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Is Crypto Bullshit? (modelcitizen.substack.com)
16 points by bpierre 56 days ago | hide | past | favorite | 38 comments

This whole thinkpiece feels like a cryptocurrency advocate pretending to write as if they were a skeptic:

> I regret to inform you that it's totally legit and crypto/blockchain networks really might be technologically, economically, and politically transformative. Ugh

The author seems more interested in convincing the reader that they should ignore their doubts because the doubters are probably just jealous they’re not getting insufferably wealthy like the crypto bros (that is, you only hate crypto because you’re not rich like all the crypto bros, right?):

> The urge to rationalize tuning out is surely amplified by the fact that laser-eyed online crypto bros are insufferable dicks. But it’s not simply that they’re insufferable. It’s also that a bunch of them are getting ridiculously rich

There’s very little actual argument to be found in this piece, other than a lot of appeals to the idea that decentralization will inherently solve a lot of social problems.

It's another example of someone imagining a use case / future for blockchain that appeals to them. That's crypto's power, it's easy to read about it, imagine some particular utopian future it brings that deals with whatever problem you have with the current state of the world (usually that you are not rich) and solves it.

Ultimately these tools/tokens are competitors to the standard way of doing business with firms, and that alone is a good thing to have exist especially if the standard way of doing business is a problem for you (e.g. you are doing something illegal or need to change your money into something more reliable due to local currency issues). I don't know if that means crypto is going to be truly transformative beyond providing a competitor for these people who need one but that alone might be something big in good ways (you can protect your household's savings) and bad (ransomware is never going away).

When you can’t tell the difference between something that “feels like a cryptocurrency advocate pretending to write as if they were a skeptic” and something that’s maybe actually got a point, maybe rather than just dismiss it outright how about heeding the advice in the article?

Afterall, isn’t the point of the article about setting aside knee-jerk reactions and consider that there maybe something going on here? (Hint: There really is. There’s a lot of bullshit too but what’s the saying “don’t throw the baby out with the bath water”).

> Replicating everything AWS or Azure or Google Cloud can do on a blockchain isn’t redundant because the decentralized collective “ownership” and governance of blockchain networks supports security, privacy, stability, and scalability features that Web 2.0 applications running on centralized corporate clouds can’t replicate because they are centralized and control is concentrated.

Author seems to be equating blockchain/crypto to "decentralized". Just because something isn't crypto doesn't mean that it need be centralized.

I think this is a core issue with the current "web3" movement; folks are equating decentralization with blockchains too strongly for my taste. I'm particularly worried this focus is draining resources and mind share from any non-blockchain forays into a distributed future web, though I don't know what those other projects are.

The big issue with this article is that once you take a deeper look at any of the examples, they are complete BS. A good example is Filecoin:

> So, for example, you have things like Filecoin, which describes itself as “an open-source cloud storage marketplace, protocol, and incentive layer.”

If you actually look at the finances for Filecoin, it costs the network about 10x times more to store data than the centralized alternative Backblaze. Who is going to pay 10x more for storage?

The reason for this cost discrepancy is obvious once you look at the technical details of Filecoin. Because of the decentralized overhead, the mining requirements are ridiculous. Just look at https://docs.filecoin.io/mine/hardware-requirements/. 8+ core CPU. A powerful GPU. For a data storage node!

Details for the cost computation for Filecoin:

Computing the cost of the Filecoin network is quite simple. https://filfox.info/en reports that miners are being paid 326,077 FIL a day to store 13.673 EiB. This is 0.0229 FIL/TiB per day. Which corresponds to 0.687 FIL/TiB per month. Which is $34.84 / TiB per month. For a single copy. So you probably want two at $70 / TiB per month.

Backblaze is $5 / TiB per month for a redundantly stored copy.

Currently Filecoin is priced at 0.02% the cost of Amazon S3 to store data (you can view all the stats https://file.app/). Specifically, the price is ~$0.0000025 USD per GiB per month.

The stats you mentioned above is the block reward subsidy that the network provides for Filecoin Storage Providers (similar to how Bitcoin miners earn bitcoin for mining), so the incentive for Storage Providers is to charge clients as little as possible so they can store real data, and earn the associated block rewards.

I'm hugely pro-crypto and I think this guy is being led astray by promises from coins that are incentivized to generate hype and not punished when they don't deliver.

I think firstly crypto has to become money and I think that's all it has to do to change the world for the better. Not many people bother thinking about how inequitable our centralized fiat systems are, but there's no system with half the influence that's even close to inflicting half the pain and suffering (while benefiting a small select chosen class of people). Fiat prints money and gives first dibs (preinflation dollars) to banks. Crypto prints money and gives it to who? Everyone and anyone. This is revolutionary. Further, most crypto doesn't implement a poor tax and steal the money from people who can't afford to buy investment assets while inflation takes from their purchasing power so they have to beg their overlords to increase their salary which will never keep up with inflation.

I don't understand why we've missed the point, but crypto is an amazing chance to get equality right with our money but so many people have their blinders on with a strong negativity bias that they don't want to see past the clickbait and overpromised tech.

Luckily crypto is dramatically better money than fiat in all categories but stability and it's becoming less volatile. I can't wait until we reach the tipping point. I can't wait to see 3rd world countries be given the opportunity to deal in the global economy and climb their way out of the hell fiat has kept them trapped in.

Yes, I've always thought so (reasons below).

What I'm sure of, though, is that this article is: Anything that contains the phrase "one of my personal epistemic precepts" must be.

Reasons why I think "Crypto" (as in cryptocurrencies) is bullshit:

1) These things don't work in any sense like actual currencies, so calling them that is inherently bullshit.

2) Their adherents have an evangelical fervour like rabid religious fundamentalists.

3) Above all, any technology based on wasting work / energy just to prove one has wasted work / energy is repellently ugly, bad, and wrong.

At it's core crypto and every other marketplace should be about lowering transaction costs for consumers(or amount of time I spend so I can consume content I want). Not sure how crypto investors get richer and that happens.

The crypto space is making me understand why the SEC regulates stocks. Projects sell their tokens and people invest because they believe the project will take off so they expect their token will rise in value accordingly. (which is a strange assumption, tokens are not stocks)

Many of these projects are marketing-driven and frankly dumb. Prices fall and creators always say "We're focusing on building a great project, we're not focused on the token price."... Yet they're taking millions in investor money. The crypto space needs something like fiduciary duty towards token holders.

Looks like its gonna be time to sell soon, LOL.

This trope he ends with, of guys wives tolerating their crypto mining interests sheds more light than it initially seems. I get periodic incomings from non-tech female friends asking me if their male partner is being taken in by a pyramid scheme. There are lots of women in tech and this isn't about that, it's about the relationship to risk.

My acquaintences with PhDs in a variety of fields all say crypto is bullshit, whereas my entrepreneur friends have mining rigs because buying electricity for a few pennies and converting it to a token people will pay 3-5x for is a no-brainer.

Smart people are essentially defined as being able to see, navigate, and align with what they understand or percieve as the real factor of power that drives the outcome in a situation. This is distinct from people who are intelligent, who are also almost defined by their aptitude for handling abstraction and reasoning about mixed counterfactuals. They're different perspectives. The reason I think my friends wives ask me about whether crypto is bullshit is because they are the smart-indexed part of the partnership, where they see all the seedy, dodgy stuff about crypto and react to it with disgust because it's an inferior distraction to what they know to be true about the world.

The intelligence indexed side of the partnership recognizes that only from shit do all things grow, and so they seek out and take the risk. It's not an intrinsic male/female thing, it's an orientation to risk as a result of their indexing.

I'm not in crypto (other than making an NFT of an experimental musical track to test it, priced too high for anyone to buy), because I didn't see it as on the list of viable paths to financial independence for me (even though it has been for hundreds of thousands of others), and it just looked like a giant deferred tax liability that will psychologically turn crypto holders into fugitives from their own governments and societies. A decade of cultivating what used to be only hacker-level paranoia has knock-on effects. Cryptocurrencies are the seed of an ideology that has analogies and precedents, but it is still forming, I think.

The people who think crypto is bullshit believe it because the smartest thing for them to do is to signal their alignment to establishment values, as if you had any apprehension of how vast and powerful the establishment was, you would too, so the thinking goes. When the rewards are greater than your perceived risk/returns on that, you buy a mining rig. I'm sure there is a straightforward game theory model to describe it.

More people believe it's useful than don't, but the people who signal they don't have the political power, so it's a question of how to bet on who prevails, and the volatility in the interim, imo.

This is off on a tangent but that dudes writing style is almost impossible for me to grok.

I'm not convinced, and even disagree with some of it; but I very much enjoyed reading this, which is a refreshing change for cryptocurrency advocacy.

The potential is so beguiling but the actuality is so lacking. I fear this current "crypto rush" is worse than a tulip mania, its like selling everyone multi-kilowatt radio transmitters back when the accessible spectrum ran up to 2Khz. The scorched wreckage and cultural no man's land resulting from the market implosion that seems imminent and inevitable are going to smother the actual potentialities for generations.

Of course I cant say what a "true revolution" that isn't founding on simple scams might look like. I just don't see enough non-scam foundation in the current cryptocurrency market to trust it, certainly not to the level that some of the advocacy sells.

The bullshit part is assuming that minimal use cases today will turn into extraordinary change in the future, because the internet took a similar path.

On the one hand it is true that we cannot fully predict exactly what new use cases of crypto will exist 10 years from now.

On the other hand, Magic Leap had a similar pitch for how world changing their technology was going to be in the future.

Another thing that is bullshit is the Web3 crowd taking credit for things that have existed for many years. Just look at DAOs. Co-Ops, LLCs, Non-Profits have existed forever and have provided very useful governance, Just because DAOs can also provide useful governance, doesn't mean that they invented the concept of shared governance.

Cryptocurrency might be bullshit, it might not, but it is not going anywhere and I'll explain to you why.

Right now, Mitumba in Nairobi can spin up a scrip in under an hour on his cell phone.

I liken it to the invention of a printing press. I can think of all the arguments for why the printing press wasn't that big of a deal when it happened. "Most people can't read! Who is this designed to help exactly? The only people that would be able to use it already know calligraphy, and on top of that have to learn typesetting, nobody is going to use this. All the illiterates will just go ask their bishop what the bible says. This is a solution in search of a problem"

And they'd be right, at the time. To some degree, world changing technological developments all solve a problem that only exists in the world they create. That's what makes them so foundationally transformative.

20 years ago if I wanted to create a currency, I had to press or mint metal coins, or come up with a print design that's hard to counterfeit, get a printer going, print tons of it at significant capital expenditure, then anyone I wanted to use it I'd have to face to face pull out my worthless monopoly money and try to explain to them why they should use it, probably to great amusement.

Right now, I can drop 20 bucks into ubiq or binance smart chain or whatever, then spend a few pennies of that launching a boilerplate erc20 contract, download coinomi wallet on my phone, watch the contract, and I've just created a sovereign currency. I don't even have to create a client application. Not only that, but in the same amount of time it took me to write that, I can explain to anyone how to use it if they want. Me and my family can just create some way to keep track of debts, we can create m3 money. We can settle out if we ever want to, just like you used to be able to redeem your bank notes for gold. Mitumba can create something to keep track of sorghum production in his village or whatever.

This is why this will take over the world. The ability to create financial instruments has been democratized. You might not like it, you might think it is stupid, you might have a plethora of reasons why it is a terrible idea. But the genie is out of the bottle, and over the coming decades you're going to begin to see lists on the front of lemonade stands telling you what currencies are accepted. Maybe Juan who owns the taco truck gives you a discount for paying him in bobcoin for some probably stupid reason or another. The day is coming where you'll be more likely to pay in some random cryptocurrency or other for random purchases than in a state currency, if for no other reason because the ease with which a person can create a currency is ridiculous today, so the world will be drowning in them.

You are describing bartering and credit. For centuries people have exchanged goods without a government currency being involved. They also would extend credit of those "democratized financial instruments". "I will give you wool this month, and you will owe me wheat in 3 months".

If you want to trade digital trading cards, great. If you want to pay with Euros or Pesos, or DogeCoin, instead of US Dollars, also great, go ahead. But don't pretend that minting your own coin for your family is a use case that was impossible to do with Google docs, or even with a piece of paper and pen.

You're missing my point entirely.

I can mint a token right now with minimal expenditure that cannot be counterfeited that anyone in the world can use to represent exchange of value. And everyone in the world can also do that. You could not do that with google docs. It is not the same thing as barter.

Again, and my main point: you might think that it is stupid, a terrible idea, and you might even be right, but because anyone can do it, it isn't going away. This is the world now.

I'm not saying it is stupid. If someone wants to create and use crypto coins, go ahead, that is great.

I'm saying that if you want to create a way to track what each person in a family owes each other you have been able to do that with with google docs for years. Or you could use a pen and paper to create a family ledger, if you were worried about counterfeiting or your house burning down, put it in a fire proof safe.

Sure. But that was just a simple example.

First, it is easier to ensure integrity of the ledger using cryptocurrency than it is keeping a canonical double spaced piece of notebook paper, and second, it is as easy to do it for my family as Mitumba for his village or a group of 1000 random people on some forum. Anyone can spin up a secure currency for any purpose with minimal cost and effort.

I understand now. You are saying that in the past to create your own currency you needed as much money as a grocery store or airline to create "reward points", or "airline miles". Now it costs less and is easier to create your own version of that.

Or mint chuck e cheese tokens, yes. But also, and more importantly, because it is easy they'll be everywhere.

Why will it be everywhere? Were there a lot of people wanting to have their own reward points but didn't move forward because of the time/cost to implement?

No, but it doesn't have to be for good reasons. Was there unmet demand for supercomputers to stare at while taking a shit 20 years ago?

20 years ago only big companies could do it. Now anyone can do it, so they will. There are over 15,000 cryptocurrencies of one kind or another right now. When anyone can spin one up for peanuts lots of people will.

Yes, 20 years ago there was an enormous demand for being able to watch any show you wanted at any time, in any place.

> 20 years ago if I wanted to create a currency, I had to press or mint metal coins

Furthermore, if you were in the United States and found any success in this, you would be arrested and charged under 18 USC 486: https://www.law.cornell.edu/uscode/text/18/486

Not so with cryptocurrency, for some reason.

It's because the law specifically applies to metal coins.

Cryptography is not. Cryptocurrencies? Probably most of them.

The former Coinbase CTO's appearance on Sam Harris' podcast a few months ago gave me a clearer understanding of why crypto isn't bs and where it likely will provide value in the future (beyond a store of value like gold).

According to 'Betteridge's Law of Headlines' any headline that ends with a question mark can be answered definitively with:


The author thought the answer was yes: "For now, I’m sold. I think there’s a there there. I honestly think blockchain can change the world — and for the better. Which, I’m sorry to say, makes it pretty hard to shut up about it. My sincerest apologies to all for whom the entire subject is “coated in oil of tedium,” especially my beloved and longsuffering wife."

My personal opinion: currently overvalued, but cryptocurrencies have some merit in medium-large p2p payments, online gaming, and digital asset trading

> Which, I’m sorry to say, makes it pretty hard to shut up about it.

True. It is hard to ignore. (It will get harder for most). The ones that are very dangerous and must be avoided are the crypto people hyping only a single coin to do everything, despite its well documented drawbacks and red flags.

As the author of the article mentions further, they are also in these investments themselves.

> My personal opinion: currently overvalued, but cryptocurrencies have some merit in medium-large p2p payments, online gaming, and digital asset trading

Exactly. Some cryptocurrencies are more better for fast low fee P2P payments than others, and most often easily conflate 'Bitcoin' to mean 'all' cryptocurrencies, and that every single one of them is environmentally bad. which is completely false.

Cryptocurrencies in general are here to stay. Some will be used for several use-cases and some will just wither away.

Except for all the headlines where this doesn't apply. (see here for data: https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...)

So to conclude: 'Betteridge's Law of Headlines' is a useless concept.

> Except for all the headlines where this doesn't apply.

In this case it perfectly applies and this 'headline' can be reduced to a simple 'Yes' or 'No' answer.

But of course, as expected having nothing to counter with other than stating something from Wikipedia.

Low-quality post.

Care to explain why it is 'low quality'?

Does 'Betteridge's Law of Headlines' lead to truth?

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