NFTs, and it would probably work ok, but why bother?
They absolutely aren't. Or at least not in the way people think. IF the tech has value it won't "Kill ticketmaster". It'll be adopted BY ticketmaster to make sure they have to pay fewer people on the front line to strip money from your wallet.
The, in theory, idea is that you can tie an NFT to an account, and make sure it can't be resold, but you could also tie a ticket to an ID, and that'd probably work better because it's not hard to spin up a wallet, get the "ticket" nft, and then sell the whole wallet.
So the idea as I understand it is that tickets as NFTs would allow you to prove your ownership of the ticket. With tickets being increasingly electronically-issued, there's currently no way to prove you've been sold a genuine ticket, or the only copy of a genuine ticket - until you get to the gate, they read your barcode, and turn you away.
So we have a second-hand market that runs through ticketmaster currently, which solves this trust issue by interacting with the issuer directly. Tickets via NFTs would help remove this dependency on ticketmaster, so we could have a healthy, trustworthy second-hand market that doesn't just feel like ticketmaster encouraging bots so they can sell the same ticket twice.
So the question is - does this benefit ticketmaster in the slightest? What problems does this solve for them? Because without them issuing the tickets as NFTs in the first place, and recognising them at the gates - it simply doesn't happen. As you say - from the issuer's POV, "why bother?"
As far as I can tell, everyone hates the current system - except the people that control it. The solution to this isn't some wonderful modern technology, it's plain and simple competition.
So it mostly exists as an example of why you'd want to be able to prove ownership of a unique token. Everyone can see the problem if I print my ticket 10 times and sell it to 10 people, it's easy to explain. The telling question is why we don't have a good example of an implementation.
The fun thing there is that ticketmaster is still the authority, and could implement rules like "resold NFTickets will not be honoured", which some bands and events are insisting on to try to save their fans from some of the outrageous profiteering, and it would be just as easy with an NFT as it would with a centralised solution to verify this. Possibly easier.
I guess my point is that there's already an authority in the picture, and there always will be, so a blockchain solution is unnecessary complexity. What's needed, as you say, is a better authority!
> We have an identifiable central authority, the ticket issuer, so… why do we need a decentralised record for that?
And look how well this is going for us? Ticketmaster is one of the the most anti consumer companies in history. There is no need for a single central authority here. Plus you get the benefit of authenticating the tickets in case of resale, etc.
It's actually a great usecase. Fraud is rampant, binding tickets to individuals doesn't make sense, and the main issuer is a literal supervillian.
Regardless - "concert" tickets isn't even my point. It's as a general purpose access token that literally anyone can verify. There is obvious utility in this.
You've told me why you think you would like it, not why the industry would embrace it.
> There is no need for a single central authority here.
Right, but there is one. If it's not tickemaster it could be the venue, the band, anyone. In which case, we don't don't need a trustless, decentralised register. We have a ticket issuer, therefore we don't need a heath-robinson type blockchain arrangement.
> Plus you get the benefit of authenticating the tickets in case of resale, etc.
Blockchains aren't needed for this. We have a central authority that can easily run its own marketplace, if it shoudl wish to.
> Fraud is rampant
A central authority can solve this just as well as a blockchain, without the need for the tradeoffs.
> binding tickets to individuals doesn't make sense
Sure it does, many bands and venues specifically want to prevent resales as it encourages profiteering over fan accessibility.
> There is obvious utility in this.
Yet the example you came up with doesn't seem to have anything over a more traditional solution, other than "I hate ticketmaster". All of this stuff can be done anyway.
>You've told me why you think you would like it, not why the industry would embrace it.
You're absolutely correct. And this is because I never told you that the industry would embrace it.
> Right, but there is one.
Right but there's no need.
> heath-robinson type blockchain arrangement
A system already exists and is perfectly usable and understandable. Hyperbole isn't doing any favours here.
> We have a central authority that can easily run its own marketplace, if it shoudl wish to.
This is true of all distributed systems.
> A central authority can solve this just as well as a blockchain, without the need for the tradeoffs.
They haven't though have they? And it comes for free with blockchains, alongside being able to do so without silly blockers like having to sign up for a business account and be verified by ticketmaster and pay fees as though you are a venue etc. etc.
> Sure it does, many bands and venues specifically want to prevent resales as it encourages profiteering over fan accessibility.
Fair, but this isn't what happens. What happens instead is that not only are people making fake accounts and bots, but the ticket issuer themselves is involved and profiteering. Literally the worst. If this takes place on a public chain then the ownership and scalping of any given ticket is fully traceable.
I'll grant you however that blockchain stuff doesn't solve KYC problems. It can certainly help though, given vouching systems by trusted third parties can be implemented and blah blah blah
Additionally, overbooking is easy to see coming and know about in advance, as well as a host of other benefits (expecting a big gig? Traffic reports can grep the chain and see attendance expecations. Blah blah public data.) Once again you can say something _ridiculous_ like this can be done by a central authority - but I'll let you be the one to hold your breath for ticketmaster to create data APIs for individual gigs.
> All of this stuff can be done anyway.
Yes. As discussed everything that can be decentralised can be centralised, basically. Unless you want / care about the additional data transparency and public programmability the chain gives, ofc you won't care.
There is always a need for a central authority to issue tickets. Some company operates the venue, and opens the gates for people. There is an organisation that is running the show.
When this is the case you don't need a distributed ledger and all the complications that come with that.
> Hyperbole isn't doing any favours here.
That system is overcomplex for ticket issuing. Anything that requires the general public to keep secret keys secret (and not lose them, ever) is pretty much a bad idea.
> This is true of all distributed systems.
No, it isn't. As much as I'm not a cryptocurrency fan, the whole point of things like Bitcoin is that there is not a central authority, and all the complexity in the protocol comes from building a distributed consensus. When you have a central authority (ticket issuer, venue operator, whatever) that is not going away in this scheme, you don't need that.
> They haven't though have they?
This is a market failure and won't be solved by a blockchain. What you need is competition which unlocks the venues and their exclusivity agreements. Nothing about the specific software implementation of the ticket issuing system really helps here.
> And it comes for free with blockchains
No, it doesn't, someone has to run the infrastructure (even if it's just nodes), write the smart contracts (and pay the gas or whatever to run them), tie in a web UI that runs somewhere, connect all this to the information about the venues, all sorts. That's not 'free'. A database can manage ticket records for a trivial amount of money, and would have a similar amount of other infrastructure needed around it to provide a full service. The datastore implementation here is not a particularly interesting part of the problem.
> If this takes place on a public chain then the ownership and scalping of any given ticket is fully traceable.
Yet we don't need a chain to do that. We can do that with any old DB. Blockchain also can't (for instance) stop people selling their private keys to each other instead of actually performing transfers, just as a DB can't stop people doing that with a username and password or whatever gets used there. And if you say "Well we tie that to real ID using a third party system"...
> I'll grant you however that blockchain stuff doesn't solve KYC problems. It can certainly help though, given vouching systems by trusted third parties
Again, a blockchain adds nothing, if there's a third party vouching system we can just use that in the traditional system too.
> I'll let you be the one to hold your breath for ticketmaster to create data APIs for individual gigs.
And I'll let you be the one to hold your breath waiting for them to embrace your blockchain solution too. Again, it's the market issue that you need to tackle, not the implementation one.
> Yes. As discussed everything that can be decentralised can be centralised
Right, and in this case it is centralised by necessity, because someone is running the gig. You can't remove that authority and that renders the blockchain part of solution a complete irrelevance and an implementation detail.
The problem here is you are looking at a market failure and deciding that if we just throw blockchains at it then it'll magically be fixed. But the blockchain solution doesn't address any of the market problems, and everything you're saying is a wonderful side-effect of using a blockchain can be done with any ticketing software solution.
I could sing the praises of a piece of software I'm building with a nice web front end and API access and a database backend, ownership traceability through simple DB records, the same third party ID integration. I can make the whole DB accessible for the public to query if I want, so data transparency is preserved. See how this solves the same sorts of issues? I could even claim mine's superior because if you phone me up and say "my ticket was stolen" and can prove your ID through that neat third party service, I can sort that out for you because my data structures aren't immutable.
But in the end my magic solution would be just as useless as yours in the face of ticketmaster's swathe of venue exclusivity agreements and stranglehold on the market, because the software implementation details are not a solution to the actual problem.
So you can shout "this could all be solved if we forced the world to use a blockchain solution!" and you wouldn't be wrong, but the fact that it's got a blockchain or not is not the good part, it's the forcing change that's the good part.
> Unless you want / care about ... public programmability the chain gives, ofc you won't care.
Exactly! Spot on! If public programmability was the whole problem in that space, you might have a great solution, but it's not! That's not even a tiny part of the problem with the ticket marketplace, and certainly isn't remotely interesting to most ticket-buyers.
This whole argument is the very definition of what's wrong with the cryptocurrency/blockchain space - instead of trying to solve the real problem (ticketmaster market dominance and abusive practice, backed up with effective monopoly) you're trying to see where you can shove a blockchain, and pretending that fixes something. It doesn't, it's just an implementation detail of a software solution that by itself does nothing to address a market problem.
Wouldn't it be nice if ticketmaster didn't rule the roost and act like dicks? Sure would. And if we could do more with our tickets? And maybe push profiteers out of the system? Oh yes. The specific way we encode, store and transfer ticket ownership records in a non-ticketmaster ticketing system isn't going to change that. Market competition or market regulation might. A specific data structure can't achieve this by itself.
A lot of people seem to have an outdated concept of what crypto is and what advantages it offers.
For the record my stance is "some of this will probably stick around, but most of it is junk".
There's stuff like bitcoin, which is basically a digital asset.
There's stuff like monero, which is basically a digital asset that's very hard/impossible to track. So anything blackmarket/anti governmental.
There's stuff like USDC (stablecoins), which is literally supposed to be pegged to the US Dollar, and "supposedly" backed to some % (depends on the coin. Tether is an infamous nightmare waiting to happen to most people in and out of the scene). The main use being that it's VERY cheap and easy to move stable coins(not just for crypto trading but say if you want to send someone money), and you can get great interest rates on them by staking (6-8% compared to the average savings account of "fuck you for asking").
And then there's basically everything etherium spawned with smart contracts, which is just a token that can execute actions based on programmatic conditions.
None of that is "new" so to speak. Any code/database can already do something like that, but the quasi decentralized nature mixed with certain features does open some theoretically interesting opportunities.
It gets complicated from there and EVERYTHING above is filled with caveats and issues and other problems, but it certainly seems to have stuck around for quite some time, and had quite a lot of legit business use, for a "scam". There is 0 doubt that something like 90% of the coins out there are scams, and of the remaining 10% probably 99% of those will fail for some reason or the other, and of that remaining % a LOT of this will probably wind up abstracted waaaaaaaaay out like IP addresses are for the modern user, but yeah there's probably something there.
There are cases where crypto solves a problem better than anything else, but they're pretty niche.
I used to live in China. Many of my friends still do, or did until recently. China makes it very, very difficult to legally transfer money abroad, even if that money was earned legally and had all required taxes paid on it.
It is trivial, though, to buy Bitcoin in China, and trivial to immediately sell it elsewhere. You are not exposed to much risk, because you can execute the transaction quickly, and although you're breaking the law in China, because you're circumventing their capital controls, you're not breaking the law anywhere else — the money was earned legally and all required taxes were paid on it.
So Bitcoin is pretty popular as a way to get money out of China if you are not living there any more (or are comfortable with the risk, if you are living there). I imagine there are many other places where it's also useful in this way.
crypto is just purely distilled capitalism. Of course it's not going to solve any problems - it's an ecosystem entirely dedicated to the pursuit of profit, without the inconvenient side effects of actually producing useful work.
it's a descriptive take on capitalism. profit is the motivating force for businesses, and in the crypto economy the profit is primarily derived from speculation and scamming. in the real world, at least capitalism is driven by demand that often comes from actual utility. crypto is like if the entire economy was wall street, including boiler rooms and market manipulation.
Profit might be #1 , but immediately after profit there is a huge moat to protect profits.
When you don't build anything of value the only moat you have is your political ability to convince people that you are.
I mean banks and insurance companies don't have to justify their existence, whereas the massive campaign that crypto enthusiasts mounted on the interwebz is telling that they are not even sure that their movement can survive.
Capitalism isn't an idea, it's a system that we live within.
Yes, if you care about blame then you can just blame people for bad actions and call it a day. But if you care about actually preventing bad actions then you need to look at incentives, and that's where the study of political economy comes in.
Cryptocurrencies do solve several issues, but some of them have become less important and others are, well, not so transparent for ordinary people. Do you remember when bank transfers using ebanking still took several days when you did them on a friday afternoon? For many banks this is actually still a thing. Yes there's Paypal and Venmo and god knows what these days, but good luck trying to send large amounts of money that way or sending anything abroad (especially to a country where the service is not available). Which brings us to point nr 2: There are many people with lots of money who would prefer to send it not just faster and easily verifiable, but also away from the prying eyes of governments and banks with strict oversight. Bitcoin only works if you manage to get it anonymously (e.g by giving some dude cash and hoping he's not monitored by the NSA), but other Cryptos give you privacy for all transfers and still keep verifiability. Every drug dealer, money launderer or tax evader can easily sneak millions of dollars across continents in an instant. This used to be damn difficult when using hard currency or art or any other tangible asset (and when you did it electronically you would set off even the most trivial alarm systems). So yeah, there certainly are big problems that were solved - the question is: Did we really want them to be solved.
Are there really counterparties with millions of dollars of privacy preserving crypto in every country?
Like say you are a cocaine kingpin. You instruct your minions in countries where you sell your product to buy crypto. How do you access that value where you live?
Or say you are a wealthy Russian with millions of rubles that you want to move out of the country. Is there really a seller with unlimited willingness to exchange their crypto for rubles?
You're assuming that the counterparty must be purely transactional. But there are people with big money in this system who have no problem holding vast amount of digital currency. They wouldn't have any problem accepting it as payment for larger investments. Also, imagine you sold one ton of cocaine and now you want to move the money out of the country. You'd instruct your dealers use their local crypto handlers to transfer the money from cash and then wire the digital assets to your crypto wallet. You can now cross any border with that wallet and access it in any country and noone will be able to inspect it if you do it right. And there's already a lot of infrastructure for getting cryptos back to cash - even (and sometimes especially) in poorer countries (think of an ATM, but you can use your crypto wallet to withdraw).
Yes, moving the money into crypto is going to be the relatively easy part of using it for drugs. Finding liquidity where you want to spend time may not be so easy.
You say "think ATM", the street value of a ton of cocaine is tens of millions of dollars. Nice ATM.
13 years and absolutely nothing interesting has happened with it, except people saying "You need to get in on this!!!" so they can push the value up and buy low and sell high.
The internet was doing interesting stuff well within 5 years. Modern smartphones were interesting and taking over the world within 5 years. Graphics cards came and revolutionized the gaming industry immediately. Crypto has been around for 13 years and all we've seen are pump and dump schemes, and by extension randomly generated chimpanzee pictures whose market has already collapsed.
> It's ten years of hype, get-rich-quick schemes and other scams, hardly new.
Right, a portion of which happened right here on HN until it became too blindingly scammy to ignore. NFT's came out which are demonstrably a scam that don't actually do what they claim to. DAO's show up, claiming members will have cryptographic (?) guarantees about decision-making when in fact they are ultimately dependent on some level of human decision-making, so ripe for scams. This maybe climaxed with the push for "web 3.0" to be some sort of new crypto-based meta-internet. People are trying to cash out, I think.
I'll be honest, until then I wasn't even aware of things like the oracle problem, the "nothing at stake" issue inherent to proof-of-stake systems, and the horrible horrible idea that is programmable smart contracts. Cryptocurrency seems like a nice idea when you handwave the actual implementation details as "the tech people figured it out somehow!" Unfortunately, they never really did. This stuff only "works" in a frictionless vacuum.
The jury is still out on whether or not blockchain’s originally intended purpose, currency, has value, and if it will see anything resembling widespread adoption in the future. I’m personally skeptical.
But almost all of the problems you list apply to blockchain uses other than cryptocurrency. The failures and scamminess of Web3, DAOs, oracles, and Proof-of-Stake are not arguments against the original Bitcoin whitepaper.
The “tech people” have definitely figured out something. The question is whether or not enough people really want to use whatever that something is.
It's a distributed ledger that is verified via proof-of-work. People have decided to assign it speculative value, largely as a sort of fin-tech smart-banking pitch. Ultimately though, there just aren't many non-financial usecases for a _public_ distributed ledger. Simply verifying transactions doesn't solve much - you need to vet the _nature_ of the transaction to make sure that screwy things aren't happening using _other_ stores of value (not bound by the laws of proof-of-work). Centralization will appear to "solve" these problems, just as it does with USD.
That's why I feel that bitcoin is always going to be ripe for abuse and highly adjacent to scams, even if the original paper is impressive and an interesting result.
I think we’re mostly in agreement here, I just found it important to distinguish the original idea from the numerous questionable applications that have been developed in its wake.
In the .com days, I was active in the e-commerce space, using public-key cryptography to solve problems. We had digital certificates, digital signatures, etc, which we used to solve various problems like authenticating and securing access to websites, creating encrypted and signed emails, etc.
One thing was non-repudiation, i.e. if I send you a digitally-signed email with a purchase order, then you can legally rely on it. There were some attempts to use similar techniques to allow trusted third parties to register documents, but nobody was willing to pay for the service.
> the "nothing at stake" issue inherent to proof-of-stake systems
The "nothing at stake" problem was inherent to proof-of-stake more than six years ago. It has, since then, been solved on Ethereum (and Polkadot) with Slasher, which is a penalizing system that burns (a portion) of the stake of malevolent actors, and then kicks them off the consensus layer.
Ethereum's consensus layer has been live for 1.5 years now, and there have been 175 slashing events during that time [1]. Some have been misconfigurations by small pools, others have been caused by users running their keys twice on two different machines (causing double attestations and double block proposals).
The most effective mitigation mentioned in the paper is the use of a "trusted" CPU module such as the Secure Enclave in Apple devices. Suffice to say, that's probably not going to see widespread adoption anytime soon and doesn't consider the other security problems inherent to such enclaves.
What they call "moving checkpoints" is a pretty widely-accepted mitigation to long-range attacks. Checkpoints might seem like a security issue, but it really depends on how recent they need to be (which is a function of staker exit delays) and the process for discovering checkpoints.
E.g. most blockchain clients come with a genesis state baked in, which is effectively a (very old) trusted checkpoint. Someone could try a long fork attack by changing the genesis, but the attack would be obvious from the git history. (Many users might still not notice, but that goes for any attack on the client codebase.)
Yes that's why I used their term. It doesn't say much about it though. The Ethereum Wiki [1] has a much better discussion of its security implications IMO.
But my point is mainly that moving checkpoints is the standard solution to long forks, so a discussion about PoS security should probably focus on that, vs theoretical alternatives like trusted hardware.
For the first 20+ years internet was relegated to a niche technology that will fail as we have faxes. I think your take on crypto is absurd and nonsensical in light of internet success. Here is the relevant quote: "By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's." Maybe you don't remember that quote, but it was said by Nobel winner, Krugman.
> The reason people are dredging up this old quote is that Krugman jokingly said Bitcoin is Evil. He doesn't think it's evil, but he is skeptical that Bitcoin can be a real store of money, and actually work as a currency.
[...]
> We emailed Krugman for a comment on the quote and here's his explanation:
Krugman:
> Well, two things.
> First, look at the whole piece. It was a thing for the Times magazine's 100th anniversary, written as if by someone looking back from 2098, so the point was to be fun and provocative, not to engage in careful forecasting; I mean, there are lines in there about St. Petersburg having more skyscrapers than New York, which was not a prediction, just a thought-provoker.
> But the main point is that I don't claim any special expertise in technology -- I almost never make technological forecasts, and the only reason there was stuff like that in the 98 piece was because the assignment required that I do that sort of thing. The issues about Bitcoin, however, are not technological! Everyone agrees that it's technically very sweet. But does it work as money? That's a very different kind of question.
> And the fact that people are throwing around my 98 quote actually shows that they don't get this point -- that they're confusing technology with monetary economics.
Yes, Krugman responded after throwing something like that in ether. Doesn't make him right or more knowledgeable having to reassess his original thinking.
Also, Krugman had to go back on his take of the internet, all I'm saying is that none can predict future and the "smartest" of us can be and often are wrong.
Sure, I'm just suggesting your argument isn't terribly convincing. Maybe stick to the actual merits of the tech rather than appeal to the inability of humanity to accurately predict the future. That's not as much of a guarantee of success as you think, and indicates you are biased.
My argument, around knowing the future, which is 100% correct, as none can. What is your argument? Crypto doesn't work because you said so?
My point is that people presumably smarter than you, have in the past said things which turned out to be wrong. So then what evidence do you have other than your words?
At least I brought a quote to illustrate my point. You brought a subsequent explanation by the author why they were wrong. I'm expecting the same from you, in 8 years, saying how you were wrong. Thanks ahead of time.
I just quoted an article and said you weren't very convincing. You're still pretty unconvincing however, seeing you react so defensively suggests a bit of cognitive dissonance.
At some point, the line always goes down. Just try to cash out before it does, and don't fool anyone to do so. See you in 8 years.
So I hadn't seen Krugman's 98 quote before, but it reminds me of Cliff Stohl who wrote a whole book skeptical of the internet in 1995. The thing is that looking back a couple decades on, their criticisms land for me - they made good points but the Internet was so rapidly adopted that they looked like fools at the time, but I think that as things have worn on and I've gotten older, they look more prescient in retrospect.
> For the first 20+ years internet was relegated to a niche technology that will fail as we have faxes. I think your take on crypto is absurd and nonsensical in light of internet success.
This is in no way a historically accurate statement. Thirty years ago the utility of data networks was well demonstrated. Not just the IP-based Internet but X.25 networks before and parallel to it (Tymnet etc). Data networks were only a "niche" technology because they were expensive. They increased in size and utility in step with decreasing prices.
Cryptocurrencies haven't brought anywhere close to that same utility. The only "problem" they have solved is separating rubes from real money in trade for Geoffrey dollars. Cryptocurrency has in fact trended the opposite direction from Internet technologies as they're more expensive to work with as time passes.
If cryptocurrencies (and associated technologies) were actually meant to be useful their costs would be decreasing over time allowing wider access. The fact their very design increases costs as they scale should tell you they're naked rent extraction vehicles and nothing more.
Furthermore, at least from what I recall, for the first several years of the existence of cryptocurrency, HN was not particularly negative toward it. It's only in the last few years—when the scams have exploded, especially the NFT craze—that a clear majority of HN's position on cryptocurrency has turned sour.
HN is actually very technology optimistic. People really think that tech can be used for good, and part of the ethos is that we should try to improve the world using tech.
The result is that HN as a whole is quite judgemental about whether people are doing that. People here will regularly tell you that AirBnB rides on externalities, Amazon treats everyone badly, and FB is destroying democracy. Basically, HN tries to hold the world accountable to the optimistic promise of technology, and to do so we have to point out some things that aren't working well.
Crypto is no different. There's some interesting stuff in there for sure, especially if you just look at the tech. But in terms of making the world a better place, it gets held to a standard just like all the tech giant firms. At the moment there's a lot of minuses on the board and we've yet to see the positives that justify the optimism.
As others have pointed out, the HN zeitgeist regarding crypto has changed significantly over time. Several years ago folks here were clearly at the
"peak of inflated expectations" phase. Currently we're in the "trough of disillusionment" phase.
The question is whether crypto will follow the rest of the curve or - as often happens but Gartner fails to note - just fall into the abyss. However, even according to the most optimistic reading, Twitter Guy is clearly several years slow on the uptake.
Not sure I'm a fan of the hype cycle, it's pretty vague.
I think the thing to remember is that tech people see through all the hype before everyone else. People who are close to a tech will be able to tell you the endgame before someone who doesn't, because they understand the constraints of the system.
Being on HN is a bit like time traveling, you can ride on everyone who has zoomed forward into the future.
Simple: There are a lot of computer scientists and software engineers on HN, and they understand that blockchain is an inferior technology in most (if not all) ways. Futhermore, they understand that this technology will never solve real problems better than the status quo. Therefore, they conclude, that almost all crypto projects are scam, and it disgusts them.
> Therefore, they conclude, that almost all crypto projects are scam, and it disgusts them.
This is very true. I remember when I was fascinated by the Red programming language and at some point they started to promote some new cryptocurrency. It was the last day I even looked at it.
Have a look back at ~2014 or so. HN was extremely bullish on Bitcoin. It sometimes took up about a quarter of the articles at any given time. It promised a bright new decentralized world and offered fertile ground for innovation. It promised to free up peer-to-peer transfers, allow some measure of anonymity in financial transactions, and perhaps even become the vehicle for microtransactions that the world so sorely needs.
Today, it is far less clear that there is something new at hand. To the extent that blockchains enable innovation, the early wins are complete and the strengths and weaknesses of the entire ecosystem largely have become clear.
In 2014, it was rather clear that blockchains had some sort of substantial potential value, something competitive with the total amount of money circulating in the world. In 2022, cryptocurrency is worth that much. Bitcoin alone is "worth" perhaps a trillion dollars, while M1 is around 20 trillion.
What we're seeing today is a lack of clarity and direction. HN was stoked on crypto when it offered something new. Today, crypto offers a lot of pump-and-dump schemes and financial curiosities, but nothing like the promise and obvious direction it held in 2014.
Something cool and new may yet emerge -- expect HN to get real excited when it does happen.
> Bitcoin alone is "worth" perhaps a trillion dollars, while M1 is around 20 trillion.
You can't compare the liquidity of M1 with the liquidity of BTC. M1 USD is accepted everywhere, ranging from a 300M apartment on NYC's Billionaire's Row to a banana stand in Madagascar.
If you believe that BTC would get to that level of acceptance then it's still the early days.
Honestly after looking under the hood the technical part of it seems like a solution on search for a problem, unless the problem you aim to solve is wealth redistribution with the same GINI index (or even higher given the concetration of wealth in the ecosystem).
Similarly the social aspect of decentralization is a really hard sell when you have Satoshi sitting on 30B and Buterin sitting on 15B and they hold so much power.
“I hope I never become as intensely default-skeptical of new technologies.” Bitcoin is 12 years old. HN is just a little ahead of people who just discovered it a year ago. Plus the HN audience knows a little more about technology than “crypto twitter” (they mean blockchain twitter).
I've been seeing a lot of kids on Twitter doing threads on things like, "What is a smart contract?", "How to transition from Web2 to Web3", and I can't help but feel like I am staring down inside a barrel that leads to a black hole.
People talk about these topics like they "truly" understand them, when there isn't much to understand in the first place. As I have said many times already on HN - it's unnecessarily complex at the very core of it, and is often spoken about through traditional marketing jargon.
"It's the future.", "But, it's decentralized!".
An example we can look at is Crypto.com - which has invested billions upon billions of dollars into the US market. Do you really think the average Joe gives a rats ass about blockchain or decentralization - the goal of these investments is to hook people on something they don't understand.
And then milk their stupidity with cheap tricks like NFTs, bullshit investments, and scam coins that come and go on an hourly basis.
It should give crypto folks something to think about. The %-age of people who know Merkle trees is probably higher on HN than among crypto users. Personally, I went from curious to skeptical twice already - once for plain blockchains, then for web3.
I still find the idea of decentralizing web services interesting it just seems to me that most projects heavily rely on their front end and not seldom on a centralized backend too (eg OpenSea, the platform for NFTs, which themselves in most cases are just links to centrally hosted resources, contrary to what most seem to believe). At that point, you just have a normal web app with horrendous UX. The idea that you can create protocols as sort of a public good is interesting in theory, but effectively it's still whoever owns the domain name (+ usually Discord server, Twitter handle,...) that effectively controls everything.
But there are some interesting approaches to mitigate that. I believe Aave hosts their app on IPFS now, Liquity has an incentive mechanism for front end hosters for their protocol. And there are some interesting aspects beyond decentralization, the ability to make binding promises to anyone is powerful.
Because ever since the Bitcoin whitepaper, the focus has completely shifted from building useful technology into speculation and grift, accompanied by scams and tribalism.
Solving the double spending problem in a completely decentralized manner is quite the achievement, but rather than embrace speculation, Bitcoin should have deterred it, keeping the price low and limiting environmental impact.
Hackernews is full of people who know what they are doing. Blind faith is rarely what we use to be who we are.
But I have to add: if you are rich enough and have money to spent, why wouldn't you believe in crypto? It's like web3: it takes a lot of knowledge to figure out what it is really about. Rich people don't have this time because they are busy. Why shouldn't we monetize this? If people really want to believe in fairy tales and it doesn't hurt anyone then you should just let them, life is probably more fun for gullible people anyways.
Most of the crypto community are non-technical people, so that's a turn off for something that should be all about tech. There is also little utility, and with stricter privacy laws it is a bad technology, since everything is public on the blockchain.
It also cost a lot more money than setting up your own server. The argument against non-crypto is that you have to trust a middle man. But most solutions to the problems crypto have is to create middle actors. Like NFT marketplaces, crypto exchanges that hold you wallet, and off-chain payment transaction systems which makes transactions faster.
Maybe a lot of the things I mention is not entirely correct, but that the other issue. It is hard for someone technical to learn about these things because most of the content online about crypto is written for non-techincal people.
Exactly. I don't know why anyone would hope to not be sceptical about anything. The opposite of sceptical is gullible. You should strive to be sceptical.
It is mind-blowing that some programmers cannot understand that autonomous programs — software that continues running independently of control over individual hardware nodes in the network — are an incredibly powerful and compelling tool. Computers that can make commitments that last beyond the initial promises of the authors of their software.
Borrowing / lending money to other people without the parties having to trust each other or having to wait for a slow and expensive legal system to work it out.
These all offer rates competitive or superior to traditional methods thanks to being able to access a global pool of capital through a single programming interface that simplifies coordination and risk sharing between counter-parties.
And another early example Valora (on the Celo network) where you can make global transfers of money with a Venmo-like experience for fees <$0.01.
> These all offer rates competitive or superior to traditional methods thanks to being able to access a global pool of capital through a single programming interface that simplifies coordination and risk sharing between counter-parties.
(Genuinely curious about the answer) How would that be different from, or better than centralized platforms like kickstarter?
None of these explain how unsecured lending works. Goldfinch says that "borrowers are required to pledge real-world assets as collateral" and in the event of default the pledged collateral is liquidated. [1] So that's not unsecured lending. Truefi says that they only lend to institutional borrowers who sign an enforceable lending agreement. [2] So that's a traditional lending agreement that is enforced by courts of justice. Maple also says they only lend to institutional and corporate borrowers [3]. In conclusion, none of these are real world examples of "borrowing and lending to other parties without the parties having to trust each other or having to wait for a slow and expensive legal system to work it out".
> These all offer rates competitive or superior to traditional methods
Also what do you mean by competitive rates? Note that if the borrower is getting paid interest at a rate above the market rate, the borrower is getting paid a competitive rate, but the lender is paying an uncompetitive rate.
I still don't understand how this could change my life. Most people exchange money through their bank accounts for free with things like the SEPA network.
I browsed through all those web sites and all I see is ways of using the crypto wallets that have to be previously created through various means incompatible with each other. Let's not talk about the "be your own bank" motto which means that you have to secure your own money which is, at least scary for most people, and at most very difficult to do even for people knowledgeable with computers.
Here is something that is revolutionary and actually happened in the past 10 years: *online banks* that have no bricks-and-mortar offices! I created an account in less than 10 minutes, I have a debit card that I can use all over the world, I literally cannot spend more than what I have, and it's still a real bank which means that my account is insured if something bad ever happens. Where is the crypto equivalent?
Why is that valuable? And more importantly, how is the upside this brings bigger than the downside it brings compared to previous approaches to borrowing/lending?
Lending requires the ability to seize assets, and the ability to seize assets requires a legal system. There's no way around it. Without this lending can't work, because otherwise the borrower can just walk away with the money.
You can have assets on chain that can be used as collateral which can be liquidated if a loan isn't paid back. Additionally lending money is not only done so people can borrow from it. For example decentralized exchanges need a lot of liquidity in order to execute trades without very much slippage. You can provide liquidity to them and they will pay out transaction fees to you in exchange.
If you have to pledge enough collateral to cover the entirety of the principal, your net investment position is either zero or positive. In other words, you're not borrowing anything.
You are right in that it doesn't make much sense if your collateral is made up of stable coins, but if you had something like bitcoin you may not always want to just trade it for stable coins, do whatever, and then trade back for bitcoin as the price can change. It may be better to just deposit your bitcoin onto one of these platforms (yes you start getting paid for lending bitcoin to them for as long as you keep your bitcoins there). Then you have the ability to borrow a certain amount of some other coin without having to liquidate your bitcoin.
If doing so was useless, pawnshops wouldn't exist in real life. There is value in not having to sell something and later try to rebuy it.
I never said that it was useless. I said that this isn't borrowing and lending.
Borrowing and lending is the primary and most important function of finance. It allows economic agents to trade future consumption for present consumption. Yet it is fundamentally impossible using blockchain technology.
I didn't say that it has no use. I was pointing out that blockchains do not allow "borrowing / lending money to other people without the parties having to trust each other or having to wait for a slow and expensive legal", contrary to what the OP claimed.
I didn't claim you said it, either, just wanted to mention why it can still make sense. However, the process of depositing something as collateral (irrelevant of the value) and borrowing on it can be described as just that, borrowing.
Smart contracts are interesting, but they're like ray traced quake was in 2004, a curiosity, a toy, something interesting that doesn't have real utility yet.
These technologies are good to have in case someday they become actually useful, but the amount of energy and money spent on them today far exceeds their usefulness and is purely hype-driven.
For example, there may be actual utility in NFTs: EU law requires that if you buy a game on e.g., steam, you should be able to lend it out, get it back, and resell it. If the EU, in a few years, were to decide games had to be portable between stores, and started actually enforcing these, it would make sense to put the actual game license key up as NFT and allow transfers.
But that's a hypothetical. It's not what's happening today. Today's excitement is purely hype.
The total energy consumption of PoW blockchains has increased global CO2 output enough that it exceeds the amount of CO2 saved by switching to renewables in the past 20 years. That's not worth it if there's such little utility in there.
Like with video games, and even personal computers, often things that start off looking like toys become the next big thing in technology[1]. The properties that make them intriguing to young technologists are not appealing to older technologists, who sometimes miss the fact that these nascent tools take time to mature.
> Like with video games, and even personal computers, often things that start off looking like toys become the next big thing in technology
That's true. But we didn't have a hype cycle spending billions and destroying the environment for Pong. We had that only once an actual market of applications for the technology appeared.
Crypto isn't there yet, and likely won't be for the next few years. And likely none of today's chains will be used for these applications.
>I hope I never become as intensely default-skeptical of new technologies.
You know, it's not skepticism for its own sake. You can actually read through some of the critiques you encounter and then conjure your own refutations against them rather than dismiss them without digesting them. You should also pay heed to the opinions of HN'ers more-so than any other group because it's overwhelmingly comprised of objective people who are both tech and finance savvy, which a majority of people involved in crypto are neither, ironically.
Here's a good one:
Deflationary currency & the hallmarks of a greater fool scheme: news.ycombinator.com/item?id=30987714.
Here's a couple of my own opinions: The idea of peer-to-peer currency is ideal in theory, but it doesn't seem to work. You still get manipulation like with traditional currency, only the manipulators cannot be identified or held accountable, and there aren't hundreds of years worth of laws and regulations and systems for preventing these crimes and judging bad actors. PoW is viable but doesn't scale, unless we figure out a way to swallow whole planets-worth of fuel by 2100 every time someone wants to buy a baguette. PoS scales, but it's just reinventing banks in the most inefficient way imaginable, replete with all the centralized ills that crypto people ostensibly desire to escape.
Crypto is a new technology contending with a very old and mature one that's working well enough - finance. And though finance has some problems (nothing is perfect), crypto has solved none of them, other than fattening the wallets of a few scammers and lucky idiots.
I would love to hear of just one time where crypto solved a problem a person or business had where modern finance could not. A real example, a thing that actually happened, not a theoretical scenario. I haven't heard of one yet.
Of course, if you're married to an idea like "crypto good; skepticism bad", then no one can help you, and if that's the case, then I'd like to let you in on something (don't tell anyone!): SCMME is pumping and we're still early: great yields, stake and earn 10000% APY - you DO NOT want to miss this.'
It was about 3-4 years ago, I was checkout out meetups at my local city and came across this launch of some new tokens/NFT. At the time, I was on a financial constraint and wanted to get a job, so I attended a lot of these to meet potential investors, employers, etc.
This dude rented out a massive mansion in the middle of the city and the tickets were like some $15 only. There were a lot of people like me, but there were a lot of old people too in the crowd. They didn't look like the rich types to me. This guy literally promised 10x ROI for every dollar invested in some crypto under his own name.
He got a lot of "pre-bookings". I was curious, read more about this dude and crypto itself and realized it wasn't as useful as people hype it to be. I tried to build some applications on top of it. It always felt I had to go out of my way to make a use case for it. Eventually, that's when I realized most people who talk about crypto are marketers or scammers like this dude.
The rest of us - we are just tired of hearing it everywhere around us when it makes no sense even in certain applications.
People with anime profile pictures tweeting about stablecoins, going to the moon and WGMI are not some youth culture vanguard. OP tweet has self-selected into an online social world consisting of people in a similar mindset and demographic to his own. Outside of this bubble, "crypto bros" are considered weird and cringeworthy.
You can read the comments on Slashdot from 10 years ago, and you'll find the same scepticism. So it's not an accident. HN's audience is probably better educated than average, and the better educated a demographic group is, the harder it is to fool.
It's almost as old as android and ios, but instead of changing the world like they did, it's perennially on the verge of something big, according to its proponents. The cryptocurrency revolution is just around the corner! And you should give us your money now!
Meanwhile the entire space is pretty much defined by scams, and economic projects built by people with a questionable grasp of economics and ethics.
And looking into the tech, well it's interesting(ish) in itself but it doesn't really solve any interesting real-world problems for me. PoW in particular seems like the most inelegant hack.
I think the tech is really clever, but don't understand a potential use case.
* Relying on trusted parties will always be significantly more efficient than a trustless system
* Most people don't want to manage their own money and if most people are going to really in third parties to manage their coins, how is that substantially different than the current situation?
* Being able to reverse transactions in a system is actually good when theft is common
* Crypto has a strong polarizing function: most people interested in crypto are also financially invested which makes it hard to get accurate takes from knowledgeable people
Crypto is a speculative investment. It may well work out for some, however, I wouldn't advise to put more money in than you can afford to lose.
I am interested in the technology behind crypto, however, I have only seen limited use cases for it so far. The major selling point for crypto seems to be deregulation, however, having worked in Finance for over two decades I have witnessed what (too much) deregulation can result in. If crypto is here to stay, it will be end up as much regulated as money.
I suspect HN chatter adamantly against decentralized governance and value storage experiments are often by intelligent people that are simply too distracted by the loud voices of greed and hype to take an objective look at the quiet yet major technological innovations happening that will change the world forever just like the internet did.
The early 90s internet was pretty rough too and also had a lot of annoying hype and greed that made a lot of people swear it off instead of looking closer at what it could become over time.
Some 90s engineers managed to look past the short term hype and greed problems of the early interent to see the true innovations and think long term. They did very well.
The Bitcoin whitepaper started a chain reaction of demand that produced better human friendly backups for private keys like BIP39, cheap general purpose personal hardware security modules like Ledger and Trezor, better privacy with innovations like zero knowledge proofs, greener datacenters and computational effeciency improvements to reduce energy waste, and massive improvements in quorum computing patterns so no one malicious sysadmin can manipulate societially critical network services.
Visa, Mastercard, virtually every bank, supply chain companies, governments, general sysadmin teams at companies everywhere, etc, etc, have huge think thanks harvesting and incorporating technology from decentralized value storage and governance experiments that spun out of Bitcoin.
The entire field of mathematics and cryptography has gotten a massive cash injection as a result of these too. Ask anyone that works in the cryptography departments at Universities like Stanford.
Sure, traders and people who hype things without understanding the fundamentals are annoying. They annoy me too, but I look at this from my role as a security researcher. Crypto-assets have seemingly overnight generated massive demand for security technology that can reduce theft and scams online. As a result those invested in crypto-asset technology are often light years ahead in security from your typical SaaS company in other industries. Crypto-asset holders and those against them all have a common interest in a safer internet.
We would all do well to learn to find common ground instead of taking unproductive stances against major technological advancements just because the early stage versions of them are a bit rough.
> Crypto-assets have seemingly overnight generated massive demand for security technology that can reduce theft and scams online.
I'm sure a wave of burglaries would spark demand for better locks and alarms too, but that still doesn't make burglary itself a good thing. "Things got better because we exploited them" does not excuse the exploitation.
There's knee-jerk generalization about cryptocurrency here. There are plenty of bad takes on Twitter and HN. That said, yes you can highlight things you do not value personally. That doesn't mean others are wrong to value them.
The above stands, even if you feel you have a superior understanding of technology. It doesn't mean you have license to generalize or an exclusive license to determine what is valuable. Others may value things differently, and that is fine.
Different strokes for different folks. Don't want to transact in cryptocurrency? You don't have to. Problem solved. Value it however you want to, but don't dismissively condemn it or generalize by calling it a scam. The claim is arrogant. Even more so when, "Because we understand tech better than..."
This take is too radical for HN, thinking for themselves. Here the people talk in absolutes and value their own opinions way above others. A simple echo chamber where "crypto bad because I said so," drowns everything else.
If only we could live in a paternalistic, centrally planned society. Perhaps if social and economic issues functioned as a purely contained system where men could have absolute information. Yes, if society were a computer and we could feed it the program to execute...
Maybe under these circumstances we could dismiss the negative outcomes of regulation and central planning. Until then, we live in the real world, where utopian dreams are not within our reach.
Ironically enough, it is the regulation which you opine for which creates the value for cryptocurrency. Want to pay a user 0.00001 cents? Not with Paypal. The regulatory overhead is too high. Want to transact online with no ID? Not possible with banks or traditional instruments. Have a problem with government issued currency? Sorry, you cannot transact at all!
The comments here citing the technical problems of cryptocurrency miss these points. The generalizations about energy usage dismiss altcoins which have innovated beyond these issues.
The last resort of these arguments always backpedals to, "But that's not the popular usage of cryptocurrency"
The point stands, the generalization is inaccurate, presumptive and arrogant.
You completely forget why money exists in the first place. Those problems you state are outcomes of resolving problems that de-centralized and finite money supply can't resolve. You can't have the cake and and eat it too.
> Maybe under these circumstances we could dismiss the negative outcomes of regulation and central planning.
Who did that? Not me. But neither do I knee-jerk believe that effective regulation is impossible, nor fall into the binary-thinking trap that it must either be 100% effective or it's worthless.
> Want to pay a user 0.00001 cents?
Nope.
> Want to transact online with no ID?
Nope, and there are great reasons that this sort of thing is generally not allowed.
> The generalizations about energy usage dismiss altcoins which have innovated beyond these issues.
But they haven't solved the issue of bitcoin burning the energy. That's like saying "shut up about cars polluting, we have tesla now!". Sure, and when every car is a tesla, that changes things. But every car is not a tesla, and every coin is not an altcoin which has solved the problem.
The post I responded too said "Don't want to transact in cryptocurrency? You don't have to. Problem solved."
But this problem is not solved by not transacting in it, and is not solved by "altcoins which have innovated beyond these issues", because it is ongoing despite these things.
So you can take your "inaccurate, presumptive and arrogant" and apply that to your own arguments. They don't address reality, and their superior tone is laughable when it goes alongside what is effectively handwaving.
Apply a little imagination here. "I don't want to send 0.00001 cent transactions" becomes, "I don't think anyone else should be able to"
It isn't hard to see where this paternalistic frame of understanding leads. "I know what is best for the larger society, my values are the only valid ones, everyone else must adhere and agree"
If you cannot see where this goes astray, there's very little to say here on the Internet. The authoritarian impulse is more dangerous in my view than any of the imagined cryptocurrency boogeymen.
>"altcoins which have innovated beyond these issues", because it is ongoing despite these things.
Then perhaps we shouldn't generalize about all cryptocurrencies?
Finally, let us consider that all of the horrible things you cite are valid. What is the practical alternative to transacting in cryptocurrency, if not central bank currencies?
Does holding USD or other central bank currencies not finance wars around the world? If climate doom is horrible and non-violent transactions threaten you, how bad is war in your opinion?
Again the argument presented is an appeal to utopia. Even if we accept that cryptocurrency is dangerous and horrible, the present alternative isn't great either. Apply the same standard of logic and sloppy generalizations to central bank currencies.
>According to Rummel, democide surpassed war as the leading cause of non-natural death in the 20th century
> Apply a little imagination here. "I don't want to send 0.00001 cent transactions" becomes, "I don't think anyone else should be able to"
Apply a little logic here, "I don't want to send 0.00001 cent transactions" becomes "I don't think cryptocurrencies are the only way to achieve this, or even a good way, given their other costs to society"
I'm not even going to bother engaging with the rest of your post, you're stuck in a binary mode of thinking in which any and all regulation is necessarily 'paternalistic' and evil, and from such a skewed viewpoint, your conclusions play out.
To summarise - my assertion is that the problems with cryptocurrencies are not solved by merely not taking part, which is what the OP of this thread argued. Your response has been a set of straw men and unfounded assumptions, and a bunch of pointing at other things to say they're worse. This is not really a counter-argument so much as a lot of noise.
Right there could be other ways to achieve that, but the regulations you are a fan of prevent it.
>> Want to transact online with no ID?
>Nope, and there are great reasons that this sort of thing is generally not allowed.
It is true that I generally dislike regulation, but the same regulations you advocate for are the same regulations preventing the functionality provided by crypto. You then try to make the largest possible exaggeration, by asserting that I am against all regulations, therefore you cannot engage in the discussion. Backpedal. Yet you are supporting these same regulations, in this same thread.
Binary thinking? Strawmen? You construct the premises which make it impossible, then call it a strawman. You set these premises and then call it black and white, all or nothing.
Perhaps a more reasoned argument would be outlining how you intend to reduce regulatory overhead so state backed debt instruments can compete with cryptocurrency on the merits.
As you are preoccupied with the moral ills (energy consumption, voluntary transactions) of specific cryptocurrencies, it would behoove you to explain how the incentives of central bank currencies can be changed. Ideally they wouldn't be used for morally perilous outcomes like war, or in your case, excessive energy use by the military.
Otherwise, what are you advocating for here? What are the practical alternatives to cryptocurrency? Engage in the discussion.
Crypto is nothing but a speculative vehicle for making money. People of high intelligence (which represents most members of Hackernews) recognize this, although depending on what their vested interests are, they may or may not reveal that publicly.
In general, if you happen to have a large stake in crypto or are depending on crypto to make you significant returns, you are more likely to be pro-crypto.
If you have no stake, it’s likely because you never saw a point to cryptocurrency and never invested, so you will likely be anti-crypto or neutral at best.
The technobabble of blockchain tech does not work on highly tech-literate people of Hackernews, we know this is basically useless technology in its current form. At it’s peak it would essentially be nothing more than a globally distributed database anyone could read from or write to. But inherently this has nothing to do with cryptocurrency.
It would be a red flag IMO if hackernews was pro-crypto.
I'm not anti-crypto. But I don't care for hype. Show me the killer app.
As far as I'm concerned, cryptocurrency already has a killer app: it increases economic freedom in some parts of the world.
Is there more? I'm sure there is. But from what I've read, I'm not going to need a kitchen sink anymore because crypto's gonna solve it.
There are a lot of neat technologies in the world with a lot of applications. Crypto is one family of such technologies. Neat stuff, but doesn't apply to everything. And I'll happily be proven wrong, if it comes to that.
I think there is potential with many of the ideas behind it, but so far it's been inundated with scammers and gamblers. People need to build actual useful things with it which are adopted into the mainstream. The problem is that the current non-crypto way of doing things is much easier and more efficient than the crypto way. If the tooling around crypto improves significantly, it may have a chance. Otherwise, it's just not worth the time or the risk.
Why is Hacker News so anti-crypto? I dont't know, let me admire my NFT's and get back to after I invest my globally accepted currency in a hashing scheme.
Because a number in a computer is just a number in a computer. It has no intrinsic worth at all.
Another way of saying that is "If you can not hold it in your hot little hand or touch it, it is not yours at all.". So don't expend your work or cash on it.
But I think the answer is that be people here understand what it is from a technical perspective; you would get the same level of anti-crypto if you went and asked a bunch of computer scientists.
Bitcoin is like a real time index measuring the health of the cult of Ayn Rand and you can bet on how the cult is faring and if it's expanding or contracting.
Much like Tesla is a real time index measuring the health of the cult of Elon Musk and you can bet on how the cult is faring and if it's expanding or contracting.
If you are interested in sociopolitical and cultural phenomenons you have a way to make money off that expertise for the first time in decades.
If we get Saylor vs. Bezos in 2024 lots of people building prediction markets for political purposes are gonna be disappointed, because at that point people would just bet on Bitcoin or Amazon stock according to their assesment of which cult would prevail and who is gonna win.
I took a Blockchain course at university (Masters CS level). I really liked how honest the teaching chair was: They just taught us the raw material along with this xkcd: https://xkcd.com/2267/
Don't get me wrong, I actually like the Blockchain Technology but I kind of have to agree with the notion that most of the "advanced" Crypto stuff is still looking for an actual problem to solve, except for Bitcoin and some of the other OG coins, the purpose of which I kind of sympathize with.
Well, "crypto" is just Ponzi scams. The more interesting question is why is HN so anti-bitcoin? Looks like they don't get how harmful fiat money is to society and the environment.
One reason might be that HN is just too woke. Probably you even get censored here for saying that men are not women.
That is the case, because Engineers have a bad understand of global finance, business and money.
That’s why they don’t understand the problems that crypto is solving.
If you look at the comments here, you’ll see that many comments are saying that crypto isn’t doing anything useful.
However, crypto is literally solving the extreme problem of infinitely printable FIAT money and very slow and expensive cross-border transfers, which might be the most impfactful invention of the last 2 decades.
On top of that, crypto adds transparency, accountability, interoperability, decreases fraud in every possible market.
However, hacker news doesn’t understand that, because they simply don’t global finance, global markets, business and moneys.
> However, crypto is literally solving the extreme problem of infinitely printable FIAT money
It might be an extreme problem to you, not to everyone else.
> very slow and expensive cross-border transfers
This has been solved again and again by different companies, be it wise.com or others.
> On top of that, crypto adds transparency, accountability, decreases fraud on nearly every consumer product.
Except for the fact that nobody can get their money back after they have been scamed. There is no authority to complain to or reverse a transaction. Wich makes it useless for the masses.
> which might be the most impfactful invention of the last 2 decades.
This is why people are tired of crypto, it has been over 10 years and it has't really changed anything. Crypto enthusiast think that, but it didn't and it won't.
> It might be an extreme problem to you, not to everyone else.
So mass inflation is only an extremely problem to me? This is probably the most false claim possible.
> This has been solved again and again by different companies, be it wise.com or others
Except they constantly freeze user accounts for no reason.
> Except for the fact that nobody can get their money back after they have been scamed. There is no authority to complain to or reverse a transaction. Wich makes it useless for the masses.
Of course there is, all the exchanges have to comply by with law enforcement and that’s what they are doing. This way, since the transactions are all public and can be traced endlessly it’s very difficult to evade law enforcement through scams.
> So mass inflation is only an extremely problem to me? This is probably the most false claim possible.
Of course inflation is a problem, but saying crypto could solve it is not true. But even if it could, why would anybody who cares about inflation use crypto, when the value fluctuates so much?
> Except they constantly freeze user accounts for no reason.
And crypto exchanges disappear with all your money. I am not saying there are no problems, just that this problem (simple currency exchange) is solved.
> Of course there is, all the exchanges have to comply by with law enforcement and that’s what they are doing. This way, since the transactions are all public and can be traced endlessly it’s very difficult to evade law enforcement through scams.
So instead of a bank I have a "exchange". All my transactions are public (which is not a positive) and if someone exchanges cryptos from bitcoin to monero then you are still fu*ed.
But ignoring all things we said. All crypto enthusiasts have one important saying: "Not your keys not your crypto". Go ahead and try to explain to someone, how to safely secure their keys and that all their money is bound to them. That if lost/stolen, they have nothing. Crypto makes things (for the avg. user) less secure, more complicated without any benefit. If you fear the government or have specific reasons, go ahed use it, nobody is saying there are no use-cases, just that it's not a useful system for the masses.
You don't seem to understand what ultimately causes inflation. Not a surprise, as you don't understand money either.
Inflation happens because central banks have been trying to fix structural problems by printing more money, and this time it didn't work out. Sometimes it has worked. If they didn't do that, the problems would still be there. If we didn't have the possibility to print more money, we couldn't even try out if that helps. Ultimately, the structural problems would be worse if financial system was ran on cryptos.
No, if that wasn’t an option, then the root causes such as wasteful spending, not holding politicians accountable, student loan crisis wouldn’t even happen in the first place, because those that are committing those misdeeds currently are the same that are printing the money.
None of those are root causes of inflation in most nations. Hyperinflation perhaps (but even then a collapse in economic output with fixed money supply can mess you up), but normal inflation is put into a deliberate low-but-not-zero level to encourage spending over saving.
> However, crypto is literally solving the extreme problem of infinitely printable FIAT money
Except crypto does nothing to prevent that; and the printability of fiat money is controlled by a number of systems from historians pointing at what happens if you don’t to international treaty to democratic accountability; and the multitude of different cryptocurrencies means it has an echo of the same problem overall only with no accountability, and even within single currencies it has one-dollar-one-vote rather than one-person-one-vote accountability of a democracy.
> and very slow and expensive cross-border transfers, which might be the most impfactful invention of the last 2 decades.
My banks do this at zero cost. Literally zero. Slowest time it a few minutes to show up as a notification on the other bank, normally it’s about as fast as the time it takes iOS to show a notification banner.
> On top of that, crypto adds transparency, accountability, decreases fraud on nearly every consumer product.
Bank can’t refund you if you get ripped off when there’s no bank.
Halifax (UK), Revolut (Lithiuania at the time), N26 (Germany), plus whoever it is backing up my share trading (I read the small print then promptly forgot it because it didn’t matter).
The EU did more to solve that issue than crypto ever did.
15'000€ in under 10 seconds, for free, across the entire SEPA zone.
Converting fiat into crypto, transferring it, converting it back still takes far longer. And keeping money as crypto isn't a working solution, because the currencies are so volatile.
Not every crypto solution adds transparency and accountability, look at monero or mixers in other chains.
And then there's the issue with deflation. Inflation is something valuable, because it means doing something today is valued more than what you've done in the past. It encourages people to spend money, to do something with it, instead of saving it forever.
Your comment arrogant so I expect you will get badly down voted. It is also fundamentally wrong, so I will comment nevertheless. Maybe I can save some poor soul from this naive ideology.
The question is not really about what are the downsides of FIAT money. All solutions have problems. Even if cryptos could solve all problems that FIAT has, that does not mean it is a better solution to the problem that FIAT solves.
The question is really about what problem money solves in the first place. The foremost purpose of is to distribute resources. Money is a completely social construct that does not have any value itself, all value is derived from the promises of those who have resources make. Real world resources, like oil, are what ultimately matters. As a side note, this is also why the Russian sanctions don't really work as well as some people hope for, and they are ultimately a bad idea.
Anyways, I think it's fair to say say that the current financial system has been extremely successful compared to any earlier financial system, such as the gold standard. Everyone who understands finance even a tiny bit knows that a system with finite money supply like gold does not solve the actual problem the current financial system is solving. It may solve some issues that money has, such as efficiency, transparency, and transfer costs, but as a tool for distributing resources it's useless.
So the comparison you are making is meaningless. Even if those problems would be solved, it won't solve the problem money is actually solving.
On top of that, the problems you mention are not problems of money. They are problems of people, of human nature. New money will not fix them.
Screwdriver (cryptos) and drill driver (fiat schema) both can be used to screw. The proponents of screwdrivers are constantly complaining how drill drivers are clumsy, how you can't safely run around with them, etc. But do you really want back the society where you build houses with screwdrivers? Current fiat schema is just so much more than what you think. I assume you didn't study finance or economics, so it might be hard to understand just how many things have been possible because of fiat currencies. Yes, many crisis too, but it put the rate of innovation and growth into steroids. Thanks to it, we now have time to argue in internet about this kind of worthless matters.
And the majority of tech people have a hard time coping with the fact that there is something they can't grasp while some others do. We tech people think of us as smart. So accepting that others are smarter in some areas is hard for us. Especially when it is in the tech area.
There are investors who see value in crypto and put hundreds of billions of dollars where their mouth is?
It's easier to say "Bah! Idiots!" then to accept that there is something that is beyond ones mental reach.
2: Some people got very rich by grasping it early on.
This creates envy and the fear of loss. You can see a similar disdain for technology in programmers and how they think about programming languages they are not used to. They don't know the benefits of the other language and they are invested in an alternative. That creates a strong "with us or against us" drive.
Imagine we are in the 60s again. When TCP/IP was just invented.
Your statement is like saying the internet is cables between machines so they can morse code each other.
Another way to look at the internet is to see all the applications that will sit on top of "machines morse coding each other". And how it will change the economy and society. That is the hard part.
> And the majority of tech people have a hard time coping with the fact that there is something they can't grasp while some others do.
What's hard to grasp? The "blockchain" is just a Merkle tree, like git, which much of the industry uses every day. You build a tree of hash codes by using the hash of the old tree as an input to a new tree. It's a clever data structure and you can do cool things with it.
All the blockchain adds to this is a distributed consensus system. This allows deciding what the HEAD of the tree is without needing a central, authoritative server. But honestly, in 99.9% of applications, an authoritative server maintaining HEAD is fine. Pay some law firm or specialized clearing house to do it.
The only other aspects of crypto is that it creates a deflationary currency with ruinously-high transaction costs, plus a permanent public record of every transaction. Oh, and starting with MtGox, most of the immitation "banks" have periodically disappeared with everyone's money. This is usually followed by Bitcoin users angrily demanding government fraud investigations.
In the meantime, all those proof of work contributions contribute to global warming.
Back when Bitcoin was new, it was an adorable technological dystopia that amused libertarians in tech. As long as it was basically real-life science fiction roleplay, it did little enough harm.
But then "crypto" promotors started treating it like some kind of timeshare condo scam, and started advertising heavily to elderly non-technical users. And all I have to say to that is, if you don't want to get treated like a timeshare scammer, don't act like one.
I really struggle with this. I'm reminded so often of the Douglas Adams quote:
> Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
> Anything that's invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
> Anything invented after you're thirty-five is against the natural order of things.
Do I just not get crypto?
So, I started doing the Certified Blockchain Professional course to understand the technology and hear first hand from the proponents.
I've come to the conclusion that Crypto / Blockchain just isn't solving any interesting problems. It is the epitome of a solution looking for a problem.
There's a huge amount of money being spent to convince the technologically illiterate that this is the next big thing - and I think that's morally abhorrent.
The amount of energy the space takes up is nothing short of an ecological crime against humanity.
Fundamentally, there are a couple of niche computer science problems in there - muddled in with some semi-interesting philosophy - and that's about it.
Most people here, I suspect, have seen hype-cycles come and go. Blockchain seems identical to all the other failed scams in the past.
Completely agree - Technology is supposed to solve a problem, and the usual approach is to say "Here is a problem I have identified, here are the requirements I want it to meet, and considering that here is an array of technology choices I can choose from, and based on that X is the best fit".
With Crypto, it seems to go the opposite way, i.e. "Let's think of possible problems that Crypto could tenuously solve, and then build a blockchain".
Going the other way though leads to solving problems that might not exist, and a technology choice that isn't necessarily best-fit. I work in Supply Chain, and as an example, while Supply Chain Traceability has long been touted as a 'golden child' example of where the blockchain can help, in the last 15 years centralised solutions have had much more traction and success. My personal explanation? Starting with blockchain as the solution led to the problem statement focussing on decentralisation, which actually hasn't turned out to be that important compared to other NFR's.
Look at other technologies such as a REST APIs, which solved lots more propblems across the first 15 years of their life despite being much a more subtle improvement from a technology perspective. Despite this, REST API's didn't come with the same level of hype from the general public, because you couldn't sell REST-API-COINS and speculate on them.
Yeah. And it goes beyond solution-in-search-of-problem; money clearly makes things worse here.
Finding great solutions might sometimes need thinking outside of the box; I can see solutions in search of problems as being that kind of long shot that's rarely but sometimes spectacularly useful.
But crypto is particularly tricky for that, because it's not just a solution in search of a problem; it's also a Ponzi scheme. And it's really hard to disentangle the two.
Were "crypto" merely a bunch of clever algorithms allowing an ever broader set of zero-knowledge proofs... then perhaps we'd find actually useful problems to solve with that. But instead, it's already a huge market by virtue of its artificial scarcity. Any new cool thing these algorithms might do is overshadowed by the lure of the Ponzi scheme; even a tiny probability of turning that pyramid into something solid is easily worth more than a long-shot at some revolutionary technology you probably couldn't even control if you did think it up.
It's the combination of so much money that drowns out everything else with a dash of gambling, a sprinkling of a pyramid scheme, all lathered onto a solution in search of a problem that makes it particularly dispiriting.
> Completely agree - Technology is supposed to solve a problem
Or give you new tools to make art with.
> It is the epitome of a solution looking for a problem.
I can't entirely agree with this. Originally Bitcoin seemed it could be a solution to a problem (i.e. decentralized digital currency), and it turned out it became something a bit different: a kind of digital investment that is highly volatile but has some advantages over, say, traditional stock (and plenty of disadvantages, too). So for a few people, Bitcoin did solve some problems - and created many problems for others on the way.
Blockchain in general has proved to work for what it's been intended, that is not being able to forge transactions. Even though we don't have any really useful applications for it, it's good that it exists, because in 10, 50, or 100 years it will turn out it's a perfect missing puzzle piece for some invention we still don't have any idea about.
I think there's an in theory use for the "digital gold" aspect of something like bitcoin, and some use for something like a smart contract to eliminate the need for middlemen in some exchanges.
The issue of course being that there's a LOT of new and exciting issues with things like this, and more importantly, some ancient and critical issues....like mass scamming and inconsistent tech. Decentralization sounds great until all your money goes out the window, never to be seen again.
I do think there's a home for the tech, and I think there's a small chance some of this really explodes (in the understanding that i don't understand something about it, which is likely), but I do feel that it's impossible to find any reasonable discussion of the topic because it's COVERED in bullshit.
It seriously reminds me of marketing. No one would say that marketing doesn't work. There's plenty of evidence it does. But actually trying to learn about certain facets of the industry is a NIGHTMARE because it's just other marketing people marketing to you, and sifting the bullshit from the legit is hell.
If I'm reading a scientific white paper, have doubts about its validity and the only evidence offered by a Google search is marketing-focused or internet comments, I tend to err on the side of caution and just assume it's probably bad information.
> a solution in search of a problem
Ding ding ding.
I'm still in the "new and exciting" part of my life, but crypto just doesn't solve any interesting problems.
The decentralisation of crypto currencies is great (i.e. there's no central bank that can devalue its currency to prop up their national economy), but it's way too volatile to actually be useful as a currency. Would you agree to be paid your salary in bitcoin? Without adjustments if it drops relative to the dollar? Heck no. It's a speculative device, not a currency.
Smart contracts are cool too. Zero trust transactions etc. Conceptually I think these are really cool, but I see no practical need for them (for 99.99% of people).
Blockchain as a data structure, again for 99.99% of applications a DB and PGP do the trick. (And I'm still waiting on that 0.01% to show up.) I'm a software engineer by trade, and firmly believe you should pick the simplest way to solve a problem, not the coolest.
All of the different uses of crypto are "cool" but pretty useless. A solution in search of a problem indeed.
> The decentralisation of crypto currencies is great (i.e. there's no central bank that can devalue its currency to prop up their national economy
Why? The "economy" isn't something abstract, everyone participates in it. Yes, losing money through inflation sucks, but losing your job due to an economic crisis sucks even more. Some central banks are downright inept ( Turkey) but in those cases it's not just them, it's the whole government, which is ruining the economy through other means as well, so even having the money as independent from their influence wouldn't be of huge help because their ineptitude will show up in other places.
I mostly agree. I think the underlying technology for some of the social systems that have been in place for hundreds of years.
For example, a new country with a new government could set up their governing bodies on a blockchain for full transparency. Ditto with their financial and currency based systems
The real issue is that there's very limited _demand_ for any of these things at present, so the money sunk into it needs to look for something that siphons cash from the existing systems
It’s not really a technology. It can only compete with cash, in a way that’s worse by every conceivable notion.
Crypto losers will see people point out how wasteful it is, how few problems it actually solves and how many it creates, and they turn their blind eyes and wonder “Why is EVERYBODY so wrong?”
Grow up. Build something that matters. I volunteer at a soup kitchen and I’ve seen regulars disappear and come to find out, some of them get killed by gang violence. Some are hooked on dangerous drugs and can’t get access to effective programs to help them. Some turn to crime when they can’t come up with enough money from working to get off the streets. Why should ANYBODY care about crypto, when it doesn’t propose any solutions to these problems that are present as a result of the current economic system? Crypto would only make it worse, if it did anything at all!
100% of crypto is a shameless grift, and the afterlife will treat none of them very kindly.
I kinda have to agree, can anyone elaborate on the uses of crypto, what does it actually solve? I understand blockchains offer a decentralized system. but how about crypto?
During the trucker protest in Canada, the government froze the bank accounts of participants. That the government can do this, shut down movements it doesn't like with the click of a button, is a dangerous centralization of power. Crypto (at its best) safeguards democracy by serving as a check on such power. This still leaves the option of shutting down dangerous protests using the police which requires the cooperation of a lot of people - thus less dangerous, striking a better balance between freedom and safety.
So... I am not at all trying to advocate for crypto here, but the putative value is in having an anarchic currency that is easily exchangeable. That is, if you had money and wanted to convey it digitally outside of traditional regulated institutions, how would you do it? There's gold, art, etc but that's not easily movable.
Now, there's lots of issues here, like how you translate the crypto into other traditional regulated assets if need be, or traceability, or energy use, or security, but that's the putative value: easily moving value outside traditional governmental boundaries.
To be fair, if you've ever looked into buying something grey or black market online, I think the value of some sort of cryptocurrency in theory is apparent?
I'm not sure any crypto at the moment checks all the boxes, though, and some of the assumptions about use seem a little naive or disingenuous, but I can see the idealized use case value. I could in the abstract imagine some kind of decentralized accounting system taking on the role of currency, probably de facto, but I'm not sure current cryptocurrencies are that.
Nothing really. A nice vehicle to strip retail investors that don't understand money or tech, or the tech of money.
Funnily enough, the only thing I see any value in are NFTs. (Remember crypto currencies are essentially just the T in NFT). But not the url asset nonsense.
Rather as a distrubuted authentication system. Concert tickets, system access etc. are all viable.
I’m seeing the concert ticket thing around lately as something this space could “solve”.
But why would NFTs or a blockchain be good here? We have an identifiable central authority, the ticket issuer, so… why do we need a decentralised record for that?
I mean, you could issue tickets to an event as NFTs, and it would probably work ok, but why bother?
They absolutely aren't. Or at least not in the way people think. IF the tech has value it won't "Kill ticketmaster". It'll be adopted BY ticketmaster to make sure they have to pay fewer people on the front line to strip money from your wallet.
The, in theory, idea is that you can tie an NFT to an account, and make sure it can't be resold, but you could also tie a ticket to an ID, and that'd probably work better because it's not hard to spin up a wallet, get the "ticket" nft, and then sell the whole wallet.
It's a nice idea in theory, but only in theory.
So the idea as I understand it is that tickets as NFTs would allow you to prove your ownership of the ticket. With tickets being increasingly electronically-issued, there's currently no way to prove you've been sold a genuine ticket, or the only copy of a genuine ticket - until you get to the gate, they read your barcode, and turn you away.
So we have a second-hand market that runs through ticketmaster currently, which solves this trust issue by interacting with the issuer directly. Tickets via NFTs would help remove this dependency on ticketmaster, so we could have a healthy, trustworthy second-hand market that doesn't just feel like ticketmaster encouraging bots so they can sell the same ticket twice.
So the question is - does this benefit ticketmaster in the slightest? What problems does this solve for them? Because without them issuing the tickets as NFTs in the first place, and recognising them at the gates - it simply doesn't happen. As you say - from the issuer's POV, "why bother?"
As far as I can tell, everyone hates the current system - except the people that control it. The solution to this isn't some wonderful modern technology, it's plain and simple competition.
So it mostly exists as an example of why you'd want to be able to prove ownership of a unique token. Everyone can see the problem if I print my ticket 10 times and sell it to 10 people, it's easy to explain. The telling question is why we don't have a good example of an implementation.
The fun thing there is that ticketmaster is still the authority, and could implement rules like "resold NFTickets will not be honoured", which some bands and events are insisting on to try to save their fans from some of the outrageous profiteering, and it would be just as easy with an NFT as it would with a centralised solution to verify this. Possibly easier.
I guess my point is that there's already an authority in the picture, and there always will be, so a blockchain solution is unnecessary complexity. What's needed, as you say, is a better authority!
> We have an identifiable central authority, the ticket issuer, so… why do we need a decentralised record for that?
And look how well this is going for us? Ticketmaster is one of the the most anti consumer companies in history. There is no need for a single central authority here. Plus you get the benefit of authenticating the tickets in case of resale, etc.
It's actually a great usecase. Fraud is rampant, binding tickets to individuals doesn't make sense, and the main issuer is a literal supervillian.
Regardless - "concert" tickets isn't even my point. It's as a general purpose access token that literally anyone can verify. There is obvious utility in this.
You've told me why you think you would like it, not why the industry would embrace it.
> There is no need for a single central authority here.
Right, but there is one. If it's not tickemaster it could be the venue, the band, anyone. In which case, we don't don't need a trustless, decentralised register. We have a ticket issuer, therefore we don't need a heath-robinson type blockchain arrangement.
> Plus you get the benefit of authenticating the tickets in case of resale, etc.
Blockchains aren't needed for this. We have a central authority that can easily run its own marketplace, if it shoudl wish to.
> Fraud is rampant
A central authority can solve this just as well as a blockchain, without the need for the tradeoffs.
> binding tickets to individuals doesn't make sense
Sure it does, many bands and venues specifically want to prevent resales as it encourages profiteering over fan accessibility.
> There is obvious utility in this.
Yet the example you came up with doesn't seem to have anything over a more traditional solution, other than "I hate ticketmaster". All of this stuff can be done anyway.
>You've told me why you think you would like it, not why the industry would embrace it.
You're absolutely correct. And this is because I never told you that the industry would embrace it.
> Right, but there is one.
Right but there's no need.
> heath-robinson type blockchain arrangement
A system already exists and is perfectly usable and understandable. Hyperbole isn't doing any favours here.
> We have a central authority that can easily run its own marketplace, if it shoudl wish to.
This is true of all distributed systems.
> A central authority can solve this just as well as a blockchain, without the need for the tradeoffs.
They haven't though have they? And it comes for free with blockchains, alongside being able to do so without silly blockers like having to sign up for a business account and be verified by ticketmaster and pay fees as though you are a venue etc. etc.
> Sure it does, many bands and venues specifically want to prevent resales as it encourages profiteering over fan accessibility.
Fair, but this isn't what happens. What happens instead is that not only are people making fake accounts and bots, but the ticket issuer themselves is involved and profiteering. Literally the worst. If this takes place on a public chain then the ownership and scalping of any given ticket is fully traceable.
I'll grant you however that blockchain stuff doesn't solve KYC problems. It can certainly help though, given vouching systems by trusted third parties can be implemented and blah blah blah
Additionally, overbooking is easy to see coming and know about in advance, as well as a host of other benefits (expecting a big gig? Traffic reports can grep the chain and see attendance expecations. Blah blah public data.) Once again you can say something _ridiculous_ like this can be done by a central authority - but I'll let you be the one to hold your breath for ticketmaster to create data APIs for individual gigs.
> All of this stuff can be done anyway.
Yes. As discussed everything that can be decentralised can be centralised, basically. Unless you want / care about the additional data transparency and public programmability the chain gives, ofc you won't care.
> Right but there's no need.
There is always a need for a central authority to issue tickets. Some company operates the venue, and opens the gates for people. There is an organisation that is running the show.
When this is the case you don't need a distributed ledger and all the complications that come with that.
> Hyperbole isn't doing any favours here.
That system is overcomplex for ticket issuing. Anything that requires the general public to keep secret keys secret (and not lose them, ever) is pretty much a bad idea.
> This is true of all distributed systems.
No, it isn't. As much as I'm not a cryptocurrency fan, the whole point of things like Bitcoin is that there is not a central authority, and all the complexity in the protocol comes from building a distributed consensus. When you have a central authority (ticket issuer, venue operator, whatever) that is not going away in this scheme, you don't need that.
> They haven't though have they?
This is a market failure and won't be solved by a blockchain. What you need is competition which unlocks the venues and their exclusivity agreements. Nothing about the specific software implementation of the ticket issuing system really helps here.
> And it comes for free with blockchains
No, it doesn't, someone has to run the infrastructure (even if it's just nodes), write the smart contracts (and pay the gas or whatever to run them), tie in a web UI that runs somewhere, connect all this to the information about the venues, all sorts. That's not 'free'. A database can manage ticket records for a trivial amount of money, and would have a similar amount of other infrastructure needed around it to provide a full service. The datastore implementation here is not a particularly interesting part of the problem.
> If this takes place on a public chain then the ownership and scalping of any given ticket is fully traceable.
Yet we don't need a chain to do that. We can do that with any old DB. Blockchain also can't (for instance) stop people selling their private keys to each other instead of actually performing transfers, just as a DB can't stop people doing that with a username and password or whatever gets used there. And if you say "Well we tie that to real ID using a third party system"...
> I'll grant you however that blockchain stuff doesn't solve KYC problems. It can certainly help though, given vouching systems by trusted third parties
Again, a blockchain adds nothing, if there's a third party vouching system we can just use that in the traditional system too.
> I'll let you be the one to hold your breath for ticketmaster to create data APIs for individual gigs.
And I'll let you be the one to hold your breath waiting for them to embrace your blockchain solution too. Again, it's the market issue that you need to tackle, not the implementation one.
> Yes. As discussed everything that can be decentralised can be centralised
Right, and in this case it is centralised by necessity, because someone is running the gig. You can't remove that authority and that renders the blockchain part of solution a complete irrelevance and an implementation detail.
The problem here is you are looking at a market failure and deciding that if we just throw blockchains at it then it'll magically be fixed. But the blockchain solution doesn't address any of the market problems, and everything you're saying is a wonderful side-effect of using a blockchain can be done with any ticketing software solution.
I could sing the praises of a piece of software I'm building with a nice web front end and API access and a database backend, ownership traceability through simple DB records, the same third party ID integration. I can make the whole DB accessible for the public to query if I want, so data transparency is preserved. See how this solves the same sorts of issues? I could even claim mine's superior because if you phone me up and say "my ticket was stolen" and can prove your ID through that neat third party service, I can sort that out for you because my data structures aren't immutable.
But in the end my magic solution would be just as useless as yours in the face of ticketmaster's swathe of venue exclusivity agreements and stranglehold on the market, because the software implementation details are not a solution to the actual problem.
So you can shout "this could all be solved if we forced the world to use a blockchain solution!" and you wouldn't be wrong, but the fact that it's got a blockchain or not is not the good part, it's the forcing change that's the good part.
> Unless you want / care about ... public programmability the chain gives, ofc you won't care.
Exactly! Spot on! If public programmability was the whole problem in that space, you might have a great solution, but it's not! That's not even a tiny part of the problem with the ticket marketplace, and certainly isn't remotely interesting to most ticket-buyers.
This whole argument is the very definition of what's wrong with the cryptocurrency/blockchain space - instead of trying to solve the real problem (ticketmaster market dominance and abusive practice, backed up with effective monopoly) you're trying to see where you can shove a blockchain, and pretending that fixes something. It doesn't, it's just an implementation detail of a software solution that by itself does nothing to address a market problem.
Wouldn't it be nice if ticketmaster didn't rule the roost and act like dicks? Sure would. And if we could do more with our tickets? And maybe push profiteers out of the system? Oh yes. The specific way we encode, store and transfer ticket ownership records in a non-ticketmaster ticketing system isn't going to change that. Market competition or market regulation might. A specific data structure can't achieve this by itself.
A lot of people seem to have an outdated concept of what crypto is and what advantages it offers.
For the record my stance is "some of this will probably stick around, but most of it is junk".
There's stuff like bitcoin, which is basically a digital asset.
There's stuff like monero, which is basically a digital asset that's very hard/impossible to track. So anything blackmarket/anti governmental.
There's stuff like USDC (stablecoins), which is literally supposed to be pegged to the US Dollar, and "supposedly" backed to some % (depends on the coin. Tether is an infamous nightmare waiting to happen to most people in and out of the scene). The main use being that it's VERY cheap and easy to move stable coins(not just for crypto trading but say if you want to send someone money), and you can get great interest rates on them by staking (6-8% compared to the average savings account of "fuck you for asking").
And then there's basically everything etherium spawned with smart contracts, which is just a token that can execute actions based on programmatic conditions.
None of that is "new" so to speak. Any code/database can already do something like that, but the quasi decentralized nature mixed with certain features does open some theoretically interesting opportunities.
It gets complicated from there and EVERYTHING above is filled with caveats and issues and other problems, but it certainly seems to have stuck around for quite some time, and had quite a lot of legit business use, for a "scam". There is 0 doubt that something like 90% of the coins out there are scams, and of the remaining 10% probably 99% of those will fail for some reason or the other, and of that remaining % a LOT of this will probably wind up abstracted waaaaaaaaay out like IP addresses are for the modern user, but yeah there's probably something there.
There are cases where crypto solves a problem better than anything else, but they're pretty niche.
I used to live in China. Many of my friends still do, or did until recently. China makes it very, very difficult to legally transfer money abroad, even if that money was earned legally and had all required taxes paid on it.
It is trivial, though, to buy Bitcoin in China, and trivial to immediately sell it elsewhere. You are not exposed to much risk, because you can execute the transaction quickly, and although you're breaking the law in China, because you're circumventing their capital controls, you're not breaking the law anywhere else — the money was earned legally and all required taxes were paid on it.
So Bitcoin is pretty popular as a way to get money out of China if you are not living there any more (or are comfortable with the risk, if you are living there). I imagine there are many other places where it's also useful in this way.
> It can only compete with cash, in a way that’s worse by every conceivable notion.
Except the part where a tiny fraction of a populace can print an infinite amount more of it, sure. But that's just a small thing, amirite?
crypto is just purely distilled capitalism. Of course it's not going to solve any problems - it's an ecosystem entirely dedicated to the pursuit of profit, without the inconvenient side effects of actually producing useful work.
That's a pejorative take on capitalism.
Given a list of possibilities for action, profit is merely an ORDER BY mechanism to prioritize them.
Incentives matter in the buyer/maketplace/seller realm of economics.
it's a descriptive take on capitalism. profit is the motivating force for businesses, and in the crypto economy the profit is primarily derived from speculation and scamming. in the real world, at least capitalism is driven by demand that often comes from actual utility. crypto is like if the entire economy was wall street, including boiler rooms and market manipulation.
Profit might be #1 , but immediately after profit there is a huge moat to protect profits.
When you don't build anything of value the only moat you have is your political ability to convince people that you are.
I mean banks and insurance companies don't have to justify their existence, whereas the massive campaign that crypto enthusiasts mounted on the interwebz is telling that they are not even sure that their movement can survive.
Capitalism and Marxism are ideas.
The historical acts, good or bad, due to these ideas are owned by the actors.
Capitalism isn't an idea, it's a system that we live within.
Yes, if you care about blame then you can just blame people for bad actions and call it a day. But if you care about actually preventing bad actions then you need to look at incentives, and that's where the study of political economy comes in.
Indeed, to quote myself within this very thread:
> Incentives matter in the buyer/maketplace/seller realm of economics.
then what was your objection? Capitalism incentivises profiteering, the crypto industry is an example of practically pure profiteering.
Capitalism is an intellectual concept, like Socialism.
Materialism is the driver of the mischief in either the capitalist or Socialist case.
Cryptocurrencies do solve several issues, but some of them have become less important and others are, well, not so transparent for ordinary people. Do you remember when bank transfers using ebanking still took several days when you did them on a friday afternoon? For many banks this is actually still a thing. Yes there's Paypal and Venmo and god knows what these days, but good luck trying to send large amounts of money that way or sending anything abroad (especially to a country where the service is not available). Which brings us to point nr 2: There are many people with lots of money who would prefer to send it not just faster and easily verifiable, but also away from the prying eyes of governments and banks with strict oversight. Bitcoin only works if you manage to get it anonymously (e.g by giving some dude cash and hoping he's not monitored by the NSA), but other Cryptos give you privacy for all transfers and still keep verifiability. Every drug dealer, money launderer or tax evader can easily sneak millions of dollars across continents in an instant. This used to be damn difficult when using hard currency or art or any other tangible asset (and when you did it electronically you would set off even the most trivial alarm systems). So yeah, there certainly are big problems that were solved - the question is: Did we really want them to be solved.
Are there really counterparties with millions of dollars of privacy preserving crypto in every country?
Like say you are a cocaine kingpin. You instruct your minions in countries where you sell your product to buy crypto. How do you access that value where you live?
Or say you are a wealthy Russian with millions of rubles that you want to move out of the country. Is there really a seller with unlimited willingness to exchange their crypto for rubles?
You're assuming that the counterparty must be purely transactional. But there are people with big money in this system who have no problem holding vast amount of digital currency. They wouldn't have any problem accepting it as payment for larger investments. Also, imagine you sold one ton of cocaine and now you want to move the money out of the country. You'd instruct your dealers use their local crypto handlers to transfer the money from cash and then wire the digital assets to your crypto wallet. You can now cross any border with that wallet and access it in any country and noone will be able to inspect it if you do it right. And there's already a lot of infrastructure for getting cryptos back to cash - even (and sometimes especially) in poorer countries (think of an ATM, but you can use your crypto wallet to withdraw).
Yes, moving the money into crypto is going to be the relatively easy part of using it for drugs. Finding liquidity where you want to spend time may not be so easy.
You say "think ATM", the street value of a ton of cocaine is tens of millions of dollars. Nice ATM.
From the Tweet:
I hope I never become as intensely default-skeptical of new technologies.
That's an absurd take. It's ten years of hype, get-rich-quick schemes and other scams, hardly new.
It's not "default-skeptical" to be questioning it after all that. The bizarre position is the wide-eyed naive butt-hurt of the tweet.
It has been over 13 years now since the release of Bitcoin.
13 years and absolutely nothing interesting has happened with it, except people saying "You need to get in on this!!!" so they can push the value up and buy low and sell high.
The internet was doing interesting stuff well within 5 years. Modern smartphones were interesting and taking over the world within 5 years. Graphics cards came and revolutionized the gaming industry immediately. Crypto has been around for 13 years and all we've seen are pump and dump schemes, and by extension randomly generated chimpanzee pictures whose market has already collapsed.
> It's ten years of hype, get-rich-quick schemes and other scams, hardly new.
Right, a portion of which happened right here on HN until it became too blindingly scammy to ignore. NFT's came out which are demonstrably a scam that don't actually do what they claim to. DAO's show up, claiming members will have cryptographic (?) guarantees about decision-making when in fact they are ultimately dependent on some level of human decision-making, so ripe for scams. This maybe climaxed with the push for "web 3.0" to be some sort of new crypto-based meta-internet. People are trying to cash out, I think.
I'll be honest, until then I wasn't even aware of things like the oracle problem, the "nothing at stake" issue inherent to proof-of-stake systems, and the horrible horrible idea that is programmable smart contracts. Cryptocurrency seems like a nice idea when you handwave the actual implementation details as "the tech people figured it out somehow!" Unfortunately, they never really did. This stuff only "works" in a frictionless vacuum.
Could be fun to do a sentiment analysis of block chain posts/comments on HackerNews and see if it possible to see the break
The jury is still out on whether or not blockchain’s originally intended purpose, currency, has value, and if it will see anything resembling widespread adoption in the future. I’m personally skeptical.
But almost all of the problems you list apply to blockchain uses other than cryptocurrency. The failures and scamminess of Web3, DAOs, oracles, and Proof-of-Stake are not arguments against the original Bitcoin whitepaper.
The “tech people” have definitely figured out something. The question is whether or not enough people really want to use whatever that something is.
It's a distributed ledger that is verified via proof-of-work. People have decided to assign it speculative value, largely as a sort of fin-tech smart-banking pitch. Ultimately though, there just aren't many non-financial usecases for a _public_ distributed ledger. Simply verifying transactions doesn't solve much - you need to vet the _nature_ of the transaction to make sure that screwy things aren't happening using _other_ stores of value (not bound by the laws of proof-of-work). Centralization will appear to "solve" these problems, just as it does with USD.
That's why I feel that bitcoin is always going to be ripe for abuse and highly adjacent to scams, even if the original paper is impressive and an interesting result.
I think we’re mostly in agreement here, I just found it important to distinguish the original idea from the numerous questionable applications that have been developed in its wake.
Fair enough!
In the .com days, I was active in the e-commerce space, using public-key cryptography to solve problems. We had digital certificates, digital signatures, etc, which we used to solve various problems like authenticating and securing access to websites, creating encrypted and signed emails, etc.
One thing was non-repudiation, i.e. if I send you a digitally-signed email with a purchase order, then you can legally rely on it. There were some attempts to use similar techniques to allow trusted third parties to register documents, but nobody was willing to pay for the service.
> the "nothing at stake" issue inherent to proof-of-stake systems
The "nothing at stake" problem was inherent to proof-of-stake more than six years ago. It has, since then, been solved on Ethereum (and Polkadot) with Slasher, which is a penalizing system that burns (a portion) of the stake of malevolent actors, and then kicks them off the consensus layer.
Ethereum's consensus layer has been live for 1.5 years now, and there have been 175 slashing events during that time [1]. Some have been misconfigurations by small pools, others have been caused by users running their keys twice on two different machines (causing double attestations and double block proposals).
[1] https://beaconcha.in/validators/slashings
Long range attacks likely exist on any implementation. It has not been "solved", the buck has simply been passed to more motivated adversaries.
https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=8653269
The most effective mitigation mentioned in the paper is the use of a "trusted" CPU module such as the Secure Enclave in Apple devices. Suffice to say, that's probably not going to see widespread adoption anytime soon and doesn't consider the other security problems inherent to such enclaves.
What they call "moving checkpoints" is a pretty widely-accepted mitigation to long-range attacks. Checkpoints might seem like a security issue, but it really depends on how recent they need to be (which is a function of staker exit delays) and the process for discovering checkpoints.
E.g. most blockchain clients come with a genesis state baked in, which is effectively a (very old) trusted checkpoint. Someone could try a long fork attack by changing the genesis, but the attack would be obvious from the git history. (Many users might still not notice, but that goes for any attack on the client codebase.)
The paper I linked discusses moving checkpoints.
Yes that's why I used their term. It doesn't say much about it though. The Ethereum Wiki [1] has a much better discussion of its security implications IMO.
But my point is mainly that moving checkpoints is the standard solution to long forks, so a discussion about PoS security should probably focus on that, vs theoretical alternatives like trusted hardware.
[1] https://eth.wiki/en/concepts/proof-of-stake-faqs#what-is-wea...
For the first 20+ years internet was relegated to a niche technology that will fail as we have faxes. I think your take on crypto is absurd and nonsensical in light of internet success. Here is the relevant quote: "By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's." Maybe you don't remember that quote, but it was said by Nobel winner, Krugman.
Krugman responded to this:
https://www.businessinsider.com/paul-krugman-responds-to-int...
> The reason people are dredging up this old quote is that Krugman jokingly said Bitcoin is Evil. He doesn't think it's evil, but he is skeptical that Bitcoin can be a real store of money, and actually work as a currency.
[...]
> We emailed Krugman for a comment on the quote and here's his explanation:
Krugman:
> Well, two things.
> First, look at the whole piece. It was a thing for the Times magazine's 100th anniversary, written as if by someone looking back from 2098, so the point was to be fun and provocative, not to engage in careful forecasting; I mean, there are lines in there about St. Petersburg having more skyscrapers than New York, which was not a prediction, just a thought-provoker.
> But the main point is that I don't claim any special expertise in technology -- I almost never make technological forecasts, and the only reason there was stuff like that in the 98 piece was because the assignment required that I do that sort of thing. The issues about Bitcoin, however, are not technological! Everyone agrees that it's technically very sweet. But does it work as money? That's a very different kind of question.
> And the fact that people are throwing around my 98 quote actually shows that they don't get this point -- that they're confusing technology with monetary economics.
Yes, Krugman responded after throwing something like that in ether. Doesn't make him right or more knowledgeable having to reassess his original thinking.
Also, Krugman had to go back on his take of the internet, all I'm saying is that none can predict future and the "smartest" of us can be and often are wrong.
Sure, I'm just suggesting your argument isn't terribly convincing. Maybe stick to the actual merits of the tech rather than appeal to the inability of humanity to accurately predict the future. That's not as much of a guarantee of success as you think, and indicates you are biased.
My argument, around knowing the future, which is 100% correct, as none can. What is your argument? Crypto doesn't work because you said so?
My point is that people presumably smarter than you, have in the past said things which turned out to be wrong. So then what evidence do you have other than your words?
At least I brought a quote to illustrate my point. You brought a subsequent explanation by the author why they were wrong. I'm expecting the same from you, in 8 years, saying how you were wrong. Thanks ahead of time.
I just quoted an article and said you weren't very convincing. You're still pretty unconvincing however, seeing you react so defensively suggests a bit of cognitive dissonance.
At some point, the line always goes down. Just try to cash out before it does, and don't fool anyone to do so. See you in 8 years.
So I hadn't seen Krugman's 98 quote before, but it reminds me of Cliff Stohl who wrote a whole book skeptical of the internet in 1995. The thing is that looking back a couple decades on, their criticisms land for me - they made good points but the Internet was so rapidly adopted that they looked like fools at the time, but I think that as things have worn on and I've gotten older, they look more prescient in retrospect.
> For the first 20+ years internet was relegated to a niche technology that will fail as we have faxes. I think your take on crypto is absurd and nonsensical in light of internet success.
This is in no way a historically accurate statement. Thirty years ago the utility of data networks was well demonstrated. Not just the IP-based Internet but X.25 networks before and parallel to it (Tymnet etc). Data networks were only a "niche" technology because they were expensive. They increased in size and utility in step with decreasing prices.
Cryptocurrencies haven't brought anywhere close to that same utility. The only "problem" they have solved is separating rubes from real money in trade for Geoffrey dollars. Cryptocurrency has in fact trended the opposite direction from Internet technologies as they're more expensive to work with as time passes.
If cryptocurrencies (and associated technologies) were actually meant to be useful their costs would be decreasing over time allowing wider access. The fact their very design increases costs as they scale should tell you they're naked rent extraction vehicles and nothing more.
Furthermore, at least from what I recall, for the first several years of the existence of cryptocurrency, HN was not particularly negative toward it. It's only in the last few years—when the scams have exploded, especially the NFT craze—that a clear majority of HN's position on cryptocurrency has turned sour.
HN is actually very technology optimistic. People really think that tech can be used for good, and part of the ethos is that we should try to improve the world using tech.
The result is that HN as a whole is quite judgemental about whether people are doing that. People here will regularly tell you that AirBnB rides on externalities, Amazon treats everyone badly, and FB is destroying democracy. Basically, HN tries to hold the world accountable to the optimistic promise of technology, and to do so we have to point out some things that aren't working well.
Crypto is no different. There's some interesting stuff in there for sure, especially if you just look at the tech. But in terms of making the world a better place, it gets held to a standard just like all the tech giant firms. At the moment there's a lot of minuses on the board and we've yet to see the positives that justify the optimism.
I've favourited this comment so I can be reminded of how both tech utopian and cynicalism are entwined. Thanks!
Are the optimism and the desire for accountability simultaneous, or sequential? I think it's more of a sequential Gartner Hype Cycle thing.
https://en.wikipedia.org/wiki/Gartner_hype_cycle
As others have pointed out, the HN zeitgeist regarding crypto has changed significantly over time. Several years ago folks here were clearly at the "peak of inflated expectations" phase. Currently we're in the "trough of disillusionment" phase.
The question is whether crypto will follow the rest of the curve or - as often happens but Gartner fails to note - just fall into the abyss. However, even according to the most optimistic reading, Twitter Guy is clearly several years slow on the uptake.
Not sure I'm a fan of the hype cycle, it's pretty vague.
I think the thing to remember is that tech people see through all the hype before everyone else. People who are close to a tech will be able to tell you the endgame before someone who doesn't, because they understand the constraints of the system.
Being on HN is a bit like time traveling, you can ride on everyone who has zoomed forward into the future.
Simple: There are a lot of computer scientists and software engineers on HN, and they understand that blockchain is an inferior technology in most (if not all) ways. Futhermore, they understand that this technology will never solve real problems better than the status quo. Therefore, they conclude, that almost all crypto projects are scam, and it disgusts them.
> Therefore, they conclude, that almost all crypto projects are scam, and it disgusts them.
This is very true. I remember when I was fascinated by the Red programming language and at some point they started to promote some new cryptocurrency. It was the last day I even looked at it.
Because, having an above-average grasp of tech, they've looked into it and have concluded that it's just glorified bullshit.
Edit: and a scam.
Have a look back at ~2014 or so. HN was extremely bullish on Bitcoin. It sometimes took up about a quarter of the articles at any given time. It promised a bright new decentralized world and offered fertile ground for innovation. It promised to free up peer-to-peer transfers, allow some measure of anonymity in financial transactions, and perhaps even become the vehicle for microtransactions that the world so sorely needs.
Today, it is far less clear that there is something new at hand. To the extent that blockchains enable innovation, the early wins are complete and the strengths and weaknesses of the entire ecosystem largely have become clear.
In 2014, it was rather clear that blockchains had some sort of substantial potential value, something competitive with the total amount of money circulating in the world. In 2022, cryptocurrency is worth that much. Bitcoin alone is "worth" perhaps a trillion dollars, while M1 is around 20 trillion.
What we're seeing today is a lack of clarity and direction. HN was stoked on crypto when it offered something new. Today, crypto offers a lot of pump-and-dump schemes and financial curiosities, but nothing like the promise and obvious direction it held in 2014.
Something cool and new may yet emerge -- expect HN to get real excited when it does happen.
> Bitcoin alone is "worth" perhaps a trillion dollars, while M1 is around 20 trillion.
You can't compare the liquidity of M1 with the liquidity of BTC. M1 USD is accepted everywhere, ranging from a 300M apartment on NYC's Billionaire's Row to a banana stand in Madagascar.
If you believe that BTC would get to that level of acceptance then it's still the early days.
Honestly after looking under the hood the technical part of it seems like a solution on search for a problem, unless the problem you aim to solve is wealth redistribution with the same GINI index (or even higher given the concetration of wealth in the ecosystem).
Similarly the social aspect of decentralization is a really hard sell when you have Satoshi sitting on 30B and Buterin sitting on 15B and they hold so much power.
“I hope I never become as intensely default-skeptical of new technologies.” Bitcoin is 12 years old. HN is just a little ahead of people who just discovered it a year ago. Plus the HN audience knows a little more about technology than “crypto twitter” (they mean blockchain twitter).
I first read about Bitcoin here on HN in about 2012. It's when I first started looking into it.
> “crypto twitter” (they mean blockchain twitter)
This says it all.
I've spent a lot of time looking into it and there doesn't seem to be much actual utility there.
What there is is people saying "here's some artificial scarcity you can buy into early and make a fortune from!"
So it's a scammer haven of minimal utility. That's why.
I've been seeing a lot of kids on Twitter doing threads on things like, "What is a smart contract?", "How to transition from Web2 to Web3", and I can't help but feel like I am staring down inside a barrel that leads to a black hole.
People talk about these topics like they "truly" understand them, when there isn't much to understand in the first place. As I have said many times already on HN - it's unnecessarily complex at the very core of it, and is often spoken about through traditional marketing jargon.
"It's the future.", "But, it's decentralized!".
An example we can look at is Crypto.com - which has invested billions upon billions of dollars into the US market. Do you really think the average Joe gives a rats ass about blockchain or decentralization - the goal of these investments is to hook people on something they don't understand.
And then milk their stupidity with cheap tricks like NFTs, bullshit investments, and scam coins that come and go on an hourly basis.
It should give crypto folks something to think about. The %-age of people who know Merkle trees is probably higher on HN than among crypto users. Personally, I went from curious to skeptical twice already - once for plain blockchains, then for web3.
I still find the idea of decentralizing web services interesting it just seems to me that most projects heavily rely on their front end and not seldom on a centralized backend too (eg OpenSea, the platform for NFTs, which themselves in most cases are just links to centrally hosted resources, contrary to what most seem to believe). At that point, you just have a normal web app with horrendous UX. The idea that you can create protocols as sort of a public good is interesting in theory, but effectively it's still whoever owns the domain name (+ usually Discord server, Twitter handle,...) that effectively controls everything.
But there are some interesting approaches to mitigate that. I believe Aave hosts their app on IPFS now, Liquity has an incentive mechanism for front end hosters for their protocol. And there are some interesting aspects beyond decentralization, the ability to make binding promises to anyone is powerful.
Because ever since the Bitcoin whitepaper, the focus has completely shifted from building useful technology into speculation and grift, accompanied by scams and tribalism.
Solving the double spending problem in a completely decentralized manner is quite the achievement, but rather than embrace speculation, Bitcoin should have deterred it, keeping the price low and limiting environmental impact.
>Rather than embrace speculation, Bitcoin should have deterred it, keeping the price low and limiting environmental impact.
Well, for something that's said to be a currency, that would be logical. But for something that's meant to be "deflationary" it isn't.
Bitcoin should have aimed at being disinflationary rather than deflationary.
Hackernews is full of people who know what they are doing. Blind faith is rarely what we use to be who we are.
But I have to add: if you are rich enough and have money to spent, why wouldn't you believe in crypto? It's like web3: it takes a lot of knowledge to figure out what it is really about. Rich people don't have this time because they are busy. Why shouldn't we monetize this? If people really want to believe in fairy tales and it doesn't hurt anyone then you should just let them, life is probably more fun for gullible people anyways.
Most of the crypto community are non-technical people, so that's a turn off for something that should be all about tech. There is also little utility, and with stricter privacy laws it is a bad technology, since everything is public on the blockchain.
It also cost a lot more money than setting up your own server. The argument against non-crypto is that you have to trust a middle man. But most solutions to the problems crypto have is to create middle actors. Like NFT marketplaces, crypto exchanges that hold you wallet, and off-chain payment transaction systems which makes transactions faster.
Maybe a lot of the things I mention is not entirely correct, but that the other issue. It is hard for someone technical to learn about these things because most of the content online about crypto is written for non-techincal people.
I don't think they are "anti", just sceptical. Scepticism is like the brake on your car. Not the most exciting part, but handy to have.
Exactly. I don't know why anyone would hope to not be sceptical about anything. The opposite of sceptical is gullible. You should strive to be sceptical.
It is mind-blowing that some programmers cannot understand that autonomous programs — software that continues running independently of control over individual hardware nodes in the network — are an incredibly powerful and compelling tool. Computers that can make commitments that last beyond the initial promises of the authors of their software.
What real world use does this have right now
It's been a decade. What can I do with it that isn't a variant of "here's some artificial scarcity you can buy into early to make some cash"?
Borrowing / lending money to other people without the parties having to trust each other or having to wait for a slow and expensive legal system to work it out.
Awesome! Who is doing this? And how does it compare to transferring money using an existing method?
For a few real world examples that may be easier to grok:
- https://goldfinch.finance
- https://www.maple.finance
- https://truefi.io
- https://makerdao.com/en/ (there is a growing "real-world asset"-collateralized pool as well)
- https://centrifuge.io
These all offer rates competitive or superior to traditional methods thanks to being able to access a global pool of capital through a single programming interface that simplifies coordination and risk sharing between counter-parties.
And another early example Valora (on the Celo network) where you can make global transfers of money with a Venmo-like experience for fees <$0.01.
> These all offer rates competitive or superior to traditional methods thanks to being able to access a global pool of capital through a single programming interface that simplifies coordination and risk sharing between counter-parties.
(Genuinely curious about the answer) How would that be different from, or better than centralized platforms like kickstarter?
None of these explain how unsecured lending works. Goldfinch says that "borrowers are required to pledge real-world assets as collateral" and in the event of default the pledged collateral is liquidated. [1] So that's not unsecured lending. Truefi says that they only lend to institutional borrowers who sign an enforceable lending agreement. [2] So that's a traditional lending agreement that is enforced by courts of justice. Maple also says they only lend to institutional and corporate borrowers [3]. In conclusion, none of these are real world examples of "borrowing and lending to other parties without the parties having to trust each other or having to wait for a slow and expensive legal system to work it out".
> These all offer rates competitive or superior to traditional methods
Also what do you mean by competitive rates? Note that if the borrower is getting paid interest at a rate above the market rate, the borrower is getting paid a competitive rate, but the lender is paying an uncompetitive rate.
[1] https://docs.goldfinch.finance/goldfinch/general-faq [2] https://blog.trusttoken.com/introducing-truefi-the-defi-prot... [3] https://maplefinance.gitbook.io/maple/protocol/borrowers
I still don't understand how this could change my life. Most people exchange money through their bank accounts for free with things like the SEPA network.
I browsed through all those web sites and all I see is ways of using the crypto wallets that have to be previously created through various means incompatible with each other. Let's not talk about the "be your own bank" motto which means that you have to secure your own money which is, at least scary for most people, and at most very difficult to do even for people knowledgeable with computers.
Here is something that is revolutionary and actually happened in the past 10 years: *online banks* that have no bricks-and-mortar offices! I created an account in less than 10 minutes, I have a debit card that I can use all over the world, I literally cannot spend more than what I have, and it's still a real bank which means that my account is insured if something bad ever happens. Where is the crypto equivalent?
You can find them by just searching but here is one that has borrowing and lending: https://valasfinance.com/markets
Why is that valuable? And more importantly, how is the upside this brings bigger than the downside it brings compared to previous approaches to borrowing/lending?
Personally it's valuable to me because it makes it quick and easy for me to loan my money out.
like that time when there's a bug and something like 40 thousand dollars just goes to waste because ~~~ it's out of everyone's control ~~~
The issue with control is trust. The answer is to enable more trust, not to reduce the control.
>like that time when there's a bug and something like 40 thousand dollars just goes to waste because
If you are that worried about losing the money you lent you can pay for insurance. Here are some examples.
https://app.nexusmutual.io/cover
https://app.insurace.io/Insurance/BuyCovers
Lending requires the ability to seize assets, and the ability to seize assets requires a legal system. There's no way around it. Without this lending can't work, because otherwise the borrower can just walk away with the money.
>There's no way around it
You can have assets on chain that can be used as collateral which can be liquidated if a loan isn't paid back. Additionally lending money is not only done so people can borrow from it. For example decentralized exchanges need a lot of liquidity in order to execute trades without very much slippage. You can provide liquidity to them and they will pay out transaction fees to you in exchange.
If you have to pledge enough collateral to cover the entirety of the principal, your net investment position is either zero or positive. In other words, you're not borrowing anything.
You are right in that it doesn't make much sense if your collateral is made up of stable coins, but if you had something like bitcoin you may not always want to just trade it for stable coins, do whatever, and then trade back for bitcoin as the price can change. It may be better to just deposit your bitcoin onto one of these platforms (yes you start getting paid for lending bitcoin to them for as long as you keep your bitcoins there). Then you have the ability to borrow a certain amount of some other coin without having to liquidate your bitcoin.
If doing so was useless, pawnshops wouldn't exist in real life. There is value in not having to sell something and later try to rebuy it.
I never said that it was useless. I said that this isn't borrowing and lending.
Borrowing and lending is the primary and most important function of finance. It allows economic agents to trade future consumption for present consumption. Yet it is fundamentally impossible using blockchain technology.
There is still use for that if the asset you deposit is:
a) expected to appreciate in value b) yield-bearing itself
and you don't want to sell it.
I didn't say that it has no use. I was pointing out that blockchains do not allow "borrowing / lending money to other people without the parties having to trust each other or having to wait for a slow and expensive legal", contrary to what the OP claimed.
I didn't claim you said it, either, just wanted to mention why it can still make sense. However, the process of depositing something as collateral (irrelevant of the value) and borrowing on it can be described as just that, borrowing.
Smart contracts are interesting, but they're like ray traced quake was in 2004, a curiosity, a toy, something interesting that doesn't have real utility yet.
These technologies are good to have in case someday they become actually useful, but the amount of energy and money spent on them today far exceeds their usefulness and is purely hype-driven.
For example, there may be actual utility in NFTs: EU law requires that if you buy a game on e.g., steam, you should be able to lend it out, get it back, and resell it. If the EU, in a few years, were to decide games had to be portable between stores, and started actually enforcing these, it would make sense to put the actual game license key up as NFT and allow transfers.
But that's a hypothetical. It's not what's happening today. Today's excitement is purely hype.
The total energy consumption of PoW blockchains has increased global CO2 output enough that it exceeds the amount of CO2 saved by switching to renewables in the past 20 years. That's not worth it if there's such little utility in there.
Like with video games, and even personal computers, often things that start off looking like toys become the next big thing in technology[1]. The properties that make them intriguing to young technologists are not appealing to older technologists, who sometimes miss the fact that these nascent tools take time to mature.
[1]: https://cdixon.org/2010/01/03/the-next-big-thing-will-start-...
> Like with video games, and even personal computers, often things that start off looking like toys become the next big thing in technology
That's true. But we didn't have a hype cycle spending billions and destroying the environment for Pong. We had that only once an actual market of applications for the technology appeared.
Crypto isn't there yet, and likely won't be for the next few years. And likely none of today's chains will be used for these applications.
>I hope I never become as intensely default-skeptical of new technologies.
You know, it's not skepticism for its own sake. You can actually read through some of the critiques you encounter and then conjure your own refutations against them rather than dismiss them without digesting them. You should also pay heed to the opinions of HN'ers more-so than any other group because it's overwhelmingly comprised of objective people who are both tech and finance savvy, which a majority of people involved in crypto are neither, ironically.
Here's a good one:
Deflationary currency & the hallmarks of a greater fool scheme: news.ycombinator.com/item?id=30987714.
Here's a couple of my own opinions: The idea of peer-to-peer currency is ideal in theory, but it doesn't seem to work. You still get manipulation like with traditional currency, only the manipulators cannot be identified or held accountable, and there aren't hundreds of years worth of laws and regulations and systems for preventing these crimes and judging bad actors. PoW is viable but doesn't scale, unless we figure out a way to swallow whole planets-worth of fuel by 2100 every time someone wants to buy a baguette. PoS scales, but it's just reinventing banks in the most inefficient way imaginable, replete with all the centralized ills that crypto people ostensibly desire to escape.
Crypto is a new technology contending with a very old and mature one that's working well enough - finance. And though finance has some problems (nothing is perfect), crypto has solved none of them, other than fattening the wallets of a few scammers and lucky idiots.
I would love to hear of just one time where crypto solved a problem a person or business had where modern finance could not. A real example, a thing that actually happened, not a theoretical scenario. I haven't heard of one yet.
Of course, if you're married to an idea like "crypto good; skepticism bad", then no one can help you, and if that's the case, then I'd like to let you in on something (don't tell anyone!): SCMME is pumping and we're still early: great yields, stake and earn 10000% APY - you DO NOT want to miss this.'
It was about 3-4 years ago, I was checkout out meetups at my local city and came across this launch of some new tokens/NFT. At the time, I was on a financial constraint and wanted to get a job, so I attended a lot of these to meet potential investors, employers, etc.
This dude rented out a massive mansion in the middle of the city and the tickets were like some $15 only. There were a lot of people like me, but there were a lot of old people too in the crowd. They didn't look like the rich types to me. This guy literally promised 10x ROI for every dollar invested in some crypto under his own name.
He got a lot of "pre-bookings". I was curious, read more about this dude and crypto itself and realized it wasn't as useful as people hype it to be. I tried to build some applications on top of it. It always felt I had to go out of my way to make a use case for it. Eventually, that's when I realized most people who talk about crypto are marketers or scammers like this dude.
The rest of us - we are just tired of hearing it everywhere around us when it makes no sense even in certain applications.
A few hours ago there was a post on HN (no comments yet):
https://news.ycombinator.com/item?id=31301824
leading to this article about paid shills:
https://www.vice.com/en/article/xgdbx3/buying-authenticity-i...
People with anime profile pictures tweeting about stablecoins, going to the moon and WGMI are not some youth culture vanguard. OP tweet has self-selected into an online social world consisting of people in a similar mindset and demographic to his own. Outside of this bubble, "crypto bros" are considered weird and cringeworthy.
You can read the comments on Slashdot from 10 years ago, and you'll find the same scepticism. So it's not an accident. HN's audience is probably better educated than average, and the better educated a demographic group is, the harder it is to fool.
It's not new.
It's almost as old as android and ios, but instead of changing the world like they did, it's perennially on the verge of something big, according to its proponents. The cryptocurrency revolution is just around the corner! And you should give us your money now!
Meanwhile the entire space is pretty much defined by scams, and economic projects built by people with a questionable grasp of economics and ethics.
And looking into the tech, well it's interesting(ish) in itself but it doesn't really solve any interesting real-world problems for me. PoW in particular seems like the most inelegant hack.
Cryptocurrency has been around for 13 years, and all we've seen is scams, pump-and-dumps and a way to pay for hit men.
I think the tech is really clever, but don't understand a potential use case.
* Relying on trusted parties will always be significantly more efficient than a trustless system
* Most people don't want to manage their own money and if most people are going to really in third parties to manage their coins, how is that substantially different than the current situation?
* Being able to reverse transactions in a system is actually good when theft is common
* Crypto has a strong polarizing function: most people interested in crypto are also financially invested which makes it hard to get accurate takes from knowledgeable people
Crypto is a speculative investment. It may well work out for some, however, I wouldn't advise to put more money in than you can afford to lose.
I am interested in the technology behind crypto, however, I have only seen limited use cases for it so far. The major selling point for crypto seems to be deregulation, however, having worked in Finance for over two decades I have witnessed what (too much) deregulation can result in. If crypto is here to stay, it will be end up as much regulated as money.
I suspect HN chatter adamantly against decentralized governance and value storage experiments are often by intelligent people that are simply too distracted by the loud voices of greed and hype to take an objective look at the quiet yet major technological innovations happening that will change the world forever just like the internet did.
The early 90s internet was pretty rough too and also had a lot of annoying hype and greed that made a lot of people swear it off instead of looking closer at what it could become over time.
Some 90s engineers managed to look past the short term hype and greed problems of the early interent to see the true innovations and think long term. They did very well.
The Bitcoin whitepaper started a chain reaction of demand that produced better human friendly backups for private keys like BIP39, cheap general purpose personal hardware security modules like Ledger and Trezor, better privacy with innovations like zero knowledge proofs, greener datacenters and computational effeciency improvements to reduce energy waste, and massive improvements in quorum computing patterns so no one malicious sysadmin can manipulate societially critical network services.
Visa, Mastercard, virtually every bank, supply chain companies, governments, general sysadmin teams at companies everywhere, etc, etc, have huge think thanks harvesting and incorporating technology from decentralized value storage and governance experiments that spun out of Bitcoin.
The entire field of mathematics and cryptography has gotten a massive cash injection as a result of these too. Ask anyone that works in the cryptography departments at Universities like Stanford.
Sure, traders and people who hype things without understanding the fundamentals are annoying. They annoy me too, but I look at this from my role as a security researcher. Crypto-assets have seemingly overnight generated massive demand for security technology that can reduce theft and scams online. As a result those invested in crypto-asset technology are often light years ahead in security from your typical SaaS company in other industries. Crypto-asset holders and those against them all have a common interest in a safer internet.
We would all do well to learn to find common ground instead of taking unproductive stances against major technological advancements just because the early stage versions of them are a bit rough.
> Crypto-assets have seemingly overnight generated massive demand for security technology that can reduce theft and scams online.
I'm sure a wave of burglaries would spark demand for better locks and alarms too, but that still doesn't make burglary itself a good thing. "Things got better because we exploited them" does not excuse the exploitation.
There's knee-jerk generalization about cryptocurrency here. There are plenty of bad takes on Twitter and HN. That said, yes you can highlight things you do not value personally. That doesn't mean others are wrong to value them.
The above stands, even if you feel you have a superior understanding of technology. It doesn't mean you have license to generalize or an exclusive license to determine what is valuable. Others may value things differently, and that is fine.
Different strokes for different folks. Don't want to transact in cryptocurrency? You don't have to. Problem solved. Value it however you want to, but don't dismissively condemn it or generalize by calling it a scam. The claim is arrogant. Even more so when, "Because we understand tech better than..."
https://en.wikipedia.org/wiki/Subjective_theory_of_value
This take is too radical for HN, thinking for themselves. Here the people talk in absolutes and value their own opinions way above others. A simple echo chamber where "crypto bad because I said so," drowns everything else.
> Problem solved.
Sure, apart from all the energy use, and the predatory scammers and all the other bad effects on society this stuff seems to promote.
But sure, other than those things, problem solved!
If only we could live in a paternalistic, centrally planned society. Perhaps if social and economic issues functioned as a purely contained system where men could have absolute information. Yes, if society were a computer and we could feed it the program to execute...
Maybe under these circumstances we could dismiss the negative outcomes of regulation and central planning. Until then, we live in the real world, where utopian dreams are not within our reach.
Ironically enough, it is the regulation which you opine for which creates the value for cryptocurrency. Want to pay a user 0.00001 cents? Not with Paypal. The regulatory overhead is too high. Want to transact online with no ID? Not possible with banks or traditional instruments. Have a problem with government issued currency? Sorry, you cannot transact at all!
The comments here citing the technical problems of cryptocurrency miss these points. The generalizations about energy usage dismiss altcoins which have innovated beyond these issues.
The last resort of these arguments always backpedals to, "But that's not the popular usage of cryptocurrency"
The point stands, the generalization is inaccurate, presumptive and arrogant.
You completely forget why money exists in the first place. Those problems you state are outcomes of resolving problems that de-centralized and finite money supply can't resolve. You can't have the cake and and eat it too.
Nice set of straw men you got there.
> Maybe under these circumstances we could dismiss the negative outcomes of regulation and central planning.
Who did that? Not me. But neither do I knee-jerk believe that effective regulation is impossible, nor fall into the binary-thinking trap that it must either be 100% effective or it's worthless.
> Want to pay a user 0.00001 cents?
Nope.
> Want to transact online with no ID?
Nope, and there are great reasons that this sort of thing is generally not allowed.
> The generalizations about energy usage dismiss altcoins which have innovated beyond these issues.
But they haven't solved the issue of bitcoin burning the energy. That's like saying "shut up about cars polluting, we have tesla now!". Sure, and when every car is a tesla, that changes things. But every car is not a tesla, and every coin is not an altcoin which has solved the problem.
The post I responded too said "Don't want to transact in cryptocurrency? You don't have to. Problem solved."
But this problem is not solved by not transacting in it, and is not solved by "altcoins which have innovated beyond these issues", because it is ongoing despite these things.
So you can take your "inaccurate, presumptive and arrogant" and apply that to your own arguments. They don't address reality, and their superior tone is laughable when it goes alongside what is effectively handwaving.
>Nope.
Apply a little imagination here. "I don't want to send 0.00001 cent transactions" becomes, "I don't think anyone else should be able to"
It isn't hard to see where this paternalistic frame of understanding leads. "I know what is best for the larger society, my values are the only valid ones, everyone else must adhere and agree"
If you cannot see where this goes astray, there's very little to say here on the Internet. The authoritarian impulse is more dangerous in my view than any of the imagined cryptocurrency boogeymen.
>"altcoins which have innovated beyond these issues", because it is ongoing despite these things.
Then perhaps we shouldn't generalize about all cryptocurrencies?
Finally, let us consider that all of the horrible things you cite are valid. What is the practical alternative to transacting in cryptocurrency, if not central bank currencies?
Does holding USD or other central bank currencies not finance wars around the world? If climate doom is horrible and non-violent transactions threaten you, how bad is war in your opinion?
Again the argument presented is an appeal to utopia. Even if we accept that cryptocurrency is dangerous and horrible, the present alternative isn't great either. Apply the same standard of logic and sloppy generalizations to central bank currencies.
>According to Rummel, democide surpassed war as the leading cause of non-natural death in the 20th century
https://en.wikipedia.org/wiki/Democide#:~:text=democide%20su...
https://earth.org/us-military-pollution/
> Apply a little imagination here. "I don't want to send 0.00001 cent transactions" becomes, "I don't think anyone else should be able to"
Apply a little logic here, "I don't want to send 0.00001 cent transactions" becomes "I don't think cryptocurrencies are the only way to achieve this, or even a good way, given their other costs to society"
I'm not even going to bother engaging with the rest of your post, you're stuck in a binary mode of thinking in which any and all regulation is necessarily 'paternalistic' and evil, and from such a skewed viewpoint, your conclusions play out.
To summarise - my assertion is that the problems with cryptocurrencies are not solved by merely not taking part, which is what the OP of this thread argued. Your response has been a set of straw men and unfounded assumptions, and a bunch of pointing at other things to say they're worse. This is not really a counter-argument so much as a lot of noise.
Right there could be other ways to achieve that, but the regulations you are a fan of prevent it.
>> Want to transact online with no ID?
>Nope, and there are great reasons that this sort of thing is generally not allowed.
It is true that I generally dislike regulation, but the same regulations you advocate for are the same regulations preventing the functionality provided by crypto. You then try to make the largest possible exaggeration, by asserting that I am against all regulations, therefore you cannot engage in the discussion. Backpedal. Yet you are supporting these same regulations, in this same thread.
Binary thinking? Strawmen? You construct the premises which make it impossible, then call it a strawman. You set these premises and then call it black and white, all or nothing.
Perhaps a more reasoned argument would be outlining how you intend to reduce regulatory overhead so state backed debt instruments can compete with cryptocurrency on the merits.
As you are preoccupied with the moral ills (energy consumption, voluntary transactions) of specific cryptocurrencies, it would behoove you to explain how the incentives of central bank currencies can be changed. Ideally they wouldn't be used for morally perilous outcomes like war, or in your case, excessive energy use by the military.
Otherwise, what are you advocating for here? What are the practical alternatives to cryptocurrency? Engage in the discussion.
Crypto is nothing but a speculative vehicle for making money. People of high intelligence (which represents most members of Hackernews) recognize this, although depending on what their vested interests are, they may or may not reveal that publicly.
In general, if you happen to have a large stake in crypto or are depending on crypto to make you significant returns, you are more likely to be pro-crypto.
If you have no stake, it’s likely because you never saw a point to cryptocurrency and never invested, so you will likely be anti-crypto or neutral at best.
The technobabble of blockchain tech does not work on highly tech-literate people of Hackernews, we know this is basically useless technology in its current form. At it’s peak it would essentially be nothing more than a globally distributed database anyone could read from or write to. But inherently this has nothing to do with cryptocurrency.
It would be a red flag IMO if hackernews was pro-crypto.
I'm not anti-crypto. But I don't care for hype. Show me the killer app.
As far as I'm concerned, cryptocurrency already has a killer app: it increases economic freedom in some parts of the world.
Is there more? I'm sure there is. But from what I've read, I'm not going to need a kitchen sink anymore because crypto's gonna solve it.
There are a lot of neat technologies in the world with a lot of applications. Crypto is one family of such technologies. Neat stuff, but doesn't apply to everything. And I'll happily be proven wrong, if it comes to that.
This is why I love HN.
Cryptocurrencies, quantum computers, fusion, self driving cars.
Enough time has passed. I've seen enough. They are simply scams. They will never deliver and they have no place in my news feed.
I think there is potential with many of the ideas behind it, but so far it's been inundated with scammers and gamblers. People need to build actual useful things with it which are adopted into the mainstream. The problem is that the current non-crypto way of doing things is much easier and more efficient than the crypto way. If the tooling around crypto improves significantly, it may have a chance. Otherwise, it's just not worth the time or the risk.
Why is Hacker News so anti-crypto? I dont't know, let me admire my NFT's and get back to after I invest my globally accepted currency in a hashing scheme.
Crypto is anti-social. I prefer a working to build a society with trust that isn't dependent upon cryptography that no one understands.
and bad for the environment.
Because a number in a computer is just a number in a computer. It has no intrinsic worth at all.
Another way of saying that is "If you can not hold it in your hot little hand or touch it, it is not yours at all.". So don't expend your work or cash on it.
This should not be flagged.
But I think the answer is that be people here understand what it is from a technical perspective; you would get the same level of anti-crypto if you went and asked a bunch of computer scientists.
It's crypto skeptical, because it's so volatile, because it's currently solely a speculation platform.
As a betting man I see value in it.
Bitcoin is like a real time index measuring the health of the cult of Ayn Rand and you can bet on how the cult is faring and if it's expanding or contracting.
Much like Tesla is a real time index measuring the health of the cult of Elon Musk and you can bet on how the cult is faring and if it's expanding or contracting.
If you are interested in sociopolitical and cultural phenomenons you have a way to make money off that expertise for the first time in decades.
If we get Saylor vs. Bezos in 2024 lots of people building prediction markets for political purposes are gonna be disappointed, because at that point people would just bet on Bitcoin or Amazon stock according to their assesment of which cult would prevail and who is gonna win.
I took a Blockchain course at university (Masters CS level). I really liked how honest the teaching chair was: They just taught us the raw material along with this xkcd: https://xkcd.com/2267/
Don't get me wrong, I actually like the Blockchain Technology but I kind of have to agree with the notion that most of the "advanced" Crypto stuff is still looking for an actual problem to solve, except for Bitcoin and some of the other OG coins, the purpose of which I kind of sympathize with.
too many old farts hanging around here talking about the good ol' days of greenbacks and command prompts
i very much agree with this
34 year old, around 22 when crypto started.
I'm not old, you're just looking for an excuse :)
30 years old, was 5 when 9/11 happened - fuck crypto.
Well, "crypto" is just Ponzi scams. The more interesting question is why is HN so anti-bitcoin? Looks like they don't get how harmful fiat money is to society and the environment.
One reason might be that HN is just too woke. Probably you even get censored here for saying that men are not women.
That is the case, because Engineers have a bad understand of global finance, business and money.
That’s why they don’t understand the problems that crypto is solving.
If you look at the comments here, you’ll see that many comments are saying that crypto isn’t doing anything useful.
However, crypto is literally solving the extreme problem of infinitely printable FIAT money and very slow and expensive cross-border transfers, which might be the most impfactful invention of the last 2 decades.
On top of that, crypto adds transparency, accountability, interoperability, decreases fraud in every possible market.
However, hacker news doesn’t understand that, because they simply don’t global finance, global markets, business and moneys.
> However, crypto is literally solving the extreme problem of infinitely printable FIAT money
It might be an extreme problem to you, not to everyone else.
> very slow and expensive cross-border transfers
This has been solved again and again by different companies, be it wise.com or others.
> On top of that, crypto adds transparency, accountability, decreases fraud on nearly every consumer product.
Except for the fact that nobody can get their money back after they have been scamed. There is no authority to complain to or reverse a transaction. Wich makes it useless for the masses.
> which might be the most impfactful invention of the last 2 decades.
This is why people are tired of crypto, it has been over 10 years and it has't really changed anything. Crypto enthusiast think that, but it didn't and it won't.
> It might be an extreme problem to you, not to everyone else.
So mass inflation is only an extremely problem to me? This is probably the most false claim possible.
> This has been solved again and again by different companies, be it wise.com or others
Except they constantly freeze user accounts for no reason.
> Except for the fact that nobody can get their money back after they have been scamed. There is no authority to complain to or reverse a transaction. Wich makes it useless for the masses.
Of course there is, all the exchanges have to comply by with law enforcement and that’s what they are doing. This way, since the transactions are all public and can be traced endlessly it’s very difficult to evade law enforcement through scams.
Thats also why this $4.5B scam was caught https://www.bloomberg.com/news/articles/2022-02-09/nyc-coupl...
> So mass inflation is only an extremely problem to me? This is probably the most false claim possible.
Of course inflation is a problem, but saying crypto could solve it is not true. But even if it could, why would anybody who cares about inflation use crypto, when the value fluctuates so much?
> Except they constantly freeze user accounts for no reason.
And crypto exchanges disappear with all your money. I am not saying there are no problems, just that this problem (simple currency exchange) is solved.
> Of course there is, all the exchanges have to comply by with law enforcement and that’s what they are doing. This way, since the transactions are all public and can be traced endlessly it’s very difficult to evade law enforcement through scams.
So instead of a bank I have a "exchange". All my transactions are public (which is not a positive) and if someone exchanges cryptos from bitcoin to monero then you are still fu*ed.
But ignoring all things we said. All crypto enthusiasts have one important saying: "Not your keys not your crypto". Go ahead and try to explain to someone, how to safely secure their keys and that all their money is bound to them. That if lost/stolen, they have nothing. Crypto makes things (for the avg. user) less secure, more complicated without any benefit. If you fear the government or have specific reasons, go ahed use it, nobody is saying there are no use-cases, just that it's not a useful system for the masses.
You don't seem to understand what ultimately causes inflation. Not a surprise, as you don't understand money either.
Inflation happens because central banks have been trying to fix structural problems by printing more money, and this time it didn't work out. Sometimes it has worked. If they didn't do that, the problems would still be there. If we didn't have the possibility to print more money, we couldn't even try out if that helps. Ultimately, the structural problems would be worse if financial system was ran on cryptos.
No, if that wasn’t an option, then the root causes such as wasteful spending, not holding politicians accountable, student loan crisis wouldn’t even happen in the first place, because those that are committing those misdeeds currently are the same that are printing the money.
None of those are root causes of inflation in most nations. Hyperinflation perhaps (but even then a collapse in economic output with fixed money supply can mess you up), but normal inflation is put into a deliberate low-but-not-zero level to encourage spending over saving.
> However, crypto is literally solving the extreme problem of infinitely printable FIAT money
Except crypto does nothing to prevent that; and the printability of fiat money is controlled by a number of systems from historians pointing at what happens if you don’t to international treaty to democratic accountability; and the multitude of different cryptocurrencies means it has an echo of the same problem overall only with no accountability, and even within single currencies it has one-dollar-one-vote rather than one-person-one-vote accountability of a democracy.
> and very slow and expensive cross-border transfers, which might be the most impfactful invention of the last 2 decades.
My banks do this at zero cost. Literally zero. Slowest time it a few minutes to show up as a notification on the other bank, normally it’s about as fast as the time it takes iOS to show a notification banner.
> On top of that, crypto adds transparency, accountability, decreases fraud on nearly every consumer product.
Bank can’t refund you if you get ripped off when there’s no bank.
What banks are you using, because cross border transfers take 2-5 business days.
Halifax (UK), Revolut (Lithiuania at the time), N26 (Germany), plus whoever it is backing up my share trading (I read the small print then promptly forgot it because it didn’t matter).
> very slow and expensive cross-border transfers
The EU did more to solve that issue than crypto ever did.
15'000€ in under 10 seconds, for free, across the entire SEPA zone.
Converting fiat into crypto, transferring it, converting it back still takes far longer. And keeping money as crypto isn't a working solution, because the currencies are so volatile.
Not every crypto solution adds transparency and accountability, look at monero or mixers in other chains.
And then there's the issue with deflation. Inflation is something valuable, because it means doing something today is valued more than what you've done in the past. It encourages people to spend money, to do something with it, instead of saving it forever.
Your comment arrogant so I expect you will get badly down voted. It is also fundamentally wrong, so I will comment nevertheless. Maybe I can save some poor soul from this naive ideology.
The question is not really about what are the downsides of FIAT money. All solutions have problems. Even if cryptos could solve all problems that FIAT has, that does not mean it is a better solution to the problem that FIAT solves.
The question is really about what problem money solves in the first place. The foremost purpose of is to distribute resources. Money is a completely social construct that does not have any value itself, all value is derived from the promises of those who have resources make. Real world resources, like oil, are what ultimately matters. As a side note, this is also why the Russian sanctions don't really work as well as some people hope for, and they are ultimately a bad idea.
Anyways, I think it's fair to say say that the current financial system has been extremely successful compared to any earlier financial system, such as the gold standard. Everyone who understands finance even a tiny bit knows that a system with finite money supply like gold does not solve the actual problem the current financial system is solving. It may solve some issues that money has, such as efficiency, transparency, and transfer costs, but as a tool for distributing resources it's useless.
So the comparison you are making is meaningless. Even if those problems would be solved, it won't solve the problem money is actually solving.
On top of that, the problems you mention are not problems of money. They are problems of people, of human nature. New money will not fix them.
> Even if cryptos could solve all problems that FIAT has, that does not mean it is a better solution to the problem that FIAT solves.
That sentence literally refutes itself.
No it doesn’t.
Fiat currency can solve problem Alpha while having itself a problem Beta, and something else can solve problem Beta without solving problem Alpha.
Screwdriver (cryptos) and drill driver (fiat schema) both can be used to screw. The proponents of screwdrivers are constantly complaining how drill drivers are clumsy, how you can't safely run around with them, etc. But do you really want back the society where you build houses with screwdrivers? Current fiat schema is just so much more than what you think. I assume you didn't study finance or economics, so it might be hard to understand just how many things have been possible because of fiat currencies. Yes, many crisis too, but it put the rate of innovation and growth into steroids. Thanks to it, we now have time to argue in internet about this kind of worthless matters.
I think it is the combination of 2 points:
1: It is hard to grasp.
And the majority of tech people have a hard time coping with the fact that there is something they can't grasp while some others do. We tech people think of us as smart. So accepting that others are smarter in some areas is hard for us. Especially when it is in the tech area.
There are investors who see value in crypto and put hundreds of billions of dollars where their mouth is?
It's easier to say "Bah! Idiots!" then to accept that there is something that is beyond ones mental reach.
2: Some people got very rich by grasping it early on.
This creates envy and the fear of loss. You can see a similar disdain for technology in programmers and how they think about programming languages they are not used to. They don't know the benefits of the other language and they are invested in an alternative. That creates a strong "with us or against us" drive.
> And the majority of tech people have a hard time coping with the fact that there is something they can't grasp while some others do.
can you please tell us what's hard to grasp?
A block chain is an immutable data-structure due to the fact that there's more computing power out there that proves the data is integral.
you get "coin" for doing the work. People then trade coin like they trade anything else.
What is there not to get? if bitcoin is an immutable data-structure, what is that data structure holding?
Imagine we are in the 60s again. When TCP/IP was just invented.
Your statement is like saying the internet is cables between machines so they can morse code each other.
Another way to look at the internet is to see all the applications that will sit on top of "machines morse coding each other". And how it will change the economy and society. That is the hard part.
What problem is it solving—besides evading governments and their laws/regulations—that can't be solved just as well or better without it?
> 1: It is hard to grasp.
Yes, and the complexity is not necessary, it is there to obscure conceal the scams and central vacuity of the idea.
This idea, that complexity is a hallmark of scams, is discussed (in other contexts) in more details here
https://pluralistic.net/2022/05/04/house-always-wins/#are-yo...
https://pluralistic.net/2022/05/05/mego/#A09948
> And the majority of tech people have a hard time coping with the fact that there is something they can't grasp while some others do.
What's hard to grasp? The "blockchain" is just a Merkle tree, like git, which much of the industry uses every day. You build a tree of hash codes by using the hash of the old tree as an input to a new tree. It's a clever data structure and you can do cool things with it.
All the blockchain adds to this is a distributed consensus system. This allows deciding what the HEAD of the tree is without needing a central, authoritative server. But honestly, in 99.9% of applications, an authoritative server maintaining HEAD is fine. Pay some law firm or specialized clearing house to do it.
The only other aspects of crypto is that it creates a deflationary currency with ruinously-high transaction costs, plus a permanent public record of every transaction. Oh, and starting with MtGox, most of the immitation "banks" have periodically disappeared with everyone's money. This is usually followed by Bitcoin users angrily demanding government fraud investigations.
In the meantime, all those proof of work contributions contribute to global warming.
Back when Bitcoin was new, it was an adorable technological dystopia that amused libertarians in tech. As long as it was basically real-life science fiction roleplay, it did little enough harm.
But then "crypto" promotors started treating it like some kind of timeshare condo scam, and started advertising heavily to elderly non-technical users. And all I have to say to that is, if you don't want to get treated like a timeshare scammer, don't act like one.