“the most impressive innovation we have seen with crypto has been in separating average people from their money.”
That seems about right. It's just amazing how many crypto scams there are. White's site has a new big ripoff almost every day. You can go back and read the web sites of some of those crypto companies selling to consumers. They deliberately misrepresented the risk. In some cases they out and out lied, claiming FDIC insurance they didn't have.
As for Web3, that's a mess. None of the NFT metaverses are any good. Most of them don't even exist, to the point that you can log in. Many of them promised to go live in Q2-Q4 2022. We're there. Many of those guys are going to have serious trouble with the SEC, which is now hammering about one crypto business a week. Of the ones that work, Decentraland has about 600 concurrent users, and in a day, about 30 of them do a transaction. The others are even smaller. $4 billion market cap. Right.
Web3 being somehow related to VR is a clear sign of the ultimate strawman. NFT’s are a tiny innovation, VR is completely unrelated, Web3 on HN is a derogatory term leaning off the assumption that it’s focus is NFTs and VR video games.
Metaverse is web3. Metaverse is also VR. Its not a strawman if there's a big, well known example that markets itself as an example of the thing being criticised.
What isn't web3 is the absence of a counterexample.
"Web3" didn't start to refer to anything VR or metaverse-related until very recently. For years, it's been the vague promise of a decentralized system, enabled by handwavey blockchain technobabble.
But now, with Meta's metaverse being hyped to high heaven, but also proving to be pretty much a nothingburger, suddenly web3 means metaverse, too? I smell shenanigans.
Also tells you about our society where money rules. Most everyone wants more than they have yet will vote for every thing that gives them less today for some theoretical future of being mega wealthy that will never happen.
I remember how many people were still cheerleading it up to a year ago. Folks would have been better off reading “Black Swan” by Nicholas Taleb and save some money.
The irony is that Taleb was a big promoter of bitcoin for many years, and even wrote the forward for the first edition of "The bitcoin standard" praising it for being anti-fragile and a black swan event that mainstream financial experts will fail to understand.
Around 2020 he fell out with some of the btc community due to their covid stance (he was and is very anti-anti-lockdowns and anti-anti-vaxers). Since then he gradually moved first to btc skeptic then to a major anti-btc figure.
To be fair, there was initially some very justified excitement around cryptos and BTC in particular. Once the drawbacks became obvious, it's totally fair to change one's mind.
Am not sure you can give him that much benefit of doubt. He was promoting btc heavily way after the initial excitement of crypto up until the end of 2019 (he gave a public lecture in Lebanon where he suggested it and blockchain technology are a good safe haven and solution for the country's currency crisis).
He was basically a fan and promoter from 2015 - 2020, that is a really long time for a critical thinker like him not to notice the flaws. I think he was blinded by his ever growing fanbase he had in the BTC community.
BTC didn't really go above $12k in 2019 so anyone who bough in then and held would be ahead still (at about $19k now in the current slump). Maybe the flaws weren't that bad.
BTC is open source, decentralized, and you can mine it. The existing coins were mined. People may use the tool for scams, but that doesn't mean that the tech itself is a scam.
By contrast, many alts were pre-mined or similar and initial coins were sold or given away via airdrops. Thus, the developers had greater control over the network.
The market cap of crypto went from 0 to 1 trillion USD over the last 13 years and created peer to peer, decentralized, electronic cash with properties varying by implementation.
I’m having trouble seeing how this is separating average people from their money. That’s not an assertion substantiated by data. It’s sensationalism based on news headlines about crypto scams.
Circa 2000, there was a website called "fuckedcompany.com" [0] that chronicled the failing dot-coms of that era, after the dot-com bubble "burst". The website encapsulated the glee that people felt at pointing out what they considered stupid dot-com ideas and internet companies that failed to capitalize on what many people consider over-hyped promises.
There were a lot of stupid ideas during the 2000 dot-com. There were also a lot of companies and founders that started their companies during this time that are stalwarts of the internet and general computing industry.
There are a lot of bad ideas in the cryptocurrency space. There also might be a lot of good ideas. I would urge people to be a little more circumspect about cryptocurrency technologies.
Except by 2000 there were hundreds of Web companies that had become real companies. It was obvious that Google, eBay, Yahoo and Amazon would survive the downturn of 2000-2001. While there were many bad ideas, there were obviously many good ideas that had become real businesses. And this was just 7 years after Congress had change the law to allow commercial activity on the Internet.
By contrast, Bitcoin is almost 15 years old, but in all this time, no one has been able to find a large-scale use for crypto, other than financial speculation and buying illegal drugs and evading national capital controls -- in other words, it remains almost entirely used for criminal activity.
Speaking of Google (as one example), it went from research project to impacting daily lives (including mine as a teenager in flyover country) within two years for a couple of million dollars (max - inflation adjusted). The crypto ecosystem has had tens of billions of dollars invested in it (not to mention countless token scams, etc) over the past decade and other than people with gambling accounts on exchanges (which are internal order books and don’t touch a blockchain) there is no meaningful usage.
No one with any kind of intellectual and rational honesty can compare the development of the crypto ecosystem to the internet, web, etc.
Tens of billions of dollars and a decade later there still isn’t a single crypto Google.
"Om Malik wrote a book on this period in which he estimated that $750 billion vanished when the telecom bubble burst. That’s a reasonable estimate in my view. The most interesting questions about a phenomenon like this are always: Why did it happen? What can we learn?"
It's also a bad design for its intended use as a digital currency. There are fundamental design flaws which mean Bitcoin will never be a world currency - pseudo-anonymity, distributed ledgers, chained transactions, lack of central authority, all come at a cost and solve problems most people don't have.
> , all come at a cost and solve problems most people don't have.
Oh yes
> lack of central authority
This is one thing that really gets my goat. Money is hard to define but one property of money is that is serves as a web of trust. That trust has a source, a central bank.
A fiat currency is as good as the central bank that controls it.
Crypto has no trust, by design. It cannot fit into that space. It cannot replace fiat currency.
You don’t like the use case for crypto, you don’t accept the narratives it’s proponents put forward and you conveniently fail to mention the objective measure of value we can actually use to compare: market capitalization. I’m sure you would believe that Bitcoin only has the market cap it has because people are speculating on it, when in reality the reason it never dies is because with each wave of speculation there are new people who store wealth in it. A subtle but important difference, objectively measurable ignored by this argument you put forth I’ve now read 100 times.
Crypto is a lot like politics - people feel entitled to their opinion on it whether they possess sophistication, competence, open mindedness or not.
Market capitalization is objective but isn’t a measure of value but specifically financial value.
Also, Bitcoin doesn’t have a market cap. It’s a currency. No one talks about the U.S. Dollar’s market cap because the whole idea is a nonsensical invention that Cryptocons have used to sell the idea that crypto currencies are investments while still calling themselves currencies to evade regulation.
The fact that the cryptocons have invented market cap as a measure for something they claim is currency is in itself a huge red flag.
This comment is old but I'm commenting to respond and for future reference.
The adjacent concept is called "money supply" [0] which is, as far as I can tell, the equivalent of "market capitalization" but for currencies. Specifically, for US dollars, the "M2" money supply looks to be around $25 trillion [1].
I don't like that Bitcoin with the language used to describe stocks and bonds but whether Bitcoin enthusiasts use that language, it's certainly being adopted by the public, so we're kind of stuck with it.
Had you been more generous in your reading, you could have filled in "money supply" for Bitcoin, which currently stands at just under $400 billion (~19.2 million bitcoin @ ~$20k/btc). The generous conversion interpretation of the US dollar "market cap" (aka "money supply") is $25 trillion.
People can and do talk about the US dollars "market cap", they just call it something else ("money supply"). People also buy and sell currencies, very similarly to stocks, via foreign exchange markets.
Market cap is not a narrative, it’s the only objective measure so far in our dialogue.
> recent
That’s great you point out the importance of long term trends, I shouldn’t even have to articulate my point now.
But why not go deeper anyways? Market cap for Bitcoin is a proxy for hashrate, which is a measure of security. Steadily increasing floor across its entire lifespan.
Here's a great example of the "value" of market cap for you:
"Theranos Inc., a consumer healthcare technology startup, was once valued at $10 billion, and its leadership claimed it would revolutionize the blood-testing industry."
What is the "market cap" of this Ponzi scheme these days?
According to you, market cap is critical and a $10 billion market cap seems like a big number so??
Market cap for Theranos is a proxy for investor stupidity, which is a measure of gullibility.
Totally not what is takings place with the COIN markets.
> Except by 2000 there were hundreds of Web companies that had become real companies. It was obvious that Google, eBay, Yahoo and Amazon would survive the downturn of 2000-2001.
Yahoo seems to have struggled with becoming a real company.
It was independent—not owned by any larger parent—until it was bought by Verizon in 2016.
It wasn't particularly "hip and up-and-coming" past the early 2000s, but it was still operating, independent, and profitable for years after the dot-bomb.
They became a "real company" when they signed the search deal with Google and stopped using Inktomi (search had been a secondary feature of Yahoo until that point; the real "value" was seen in their Big Blue Wall of curated links). That was also roughly when they finished fully integrating Viaweb (Hi, PG!) into their store. This was if my ancient memory serves roughly exactly during the April 2000 crash.
I think this is a decent response but it's not completely fair.
It was obvious to me that when Google came out, it was a game changer. It wasn't obvious to everyone and I remember at least one article talking about how Google wasn't really search because it could only find what other people liked and couldn't actually understand the things it was searching (the article was old, I can't find it, sorry).
EBay was a front end for Beanie Baby sales before it became legitimate.
Yahoo before Google, much like the rest of the search engines like AltaVista, was a cesspool of irrelevant links to porn.
Amazon was great for books but being the "Sears of the internet" was a laughable idea until it wasn't.
As an aside, it was obvious to me that Wikipedia was also a game changer. I remember having many conversations with people thinking that an online encyclopedia would degrade into a radioactive comment forum with anyone and everyone saying whatever it is that they wanted, without any relation to reality.
I agree that cryptocurrency has been around for a while with not a lot of use cases to show for it but I also want to point out that until "Web 2.0" came around, the internet and online services were still very niche. It wasn't until social networking took off that it became widely adopted. It wasn't until smart phones existed and became cheap enough that everyone took the internet for granted.
You're using metrics from a previous iteration and imposing them on a new technology. Maybe it's appropriate but, in my view, it's tone deaf to what the underlying technology is.
Cryptocurrencies are, in my opinion, more akin to the early days internet infrastructure. It's lower level foundational technology that can be used for applications to be built on top of.
As a fundamental technology, it is getting widespread adoption, as can be seen by the volume and value. Real world people are using it to exchange money. We can argue about what percentage of that money is "valid" and for what purpose, but it is being used.
Again, in my opinion, we're seeing the growing pains of a new technology that has potential but hasn't been widely adopted. People have funds that are hard to move out of the cryptocurrency space so any outlet for spending within the system, like with NFTs, gets amplified.
EBay was a front end for Beanie Baby sales and the same arguments levied against cryptocurrencies could have been levied against EBay (and I suspect they almost surely were). Telling people you would order toilet paper online was laughable in 2000 and considered hype, just as saying you could order toilet paper without a bank account now.
I don't have a crystal ball, I don't know what the future holds but the visceral hate that I see against cryptocurrencies seems more rooted in emotion than in reality. I saw the same hate for start-ups mid 2000s. I'm advocating for circumspection.
> Cryptocurrencies are, ... akin to the early days internet infrastructure. It's lower level foundational technology that can be used for applications to be built on top of.
No sign of anything, that is not a scam of some sort, yet.
The foundation is wonky. The distributed ledger algorithms have no utility and a huge cost.
Some interesting ideas in it that may make their way into versions of digital cash versions of fiat currency.
> other than financial speculation and buying illegal drugs and evading national capital controls -- in other words, it remains almost entirely used for criminal activity.
Speculation is the main use. How is that criminal?
> I would urge people to be a little more circumspect about cryptocurrency technologies.
Good ideas will out. In crypto, they don't even have to be good, just not utterly shite, corrupt or broken.
crypto as cash, has it's downsides, (total visibility, low transaction volume, difficult to secure) but it more or less works. legally, thats pretty simple. all you have to do is make people think 1 token is worth is x dollars.
The problem is, people think that you can apply the same logic to everything else. looks at the NFT crowd The big problem is that for legal stuff, you can't just go full digital. You need to provide a stable and workable link to "old school" legal processes for your crypto stuff to be valid.
For example NFTs could have been useful, if they were backed by a real contract system. The price that they were going for, it would have been simple, if it wasn't money laundering. Allowing quick and simple exchanging of digital content regardless of country of origin is a really useful tool.
sure in 20 years, it might be as simple as something like a signed database update, but we've got to do the work to get there first.
smart contracts are not "literally" contracts in the legal sense, as there isn't precedent of enforceability in enough jurisdictions for any lawyer in their right mind to use a smart contract without an accompanying traditional text contract. this is taught in law schools as best practice and will be with us for at least a decade, almost certainly longer. sure some applications of smart contracts might streamline ops (international logistics comes to mind), but in a legal scope they just make things riskier and more tedious
> smart contracts might streamline ops (international logistics comes to mind)
"Smart contracts" is just code. In case of crypto this code is running on world's most innefficient VM.
Elsewhere its just code and code has been runnig "contracts" for as long as there have been computers.
Everytime you buy a ticket inline, there's a "smart contract" running. Everytime you listen to music inline and money get accumulated and paid to artists, there's a "smart contract". etc.
The code at Ticketmaster is not a 'smart contract' - I mean it's reasonable to use that as an example to clarify the similarity between TM and 'defi contracts' - however, it truly is 'just code'. There's nothing 'contractual' about it. The 'contracts' and legal implications are signed when you accept terms (a 'contract' between you and TM), and the transfer of money for tickets is regulated by the prevailing regulatory conventions.
I think NFT's may eventually become a form of 'ownership by convention' in which case maybe we could apply a general legal principle (i.e. obtaining and NFT is tantamount to accepting some legal terms). But we'll have to see.
There's literally nothing contractual in "smart contracts". They enforce nothing. It's just code.
Ticketmaster's tickets are actually more of a contract because the ticket you get is actually covered by laws, Ticketmaster provides certain guarantees etc.
By literally, I obviously meant that the word contract was in their name. I don't mean they are covered by state enforcement. If an NFT falls in the woods and nobody is there to hear, it has not fell.
Which some people can try to pass of as 'contracts', which is fine, but future magistrates will decide how much they are really contracts.
That legal outcome is not clear so it's unlikely companies are going to spend a lot of time using said 'contracts' in any other terms than they use code today to do things.
More likely, companies will use an 'actual contract' to clarify the meaning and use of the NFT transactions, which participants will have to sign should they want to meaningfully participate in something.
Which highlights the existential problem for distributed systems in that they mostly rely on some civil 'context' which is likely going to be 'centralized' at least in the purview of the decentralized people.
NFTs are literally a name, a description and an URL.
Does the buyer own the entire thing? a licence? can they freely re-distribute? derivative works? can they sub license?
As I said, NFTs are bullshit. They don't even begin to bridge the divide between the legal and digital world. it is a high schooler's attempt at solving a problem, they got a c+
Crypto is one very specific thing, even at he broadest interpretation and acknowledging possible future ideas based on it. The web is more than just one order of magnitude broader and basis for a far wider and more diverse set of ideas and use cases. So to me, your comparison looks more than just a little weak.
> Fucked Company allowed employees to post anonymous comments on why their employer was losing money, had abused employees, or was discriminating against some group, identifying unethical managers and defective products or services by name. Employees were free to explain why they thought the companies were going out of business.
This really doesn't sound like the same thing at all. Just saying “bad ideas exist everywhere” isn’t a valid retort. Plus unlike crypto, web and software technology has actually almost consumed every inch of our reality.
It was definitely visible during the dot-com bubble that some projects, ideas, companies would have a future. And back in 2000-2001 people were already experiencing the advantages and benefits of using the web and products on the web in their lives.
Contrast that with crypto, 15 years in and no one knows exactly what's good for, there is no mass of people being helped by it. There are some traces of some people being able to evade capital controls in dictatorships and... That's basically it, no other benefits to the masses have shown up, at all. What was the cost of this benefit? Hundreds of thousands to millions have been scammed out of their money by con-artists.
Hell, the 3rd season of James Burke's Connections in 1983 showed him talking to a voice-activated and voice-responding virtual digital assistant over a satellite modem scheduling videoconferences, buying airplane tickets, and making electronic financial transactions. Everything about that was already possible in 1983 except for the voice recognition; it just wasn't yet cheap enough to be in mass use.
This lady is doing important work; her comments are thoughtful, balanced, not overtly cynical or vindictive, not hyperbolic, stated fairly plainly. I don't sense she's trying to get super famous from being an antagonist. Refreshing.
They are in the article - their actual website is clearly vindictive and even brags about being SEO optimized to tru p other Web3 queries. Let’s at least be self aware.
She's doing everything in her power to become famous/viral.
Look at the amount of work she puts into SEO and her own Wikipedia page. She's a Wikipedia editor that edits her own page. Can't get more self-absorbed than that.
The general populace was sold the idea that crypto is "investing", when in reality it is an overly complicated, asset-less, currency trading system, with questionable value and questionable stability.
It sucks, because there ARE crypto projects that have interesting applications, but the entire conversations about them online are about how much money the community can be making, or the disappointment that they aren't making as much as they'd like to.
You can't actually talk about the project, because once it gets too big it's just a farm for speculators. The devs don't give a shit because their project getting buzz boosts their coin's value, but it also means the project itself stops mattering.
I’m flabbergasted by how often HN commentators who should know better keep refusing to acknowledge the trade-offs in the technical implementations of crypto. What SQLite database running on raspberry pi is immune from seizure by relevant government authorities for helping with criminal transactions? Compare and contrast with Tornado Cash, which still works fine despite being OFAC sanctioned.
Now, you may not care for law evasion, and that’s fine. But it’s asinine to pretend that crypto tech is not better for such purposes than “an SQLite database running on a raspberry pi.”
> What SQLite database running on raspberry pi is immune from seizure by relevant government authorities
What cryptocurrency is? The answer is none, because there are several weak points to any cryptocurrency and if state agencies choose to take them seriously they can easily shut them down.
> keep refusing to acknowledge the trade-offs in the technical implementations of crypto.
No, we don't. The thing is, every time a "good application of crypto" comes up the next question is "show these to us". And invariably those "good applications" have no idea what they are doing, require centralized trusted entities to function, and can be run from a Raspberry Pi.
The only real use-case of crypto is value transfer that is immune to government interference - I don't think anyone is denying that.
But for the vast majority of businesses which interact with the real world, it doesn't matter whether the actual logic is on a bulletproof, uncensorable VM if the government can just go after the few input/output points where the system interacts with the real world.
Therefore, it's no better than just running SQLite and much worse because crypto makes significant tradeoffs (to be resistant to adversary interference) that aren't actually useful here.
Why do you need cryptocurrency for that? Just make a p2p app and trade public keys. The only reason Signal uses phone numbers is convenience in locating people and restoring accounts.
the pki does make life easy - ethereum address as a global unique id + seed phrase around for recovery + integrate this thing with the rest of the ethereum ecosystem (e.g. other apps can require ownership of an account on this app by looking for a signed message on chain)
They don't go down if you turn off your Raspberry Pi.
I also can be 99.9999% sure that they run correctly and Ethereum itself is pretty unhackable, as proven by the multi-billion bug-bounties.
The smart contracts running on Ethereum are open source, unlike your PHP script, can be audited, and if marked immutable, i'm sure no malicious person/business can hack or change it, and if they do it has an auditable backlog.
> The smart contracts running on Ethereum are open source, unlike your PHP script, can be audited, and if marked immutable,
Ah, to once again have a child's wonder and belief in magic. Just add th incantation "blockchain ethereum smart contracts", and all is right with the world.
Meanwhile reality [1] just in the past ten days:
--- start quote ---
Insufficient validation on an OHM smart contract at Bond Protocol allowed an attacker to drain 30,437 OHM (~$300,000) from the Olympus DAO defi protocol.
Olympus DAO wrote in an announcement that "This bug was not found by 3 auditors, nor by our internal code review, nor reported via our Immunefi bug bounty."
---
On October 14, Ethereum reached a milestone that alarms many who have pushed for blockchains as "censorship-proof" technology. More than 51% of blocks produced in the preceding 24 hours were processed by relays that filtered out transactions involving Tornado Cash
---
The defi project Earning.Farm lost 748 ETH (~$971,000) to a hacker using a flash loan attack. The project contract was missing a check that a flash loan was initiated by the protocol, so the attacker was able to instruct the project to withdraw large amounts of funds
---
Rabby Swap, a feature of the Rabby crypto wallet, was exploited a month after it was first rolled out. An attacker discovered an apparent vulnerability in the Rabby Swap smart contract that enabled them to arbitrarily transfer other users' funds.
> The smart contracts running on Ethereum are open source, unlike your PHP script, can be audited, and if marked immutable, i'm sure no malicious person/business can hack or change it
And equally sure that any bug in there (and there will be bugs in there) is unfixable and any funds stolen through it unretrievable.
Wrong conclusion. The hacks never targeted the underlying platforms and security. It was always the bugs on the smart contract level. The same way you can't blame Java/Ruby/Python being insecure because of SQL injection attacks.
What useful thing do those smart contracts achieve in practice? The only place they have authority over is their respective blockchain. They are powerless in the real world, always relying on some centralized entity to sync real-world state with blockchain state, but doing so inherently throws away all the benefits of running on a blockchain, so you may as well just let the centralized entity run a good old database and call it a day.
"A secured blockchain" is hilarious in concept to me. Looking at cryptographic constructions in general, 'secure' tends to mean "some multiple of the current total computing power of the world, running for hundreds of thousands to billions of years, might be able break the system".
With blockchains we have "a subset of the current compute power on the planet could start subverting it immediately".
For a lot of every-day "investors", it's not even currency trading, not as far as I understand currency trading tactics (that said, there's definitely very smart people trading cryptocurrencies like regular currencies)
It often feels like it's just "number go higher" gambling, à la 1987 stock "investing".
EMV/tap to pay doesn't expose credit card or account numbers. This is sufficient for most user's banking needs.
Bank ledgers generally provide better integrity for people than blockchains, because they allow fraud remediation.
The two primary advantage of cryptocurrencies in my view is semi-anonymous payments for grey/black market transactions, and international money transfers.
I agree that those are both significant advances but having transactions and wallets reside on exchanges nullifies those benefits entirely. The fear early on was that you’d never be able to achieve mass-adoption due to the upfront cost of setting up a wallet and waiting on transactions. Despite crypto’s popularity today, that fear has never truly been overcome.
There are several proven cryptocurrencies with negligible setup costs and fees. For example, I have over 200,000 microtransactions on Algorand on my account. The cost is less than 1/10th of a penny each.
And yeah, we should not rely on exchanges because it does defeat the purpose.
This is not what happens. Trust is moved from institutions to code and math. General public has no chance to evaluate the trustworthiness of either while there is a mechanism to certify the first and not the latter.
Except you need to convince no one gold is valuable given it was used as currency and jewelry for thousands of years. Cant use bitcoin to signify a marriage
Gold isn't intrinsically valuable as currency or jewelry. Those are cultural attachments that can disappear.
It is, however, intrinsically valuable because of its many medical and electronic applications, which means its value can never theoretically reach zero (unlike a crypto token).
People always say that. But the fact that gold was considered incredibly valuable by literally every civilization for thousands of years makes it a lot more durable than, like the English language, or books.
I mean like when the Europeans arrived in pre-Colombian America looking for gold, the people they encountered also had it as a major cultural attachment too, without any coordination whatsoever.
I’m not sure there’s a better definition of intrinsic value than that.
I gave a better definition of intrinsic value in the second paragraph: it has unique applications for extremely important categories of goods.
I agree it's not a coincidence that most societies valued gold, even without contact with each other. But that's also because of its elemental qualities.
Silver and most other shiny metals will tarnish. A lot of metals are difficult to shape into jewelry or stamped coins. And other metals are denser and heavier, making them hard to transport.
Gold is better than other metals for coins and jewelry for many reasons.
That doesn't mean its current price is 0% cultural or that that cultural element is permanent.
I agree it's likely going to last for as long as society does, but I don't think that's a guarantee inherent to gold as a metal.
> And other metals are denser and heavier, making them hard to transport.
Gold is the 8-th densest chemical element, and by far the densest element know to mankind until the discovery of platinum and tungsten (slightly less dense, but very close) in the 18th century. I don't have a source for this, but I suspect that part of its popularity was because being so dense made it impossible to counterfeit.
Aside of its cultural preferences (high luster, desirable yellow color), gold is valuable as jewelry because of its tarnish resistance, ability to be drawn into wires, hammered into sheets, or cast into shapes. Other than that I agree with you.
>she feared crypto was going to wreak — not just on the startups and investors rushing into the field, but also people betting their life savings on tokens they’d barely researched after hearing about them online
Sorry to sound rude, but if you bet all your savings on something you saw online, something you've barely searched, than you can fall a victim to any scam you come across, online or offline. You can become a victim by investing in something at the bad time, in a bad way, so being a victim is mostly your fault.
The volatility, in one direction, is a bread and butter argument for the crypto skeptic. Most people investing in crypto know the risks, that’s exactly what draws them in, because it comes with huge potential upsides. No one is better at pointing out scams and schemes than other people in crypto.
What the skeptics fail to realize is that they often occupy just as much, if not more of a ‘team mindset’ than those engaging in the space. Their skepticism becomes more like the failed D.A.R.E. program to reduce adolescent drug use by exaggerating the virtues of abstinence and the worst case scenarios. And ironically, they can’t even articulate the worst parts, because they never engaged enough to have a deep understanding.
If you really want to find the deep dark secrets of crypto, no group will do it better than devout followers or developers of competing projects. I have read far more useful takedowns and warnings from people heavily engaged with and passionate about crypto currencies than the cynics are even capable of.
Yet the visible crypto communities on the web usually control the narrative to exclude such things, and then the major crashes (Terra/Luna, Celcius) come as a huge surprise to the adherents, where sceptic communities were warning against them for months.
So while you may come across 'takedowns' from enthusiasts, wherever it is you are getting those, the public face of the community pushes these away, bans and silences negative voices and encourages speculation without a second thought.
My brother in law lost absolutely enormous sums because “return was guaranteed” and “there was no way to lose.” He wasn’t seeking a high volatility investment with high upside. He was following what was claimed to be foolproof advice for getting rich guaranteed.
> You can become a victim by investing in something at the bad time, in a bad way, so being a victim is mostly your fault.
You can, but in most cases society tries to protect the naive from being defrauded by such things. We regulate what sort of things can be offered. Ponzis and Pyramids are generally verboten. As is, generally, fraudulent selling practice like advertising insured investments where they are not insured, or (for instance) selling land for development where there are government restrictions on that sort of development, those sorts of things.
People are taken in by all sorts of shonky schemes, and yes, often they should know better. But that doesn't mean that we don't try to prevent them, or that the people running these schemes should escape blame.
When people make money, it's because they're smarter than the average bear, they called it right, they worked hard finding that investment etc.
When they lose money, it's all a scam, they were cheated, someone fooled them.
I don't know why we, as a society, listen to whining like this. But people lap it up. We should just require a big red disclaimer saying "your money is at risk" and let people do what they want (and I'd do the same for shares and bonds and gold and anything else really).
Uhhh well that’s exactly what crypto “skeptics” are asking for. Disclosure requirements that bring the risk in line with the accessibility of these “exotic instruments” to the general public, and penalties to compel compliance with those requirements.
It’s a failure of culture, not legality. All crypto is open source, if it isn’t then it truly doesn’t deserve the title. Apathy on the part of investors to allow so much privilege to founders in the form of token distribution and outright control over the protocol are as unsustainable as they are preventable.
The law can come in and add friction to corruption, along with everything else, but it is only by returning to the culture in which crypto was founded that you will get anything of value - regulations or not.
I don't believe in self appointed prophets fight for something or against something. I disbelief them the more they don't have any proven expertise in the domain.
The media goes the other way around as they love hype.
HN is proof itself that Software Engineering isn’t a prerequisite for expertise in the space. It’s like a construction worker talking about architecture.
The expertise relevant in blockchain are economics/game-theory and cryptography - software engineering is to cryptocurrency what typing is to writing.
It's funny though, that people who are learned at economics tend to write it off as zero-sum nonsense as well. At which point they are told they don't understand the technology.
It's kind of like that trick where you tell X that their task will be the next priority after you're done with Y, and you tell Y that their task will the the next priority after you're done with X, when in fact you're making no progress on either and quite likely don't even intend to. It kind of works too, sometimes ... until X and Y talk to each other and they both realize you're full of crap. Gatekeeping doesn't work so well when people can see it's all gates and nothing in the middle, but some people are so addicted to it that they try anyway.
This is extremely pessimistic. Same comment could have been made ages ago about internet businesses as well.
The issue is that there is significant amount of money in the space, relatively little regulation making it attractive to scammers. It will be solved.
I sincerely hope people stop investing in things because it is crypto. However, investing in a good project with decent chance for the future will bring along a healthy ecosystem; coupled with a bit more of a decent regulation around it.
I can't understand why people keep comparing internet and blockchain.
Nobody would compare a heavily constrained MySQL and the Internet, why it is any different for blockchain? It's at most that, a (bad) piece of software that allows you to store data in a convoluted way.
It's not a business, not a business model, not a revenue source, it's a piece of technology.
It is an ecosystem by this point which does store value as things stand. That is different than MySQL.
Once it matures enough to merge with the “real world” so to speak possibilities are exciting. For this to happen a lot of regulation and effort is needed not to mention skilled, critical thinking folks from non-crypto world to join and help.
Muh “constraint bad” argument. Constraint on control is the whole point - you don’t even understand the explicit purpose of the thing which you critique.
It is a different level business can be done at. Compare business before telephone/fax, contracts had to be signed in person. With internet we can sign remotely, but we still need to trust each other that we are who we say we are. With blockchain we don't trust anyone anything and can prove everything.
> It is a different level business can be done at. With blockchain we don't trust anyone anything and can prove everything.
No. Anything that is not produced directly on the blockchain cannot be trusted and is not provable. With "proving who you say you are", you cannot prove anything, since you need an off-chain verification saying "Yep this guy is jakupovic because I can see it on his ID".
All you can prove on the blockchain is that someone that has access to the address f9c979ebe8cda1f345b has signed a contract. This doesn't tell you that jakupovic signed, because there is no way to prove on chain that f9c979ebe8cda1f345b is owned by jakupovic. Similarly, there is no on chain way to prove that f9c979ebe8cda1f345b is NOT owned by jakupovic.
Before you bring up having the private key, having the private key means nothing more than "I have the private key". It doesn't mean that the key is really yours, and it doesn't mean that someone else doesn't have the key.
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People have been conned in believing that "This business is using blockchain" is a viable basis for investing into said business. But everyone would laugh if someone said "You should invest in this business because it's using MySQL".
"We use blockchain" is as much a selling point as "We use Swagger". If you believe otherwise, you have been conned.
Thank you for describing what I was trying to put forward.
Here if jakupovic == f9c979ebe8cda1f345b then anything signed by f9c979ebe8cda1f345b is the same as being signed by jakupovic in the eye of the law and the blockchain used, also not a lawyer here. For example clicking I agree on an online form is the same as signing a contract, but neither of these can really prove the person "signing" is really who they say they are unless someone is sitting there checking their ID during the signing. This ID checking part is the crypto land promise and not currently possible with tech we have, short of someone sitting there.
You must have misread what I wrote because your answer proves (something that blockchains can't do) that you haven't understood.
> Here if jakupovic == f9c979ebe8cda1f345b
This is the first point you are getting wrong. There is NO WAY to prove that jakupovic == f9c979ebe8cda1f345b.
The only thing you may be able to lawfully prove, if you are yourself jakupovic, is that you have the private key for f9c979ebe8cda1f345b. You can also lawfully prove that you are jakupovic, because you have an official ID that says so. But there is NO WAY for the blockchain to link your official ID to your private key, because your official ID is not issued on chain.
> then anything signed by f9c979ebe8cda1f345b is the same as being signed by jakupovic in the eye of the law and the blockchain used
The first point is wrong anyway, but thinking that your blockchain has any legal weight is simply laughable.
Otherwise it would mean that if I somehow gain access to your private key, and sign a contract saying that your house, an off chain entity, is now mine.
> This ID checking part is the crypto land promise and not currently possible with tech we have, short of someone sitting there.
Well that's funny because if you use DocuSign you will be connected to someone that will verify your official ID, and verify that it matches your face. Same when I opened my bank account online, I got put on a call and had to show my ID. So it is absolutely possible with the tech we have, and it is already heavily used.
> For example clicking I agree on an online form is the same as signing a contract, but neither of these can really prove the person "signing" is really who they say they are unless someone is sitting there checking their ID during the signing.
As explained above, blockchain doesn't solve that. Blockchain literally does not solve anything, because it cannot prove anything that did not originate on chain, and the only things that originate on chain are tokens, which themselves have no value outside of the blockchain.
You go through all this trouble to prove that blockchain is useless and yet keep coming up with examples where it's useful. Too much to respond to but this point:
"Well that's funny because if you use DocuSign you will be connected to someone that will verify your official ID, and verify that it matches your face." Here you describe "Docusign chain" which does have the property of linking ID to public id/key and is useful.
But it's better that Docusign describe their use of blockchains, since 2015, in their words https://www.docusign.com/products/blockchain. Pretty sure that invalidates your conclusion, too, "As explained above, blockchain doesn't solve that. Blockchain literally does not solve anything"
Docusign is a centralised trusted 3rd party which performs ID verification and holds hashes of signed documents. This doesn't require blockchain. They were performing this service before they offered anything related to blockchain.
You should read the link you shared, because it would become evident to you that they offer customers to connect their Web3 application to DocuSign, not that they rely on blockchain for their service.
What would be a "good project" though? The way I see it, smart contracts have no power on the real world and thus always require a centralized entity to sync real-world state with blockchain state.
Not only is it not always possible (what if the blockchain states that a certain house belongs to X, but Y is currently living in it - do you have the legal authority and/or a team of goons to forcibly kick out the current occupier?), but it throws away most of the advantages of using a blockchain if a centralized entity is ultimately responsible for applying (or not applying) the blockchain's wishes.
At that point, why not just run a database, thus no longer being a "crypto" project.
There are legitimate businesses that can be done all on-chain but I find the space to be very tiny. There's only so much people can do entirely on-chain (as most business, not to mention people, live in the real world). Even something like sports betting would require an oracle to feed real-world sports results into the blockchain for the betting smart contract to do its work, at which point the oracle can just run the betting site directly (and publish data augmented by Merkle trees if transparency is desired).
Trusting an entity is different than trusting the specific process / people within it etc. not to mention being able to create an ecosystem.
Crypto by this point is a type of platform so to speak. Actions are verifiable; and of course you need to interact with the real world. However; this doesn’t mean you have to say fuck it; just trust fully.
If we can limit the parts we need to trust; idea of auditing / verifying etc. also becomes easier. I no longer need to trust what the bank will do to let me have a transaction for example; even though I may need to trust them to verify my ID. Off the top of my head, “Are they being racist about giving me a loan?” becomes as simple as “can I get onboarded without prejudice (obviously need auditing) and is their system to allow me to get a loan look at my race (verifiable based on code.).”
I know it is popular to hate on this at the moment however as far as democratising finance and access to it goes crypto is a marvellous tool. Both sides just need to realise that the correct answer is a combination of two worlds, not either or.
For those who appreciate a fair degree of skepticism and critical thinking, I would also recommend the Crypto Critics corner podcast, as well as the broader focused Griftonomics from Jackson Palmer (of Dogecoin fame). A lot of their stuff is way over my head in terms of financial regulations and lingo, but very sobering even without getting too far into the weeds.
Why would it be a shorthand for cryptography instead of cryptococcosis? There are many words starting with crypto, but cryptocurrency is the most popular one.
But to actually answer your question, it is because the crypto in cryptocurrency itself is short for cryptography. But a lot of stuff in the “crypto” space (NFTs, ERC20 tokens, etc.) don’t even have any cryptography associated with them anymore.
Imagine if people said 'mints' to refer to fiat currency. Then we'd have to work out if someone was taking about sweets ( candy ) or currency. In that context calling them all 'dollars' would help eliminate ambiguity.
That seems about right. It's just amazing how many crypto scams there are. White's site has a new big ripoff almost every day. You can go back and read the web sites of some of those crypto companies selling to consumers. They deliberately misrepresented the risk. In some cases they out and out lied, claiming FDIC insurance they didn't have.
As for Web3, that's a mess. None of the NFT metaverses are any good. Most of them don't even exist, to the point that you can log in. Many of them promised to go live in Q2-Q4 2022. We're there. Many of those guys are going to have serious trouble with the SEC, which is now hammering about one crypto business a week. Of the ones that work, Decentraland has about 600 concurrent users, and in a day, about 30 of them do a transaction. The others are even smaller. $4 billion market cap. Right.