I don’t know. This hype-crypto-machine is not catching up with my “feelings” about the future of the Web. Maybe I am getting old, but aside from some communication protocol usage and some form of authenticity (which is questionable), I don’t see web3.
I would go out on a limb and say that if this is web3, I don’t want to have anything to do with it. This is an outrageous waste of resources and energy with awful environmental impact, driven primarily by pure greed and wishful thinking.
Looking at mindset of the VC’s, which are giving this “things” validation, scares the living sh*t out of me.
More and more, implementation of modern ‘tech’ is pushing me towards abandoning the ship and moving into the woods somewhere.
Don’t let me start with NFT’s. It is horrible. The impact of this thing over a lot of my friends is getting ridiculous. I somehow understand “the money” aspect (ponzi scheme, money laundering), but recently I got “the cult” vibes from some of them and closed the door permanently.
So hard “no” from me. I already have a “Metaverse” in which I feel comfortable, it is called reality.
OK. I am convinced. The entire cryptocurrency industry is a scam.
So rather than saying the same thing over and over on every HN thread about it being a 'scam', let's do something about it then? How do we ban it all to save the planet and stop the scams everywhere then?
Or are we going to complain on the next HN thread about cryptocurrencies and web3 once again?
It's no more a scam than the dollar, yuan, or euro.
It's as trusted as the system backing it. Can it be trusted enough that you at least can see when it's being manipulated? Can your current system? Some countries benefit greatly, some maybe little to none.
When every transaction flows publicly that's already a different starting point than what we have today.
How do you wanna ban it? Break my fingers so I can’t run some open source software? Break my hardware so It can’t Hash, cut my power? Arrest me for doing math?
The battle is between the libertarians and the authoritarians. The authoritarians want to ban things they don’t understand. They want to bully others with their choice of how they use energy. They want the state boot stomping on the face of humanity forever.
Banning is always an act of violence. Don’t give in to violence.
Because the "argument" has a limited view, namely that individual liberty is the ultimate goal/blessing/benefit. A blanket "all banning is bad" is just wrong. Saying "are you gonna arrest me from doing math" is like saying "are you gonna arrest me for mixing chemicals?" when you're making a homemade bomb to explode other people. The impact of the current crypto rush is worldwide, this person's energy use to generate BOOBER COIN TM is directly impacting the environment I exist in, why is it OK for your liberty to affect me? Do I then have the liberty to somehow harass/exploit your liberty to make my money?
Not saying banning crypto is the answer, just saying this is reductive and flawed as an argument
Where is this energy towards banking institutions that use even more Tw hours and do even more damage?
Your argument is flawed. Making a bomb has a narrow purpose to do damage. Banking institutions do dramatically more damage. This is a potential alternative removing middlemen from the equation and operating at a fixed rate.
Proof of Work didn't predict the use of ASICs and was intended for common hardware that would make dominating the pool cost prohibitive. Proof if Stake is one alternative although has its own issues.
Yes, greed is what you are angry at. That is absolutely the problem. If you are truly upset about the environmental impact then moving upstream to energy producers should be your target.
Nuclear is astronomically more energy dense and has made significant strides in zero waste plants and safety features. Then again you aren't complaining about the banking institutions impact on climate which outscales crypto and continues to climb.
People like you helped a lot to make cryptocurrencies born by banning rights and oppressing freedom. Paper money does a lot more, and I mean A LOT more damage to the world, still damaging...
You just don't understand what you are talking about. Everything can be abused, but just because it is abused that does not mean it should be banned.
To add to this who is out there quantifying how much energy is used by the data centers, jets, etc, of banking institutions and other institutions driving money to contrast this to? It's almost like some people might want the system that is currently in place to stay that way.
Yes, someone else is doing something morally reprehensible, so it clears my morally reprehensible behaviour too. Now you're sounding like a Ferengi Putin.
This isn't a whataboutism...we are literally comparing apples to apples.
How much impact does the banking institution makes vs how much crypto makes. Comparison is not a novel concept and is quite literally part of the scientific method.
It's almost like you are intentionally sowing seeds of misinformation and distrust to redirect...or you just like throwing stones from glass houses.
I don't understand how any take on crypto can not mention that it is now the de-facto currency of online black markets, from pornhub to silk road 9.0 or whatever version we're up to.
This is crypto's utility and the only thing I've seen crypto being used for seriously that isn't speculation. Cryptocurrency is disrupting the black markets the same way amazon/ebay/online shopping disrupted the retail markets.
Crypto isn't a solution looking for a problem, the problem was found back in 2011 - it's just that nobody wants to admit it. It reminds how everyone used to say that BitTorrent was used for downloading Linix ISOs, but with less self-awareness.
I'd add ransomware payments to the list, but otherwise your take "the problem was found back in 2011 - it's just that nobody wants to admit it" is spot-on!
An interesting tangent of your BitTorrent analogy is that, for BitTorrent the protocol, an actually legal use case was found later: it is now used to create powerful ad-hoc CDNs for limited use cases with the novel property of gaining bandwidth automatically as more clients show up. The "Linux ISOs" that actually existed were the earliest incarnation of this, driven by non-profit orgs low on cash, but the concept is now in active use also for purely commercial purposes such as downloading large game updates (World of Warcraft, StarCraft 2 etc. have been using this scheme for a long time now) or generally distributing large software packages to a bunch of clients (I've read about at least one company-proprietary project that uses BitTorrent embedded in some kind of software package distribution system to quickly roll out microservice updates in a mesh made up of thousands of servers). This may mean that it's not impossible for some of the crypto protocols to eventually end up being used for actual benefit in some legal way that is not just again financial speculation. However, it will probably be much less world-changing than the crypto enthusiasts expect.
I would consider ransomware under the umbrella of black markets. Perhaps "anything illegal" would have been a better description.
Nice point about BitTorrent. I'm sure crypto will have some niche adoptions in the future too. Apparently P2P game updates ended up being disabled though. Probably a good thing too - imagine the absolute carnage on ISPs if places like netflix decided to outsource their CDN to everyone's home internet.
> Apparently P2P game updates ended up being disabled though. Probably a good thing too - imagine the absolute carnage on ISPs if places like netflix decided to outsource their CDN to everyone's home internet.
Given how asymmetric many home connections are, and were more so further back, and that using the whole upstream will effectively throttle downstream & there is no reliable way to detect at what throughput you will become a problem, I never saw P2P game updates as a good idea in general. Excellent for those behind the same bottleneck though - two PCs in the same student digs updating the same huge game for instance, saving a second slow download using the orders-of-magnitude faster local LAN - but I don't think that is a common enough use case to be worth the implementation effort.
I just recently noticed the delivery optimization feature in Windows 10. It sounds similar to what you are saying, sending Windows update to other PCs on the local network.
Yes. It makes more sense for something as ubiquitous as Windows, for which multiple devices running the same product on the same local subnet is a norm rather than a relatively rare exception.
At my last workplace we used BitTorrent to distribute content to thousands of sites. The endpoints were not ‘seeding’, the main reason for us to use it was the splitting of files into pieces and the automatic checksumming of the content. Quite convenient when the content could be several hundred GB.
> the only thing I've seen crypto being used for seriously that isn't speculation
When paying for domain names or VPS (or anything online, but those are the cases where it's easy), I prefer paying with crypto because I don't want to give my credit card information to some stranger so they can misuse or lose it. This is not illegal and a legitimate use case.
Crypto offers zero protection from fraud, as transactions are non reversible however if you pay by credit card goods are not delivered or if your card is used fraudulently, the credit card issuer can and will reverse the transactions. Also due to PCI standards almost all online transactions are done via a third party, PCI compliant payment processor.
I don't see the value crypto is adding here. If you did have misplaced worries about being a victim to CC fraud, seems like it would be easier to use a prepaid credit card, debit card that you only transfer funds to when making purchases or a service like paypal.
With credit cards, you have to give out your details to whoever you are paying. That party will save them somewhere and then there is a possibility that someone else will gain access to your details and abuse them. You won't ultimaltely lose money here, because your credit card company will reverse the transactions, as you said. Being the victim of credit card fraud is still a hassle, however.
With crypto, the only thing you give out is your public key. No one can perform any fraudulent activity with just your public key. It is of course possible to be defrauded with crypto, but then it will be partially your fault because you did something you should not have. With credit cards, you can become the victim of fraud through no fault of your own.
I do think that is a difference worth pointing out.
Sure, but I think the risk is overrated. Almost all online shops outsource payment processing to a third party payment gateway, which you can validate pretty easily. They never get access to your details in order to abuse them.
Third party payment processor breaches where CC data is lost are quite rare I don't think I've read about one in a very long time.
Sure, I guess you can't get phished out of secrets with crypto like you could with a credit card, but that's never happened to me, and probably won't happen to you unless you aren't very good at detecting dodgy websites. Also, if you fall for those kinds of scams, I have some monkey jpgs I want to sell you.
The real benefit to crypto here is that you can send money, to anyone, anywhere in the world.
The last time my cc was compromised is when the bad guys injected js into a large e-commerce site and stole the card data. This is a real threat. I’d rather not use any pull based payment mechanism if possible. Push only.
I understand the potential security issues. But the only affect this would have had on you is you would have had to contact your bank to reissue the card and chargeback any fraudulent transaction.
Consider a similar hack on a site that accepted Bitcoin instead of credit cards. The fraudulent JS replaces the payment address with the hacker's address and you send your coin to it. There's no getting your money back now.
I know which outcome I would prefer. However based on your username there is probably some bias in your argument.
Getting new cards is a pain, especially if you are traveling. You are without a card for a bit until it is replaced. And chargebacks are a headache. That is a good point about malware, However I would bet address substitution would be discovered a lot more quickly. Magecart was ripping vendors for weeks before the cc vendors tipped them off. 1 bad purchase flow and the customer complains and the site would investigate. It’s pwned for minutes not weeks. Cc theft can be silent and might only strike its victims months after the compromise.
The difference is the victim. In a malware scenario, cc’s it’s the card holder, with cryptocurrency it’s the vendor that is getting screwed.
> The difference is the victim. In a malware scenario, cc’s it’s the card holder, with cryptocurrency it’s the vendor that is getting screwed.
This makes no sense. The CC holder isn't screwed, they are mildly inconvenienced while they wait for a replacement card. It doesn't matter how many months after a breach it happens - the person who ends up without money is whe merchant who the fraudster used the stolen card with, because they will get a chargeback fee and lose stock (if they sent it out before chargebacks happen).
The vendor isn't screwed in in the cryptocurrency situation. The vendor isn't out of pocket (except for losing a sale). The person who sent the money to the hacked address (i.e you) are. Maybe the vendor will decide to send you the product anyway because their site got hacked, but that would be entirely up to them and not a function of the payment method used.
I can see how it might aid early detection. But I don't see how in that scenario you're safer using Bitcoin. The malware could be on the customers computer rather than the website. It could only be altering one in every 100 transactions. It could not be malware, it could just be a vendor selectively scamming. There are many nice features in cryptocurrency, but consumer protection is not one of them and it's a weird thing to espouse.
> Getting new cards is a pain, especially if you are traveling.
Well, if you lose your crypto wallet - you lose your funds. Generating a new wallet is not going to solve that. Whereas losing fiat cards doesn’t result in my bankruptcy.
> With crypto, the only thing you give out is your public key
That’s not really true. The service/product provider can and will ask for more details, like name, address, etc - it has nothing to do with the mode of payment.
This is already a solved problem everywhere in the world except for places that overly rely on credit cards. Has nothing to do with crypto or credit cards by itself.
That's what I'm always saying too. Crypto is used for two things: criminal activities and convincing others to buy into your crypto so your crypto portfolio increases in value. The second thing can also be considered a criminal activity because it is _literally_ a pyramid scheme. Not "almost" or "something like", but by definition it is a pyramid scheme.
The second thing is that crypto or "defi" enthusiasts go on raving about the decentralized structure. Anyone older than 25 should know that decentralization/centralization is a continuous cycle in which neither one is inherently better than the other. However, decentralization by itself is always used as an argument for crypto without further explanation. Red flag to me.
Why a red flag? First, crypto is not decentralized, contrary to popular belief. In the case of smart contracts as the author of the article points out, everything runs on the network (Ethereum for example). That is _extreme_ centralization. Everything has to happen within the boundaries of the network. Sure the execution is decentralized, but there is one and only one protocol that everyone should use. Imagine a world where every messaging app has to use the SMS protocol.
Second, centralization has enormous advantages, which is why we have so much centralization. Do you trust yourself to safely store the key to your life savings or artistic portfolio? I absolutely don't. I don't even trust myself to backup my holiday photos.
You could then argue that there are identity/access services for that, like Coinbase (or whatever equivalent in the future). But as soon as you use a service like that, you are basically creating the crypto equivalent of Facebook/Google/Twitter for single sign-on. To me we are then exactly right back where we started in 2005: building centralized services on top of a decentralized infrastructure. What have we gained? Nothing. Except that some VCs got to execute web 2.0 all over again and get rich from the gains, which they apparently missed out on in the previous cycle.
I have thought so much about this subject, and maybe I'm just too dumb or know to little about it, but honestly everything about crypto is repulsive to me.
From Wikipedia "Pyramid schemes are based on network marketing, where each person in the pyramid is tasked with bringing in their own subordinates and in turn profiting from their sales or recruitments."
just because something is illegal doesnt make it immoral.
Money transfer across country boundaries is a big use case. Chinese were using btc to get money out of the country which was one of the original big bumps.
the immoral people are the countries that restrict people's ability to move by restricting their ability to move their assets.
The US exerts its will around the world through the banking system. Sometimes for good and sometimes for immoral purposes. Crypto allows good and bad actors to avoid that pressure.
Yeah. I think speculation can be good when you don't have the speculators at the top of the food chain.
I'm talking specifically about the Friedman Doctrine and making companies beholden to shareholders in the United States. It's been proven that it doesn't work yet we still have that structure.
Predicting future direction can get people deeply invested in an investigative way but when they hold the reigns they can coerce entities to follow their direction
You send it from your wallet to the exchange where you bought it, sell it for fiat and withdraw it to your bank account. The most complicated parts are complying with KYC regulation and calculating taxes, as well as not losing or leaking your private keys.
If the asset has only low liquidity, then it is difficult to sell it at the sticker price and your sale may actually lower the price, but this will not happen for most people with high liquidity assets, such as BTC or ETH and so on.
why wouldn't you just leverage a stable coin if you are looking for speed?
The slowest part of this are the banks and the clearing houses. They essentially "trust" other institutions to a certain extent and vouch for the money until it officially arrives on the books. You should read up on FedNet
if you are worried about volatility there are less volatile options inside of crypto
It's funny watching crypto boosters realize there are actual benefits to institutional trust that are superior to cryptographic trust. These allow for high liquidity and allow participants to capture gains (or losses) practically in real time.
You misread my statement. The trust of banks is an illusion and actually slower than the consensus.
I don't "boost" crypto. I disagree that crypto is how we should buy our lattes.
If you live in a country where financial independence and control is not a reality this could be something greater than the corrupt system you are trying to extricate yourself from.
There is rampant corruption in crypto and although I feel easier to see, still a dangerous investment vehicle.
Is this the thing that changes the world? I think it did in some ways already. Is it the final iteration? I doubt it.
As a first cut, I am wholly impressed and I believe it can create something different.
> You misread my statement. The trust of banks is an illusion and actually slower than the consensus.
It doesn't matter. Trust makes the world go round.
Even if consensus took seconds to attain instead of minutes, it would still be too slow to maintain the liquidity of even current financial markets. We're talking 2-6 billion trades per day on NYSE alone, often concurrently - as low as 4.6 microseconds per execution. There is no way we'd be able to achieve that with the consensus state of the art.
Only through offline trust and batch reconciliation can we achieve this kind of liquidity.
You are under the assumption I believe that speculation in it's current form is a good thing. Friedman Doctrine never worked, he himself admitted it.
Crypto is not for buying your latte. It's for the people that cannot trust the system that issues the money to begin with. In your country perhaps it's not an issue. I am sure there are plenty of countries you can see that it is.
I've gotten this feeling, ever since about 2008 or so, that the map that is asset prices is slowly, inexorably becoming uncoupled from the territory of the physical world.
This economy-scale decoupling is the dual of each and every one of our very own psychological uncoupling from our own physical worlds, which has occurred because of the computerization of work, socialization, and life itself (the shimmering neuralink dream).
Cryptocurrencies are what happens if you completely decouple the asset price from the physical world. To create the "value" of cryptocurrencies, we purposefully do nothing at all. The asset is valuable only because of the flow of entropy. Not the flow of energy (which generally has some physically useful function). But entropy itself -- a thing that exists only in the "map" of information, not the "territory" of the real world.
Typically, moving entropy around is useful to us, because it actually corresponds to changes in an underlying physical process. Like, your job doing excel spreadsheets for warehouse inventory management is just changing the flow of entropy -- to you, it is decoupled from the physical world. But there is a link to the physical world: when you change a cell in a spreadsheet, so too a physical good moves somewhere else in the warehouse.
With cryptocurrencies, not so. All this entropy is moving for the sake of itself. It's all virtual -- none of it can be coupled with the physical world (by design! if it could be, some physical force could go in and take your crypto-coins).
Now, here's the delusion: unfortunately for us, moving entropy around is actually still coupled with moving energy around. It actually has a tremendous physical effect on the world around us.
Something I've noticed about cryptocurrency people is that they are very, very plugged in. The evangelists never have a physical job; always a computer job, and they are always online, and believe in being online to the greatest extent possible. And I think, actually, there is a very obvious reason for that.
I'd have a slightly different take, recent changes in asset prices and the speculative frenzy are due to changes in monetary and fiscal policy since 2008. I'd include the popularity of cryptocurrencies as speculative assets in that (they don't seem to have any other use-value).
Asset prices have seen massive inflation in the last decade due to ZIRP, asset purchases by central banks on an unprecedented scale. The risk free rate has been zero for far too long, and this has directly led to people moving into more risk in order to try to get a return, any return at all. So asset prices, particularly risky speculative asset prices, are no longer judged on their fundamentals like cash flow, but are tightly tied to monetary policy instead. This is starting to feed through to prices of food and other commodities as price inflation as well. So now central banks (and the Fed in particular) have an invidious choice - crash the stock market and save the real economy, or crash the real economy via inflation and save the stock market.
The Fed just suggested they would take away the punch bowl from assets a little earlier than planned, so the party is over and people are scrambling for the exits - that will continue this year. This impacts tech stocks which are not making money and not likely to make money, and speculative assets like bitcoin which money has piled into due to Fed policies.
We've seen this story before, we know how it ends.
That's very interesting, could you answer a few questions, or point me to some resource which explains in more detail?
1. How does this story end?
2. Which Fed announcement are you referring to? That rates will be raised? What do you mean the party's over, that speculation will decrease and prices will drop?
3. "This impacts tech stocks which are not making money and not likely to make money" You mean that this will impact stock of tech companies which are not profitable, since their stock values are speculative, and not that tech stocks won't make money, right?
4. So that means the Fed has chosen to crash the stock market and save the real economy, right? And by that statement, you mean that the Fed will curb speculation in order to stop price increases in food and other commodities?
5. How and why does rises in prices of risky speculative assets trickle down to rises in food and commodities prices? Is this because some part of the market gets out of the high risk assets and start bidding up lower risk assets? Is this true in general, that price increases due to too much speculation in one part of the market will eventually spread to everything else?
1. IMO it ends in inflation and crisis or stock crash and crisis, it's created a very unstable system addicted to fed stimulus. Possible of course that the fed can keep printing and try to prolong the agony a little longer.
2. For the last few months and more strongly recently the Fed has been signalling that they are going to taper stimulus, hence the rocky ride in the US stock market (driven to spectacular highs over the last decade by Fed purchases of treasuries and even corp bonds).[1]
3. US stocks in particular have not been valued on fundamentals in a long time - the indexes are propped up by a small group of tech stocks which are very overvalued, even world indexes are imbalanced in this way (50% US, 2% Apple for VWRL for example).
4. Well so far, they will doubtless have some wobbles on the way and may even reverse position completely as they have in the past (see 2013 and 2018 withdrawal of QE below [2]). This prevarication IMO just makes the eventual shock when they have to withdraw it even greater, and/or devaluation of the currency worse. They may choose to devalue the currency further so that nominally stock prices stay level, but that leads to inflation...
5. I don't think the two are linked, save that commodities are also linked to monetary and fiscal policy which has bid them up to unsustainable highs and led to unrest around the world (after 2008 and now again as price inflation rises). Sorry if that was unclear, I meant the Fed policies were starting to feed through to inflation.
To be fair to cryptocurrencies like Bitcoin, this is precisely the sort of market distortion and financial repression it was created in reaction to and attempts to solve, it's just unfortunate it was unsuited to use as a currency and has been taken over instead by speculative carpet baggers intent on fleecing others.
The last point you made about cryptocurrencies fleecing others bit built with intent to prevent market distortion is dead on.
People getting into crypto in fratboy style have gone on the rollercoaster and often are pushing it to their desires.
In the history of money (I'm talking U.S. at this point but other countries have their story) this carpet bagging happened earlier on... we've just been using it long enough that the story was forgotten and long before our time.
I'm referring to the Gold Reserve act Executive Order 1602 of 1933 where gold was required by law to be turned in at an exchange of $20/oz and a year later jacked up to $35/oz an ounce.
This decoupled the Federal Reserve from backing credit with gold, etc. The story continues but you get my point.
So the key relation you need to pay attention to is in growth of the money supply compared to growth in the real economy. If they are growing at the same rate, prices will be stable forever. If one is growing at a slower rate, you will see a bubble in that side.
And the secondary thing you need to keep in mind, when the money supply is growing at a rate faster than the real economy, and the value of that money is pushed into either consumption(CPI) or investments. But because the Fed explicitly outlaws more than 2% inflation, it must therefore be in investments. Those investments can be anything, from houses to stocks to tulips to receipts of monkey jpegs.
The third thing you need to realize is that once an asset is above their 'true' value, there is no rule that better assets will grow more. What actually happens is those which have the least supply and largest marketing raise the most. So you see houses go up, you see buyback stocks go up, you see collectables go up.
So next you need to look at, how is the money supply going up? The money supply goes up when interest rates fall. Wealthy people who have good credit take out more and more money to buy more and more assets. As the wealthy don't use this new wealth to consume, as they already consume as much as they want, inflation doesn't occur. This is the savings glut of the rich[0]. When this happens, because we don't get inflation, this pushes the Fed to allow even more money printing to occur to allow inflation to hit their 2% target. It becomes a vicious cycle of more wealth inequality begets more interest rate reductions.
But with interest rates at 0%, the Fed is no longer able to move the money supply anymore. Now they need to do it directly. When they were doing it indirectly, they had that indirect buffer, "that's just how the way the world works", but when they do it directly, suddenly they have accountability. So instead of 90% of new money going to the wealthy, maybe only 50% goes to the wealthy and 50% is spread around to the non-wealthy.
So once the Fed starts Monetary Policy 2, now we see inflation. And once inflation kicks in, the Congress and others will see the hurt that is occurring to normal people, and they will push for even more policies that trigger inflation even more. This is what happened in the 70's.
So the Fed needs to put a stop to the bubble, just as they did in the 70s, so they will raise rates. Those raised rates will push the balance to currency, and money managers will work out that fact, and more a bigger and bigger percentage of their investments into this area. This will crush all of that extra value, and boom will go the inevitable cyclical money velocity bubble. Houses will drop down to their fundamentals, stocks will correct, monkey jpegs will crash to 0.
The big thing we need to watch as this occurs is what happens to things that we thought were not correlated, but ended up correlated based on everyone buying into the bubble. What happens when people pull their broad index funds? When the index funds are net negative, how low can the market go? Can the Fed have the precision to crash the Bitcoin market, to slow down the housing market, and not allow the stock market to fall 90%? I guess we'll see.
No, you can’t. If you follow the axioms of the cryptocurrency evangelists to their logical ends, transferring cryptocurrency to another wallet is something that happens entirely in virtual space.
Of course, this virtual space is coupled with physical space, by hugely centralized entities called exchanges. To get your money across the border, you need to deal with them. In that case the physical value you can buy with your cryptocurrency comes about from the exchange, not the currency.
Value is a physical thing, not a virtual thing. That’s because we live in the physical, not the virtual world. But we’ll readily delude ourselves into believing that’s not the case.
I can send money from a cold wallet to any address I want.
An exchange is merely a full node with a user interface.
To operate as an exchange there are certain KYC/AML rules they must follow.
Setting up a node takes about 20 minutes and then letting it sync for a couple hours to a day depending on your internet.
You can send crypto with as high or low as a fee as you want...it's just a manipulation of the queueing metric and which transactions miners add to the chain. With exchanges they set that for you.
Only to the extent it allows me to do things. Realistically, that currently means fiat->crypto->fiat, which requires a semi-stable conversion rate (on the order of time to complete the roundtrip), but the transitory nature of the crypto holding seems a nebulous link to floor value.
The irony is that much of the criticism against the missing physical link / utility of crypto was surely levelled against the idea of money in its earliest days.
"Coins? Why would I want those instead of food? I can't eat coins."
To which the killer adoption feature was governments saying "Well, you have to pay taxes in coins, so you need some" to bootstrap & put a floor in under the system's value.
Crypto doesn't appear to have had a "tax" moment yet.
Is there anything I can only do with Bitcoin, Ethereum, etc? Which is to say, if the value of both absolutely collapse (to some fraction of a cent), who would still be buying, and to do what?
Note that in the latter case, the physical money doesn't even change hands - it's all in a ledger, but the ledger is in people's heads. In fact, you could say it's a proof-of-work system, since making the stones is expensive in terms of amount of effort spent, even though they don't have any utility as such.
Point! But I'd guess the velocity of information and rate adjustments in shell-based economies were slower.
E.g. If someone said "The value of the cowrie has crashed!", then how long did it take for everyone to find out & the cowrie economy to reprice itself?
I'd hazard we deal with much more sophisticated, capable, fast, and aggressively predatory market participants now.
Well, commodity-based currency had non-zero value because it was an abstraction of a physical process somewhere. Proof of work. I have to spend time mining gold, so gold has value, so gold coins have value.
But that wasn't sufficient alone to give it utility. And without utility, there is no buyer of last resort, and no floor under value. Hence taxes.
Fiat currency removed the proof of work, and replaced it with proof of stake (-ish?), but retained taxes.
You could probably make the argument that "buy NFTs" or "run dApps" are the beginning of crypto's tax moment, but both seem a pretty small scale to base value on.
IMHO, that's the entire point behind dApps: a crypto-native version of taxes that puts a value floor under the cryptocurrency. If you have a solution that can only be solved by dApps, and you need cryptocurrency to run dApps, then there you go...
The difference, though, is that the proof of work is qualitatively — physically! — a different type of work.
The value of money is derived from moving against thermodynamic equilibrium. Cryptocurrency’s value comes from moving towards thermodynamic equilibrium. The conversion of work into heat — not heat into work!
I’m not talking about taxation or apps. Those are things built with the axioms of crypto-evangelism. I’m talking about the physical fundamentals underlying those axioms.
Burning electrical power is the most globally available version of burning universal value.
The thermodynamic direction is less important than the fact that people didn't want to do it.
But proof of work was always a transitory, bootstrapping phase. Even among the crypto evangelists, I can't believe anyone saw a long-term future in that.
Slinging double SHA256 til the heat death of the universe is my long term vision. POW as a bootstrap phase is ethereum pos wishful nonsense. Many see the long term future of PoW. Many believe it is the only way.
Solar, geothermal, wind and nuclear power? Using energy doesn’t destroy the environment. Producing energy uncleanly does. Shouting at children using PlayStations or miners producing hashes doesn’t make the environment any better. Shouting at the coal lobby might.
Color me skeptical. The cost-security tradeoff of PoW fundamentally relies on using more energy until it becomes expensive (relative to crypto revenue). If energy is cheap ("), someone will consume additional capacity.
Solar, geothermal, wind, nuclear et al. are cleaner (from an energy production standpoint, and mostly from a generator production standpoint), but still have fundamental capacity limits.
"We're going to burn {currentWorldPower}+1, forever" isn't a viable end state.
We will use more and more energy every year as our species evolves. It is the trajectory of every civilization to generate and harness more energy. Cryptocurrency will use more and more energy, and we will seek out new ways to generate it. It is the drumbeat of human progress.
Building oligarchical proof of stake ponzi games is not progress. That is when we have given up and just want to stagnate.
> Something I've noticed about cryptocurrency people is that they are very, very plugged in. The evangelists never have a physical job; always a computer job, and they are always online, and believe in being online to the greatest extent possible. And I think, actually, there is a very obvious reason for that.
This is a very important point, that I’ve also been saying for a while. Crypto is purely digital, almost every application that goes popular is fully digital, and almost no ideas have any connection to the real world. That’s gonna cause problems one day…
Bitcoin is tied to the physical world the same way every other currency is tied to the physical world. Right now you can transfer abstract value you have acquired without a 1-2% fee through bitcoin, which is much easier than doing it via a bank. For example a poker player needing to get 1 million dollars to Monaco to play a tournament would have to pay 1% (10,000$) and wait god knows how long if he went through the banks, with bitcoin that process is much smoother.
> For example a poker player needing to get 1 million dollars to Monaco to play a tournament would have to pay 1% (10,000$) and wait god knows how long if he went through the banks
Do you have a source for this? I find it hard to believe that high stakes gambling is hindered by banking systems.
The blog post itself also touches on this, slightly, by asking what the connection between compute and money is. Is compute just a proxy for money? Or, will in the future money become increasingly a proxy for how much compute you have at your disposal. The latter surely seems unlikely, but with what you said here, it is not out of the question, especially if people increasingly associate pleasures with things that require compute.
The author believes "a Twitter where your popular tweets earn you money" would be a good thing? Twitter is already full of people trying to shout the loudest - how can adding a financial incentive to shout even louder make things better rather than worse?
Because money is a different weighting scheme than costless engagement. Money weighted things behave differently than vote weighted things. Whether or not it will be better remains to be seen, but it should be interesting.
People willing to pay for quality content is always a good thing for content authors. By nature of their willingness to pay, it's a good thing for content consumers (otherwise they wouldn't do it).
Nobody requires anyone to use any website that they don't want to (except perhaps irs.gov). You are always free to ignore it, like you are free to ignore Twitter.
Giving people more options rarely makes the world worse.
If people are willing to pay for it, the people consuming it find it valuable, which is frequently a proxy for quality (in the eyes of those consumers - the ones who count in this equation). Quality of content is, of course, subjective.
The quality problems often come from the poor proxy. Money being fungible means that the rich get higher weight in determining what's considered valuable. In this marketized system, who will value journalism - especially the kind that people in power need to hear, not what they want to hear. If the rich want to suppress a fact, they can buy fake news - and because price = value, the fake news becomes the new truth.
Quality of content is not quite "subjective" in general. Perhaps in entertainment.
Don’t confuse "being paid for your popular content" and "people paying actual money for your content". On Quora you get paid for your popular content even if nobody willingly gave you money: it’s just that the website is now full of ads and you get a small percentage of that.
Quality is of course subjective, but there are certainly examples of things which are popular and trashy, or cost lots of money and are not high quality, and even some examples of things which are popular and trashy and cost lots of money but are not high quality (Melania Trump's interior design comes to mind).
Even if it were decentralized, the moment a technology appears to be decentralized, we do everything in our power to add a centralized (management) layer on top (e.g. github). That layer is what the masses will flock to and eat the lunch of the original technology.
If you have a technology that is already centralized which you try to decentralize it will be nothing more than a niche existence (that might not be a bad thing. See centralized Twitter vs decentralized Mastodon as an example of this)
"Distribute", is more practical than "Decentralize" because it lets you articulate the players and don't have to worry about sybils.
The funniest thing right now is the noisy people into NFT "art" who get their work stolen and are appealing to authority in meatspace.
So-called Web3 applications are not pure Web3 - they have many centralized Web2 elements still present. The transition to Web3 will naturally happen incrementally, given it's an entirely new technological stack that has to be built out.
Also, there are benefits to even partial adoption of Web3 by applications. For example, providing a decentralized ownership graph gives the community more power to fork if the centralized server-provider abuses their power, for instance.
See what happened when Steem was seized by a billionaire to be made into a corporate appendage:
Is that really what's holding this idea back, though? Seems doubtful.
I could maybe buy the idea that we'll move to an internet where every site nickel and dimes us. But is it more likely for the world to adopt crypto or is it more likely for our Google and Facebook OAuth accounts to support a non-chain wallet api? The crypto cut seems like it will always be more expensive as well.
> Is that really what's holding this idea back, though?
I personally don't believe it is, but some people seem convinced. Also, there's a lot of money to be made for the early entrants who are promoting this idea.
Its well tread territory considering they're global companies with store fronts and app stores for most countries. Moreover, I'm sure they handle more of the tax law than a crypto transaction would.
I am glad we are talking about crypto pro/cons but this article was a huge miss imho.
The arguments against are these beaten dead horses that many within crypto know already and frankly not well versed.
NFTs were an unenforceable joke, integrating the physical world and the digital world doesn't exist (yet?), there are alternatives to the PoW model in use, legal aspects and oracles in the Ethereum network need to be addressed still...what about the DAO reversing the hack which was essentially a loophole in the contract. When loopholes happen in current legal systems it's frowned upon and demands precedent. How about the ridiculous pump and dumps, the toxicity that is speculation amidst many other things.
Governments didn't pop up in one day whole cloth and this will take iterations as well. There is some evolutionary approach to things where what "theoretically works" is tested in reality and deduction is provn out against induction.
There is more transparency in some ways, a lot of confusion in regulation, and misinformation galore. Look no further than the current dealings in Wallstreet to see that existing systems are not currently solved with digital money having been tested for decades now.
I think there are many deserved "good, bad, and ugly" articles to be written but this one was lacking in depth, context, and what I feel is missing most frequently...contrast
"NFT Art" is a stupid implementation of NFTs that probably mostly exists for money laundering.
I always thought of NFTs as a good backend for things like concert tickets or other kinds of "club memberships". This would not really have the enforceability problem, at least not more than traditional tickets, while some new features are added.
If there is no way to enforce the NFTs, then they are useless.
If someone is enforcing the NFTs then that someone could just as well store the data in some SQL table, since there is exactly 0 decentralisation in that case
There is also not really a way to enforce a physical concert ticket, but with a NFT, the owner can prove ownership and authenticity of the ticket (for example when re-selling a ticket), without relying on collaboration of the issuer of the ticket. The issuer can show that they created a fixed number of tickets and are not over-selling the event.
>The issuer can show that they created a fixed number of tickets and are not over-selling the event.
But there is no way to prove that the issuer is actually the person who "owns" the event. This all goes back to the oracle problem: Unless the proof exists on-chain (like the currency value of a public key), it is useless; there is still an "oracle" outside the chain that must provide the proof.
The primary use case for crypto is simple: (1) People buy crypto because it keeps going up in value (2) It keeps going up in value because people keep buying it. (3) For why people keep buying Crypto, see (1).
That's the logic of a Ponzi scheme. All previous Ponzi schemes failed because either (a) sooner or later the scheme runs out of new suckers, and/or (b) the authorities intervene and shut it down, and/or (c) The founders cash out and 90% of the money just disappears into thin air.
The truly fascinating thing about crypto is that neither (a) or (b) appears likely in the near future. It's a Ponzi scheme with fungible shares.
For (c), as with other Ponzi schemes, the founders make a lot of money, the later entrants lose a lot of money. Sooner or later, the founders of BTC (for example) will start to cash out. At the moment, they seem to be cashing out gradually, so as not to cause a crash in their remaining holdings. That is one reason BTC prices are so volatile.
At the same time as the BTC founders are trying to find the optimum point in their cash out equation, there is another use case for crypto which continues to drive demand: crime and money laundering. Crypto is a great way to move money between jurisdictions. For some criminals, it is well worth the risk of volatility.
Ponzi logic and money laundering logic will continue to drive the price of established cryptos upwards. I suspect it might be quite a while before the game stops. That makes cryptos like BTC an interesting short term speculation. But to paraphrase Gurf Morlix: stay in too long, you're gonna get cut, and you're gonna bleed.
That's the real innovation behind cryptocurrency. There is no single founder, and so there is no one to put behind bars when the whole thing collapses. But still the formula of paying old investors with new investors money remains. It's quite brilliant really
No, that's not the logic of a Ponzi scheme. Crypto is not a Ponzi scheme.
Ponzi promised a 100% return on investment in 90 days. He got money from 15,000 investors. He needed 30,000 investors in 90 days to pay off the original 15,000. By the end of the year he would have needed 240,000 to keep the scheme going. By the end of 5 years he would have needed 16 billion investors. Crypto has been around what, 14 years now? In 14 years he would have needed 1080863910568919040000 investors.
Ponzi schemes don't collapse sooner or later, they collapse sooner. Ponzi started his scheme in January of 1920 and it collapsed in April of 1920.
Crypto is just a normal speculative investment. People buy it because they think someone else will pay more for it later. Same as speculating in gold, Amazon stock, or MTG cards over the last 14 years.
So? It doesn't pay a dividend. The only way people have made money off of that over the last 14 years is to sell the stock to someone willing to pay more for it than they did. Well I guess you could loan it to a short seller, but for the most part, it has just been a purely speculative asset, same as crypto.
>> gold has both utility and intric beauty
Crypto has utility as well, as the parent post pointed out. Many people suspect that for both gold and crypto, their utility value is tiny compared to their speculative value.
'"Tokens align network participants to work together toward a common goal — the growth of the network and the appreciation of the token." That's great if what you're trying to do is create an ecosystem of tokens that appreciate in value all the time. What percentage of systems can be modeled that way?'
That's the problem. "An ecosystem of tokens that appreciate in value all the time". The perpetual motion machine of finance.
Bitcoin has actually been able to pull this off, more or less. Etherium, maybe. The rest, not so much.
The NFT thing is winding down. NFTs are basically Axie Infinity, OpenSea, and the little guys. Axie Infinity is crashing. SLP is down to $0.02, from $0.35 at peak a few months ago.
OpenSea is hard to measure. There's wash trading to pump up prices.[1] NFTs have no overall market price. NFT markets stall, rather than crashing - high asking prices, no sales. There's a lot of that on OpenSea. "So far, most new NFT collectors on the secondary market have yet to recoup the costs of their purchases"[2] In other words, the issuer makes money, but the suckers who buy NFTs lose. Many of them don't realize they've lost. Someday they will find out, when they try to liquidate their Bored Ape Yacht Club collection.
I kind of liked the idea of NFTs as part of an asset portability system for virtual worlds. Goldman Sachs even endorsed that. I was thinking of this for items in the US$1 - US$100 range, like game items. The transaction costs would be too high if it took a blockchain transaction to walk through a portal, even for the cheap blockchains.
Some big part of all this is probably going to come apart in 2021. Definitely Axie Infinity. Maybe Tether.
>I kind of liked the idea of NFTs as part of an asset portability system for virtual worlds. Goldman Sachs even endorsed that. I was thinking of this for items in the US$1 - US$100 range, like game items. The transaction costs would be too high if it took a blockchain transaction to walk through a portal, even for the cheap blockchains.
This is theoretically possible on Zero Knowledge rollup L2s (two strongest contenders are zkSync and StarkNet) if they achieve sufficient scale but definitely wouldn't work on monolithic chains (not even relatively cheap ones).
zkSync says they don't have their test net for smart contracts up yet.
StarkNet is in alpha.
For this problem, it's OK if change commit verification takes a while, as long as it's cheap. If you move your no-copy NFT from grid A to grid B, grid B can verify that you own it, even though the current state is on grid A, and let you show it on grid B. A slow check later by each grid can prevent persistent dual copies. It's like catching double spends later. It's consistent eventually.
This is one of the things NFT proponents talk about - being able to move your truly-owned asset from one grid to another. However, so far there seem to be zero implementations. NFT land is tied up with make-money-fast right now. Potentially useful low-cost applications aren't getting done.
Speculation generates 99% of the noise in crypto but technology does keep moving forward. L2s were just whitepapers a few years ago, now there are multiple full featured optimistic rollup L2s (e.g. Arbitrum); zkRs, which are much more complex, are getting close. Lots of complex applications are now running on single-app StarkNet (e.g. derivatives platforms like dydx) and like you mentioned, the multi-app network is in alpha.
And only 0.665 % earns money on OpenSea. Concentration of it is way less, you can just crawl the collections. 5 collections dominate all the rest and only the first 266 collections earned > 0 eth. The other 40 k. earned 0 eth. It's obviously not a way for an artist to earn any money.
That number seems off by a few orders of magnitude.
I tried searching for familiar collections and couldn't find any of them:
- Corruption(*s)
- Bored Ape Yacht Club
- Lonely Aliens Space Club
- NFT Worlds
You also have neither entries for the major Art Blocks series (Curated/Playground/Factory) nor any of the hundreds of individual artist collections contained in them.
So, I think your crawl might be off.
Additionally, individual artists tend to not use OpenSea but instead use Rarible, Foundation, and SuperRare (or skip ethereum altogether and use something on Tezos like fxhash).
What does "market cap" mean here? The sum of asking prices? That's meaningless. You can put any asking price you want on something, and through a wash sale, even put it on the blockchain.
That's the central bank narrative, whether its a good thing or not I think is still up for debate. Regardless, this can still be done with crypto (in fact, Ethereum is inflationary and not fixed cap like Bitcoin is), except that speculation and capital inflow still drastically outpace the inflation. Presumably one day an equilibrium will be reached.
Whether a certain amount of inflation is good or not, is definitely not up for debate. Nobody wants something that is a medium for value to become so valuable that you can't use it for its original purpose.
Easily the best take posted here in a while. These are money games. And if you think this will be a minor sector of the economy, look at Wall Street - there is huge demand for these types of games, and that's when only people with $1+ million in net worth can really play. Now anyone can play, at the same time that traditional paths to wealth are stagnating or closing off completely.
> Now anyone can play, at the same time that traditional paths to wealth...
the association of wealth with "playing" is very much a metastasis of the old system masqeurading as some sort of innovation. this is not wealth creation, this is zero sum games robbing orphans and widows. be my guest "playing" and feeling smug about it, but lets not rewritte the meaning of words
actually that strongest hint that crypto as it stands is an ugly distraction is that there is no real wealth creation associated with it. as in: a real economic activity (that is kosher) that has been enabled by it while it was prevented by fiat currency systems
Sure, I see you saying there’s no “real value” here. I get where you’re coming from, there’s no clear output of value the way we think about it sometimes. For years, even owning tokens, I was torn by this dichotomy. There’s no real value being produced…yet they’re transacting millions of dollars, and now billions, and now trillions. It was hard for me to reconcile that. What gives? I would ask you to consider your definition of real value. If you also advocate for the shuttering of high frequency trading firms, investment banks, and quant desks the world over, then fine, I respect your take. But people want to speculate and play zero sum games. Is what Wall Street does “real” to you? I don’t mean giving out loans. I mean the rampant trillions of dollars worth of speculation that is the real bedrock of what they do. Why does something have to provide “real value” to exist? Close all the poker tables, lotteries, casinos, stock exchanges. What this whole saga has actually made me think is, what is “real value”? Why does this feel different to you? It took me some time to recognize, this is real for many people. That’s all the value that’s needed. Again, the article points that out pretty well I think. And finally, the usage of the phrase “widows and orphans” feels a bit extreme.
> If you also advocate for the shuttering of high frequency trading firms...
yes, that is what I mean by "metastasis of the old system" but there is much more nuance: the overfinancialization of the economy is a recent phenomenon and while it is not black-and-white to separate from actual underlying intermediation needs I seem to recall somebody claiming that 5% of the current financial sector is actually useful. The rest is parasitic wealth transfer, essentially exploiting governance failures. With crypto there is no real economy so it is 100% parasitic.
I don't have a problem with an entertainement oriented gambling industry provided it is informed, discretionary and it does not become an abused addiction. But ideally in a society that has real problems to solve (health, education, environmental degradation) you want to harness the speculative instincts of both finacial system end-users and intermediaries to really perform "God's work"
Alright, I get where you’re coming from. I am a believer in the vampire squid as a mascot for investment banks. And I do think that the brain drain from more positive endeavors into these ones simply because they pay spectacularly more is not necessarily positive. A nuanced counter to the argument, I appreciate it and will ponder.
How does this enable new people to play? The rich can still gamble the most and come in early to earn the biggest rewards.
The poor still take the highest risk. As the poor buy more into it , the rich get richer as well. Maybe the poor get richer but how much money can they lock away? What stopped them from investing that money in the stock market before crypto was around?
I fail to see how this creates a new economy. It's the same economy just wearing a new skin. The players are the same players. The winners are the same winners with the same luck of making it big or not to inspire others to get into the hype.
You’re right, many of the biggest winners are ironically probably the same players. Probably lots of white, well educated, male, geeks. But the barrier to entry is way lower. Consider rules against “pattern day trading”. Sometimes to make more than 2 equity trades in a day, you need $25,000. To invest in anything besides bare equities, bonds, options, you need $1M+. This is US specific, but it’s common. Average people are literally not allowed to trade “exotic derivatives”. Cryptocurrency opens up the option of putting $100, $500 or $1000 (some tokens sell for fractions of fractions of a penny) into a range of games, derivatives, and other assets that you can trade 24/7, 365. You can create one yourself and make it available to everyone in less than 30 minutes, for free. You need a web browser and some money or credit (not much). Pay your taxes, and you’re good to go. The other options available to people are boring and take decades to pay off on average even if you do it right. But they provide the same thing - no one really cares what stock they own. They are speculating, playing money games. I think there is huge pent up demand for money games because it’s so hard to get into “traditional” finance. Even if you get in, there’s very few games available to you on Wall Street.
And you’re right it is the same economy, just open to all, and with way more fun ideas like flash loans (impossible in traditional finance), no-loss lotteries, decentralized automated market maker exchanges, tokens you can stake for other tokens that represent the interest and the principle which can then be traded again, etc.
Should it be allowed? Up for debate. I’m strongly against any rule that says “you’re too stupid, this is for your own good”.
Parent is referring to the accredited investor definition in the US [0] specifically ($1M+ in assets as one test), but more broadly to similar financial gatekeeping.
I'm skeptical it's an overall social good to remove guard rails that prevent sophisticated sellers from fleecing unsophisticated buyers (say what you want about the SEC, but they do enforce some rules), but I agree the current scheme prevents all people from equally freely investing in all opportunities.
Reading thru comments made me realize how narrow minded people are. You have to have embrace some principles and understanding of the life, ethics and technology before blaming the crypto world.
1- Anything can be abused, just because something is abused that doesn't mean it should be banned. Want to stop child abuse? Don't ask people to stop having children, go after abusers!
2- The fact that governments can print money whenever they want is a scam and some clever people want to be free of it. Demanding this is not a crime!
3- If you don't like it, then don't use it! It is simple as that.
4- If you don' know what decentralized means, you may start from what democracy means. And after finishing that, you should understand that when 51% of the population wants to ban the remanining 49% of people to live, it's no longor called as democracy, but fascism.
5- In order to understand crypto, you have to understand how paper money works and essentially how the world works in the first place.
> you should understand that when 51% of the population wants to ban the remanining 49% of people to live
Kinda disingenuous to frame crypto as a life essential to 49% (??) of the population.
Also when most crypto users are aiming to avoid taxes while participating in the same society as the non-crypto majority. You need public infrastructure for things like the “internet” to function.
> And after finishing that, you should understand that when 51% of the population wants to ban the remanining 49% of people to live, it's no longor called as democracy, but fascism.
I believe this scenario fits the definition of "democracy".
> Democracy (Greek: δημοκρατία, dēmokratiā, from dēmos 'people' and kratos 'rule'[1]) is a form of government in which the people have the authority to deliberate and decide legislation ("direct democracy"), or to choose governing officials to do so ("representative democracy").
I belive that democracy comes after the birth rights. So the %51 cannot cross freedom and rights of the anyone (although it is not true for most of the govts that claim practicing democracy). if the the scenario I've presented is indeed the democracy, then I would be against it already.
I've been quietly following the development of cryptocurrencies and blockchain, although I only own a very small amount. Some thoughts I have:
1. If you study the history of technology, it becomes pretty clear that it often take decades or even centuries to see the full impact of an invention. Declaring the ultimate value of a technology barely a decade after it was invented is just ignorant. It's only been about 30 years since society became "networked" and it seems clear that some form of "Internet currency" is inevitable. If you had judged the impact of gunpowder, the printing press, or photography 10 years after their invention, you'd obviously be quite mistaken. We might not see the "killer app" (whew that's an old expression) for blockchain for years.
2. A lot of crypto-critics seem to focus on the people in the crypto world (scammers, NFT sellers, etc.) and the things that they supposedly do wrong, but then apply these criticisms to the technology itself. This is a flawed approach for obvious reasons, but I also understand it, as the crypto world is full of hero worship and hype machines. If you're interested in this tech, you have to learn how to ignore these things.
3. It's somewhat unfortunate that blockchain and crypto have become dominated by finance, as it drowns out discussion of other use cases. Hopefully, this will fade into the background more as the technology matures and is adopted by a larger percentage of the population.
Your first comment is a very common crypto talking point that isn't really borne in reality IMHO.
It takes decades to see the impact. It almost never takes a decade to see the use, and that's what people are deriding. Crypto doesn't really solve a problem that needed solving and it is often the wrong solution for many things it's used for. All at a very high cost.
Cryptocurrency hasn't really brought much in the way of new technology to the table.
"no use case" and "no new tech" are just vague opinions that are typical anti-crypto talking points. Whether you personally like the use cases or not, obviously they are there as it's been on fire for more than a decade now, and continuing to grow in popularity. And regarding tech, there is no doubt that the advent nakamoto consensus algorithm is an absolutely breakthrough technology that will be seen as a pivotal moment in the history of tech, for better or wrose.
You are suggesting that there is an alternative. What perchance might that be? Some authority figure or organization that decides whether something is useful?
The same can be applied to your comment of "Crypto doesn't really solve a problem that needed solving". That's not an axiom, thats a subjective opinion, saying its not useful because it's not useful. Plenty of people will, and have, argued otherwise.
I didn't say it's "useful because it's useful". It's "useful because it's used by many people". Unless you are implicitly agreeing with me that the definition of useful is that many people use something and find value in it.
If you study the history of technology, its ultimate impact is never manifest within a decade. It took decades for the Gutenberg Printing Press to spread around Europe and centuries for the consequences to see be seen (Protestant Reformation, newspapers, birth of the modern media, on and on.) This is the case for pretty much every other invention.
> Crypto doesn't really solve a problem that needed solving
Again, this may be because the problem hasn't arisen yet or isn't obvious yet. We have only just begun the era of networked communications.
I'm not sure why crypto is being compared with historic technologies in a world which lacked the communication and education to spread them, and not much-hyped Internet technologies like eCommerce video streaming or cloud computing which arguably had much greater technical barriers to spread than crypto but were ubiquitous within 10 years and exciting to people that didn't have a financial stake in them.
The second bit worth noting if you think crypto is more to follow the Gutenberg path, is that investing in him turned out to be a terrible decision: he made things which were tangibly useful from the start but lost money doing it...
Again, if you had made any declarations on the printing press a decade after it was invented, you'd have missed pretty much its entire impact.
There are clear use cases for blockchain which have been laid out ad infinitum by other people. There are also downsides. This makes it pretty much the same as any other technology, e.g. the combustion engine.
I'm not suggesting "an appropriate time" in which an invention can be deemed impactful, because that isn't how history works. This is the point I am trying to convey. If we look at other inventions and broadly speaking, "knowledge," it's quite common for the real impact to not be seen for quite a long time. E.g. the Renaissance and re-interest in / rediscovery of classical sources.
I don't know why this is so controversial, but I suspect it's because of #2 in my original comment.
Again, I didn't say that crypto will become extremely useful and important in the future, but simply that declaring it useless or unimportant now is foolish and unlike virtually every other technology.
I just find the general sentiment very hand wavey by conflating impact and use because it doesn't say anything. It's a wait and see indefinitely to prevent any real discussion on the merits today, while being a catch all to side step critique.
I'm not sure where or how I am "preventing any real discussion." If anything, the people constantly criticizing it are shutting down genuine analysis of its merits and downsides.
This is the case for pretty much every other invention.
It is, but that was because far fewer people were well educated so they didn't really see the need, and innovations tended to be physical objects that can only travel as far and as fast as the transport of the time will take them. Today most people in the developed world are very well educated (relative to the 1600s) and things based on computers travel at pretty much the speed of light. Things, particularly in tech, obviously move faster now.
The problem Hawala solves is turning currency at one end into spendable cash (probably denominated in a different currency) at the other end
Crypto doesn't solve this (except in very limited circumstances where recipients can buy everything they need with crypto). It's just a layer in the middle, and as it's a layer which requires additional exchanges, it's not more efficient except where it provides a loophole in foreign exchange regulations or where parties with a vested interest in crypto have chosen to subsidise the exchange costs.
The problem Hawala solves is e.g. sending money from USA to Iran (substitute any other two countries where legal barriers are in place). Which, yes, is a loophole in foreign exchange regulations. Whether you believe that it's a valid use case depends on whether you believe those foreign exchange regulations are justifiable. It can be argued both ways, but don't assume that everybody agrees with you on this.
Hawala is just a system for eventually consistent settlement between money lenders; sometimes the transactions are entirely legal, sometimes possible legally via more expensive regulated entities, sometimes entirely illegal. Legal or illegal, crypto is still just a possible settlement layer in between parties that receive and dish out spendable cash, requiring the cash dealer to trust the stability of the token rather than his relationship with the counterparty
The tech is interesting, but the full impact of the invention isn't yet discovered. Focussing on the scamminess of the loudest players in the current tech environment is unfair to the tech. But you can't critizise the current state and environment of said tech, because it's full potential hasn't been discovered yet.
Where did I say you couldn't criticize it? I just said that making final declarations is foolish, and that criticisms of the technology are often just criticisms of people using it.
I've just read the intro, but imo the PRIMARY reason for the hype is simply money. People got rich off of crypto. Rich people that want to get richer simply pay people to hype up crypto (and stonks). And like the 2016 elections, this hype ended up having a snowball effect with people who do not get paid for it hopping onto the hype train to generate more hype.
I'm not saying crypto is some fad or whatever, I'm just not convinced there's anyone into it that doesn't just want to get rich.
The "True cloud computing" angle is interesting if a little dubious in its over promising and under specified downsides. No closed source, after all. No private execution etc. Why not just open source the code and have those interested parties run the source directly? What does the blockchain add here?
That said, I think there's probably a good idea in there though. AWS, GCP or a niche player could essentially add a donation API to their serverless platform. This would create a similar promise of a service that can be directly financially maintained by users with some added benefits like support for closed source, and a protected execution environment.
Crypto needs to solve a problem. I think cryptocurrencies should focus on making a cheap currency that people can actually use.
requirements:
- low transaction costs
- low volatility
- many places where you can pay with it
- secure
- privacy
- no tax problems
- fast transactions
- handle fraud
- scalable
If a crypto currency can solve above points by cutting out the middle man and making transactions virtually free instead of paying 1.29% + 0.25c per transaction that would be huge.
But that is a big if. Bitcoin fails at almost all of the above points. The only coin that comes close is Nano (I've got no investment in it). They solve fast, secure, scalable and cheap transactions, which I think are the main problems right now. Read their whitepaper, it is interesting. Whether they can solve the other problems remains to be seen.
The only advantage to cryptocurrency is the concept of decentralized trust. A blockchain only has value in situations where no central authority can be trusted. If Nano solved every problem on your list the result would be what we already have, but with a distributed network of coin owners in control of it instead of credit card companies. That just doesn't seem like a very compelling benefit [0]
As the article says, I'm sure there are enthusiasts who are very interested in the technical problem of creating a global payment network. Unless they can do it for roughly half the cost of what we have now, it doesn't have a lot of practical value.
[0] I am aware that there are people who are locked out of financial systems because of corrupt governments, etc. But if 80%+ of the population can use the existing systems, they aren't going to go through the trouble of switching to a new currency for the sake of the 20% that can't. And even if they did, it wouldn't be long before the same corrupt governments found a way to lock certain people out of the new system
> Unless they can do it for roughly half the cost of what we have now, it doesn't have a lot of practical value. And there's nothing stopping Visa from implementing something similar.
I agree with this. And that is probably what will happen, but that wouldn't be a bad outcome. See it as one way to break a chain of middle man's.
Another (more likely) way to push down prices is with regulation. But to do this on a global scale is also very difficult.
Card payments are expensive for multiple reasons, the biggest one is that it involves multiple trusted peers that will refund your money if anything goes wrong.
And to be fair, EU regulations have very successfully brought these fees to about half of the typical market-driven price we see in other parts of the world. I'm not saying they cannot be decreased even further, and the EPI was created specifically for that, but you cannot deny the situation in Europe isn't too bad.
Providing one-way, immutable money transfers is inherently cheap. Even SEPA transfers, which are reversible in some cases, are incredibly cheap. As you listed yourself, if you need to handle fraud with low transaction costs, that instantly discards permissionless blockchains; you're essentially going back to a centralized, federated network of trusted peers.
I Agree that the situation in Europe is not too bad. Still I can see a situation where some cryptocurrency pushes transaction prices down for regular payments (maybe without handling fraud, because it is a smaller problem with smaller transactions?).
But none of the cryptocurrencies are there yet, and maybe it will never happen.
If you need marginally free payments, the mobile payment systems that exist in several countries are already doing a pretty good job. We could imagine some EU regulation push to mandate inter-operability [1] and no/low cost to small businesses.
I don't think big businesses can just disregard the cost of fraud and other payment incidents. On the other hand, subsidizing small businesses makes sense: for good or bad, there's an increasingly anti-cash movement in some European countries.
Yes and of course regular online payments such as visa or ideal (cheap payments in the Netherlands) also solve that. Global payments and handling taxes could still be cheaper and easier though. I see crypto having a small chance of succeeding in doing this. This small chance of succeeding is a reason for me not to invest in it right now, but I don't think it is impossible.
Interesting blog! Bank transfers using the same bank are free here. Even the most used payment method used here in the Netherlands is pretty cheap (Ideal). But the question is if this can be scaled to a global scale. A lot of parties have to come to an agreement for that to happen.
It can also come in the form of something like paypal. Paypal could reduce their rates to almost zero. If everybody then uses paypal we achieved our goal. But for that to happen paypal needs to become a monopoly, and once it is it has no incentive for low prices.
Note: I meant privacy as in private for consumers. With bitcoin everybody can see all transactions. I (and most people) don't really care that the government can see your transactions for tax and anti-fraud purposes.
The author states without very specific evidence that "proof of stake" demonstrably works, and thus quickly dismisses the energy costs of cryptocurrency. I'd personally be very interested to hear more about that, since there is a lot of hand waving around proof of stake. The cynic in me says that it would already be broadly used, if there weren't fundamental problems with it. It does, however, seem like a handy way to support the idea, in the long term, wasting real-world resources isn't an essential element of crypto, which is of course very attractive to people who stand to make short term gains from crypto.
many of todays popular chains that are not BTC and ETH are currently using PoS, especially those interacting with web dApps and smart contracts. See Tezos for a real world example that “currently works.” ETH (the devs and community) is also heavily committed to PoS—most of the value and rewards now locked in the $33B staking contract cannot even be withdrawn before a successful merge of PoS occurs (likely some time in the next several months, but let’s wait and see).
The idea that crypto is inherently wasteful is inaccurate. PoW is extremely energy intensive, especially without L2s, but it need not be the only consensus mechanism for the future of these protocols.
I'm always surprised by the negativity towards crypto in tech focused forums. I understand the costs; disruptive technologies always come with enormous costs. The value proposition is much larger still.
* Popular payment processors like visa and mastercard have become moral arbiters. Shutting down one's ability to donate to Wikileaks was a huge wake up call to the world. They've only ramped up efforts since then, blocking the purchase of marijuana, pornography, and donations to many organisations. It is clear that the centralisation of power in this space is not in the best interests of us.
* Banking infrastructure is stuck in the 90s. It should never take a business day to settle payments. It should never take several business days to settle cross-boarder money transfers. It should never cost [$x|3%|whatever exorbitant exchange rate the bank is offering]. Payments should never be tracked by government agencies as a matter of course. Payments and transfers should be instant, virtually free, and private.
* Confidence is low in government management of currency. Modern Monetary Theory appears to be winding its way into policy decisions which is basically the financial equivalent of formulating a nation-wide strategy based on moon crystals and horoscopes. Predictably, inflation is creeping up, and the desire for a stable store of wealth is increasing; or at least a hedge against inflation which isn't already inflated stocks.
NONE of these drivers above can be completely satisfied with crypto yet, but I am amazed with the progress it has made to date, and I have no doubt these will all be solved in time - far ahead of the conventional banking industry.
At least on the monetary side I liked Nassim Taleb‘s paper [1]. I don’t agree with everything he writes but for crypto-currencies he has some points that ring true.
For crypto in general I see definitely the supply chain application, but still think it is in the hype part of the cycle.
1.5 decades into the tech, blockchain hasn't really provided any utility aside from easing drug transactions and money laundering.
I agree with the author that some interesting tech issues were solved but apparently this still doesn't lead to anything legitimate and more useful than the non-crypto version of whatever problem you're trying to solve.
Would somebody maybe explain to me what an NFT is? I have good understanding of Bitcoin and Blockchain technology (not deep but sound). But I fail to see how an NFT could be applied to a video clip in a meaningful way. To me it sounds like an NFT is a signature signed with a key of the rightful owner for a digital object like a video clip and that signature is then integrated into a blockchain and associated there with that rightful owner in a verifiable way via that rightful owners public key. Is that it? I mean, I assume no b/c that whole process is meaningless as you may just change one bit in that video file and its no longer associated with that rightful owner - so I suppose I'm missing something here.
>Every time I dig into crypto I find things that seem stupid, or useless, or actively bad. But so many people are into it!
During my time in tech I've only knew two people who held crypto. However, I've know a lot of people(myself included) who got into crypto, got dissilusioned by the promises, and after seeing that nothing they promissed actually arrived left.
5 Years ago I've heard how crypto is going to be a killer usecase for e-commerse, banking, and even cloud computing but no actual work was ever done to acomplish these goals
NFTs in the current form might be pretty useless as such (just a proof you "first purchased" a jpeg). But I think in the gaming space this will become huge and actually makes sense - use elements (items, characters, stats,...) and their history in different and independent games if the developer wants to integrate them. No lock-in and portable, not tied to game-specific accounts.
It helps to think about this more clearly if you forget the NFT bit and think about just doing this with standard tech. What stops developers today from implementing publicly documented formats for in-game elements? What stops other developers from writing code to import these elements from one game to another? All an NFT adds is a verifiable signature and a pubic database. The signature bit seems completely irrelevant. Why would one game developer care if did or did not pay a different developer? If it's the same developer, they already have some way to track that you bought the items. The public database is more useful here, but all this data is usually sitting on your local disk anyways. Devs could make use of it today if they were so inclined.
NFTs are always brought up for game items but I don't understand the non-fungible part of it. A game item or cosmetic is the example par-excellence for a thing that anyone can have a copy of - I don't get why there has to be artificial scarcity in that at all.
Perhaps you're not playing modern games where skins and cosmetics already go for a lot of money. Games like Call of Duty, Apex Legends etc.. Cosmetics in these games have a rarity rating and single items can go for hundreds of dollars. They are already artificially scarce, however the user needs to trust the developer that this artificial scarcity will remain in the future post purchase. And that the items will be available (there has been recent examples of developers deleting user accounts with significant $ items on the account).
NFTS provide no reason to trust the developer about the artificial scarcity; there's absolutely nothing technical stopping them making, say, in-game clothing originally marketed as an expensive NFT the default player skin, or not allowing accounts with linked NFTs to log in. Sure, the NFT holder still has their unique alphanumeric string, but from a gameplay perspective nobody cares.
And from a developer perspective, if game engines were written in a way which made the holders of a certain token impossible to exclude from the game or possess items whose properties couldn't be adjusted for gameplay balance or aesthetics, that would be a bug, not a feature.
Being technically a verifiable signature, this brings new incentives for users (emotions, possibly valuable) and devs (monetary, user base) which might change the game. But I agree, until we see more advanced intermediary-platforms only the simplest forms like unique avatars or simple rpg-items will be possible to integrate.
NFT technology doesn't add anything for games that isn't already available using guess what, a database! Using a MySQL or whatever database allows single use only items, one-off items that only player can have, multi-use items, any possible combination of items is possible using simple SQL. It's not rocket science, the only difference (which doesn't really add any utility to games) is the idea of this database being public.
Think about it, you could implement items in a game using NFT tech OR a database: would the players notice anything functionally different in the game? If not: why the big deal about NFTs in gaming?
> the only difference (which doesn't really add any utility to games) is the idea of this database being public.
On the contrary, this does add utility. By the database being public I:
A) Have reasonable guarantees of ownership of my items
B) Can use my high value items across multiple experiences
Well no they don't because the NFT only has meaning in the game world which is still owned and operated by the game company. NFTs in their current incarnation merely move the receipt from a centralized private DB to a decentralized public one and make the entire thing much more expensive.
So someone’s selling in-game items for games with no game with the expectation that games will just magically support them despite the cost to the developers to do so?
FWIW I can definitely see an asset store like model if that’s what you mean. Where games that share an engine can share developed assets. But you need to look at how that works out in practice in terms of how much integration cost there is, gamers tolerance for asset reuse and actually how broadly applicable it is between different games. And even then extant asset stores already work perfectly well so it’s not clear what putting it on the blockchain and presumably some decentralised storage actually provides.
You have a credibly neutral place to store the items, publicly accessible to any other developer to leverage without having to maintain you're own endpoints and documentation. Baked in royalties. Sounds... much easier than the convoluted solution you propose with standard tech.
Except NFTs don't store the item, they only store a creator-defined URL hypothetically pointing to the item or a hash of it's contents. Also nothing guarantees the royalties if you can just download the item. Nothing in NFTs prevents right-click-save-as.
Steam already has an inventory service, trusted by millions of players to store billions of items. There is already machinery for users to authorise applications to see their inventory. If a game developer wanted to allow use of another game's inventory in their own game, they could already do this.
What incentive does the developer of the second game have to support a portable account? We've seen how it played out with social networks. And if both game 1 and game 2 are by the same developer, then all that's needed for portability is a common account management service owned by the said developer.
Possibly the big fan-base ready to play a game where there can log in easily and use some of their hard earned collector items.
True, with social networks it played out differently, but social networks is a rare category where the almost only thing you care is having/finding all people you know, all other features are kind of irrelevant. Joining another social networks adds close to nothing (as long as you can chat with those people) and only add friction. A bit like money… the more uses it, the better, it doesn’t need to do many things, the very only thing you care, is all people you know using the same.
Many other things work similarly, but no way in that extent. Mostly you care a lot more about additional features. For example Airbnb works better the more people use it, but you also care about important features, and you would switch to another similar service if it was a lot better and has a reasonable amount of choice/venues, as you don’t need everyone around you using it (which is the case for money and for the main social network you use… at least for the masses who want the fastest solution on most days)
The NFTs might be independent of the game, maybe just exist as data structure on a neutral NFT smart contract with an existing network effect/reputation.
There might be many, this is a new field. A starter would be an existing userbase holding NFTs that enter the game. Different forms of monetarization (entering with NFTs, storing progress on the NFTs, marketplaces,...) might be a thing.
The problem with your first suggestion is that you do an awful lot of work to map another games NFTs to your own items but presumably get none of the money from them. You also have an immediate balancing problem. And the better way is to just make a game that those players want to play, which is how game populations move around now anyway. The only way I can see supporting external NFTs as worthwhile for a game developer is if they’re already table stakes for taking part.
Or say you support BAYC, all that work to address 10k potential users?
Valid points, time will tell. I can image there will be neutral intermediate services (NFT-platforms) that provide assets and smart contracts/APIs for integration for small fees.
Yes all the time but this is specifically about game development as a business by my reading so I’m interested in why this would be appealing in that context.
Your proposal doesn't really make sense from a technical or financial perspective.
Technically, most games aren't interchangeable with assets. There's a wide array of asset formats and bespoke optimizations. It's very hard to take something from one game to another unless they share an engine.
The alternative is the second developer would need to make a corresponding asset for every other one. Though they won't get financially rewarded for it and there's no guarantee that the users will buy the future assets from them instead of elsewhere.
I see this suggestion come up a lot in crypto circles and it's almost certainly always from people who have no experience with game or other real time development, trivializing the cost of asset creation.
this runs into the boundary issue, though. getting your hat asset you bought in HatWars into your Garden Town save file isn’t trivial. the two games’ developers need to use the same assets or one needs to remake the asset. it’s cool for the player but work and money for the developers that i’m not sure provides them much value
Right but then the developer has to decide what the stats are and make a graphical representation for every NFT. In fairness that could just be some free currency for owning an NFT but it’s not exactly compelling. The compelling version makes the item worthwhile but that’s a lot of work the holder of the NFT essentially expects for free.
The metaverse version of this is NFTs that drag around their own code, art and so on. That can run in a sandboxed way and there are protocols for game entity communication and so on. But this level of interoperability is a pipe dream outside of games like Second Life.
I agree, but our problem is with proof of work, not crypto. I don't buy/use bitcoin any more because of this. Ethereum is moving (the sooner the better), and the only other PoW crypto I have a bit of is innovating PoW and (hopefully) becomes more environmentally friendly as a result. To be honest, I'm still unclear on if this is even possible, and if energy usage becomes significant relative to what it does, I would drop it as well.
The transition is not straightforward, and with what's at stake they absolutely need to take their time to get it right; they only get one chance.
I don't really use Ethereum, but I commend the devs for recognizing the problem years ago (before I was even aware of it) and taking steps to remedy the situation.
In the short-term, yes, it is incredibly wasteful (though recent changes have disincentivized mining somewhat, even with a bit of protest) and there are many other cryptocurrencies which are already proof of stake available. This year, hopefully, Ethereum will finally move to PoS.
They need a working theory for how this PoS will work first. Wishful thinking and handwaving does not equal theory. PoW is the only tech that has solved the problem so far. Many things were tried before bitcoin with no results
But you're missing an important point: PoW is the foundational building block of the biggest cryptocurrencie promise: decentralization and “permissionlessness”. With “Proof of Stakes”, the creator of the chain start with all power and then they'll slowly distribute it to a group of investors in exchange of something (usually money, but it could be other tokens, advertising, or anything). The investors can in turn sell some of all of their power on the market to make a profit, or keep it a receive dividends (newly minted tokens). In the end, you have a small group of people, closely related to the chain developer/creator with aligned interest holding all the power on the chain.
Hybrid systems like Ethereum, bootstrapping with PoW and then switching to a PoS system afterwards seemingly solve this problem, but such a switch implies that the social structure around the blockchain is centralized: Ethereum is technologically decentralized, but politically very centralized (you can also see in their way of handling the DAO “hack”, violating the Ethereum protocol and rolling back the blockchain) and that's why the developers can just go “screw the miners and their hardware, we're moving to PoS now”.
You couldn't do this kind of switch for bitcoin, because it's really decentralized, with stakeholders having deeply unaligned interests.
Bitcoin and PoW is our only shot at decentralized monetary system. PoS has many problems, and it can't provide the same level of confidence in the system as PoW. There's no way to reach objective consensus in a PoS system.[0] From this angle, I see PoS as an adversarial attack against decentralization. Failing to understand this is dangerous. Bitcoin mining uses increasingly clean or otherwise wasted energy, which solves the actual problem, which is unclean energy production.
Ethereum has many problems, which prevent it ever competing with bitcoin as money. It can do NFTs and games, sure. However, there are many competitors who do these better, like BSC and Solana, and other more centralized blockchains. So, in the end there is really no place for Ethereum to be competitive in.
Bitcoin adds a whole new country to an international power economy that already cannot provide enough green power. In some places (notably the US) fossil power is being brought back online to service it.
These assertions that it is clean are not based on anything more than wishful thinking.
Greenwashing and people defending their bags against what they see as attacks. I suspect a number of people are aware that it's bullshit but handwave anyway, and then a lot of people buy the bullshit because they're emotionally invested.
I like(d) everything else about bitcoin even though it's dated technology now, but proof of work is unjustifiable, the incentives create an extremely negative externality that aren't offset by its potential as borderless, uncensorable money. Especially when other blockchains avoid this issue entirely.
Yeah, it may be right to dismiss the environmental criticism as the weakest one, but I don't think the article sufficiently makes the case for that dismissal.
In a system centred around the premise that money is the only thing that motivates, for thing A to beat thing B, there has to be more money to be made from doing thing A. I don't think the case has been made here (though perhaps it has elsewhere) that PoS can beat PoW on these grounds -- are there sufficient incentives to make that shift?
The price of cryptocurrencies are strongly correlated.
I have the feeling that if you inject money in any cryptocurrency, you inject money in the "cypto market" which eventually mean that the price of PoW money also increase. And the energy usage follow the price of the PoW money.
The "crypto market" is also very correlated to the US stock market, and risk assets in general.
The best way to push the energy usage of PoW money down is to get back fiat money under control and stop incentivizing reckless gambling, like the FED finally seems to be doing.
This may be true short term, but it doesn't hold long term. When you support a competitor you improve the narrative for its relative strength.
Eventually I think Bitcoin will lose out to PoS cryptocurrencies (probably Ethereum), and many people such as myself are specifically rallying behind this narrative, which is why we see bitcoin dominance at near historic lows, and I suspect it's unlikely to recover to >70% and perhaps not even >60%.
It’s a good thing. Secure money is pretty much one of the most important thing we have invented in this age. The energy today is nothing to the energy can harness tomorrow. The planet burners ain’t the energy buyers // it’s the energy sellers. Fix production to be green and grow grow grow.
Wow, glad to know you have the global carbon emissions problem in hand!
Back in the real world, until we have actually got that problem in hand, PoW cryptocurrencies are a huge extra amount of consumption, where we already have more consumption than green energy producers can keep up with. And now crypto miners are bringing decommissioned fossil fuel plants back on line in some places, purely to service PoW.
I’m not a fan of the fossil power plants coming online, but this is one small example. Many fossil fuel plants actually increased production during the pandemic too. Nuclear plants were taken offline too. But this is not cryptocurrency to blame. The fundamental disconnect here is that you want to tell people how they can and can’t use energy. That’s authoritarian nonsense and I reject your wishes. I am saying use it how you wish, but optimize it to be green. Ideally, the use will drive it to be more green as that is the cheapest and more sustainable way to generate power in the long run. Do you see the difference in position?
Disagree. Waste is subjective, and ultimately not for you to decide. If the miners do not find it wasteful, who are you, the non-economic participant to say it is?
Green and crypto are quite different things, supply and demand — green is about production, the only important part. How we generate energy in a clean and sustainable way.
Crypto is about consumption, and you have no business telling others how they should spend energy. You can however incentivize the consumers to do it cleanly. You can be green and also pro-energy usage.
Being green doesn’t mean being a bully and telling people what they can and can’t do.
Why do you consider the energy usage from GPUs mining cryptocurrency worse than energy usage from GPUs used for playing video games or rendering CGI graphics? Or porn? TV commercials?
Why is it considered OK to generate massive amounts of pollution and expend tremendous energy flying beef from Japan to New York for people's consumption, when there are perfectly edible cuts of beef which require at most a short train ride?
What if the crypto is mined in part or full by renewable energy, which many crypto miners do (it's economically to their advantage in certain areas/climates)?
If the goal is saving the planet, there are plenty of activities like flying internationally for pleasure, or eating meat that do far more environmental damage than cryptocurrency mining.
We’ll, firstly the largest contributor, BTC, doesn’t use GPUs.
Secondly, many of us don’t think that beef example is really “OK” either.
Third, the idea that Bitcoin or crypto in general runs predominantly on green power is bullshit.
Fourth, BTC now consumes more power and has more associated carbon output than many mid sized countries, it is not some piddling little thing that we can safely ignore.
Fifth, and last - My point that you replied to was about the article writing the problem off as personal choice. While we only have one planet it is not just personal choice.
Sounds like we should tackle the biggest problems first, of which greenhouse gas emissions from raising and transporting meat is the largest. Much larger than bitcoin. Only those with a medical reason requiring them to eat meat should, and the rest should eat local plant-based food. After all except for people who require meat in their diet to survive (extremely rare) it's a personal choice.
> Why do you consider the energy usage from GPUs mining cryptocurrency worse than energy usage from GPUs used for playing video games or rendering CGI graphics? Or porn? TV commercials?
Because gamers, graphics designers, porn watchers and TVs don't use piles of thousands GPUs kept at 100% load 24/7. The spike in power demand and consumption after cryptocurrencies became popular speaks for itself.
> Why is it considered OK to generate massive amounts of pollution and expend tremendous energy flying beef from Japan to New York for people's consumption, when there are perfectly edible cuts of beef which require at most a short train ride?
Totally unrelated issue that the absence of cryptocurrencies didn't create and that cryptocurrencies can't solve.
> What if the crypto is mined in part or full by renewable energy, which many crypto miners do (it's economically to their advantage in certain areas/climates)?
Because they still pump heat in the atmosphere. Also, most places where renewables such as solar can be convenient, aren't the best places to generate more heat, and they would need even more energy to cool down the electronics.
> If the goal is saving the planet, there are plenty of activities like flying internationally for pleasure, or eating meat that do far more environmental damage than cryptocurrency mining.
>Because gamers, graphics designers, porn watchers and TVs don't use piles of thousands GPUs kept at 100% load 24/7. The spike in power demand and consumption after cryptocurrencies became popular speaks for itself.
Many blockchains already use or are transitioning to proof of stake cryptocurrencies. Not to mention gamers, porn watchers, and graphic designers in aggregate utilize far more energy than cryptocurrency and also do not use green sources. It seems you just have a personal dislike of crypto and are letting it preclude you from objectivity.
Actually I would be very interested in it, but I don't see any evidence that it is becoming environment friendly. Energy demand (and therefore cost) increases every day, so are GPU prices. The day I'll see them going back to normal I may change idea about the technology, although I wouldn't touch it as a currency with a 10 meters pole: 3 days of protests for soaring energy prices in Kazakhstan made Bitcoin drop from over $47K down to less than $43K.
So then is the problem "crypto currency mining" or "large bitcoin mining farms"? If that's the case it shouldn't be a problem if an individual wants to mine ethereum in their home.
Regardless there are 1.5+ billion gamers which does make it comparable. Video streaming in aggregate consumes an incredible amount of energy, as does non-essential plane travel. But people seem to not mind that. It's fine if people want to enjoy their movies or fly around the world for pleasure but it's a bit of cognitive dissonance.
The current fiat system (and the Governments that control it) are completely enslaved to the welfare (pension) and healthcare demands of baby boomers.
These demands will only multiply as the populations age, until eventually consuming the host. You can already see this in countries like Italy, which are now in demographic death spirals.
If we can craft a new financial system without spending 15%+ of our GDP and rising on Pensions[1], even with some inefficiency its still worth it.
> The current fiat system (and the Governments that control it) are completely enslaved to the welfare (pension) and healthcare demands of baby boomers.
If we can craft a new financial system without spending 15%+ of our GDP and rising on Pensions, even with some inefficiency its still worth it.
Avoiding sales taxes, platform commissions, and income taxes is a major advantage.
So you think the problem solved by crypto is no longer paying taxes or contributing any part of our incomes to the collective good? I guess you think that child mortality isn't something we should worry about? Or looking after the weak and sick, in general. Why pay for schools, or sanitation, or public transport, at all? And the rules that govern human behavior - we can just rid ourselves of the police in this libertarian-anarcho system where the rich do as they please, and the rest predate upon each other.
It only solves one problem, proof of work (or now I guess proof of stake).
It doesn't solve the political issue(s), for this reason most everything going on is harmful nonsense...
It could have been a part of a larger puzzle, but it's not and the people (seriously) involved with it are mostly scumbags and scammers, by the sound of it.
The legit businesses were a start but it never became a true payment contender, meanwhile those in power ran interference with competing payment systems (think apple or google pay, absolute nonsense I absolutely do not want) or propoganda "yeah this is illegal and fake and all worth nothing", which just hurt adoption.
Sounds like there is hope with Ethereum for it to actually be useful but Bitcoin is just a speculation heatsink at present. "In the future" it might work but there is a likely chance it will be gone in the future...
>taxes now become a voluntary contribution to whatever charity
yes
>And you don't see any scale issues with that?
No. I see it vastly superior as private competition ensures people can donate to charities they find most effective, rather than monopolized government with little incentive for efficiency.
This means people will mostly give their money to the loudest charities that spend the most on marketing, not on their actual effectiveness. Boring yet important projects will get almost nothing with this model. Don't make the economist mistake of assuming that people are perfectly rational actors.
The idea that privately-managed charity could adequately address even one of the numerous structural-level problems in our society is tremendously naive.
Well if mentalpiracy says achieving a huge goal privately is naive, it must be so.
But I think that discounts the massive achievements and structural changes around us that private enterprise has contributed to. It seems naive to believe humans can't solve large problems, or at least improve their lot, without men with guns forcing them to pay up for it.
I didn't say "income tax" or "federal tax". I asked for examples of economies that don't collect taxes but have been effective. Survival is one important aspect of "being effective". So, an example that has survived to the present day would be more relevant.
The reason why charities underfund public goods is because of the well-known free-rider problem. It's the same reason why cryptocurrencies need to collect transaction fees and reward miners and cannot rely on charitable miners. https://en.wikipedia.org/wiki/Free-rider_problem
The OP I responded to said income and sales tax. You're just copping out by saying that I've fulfilled the criteria laid out was somehow wrong. But even without taxes, a charity can exist.
I guess you think all dead men were failures, if survival to present day is your criteria.
The "frees-rider" problem applies to government programs, too.
But you're right, we can't just depend on charity. We need for profit enterprise too.
We tried private ambulances and that is an ongoing disaster, what you are describing is a personal army or guard, look at history to see the plethora of problems with those...
Not that Police are perfect, far from it, but I'd rather a force I can sue in court and protects me from my enemies even if I'm broke than a private militia.
You could have Police-As-Contractors I guess but unless that comes with some legal innovations that just adds another layer of bureacracy.
50% of healthcare costs are incurred in the final 5 years of life, and in much of the world private healthcare is accepted and efficient.
I'd rather euthanize myself at age 80 and pay much lower taxes throughout my adult life than die at age 85 in a gold-plated Government hospital.
Sanitation and public transport can be directly charged to end-users based on usage. Education can be funded with land value taxes.
Federal Government bureaucracy just exists to support itself. Healthcare agencies have been turned against the population to promote lockdowns and big pharma, and intelligence agencies spy against their own citizens.
> in much of the world private healthcare is accepted and efficient.
It is accepted in many parts of the world, unfortunately, but in what part of the world is it "efficient"? Can you give an example? Is "basic medicine costing $500 (see insulin) to the few that can afford it and the rest dying because they can't access it" what you define as efficient?
> I'd rather euthanize myself at age 80 and pay much lower taxes throughout my adult life than die at age 85 in a gold-plated Government hospital.
I'd rather not. I doubt many people would be okay with that. I like living and being healthy. You can still feel free to do that in either situation.
> Sanitation and public transport can be directly charged to end-users based on usage.
So the rich should get clean streets and running water while the poor walk on their own shit? Should we charge per poop? As for public transportation, you think it would work if I didn't pay taxes for it and it cost $80 for someone to take it because they can't afford the $20 Uber ride?
> Federal Government bureaucracy just exists to support itself.
This is objectively not true. Many techies (not just crypto people) tend to forget why societal structures were invented in the first place. No one's saying inefficiencies don't exist but disregarding all of society seems to be specifically tailored to get a rise out of people.
I don't know how I can explain to you that we all need to care about each other, otherwise we'll all go extinct.
> I'd rather not. I doubt many people would be okay with that. I like living and being healthy. You can still feel free to do that in either situation.
Part of GP’s point is that you’re not healthy & free for those extra five years when the costs truly spike.
>I'd rather euthanize myself at age 80 and pay much lower taxes throughout my adult life than die at age 85 in a gold-plated Government hospital.
Only it wouldn't probbably work that way, more probably it would be something more like:
Dear Citizen, this is the Government.
Our actuaries determined that you can only live up to 70 years with the tax you paid, so you are kindly requested to present yourself on the morning of the day before your 70th birthday at 9:00 o'clock at [redacted] so that we can proceed to your termination.
We assure you that the procedure will be quick and painless.
Sure, but the claim is that crypto magically allows you to avoid all taxes. It doesn't. How much the government chooses to tax you is entirely unrelated.
This article comes off very biased. There are a number of major problems blockchain solves - most importantly, ownership and control of things. Saying “crypto is for people who love money” is silly. Cryptocurrency is for people who wish to control their assets.
Spending time writing a hit piece on these technologies is silly and I wonder what the actual motive is.
You mean like when ethereum split to reverse a transaction some of the devs didn't agree with? Or how huge Bitcoin mining operations basically decide what chain to work on, with no accountability to anyone who "owns" Bitcoin? Name any other shitcoin and I'll tell you why it's a scam.
Blockchain and associated tech solve no real business problems that aren't better solved by other means. Einstein was offered the role of president of Israel but declined because he knew he was not qualified to lead a country. The devs working on crypto may be technical geniuses, Satoshi included, but that has no bearing on whether they have any understanding of economics.
> most importantly, ownership and control of things.
I feel ownership and control of my house and my stuff. To some extend at least. Can the government theoretically seize my assets? Yes. Can the goverment seize my Bitcoins? Well, depends on whether or not I want to leave my social circle.
The sense of ownership of Bitcoin is based on your willingness to leave everything behind. And your ability to cross borders into countries that won't send you back.
I think, ultimately, crypto only works if your outlook on the world is very pessimistic and you have zero trust in existing structures of society.
Easy front-page on HN, easy shares on twitter, easy to regurgitate the same complaints for blog SEO. I can't think of other reasons - they all same the same thing.
I would go out on a limb and say that if this is web3, I don’t want to have anything to do with it. This is an outrageous waste of resources and energy with awful environmental impact, driven primarily by pure greed and wishful thinking.
Looking at mindset of the VC’s, which are giving this “things” validation, scares the living sh*t out of me.
More and more, implementation of modern ‘tech’ is pushing me towards abandoning the ship and moving into the woods somewhere.
Don’t let me start with NFT’s. It is horrible. The impact of this thing over a lot of my friends is getting ridiculous. I somehow understand “the money” aspect (ponzi scheme, money laundering), but recently I got “the cult” vibes from some of them and closed the door permanently.
So hard “no” from me. I already have a “Metaverse” in which I feel comfortable, it is called reality.
And Web 2.0 is enough for my needs.:)