I am someone from a developing country who regularly used crypto either to get paid, or to pay for things online.
Does crypto have issues? yes. Is it good enough that in occasion it was my preferred payment method? yes.
Crypto community and companies are maybe bad, but if you zoom out into IT overall there is a fair share of greed and misuse. The internet is full of scams, gurus selling courses with false claims, spam emails that drain your grandpa's account, affiliate programs with 70% margin to sell fake products from questionable weight loss ebooks with health-harming diets to fragrances claiming to be perfumes that attract females supported by endless fake video testimonies, online communities encouraging hate, demoralization, and lack of belief in society.
Seem to me that those articles are nothing but status quo bias, does crypto has bad aspects? yes, is it worse than say internet? I don't know.
In both of your examples, crypto provides an advancement in live valuation that the other industries cannot.
Despite you making them rhetorical demonizations of crypto, the answers are actually “maybe? we don't know, what does Forrester and other market research firms say, do they have that data?”
(Other times when this is pointed out, people typically reveal that they view everything else as more useful than crypto - which naturally would then include gurus and affiliate programs - so their market size and country size emissions doesn't actually matter when this point is more accurately challenged. Just wondering if you had a more articulate argument or a more predictable one)
An open and permission-less global monetary network that does not exclude anyone at all, is about as valuable to you as malformed viagra emails?
4 billion people today live under less than ideal circumstances.
Spending a fraction of a percent of global electricity is absolutely worth it. It provides those 4 billion people with access to the financial services that they would otherwise never get.
Nigeria alone has 34+ million users. Just one country.
1. Nigeria has 30 MILLION people that use it. Most of the usage is for cross-border transactions.
2. transaction rate limitations only apply to the settlement layer. retail does not need to use it, only very large transactions that need high settlement guarantees.
Lightning network has essentially unlimited tps, currently has close to 1 million (!!) live nodes, and even sub-penny transactions are perfectly viable because fees are even tinier or can be even nil.
If you truly do care about lives of 4 billion people on the planet, you should at least internalize these basic facts, as you are simply repeating misinformation: tps are low, no traction. it is simply not true.
1) You claimed it provided services for 4 billion people. 30 million != 4 billion.
2) Lightning requires BTC transactions to establish channels and for funding, no? While the TPS when funds are on lightning may be impressive, in order for 4 billion people to set up and fund lightning channels, at 7 TPS the bitcoin chain is going to take ~18 years to process that.
3) Are these 30 million people in Nigeria using BTC on the main chain? Are they using lightning? Or are they using one or more custodial, centralised wallet services/exchanges?
(I see 'sidecar channels' are a thing which may help onboarding speed, skipping the bitcoin blockchain entirely, but it all sounds hideously complex, with a bunch of fees in different places to a variety of service providers. It really all points to a failure in the L1 solution)
Certainly, but I don't see anyone trying to properly stop it in both cases here?
Amusingly the PoW as we know it in cryptocurrency came from attempts to combat email spam with HashCash, it's clearly referenced in the Bitcoin whitepaper as a precursor.
I am not sure if I am correctly interpreting your question here, but if I am then I can assure you that a great deal of time/energy/resources are devoted to stopping spamming/scamming, particularly over email. There is an entire public-private industrial sector focused on doing so and many billions of dollars per year are spent towards that end.
I remember nicer days when crypto had some value, and yes exchanges were already shady and did a lot of washing, but there was clearly a closer approximation to market sentiment and real world use cases. Nowadays everything seems to be revolve around derivatives, margin lending, yielding and staking to be margin lent again. The problem, IMO, might actually have been smart contracts.
A family member started getting pretty deep in the crypto game, and went to one crypto conference. Afterwards, we hung out and he was really deflated. He just said, "none of these people understand what's going on. I asked what would happen when the underlying asset values went down, and they tied themselves in knots trying to unravel their own cleverness".
Crypto is interesting to me in the way that algotrading is interesting. Lots of interesting math doing fun things, but not worth really doing unless you have _massive_ resources. To me, there is 1 huge potential win for crypto - replacing clearing houses and banking infrastructure. Winning that is going to make a small number of investors extraordinarily wealthy.
There is 1 other interesting case for crypto, which is a common API that doesn't care who the winner is. But that's a questionable win.
Everything else in the crypto/defi/web 3.0 world is just a scaled MLM ecosystem.
The thing they describe as the box is literally a Ponzi scheme. You put in some money and you get high guaranteed return.
You have money, and you even can cash out some unless too many people try to cash out at the same time. Then it turns out there's no money to cover the returns.
Key innovation that further obfuscates this is that instead of cashing out directly you might use IOUs from the Ponzi scheme as a collateral to borrow some money and never pay it back leaving your Ponzi collateral with person that borrowed you money.
Noone has an incentive to cash out direclty to not endanger percieved valuability of Ponzi box. And everybody has incentive to push as much IOUs to as many new people as possible in exchange for hard currency.
Many---nearly all---altcoins are dangerously close to ponzi schemes, except bitcoin. Bitcoin stands apart as the sole protocol that's really decentralized and doesn't promise ridiculous returns.
However, given that Bitcoin is jn the process of monetizing and may become the world's base layer of money, it stands to gain a lot of value the long term compared to the melting icebergs of central bank and commercial bank created fiat currencies.
If this doesn't make sense, please read "The Bitcoin Standard" and "Inventing Bitcoin" to understand this technological advance.
One can prefer sundials to watches, but reality was changed when the watch was invented.
It’s not a Ponzi scheme. It’s a bubble—the belief is that prices will rise on the open market.
You get tokens for putting money in the box. You can sell the tokens on an exchange later for cash. The cash comes from exchange participants, not box people. All the box people receive the tokens they expect. They don’t receive tokens from new box people.
If it’s 1995 and Toys R Us is giving away Beanie Babies to the first 250,000 Elmo buyers, that’s not a Ponzi. If somebody buys lots of Elmos to flip Beanie Babies knowing 250,000 Beanie Babies are going to hit the market, they are delusional. It’s still not a Ponzi. It’s a bubble.
Bitcoin is a bubble. Protocol that arbitratily rewards holding is what makes this Ponzi.
Awarding tokens without efficient mechanism to destroy them causes inflation when speed of printing exceeds the speed of raising demand for them. And there's no way to correct it so inflation can turn into hyperinflation and run on bank and collapse of the whole scheme.
If bitcoin is just a bubble why is it still here after 'popping' like five times. And if the protocol that rewards the token holders is a Ponzi who is the Ponzi schemer?
It seems to me much more like the beanie baby thing.
I disagree with you on the smart contracts being the problem. a) Bitcoin doesn't use them, b) none of the issues you raise are caused by smart contracts. ALL of those are caused by large exchanges luring people in on the promise of free money.
The margin lending, staking, and all the rest are not Bitcoin, but Bitcoin!TM [1].
This isn't a "real bitcoin hasn't been tried" argument. It's a "if you treat it as any other asset or stock and play the Wall Street game, then of course it will look like Wall Street".
Bitcoin is the solution to the fundamentally broken debt-driven economy. Critics don't get it because they lump it together with "cryptocurrency". While technically a cryptocurrency, Bitcoin does not exhibit any of the ponzi, scam-like shenanigans that are easily observable in shitcoins. Yes, there is a lot of crazy stuff happening with wash trading - but this is a byproduct of lack of regulation and has nothing to do with the thing that is Bitcoin. Most critics just don't understand what problem Bitcoin solves. They think it has something to do with replacing currency, or sending payments. Bitcoin is a financial freedom tool for billions of people, the likes of which do not browse Hacker News. Those people get Bitcoin instantly. They don't need articles like this one to tell them why their needs are unmet by the traditional finance system. The thing that Bitcoin critics lack is the understanding of credit markets, central banking and manipulation of money - the source of a large number of problems in the world. To them, everything is fine. Reminds me of that meme where the place is on fire and the dog is sitting in the middle of the room - that's the Bitcoin critic.
I have a deep understanding of all of the latter. I work in capital markets daily. I do not know anyone serious with my level of experience in the actual markets who thinks bitcoin is the answer.
There are several issues with tradFi. Pointing that out is like saying the sun will rise tomorrow. In some cases, people are working on a fix. In other cases, the inefficiency and criminal activity is not ceasing because the scale is too small for overburdened regulators to care about.
Not one of these uses bitcoin as a fix. Whoever is building it has almost never been in finance. They think tech bros can easily understand finance cos numbers! Except finance is extremely advanced. It’s like trying to join a full ML team after running a single random forest regression or something. The consequence of such hubris is sentences like this:
> Bitcoin is the solution to the fundamentally broken debt-driven economy.
The debt driven economy is by design. It’s not a fucking flaw like the hard money idiots listening to Peter Schiff daily want to believe. Sometimes it goes to excess and we get 2008. Doesn’t mean the older idea was better. There is no wealth distribution in a hard money paradigm that makes sense.
For simple terms since you’re obviously not in the field, ask yourself where is money created? If you say central banks, go back to Econ 101 and study better this time.
Exactly. This is a problem. It can be so advanced that almost nobody understands it.
Now take a look at how advanced Bitcoin is:
Total circulation will be 21,000,000 coins. It'll be distributed
to network nodes when they make blocks, with the amount cut in half
every 4 years.
first 4 years: 10,500,000 coins
next 4 years: 5,250,000 coins
next 4 years: 2,625,000 coins
next 4 years: 1,312,500 coins
etc...
When that runs out, the system can support transaction fees if
needed. It's based on open market competition, and there will
probably always be nodes willing to process transactions for free.
Satoshi Nakamoto
Your idea is KISS works for finance and the rest of humanity are idiots. As you sit down and type from a device created very much by the financial engineering “complications” of the modern market (and in turn being used to create further pockets of complexity).
> As you sit down and type from a device created very much by the financial engineering “complications” of the modern market ...
That's a ridiculous claim.
As if the development of complex technical devices wouldn't have happened without complex financial markets and inscrutable financial business models.
Complexity in finance .. up to a certain degree it may well serve the purposes of society .. beyond some level though, excessive complexity mostly serves few big players who can manage and understand the complexity and gain an advantage over other actors with less resources (that'd be most of the rest of society).
> There is no wealth distribution in a hard money paradigm that makes sense.
Care to explain how one can come to this claim based on first principles?
Maybe I'm misinterpreting this sentence of yours. I read it as: a hard money paradigm will inevitably lead to a very undesirable wealth distribuation (Gini coefficient --> 1) and there's no way to fix/prevent this other than moving from hard money to soft money.
I'd refute this claim. There are completely obvious ways to prevent Gini --> 1. Effective redistribution from wealthy to poor. The only hurdle to that is political systems, voters, governments or monarchs deciding to and then enacting it. Absolutely possible.
My point here is: concerns with undesirable wealth distribution (in a hard money system) make IMO no sound argument against hard money. Because there's ways to redistribute wealth through the state.
Besides that, if the current wealth distribution (under non hard money) isn't all but a calamity, then what is it?
Also most states are currently doing effective redistribution of wealth so it's clearly something that can be done. One issue though in most states is that the redistribution is getting outpaced by countering effects, so it's insufficient.
Good luck forcing redistribution using central authorities. The very reason for the existence of modern loans is to bypass their stupidity. You do not comprehend the literal scale of the problem. You have to replace every fucking bank employee with a govt employee (in simple terms). If you think a central body is bloated now…
> You do not comprehend the literal scale of the problem.
Phew, OK, if you write so.
> You have to replace every fucking bank employee with a govt employee ..
No, all it needs is a reasonable tax system without loopholes and where taxes are well balanced and of course reasonable services provided by the state funded by these taxes.
You have a rather pessimistic view of the world that leads you to believe that while such tax systems might be possible they allegedly haven't ever been observed in the real world. So you go on to infer that what hasn't been observed is not possible.
I think it's a stretch to draw a parallel here to the unyielding character of physical laws.
I assume the world has seen reasonable tax systems in the past but since politics/science/tech/societies/culture is constantly evolving this "state" was not stable.
That it wasn't, doesn't prove it's not possible.
Future societies with more knowledge on the whole subject (of creating beneficial equilibria in society) might find ways to keep desirable states over long periods of time.
I’m not pessimistic. In fact, I definitely think something will disrupt the status quo and it is very corrupt. That’s not the point. I just don’t think your solutions are workable. If you’d told me about btc 10 years ago, I would’ve thought it was a radical attempt at a solution. Now I don’t think it’ll work with the benefit of hindsight. I just think anything in the future that disrupts tradFi will have equally crazy origins.
> If you’d told me about btc 10 years ago, I would’ve thought it was a radical attempt at a solution.
But Bitcoin has kept working mostly the same way it started, right? Miners mine. People interested trade/speculate.
The thing about Bitcoin that changed over these years is what people think it is. Digital cash, nope. Micropayments, nope. Currency, nope. Store of value, could be. (I'm assuming volatility will decline in the long term if market capitalization approaches that of gold and as it gets adopted by millions more who don't speculate short term but just hold a few years to park some money and eventually exchange back to regular currency)
> For simple terms since you’re obviously not in the field, ask yourself where is money created? If you say central banks, go back to Econ 101 and study better this time.
The Fed itself directly created 8T USD since 2009 (QE). Some of it in the past two years even went straight to consumer's pockets via the Treasury in the form of stimmies and forgivable PPP loans (helicopter money/MMT).
Where did the rest of the increase in M2 come from? Fractional reserve lending by banks -- at interest rates artificially suppressed by Fed policies specifically to encourage lending/money creation.
Before the Fed was created in 1913, USD was created by fractional reserve lending by banks at market determined interest rates and the marginal increase in monetary gold and silver from mining output (typically 1-2%/yr).
This historic monetary system was dynamically unstable as mining output was uncorrelated with natural business cycles and unbackstopped banks were subject to runs during downturns. The Fed was created to solve these problems, specifically the panic of 1907.
Over time it's mission evolved from being a lender of last resort to actively targeting employment and consumer prices. Since the 1987 crash however, this official mandate was effectively replaced with one targeting asset prices - primarily stocks and houses (wealth effect targeting).
Normal business cycles were now increasingly distorted by the fed Fed responding to (or not wanting to hurt) asset prices for fear it would psychologically affect consumer and business spending and eventually employment.
This lead to a new instability: bigger booms created or exaggerated by easy Fed money, followed by bigger busts during the tightening phase.
Each boom/bust cycle led to more micromanagement by the Fed and thus more instability. Since 2008 (QE), and especially after 2020 (helicopter money) they have gone completely off the rails as seen by the M2 chart above and soaring consumer prices. "Inflation is always and everywhere a monetary phenomenon - Milton Friedman"
Also just to be clear, almost every measure of banking and economic crisis has reduced after the advent of central banking in most countries. 2008 still happens and we should hold everyone accountable etc but if you think living pre 1971 was some dream time with everyone eating a full meal and heavy technological innovation, you’re misguided. It’s not to say the lack of innovation was a monetary issue but removing those obstacles sure as fuck didn’t hurt.
That fact that you conflate the QE and fiscal stimulus is reason enough not the read the rest of this diatribe.
Basically you did answer where the M2 increase is coming from but you have no idea what is the difference between M2 and real money. If you’re following the idiots on finance twitter tweeting daily about velocity of money charts, stop, pick up a modern macro textbook and read in detail.
That's a loaded question, don't you think? What I meant was that there are several respected economics scholars who have endorsed "hard money" and/or competition among currencies. Regarding "shilling", Milton Friedman didn't quite do that but he largely predicted a system like Bitcoin: https://www.youtube.com/watch?v=leqjwiQidlk
Bitcoin is not ever going to replace the fiat economy, it simply solves the wealth preservation problem by acting as gold v2.0. This is a huge deal as most empires in history have risen and fallen via currency manipulation, hurting millions of people in the process. The life preservers have finally arrived, just in time.
People should ask "whose design?" then. Who's the beneficiary of this design?
What do you think is more likely to be true?
A. The wealthy/influencial/powerful/elites use their (disproportionate) power to influence the design of fundamentals of society - such as the monetary system - in a way that benefits/stabilizes their position at the top.
B. The wealthy/influencial/powerful/elites just let the design of fundamentals of society - such as the monetary system - be in whatever way it's shaped by society or political processes.
Safedean Ammous isn't 100 % studied economist. But according to his CV he studied at London School of Economics, also gave economics lectures and was/is assistant professor of economics at Lebanese American University (Beirut). [1]
I'd recommend listening to his interview with Lex Fridman. [2]
Do not read idiots like Ammous. I don’t like to restrict people’s reading choices but this is equivalent to reading Deepak Chopra for economics. Between that and someone like Lee Smolin who is also extremely anti establishment, only one of them is an incredibly deep thinker.
People’s appearance on Lex Fridman shouldn’t be used as an indicator of anything. He interviews very widely and he does it well. But he isn’t very selective about guests.
A comparison of Safedean Ammous to Deepak Chopra isn't useful IMO. Chopra does likely have views on economics but it's not the focus of his work. Ammous' work is about economics.
Thus it appears you're merely trying to discredit one person by comparing them to another person whose views (on a totally different topic) are ridiculed/controversial (for potentially legitimate reasons).
As to Lee Smolin .. he appears rather off-topic to me in this discussion. I like his view on "There is only one universe." though [1]. Makes him stand out from the many many people who handle the meaning of words with insufficient rigor and then come up with useless conclusions.
> People’s appearance on Lex Fridman shouldn’t be used as an indicator of anything.
I was just linking to this interview because it's reasonably well done and Ammous' views come over, not because it was done by Fridman.
I wasn’t clear. I should’ve said it is equivalent to reading Deepak Chopra about quantum mechanics or string theory vs reading Lee Smolin. Not economics.
Additionally, imagine why and how someone with an Econ degree who wasn’t very well known became incredibly famous. Enough for Taleb to write a foreword for him (although I suspect that was motivated by their ethnic common origins and less so by the rigor in the book). This is a common grift. Several professors in extremely high end Ivy League universities tried the same tactic. Including that one fucktard from MIT who claimed he’d done simulations for a million years and Terra (or some other coin, I really can’t keep all the scams straight in my head) couldn’t fail no matter what. Same motivation. New shiny thing? Let’s use it to try and increase our social capital. Less erudite crowd? The better.
> Additionally, imagine why and how someone with an Econ degree who wasn’t very well known became incredibly famous.
Whatever you're implying here, I'm too stupid to get it.
You mean: he became famous enough despite only talking trash but in a way that fools dumb people like me? Or: he became famous through illegitimate means? Or: he became famous purely out of luck? Or: he became famous because he understood how to tell these people who mistrust some official institutions what they want to hear?
Or: something else?
I just think he's got a few points right that go against today's mainstream economics. Somehow I haven't yet heard sound arguments from people who oppose the "deflation is an acceptable and possibly even better state of the economy" notion. They mostly put up strawmen.
> This is a common grift. Several professors in extremely high end Ivy League universities tried the same tactic. Including that one fucktard from MIT who claimed he’d done simulations for a million years and Terra (or some other coin, I really can’t keep all the scams straight in my head) couldn’t fail no matter what. Same motivation. New shiny thing? Let’s use it to try and increase our social capital. Less erudite crowd? The better.
I don't see why this is relevant here at all. The world is full of people trying to come out on top, almost everybody is. And some people tell lies to achieve that, some do scams or criminal stuff. Humans use tactics that "work" with humans, so what?
There's no law of nature from which follows that every person who curiously becomes famous for uncertain reasons can only be telling stupid things.
Discussing the person rather than their ideas is IMO a telltale sign that the subject (and gaining new insights about it) isn't really top priority here.
>Enough for Taleb to write a foreword for him (although I suspect that was motivated by their ethnic common origins and less so by the rigor in the book)
Ironic since nowadays Taleb seems to enjoy trolling bitcoiners.
Yep. I don’t fully trust him either. I understand his point that there’s no cash flow etc but suddenly he turns around and says gold is not limited by this argument.
hmm, no government in the world supports his thesis I guess. From what I understand of his position: deflational currency is the best type of currency. Any inflation is bad etc. The reason governments create inflation is to keep population poor and control them I guess?
Putting aside the weird trash-talking of status quo economists, in order to evaluate the correctness of his position, I would have to do way too much homework.
His prediction of human behavior under a deflational currency though does raise some flags. He says people will buy stuff regardless. If know I can use the same money to buy two cars next year instead of buying a car this year, I will not buy a car this year. He seems to say I will.
> The reason governments create inflation is to keep population poor and control them I guess?
When I listened to the interview I didn't hear him say that.
My view on this: governments simply cannot help increasing debt to spend more on whatever purpose they deem right at a certain time. It's simply the easiest way (least opposition from voters) for them to enact their programmes. The only other option (cutting other spending to increase spending on what's current high priority) doesn't get them reelected.
> Putting aside the weird trash-talking of status quo economists ...
Yeah, I admit he does too much of that, not optimal. But that doesn't mean the message is wrong.
> He says people will buy stuff regardless.
You won't? If your car breaks down, you won't let it get fixed right now but next month because it's cheaper? If you're hungry today you'll wait till next week to buy food because it costs 0,005 % less? You'll wait 10 years to fly to Fiji because it'll be cheaper? Oh wow, you must be a special person then.
> If know I can use the same money to buy two cars next year instead of buying a car this year, I will not buy a car this year.
You sure? You just watch everybody drive around? Besides: same money, next year worth 2x is dramatically exaggerated. What are typical gains of efficiency through technological advances? Maybe 5 % per year? I say you're putting up a strawman here. With 5 % deflation you'll have 2x the buying power in ~ 14 years .. you're going to wait this long?
> He seems to say I will.
Nope, as I understood what he says, he just says it somewhat shifts time preference.
>If your car breaks down, you won't let it get fixed right now but next month because it's cheaper?
Which car? The one I don't have because I'm saving to buy two next year? You're changing the example I gave into something else entirely. If you're saying that drastically reducing or eliminating the purchase of everything that is not absolutely essential to have won't be bad for the economy, or if it is, it won't be bad for society in the long term -- then say that.
>> If know I can use the same money to buy two cars next year instead of buying a car this year, I will not buy a car this year.
>You sure?
Yes. (I lived someplace where there was a ridiculous price markup for electronic goods. I needed a new phone and laptop but I refused to buy them because of the ridiculous prices. Then the currency crashed a year later and I immediately bought them by exchanging US dollars before they could markup the prices or pause sales. I ended up getting them for less than the US price incidentally. Otherwise I would have waited until the old ones were preventing me from doing essential tasks. This is same for cars.)
"People consume because there's a limitless desire to consume" he says. And when Fridman calls him on it, he says yes well people economize due to constraints no matter what.
>same money, next year worth 2x is dramatically exaggerated.
Well yes that’s the point. aren’t we talking about a bitcoin economy in the end after all? If a transition from fiat to bitcoin standard starts happening, this is the path its going to take until the price stabilizes, no? People doubled their money in half a year in 2021 after all.
EDIT: his odd comment that he is migrating from anarchism towards supporting benign dictatorships doesn't exact endear him either.
> Which car? The one I don't have because I'm saving to buy two next year?
So eventually you'll have two ... and what will happen? Yes, some time your car will need repairs. Will you have the repair done months later because it'd be cheaper then? Highly unlikely.
> If you're saying that drastically reducing or eliminating the purchase of everything that is not absolutely essential to have won't be bad for the economy, or if it is, it won't be bad for society in the long term -- then say that.
I think people would - as they always have been doing it - still spend money on things that aren't absolutely necessary. If not for mere hedonistic pleasure then for status or whatever.
>>> If know I can use the same money to buy two cars next year instead of buying a car this year, I will not buy a car this year.
>>You sure?
>Yes. (I lived someplace where there was a ridiculous price markup for electronic goods. I needed a new phone and laptop but I refused to buy them because of the ridiculous prices. Then the currency crashed a year later and I immediately bought them by exchanging US dollars before they could markup the prices or pause sales. I ended up getting them for less than the US price incidentally. Otherwise I would have waited until the old ones were preventing me from doing essential tasks. This is same for cars.)
You ignored what I read about the buying power doubling over not one year but rather fourteen years ... you're writing about "currency crashing" which is something completely different from a gradual steady deflationary currency.
> "People consume because there's a limitless desire to consume" he says. And when Fridman calls him on it, he says yes well people economize due to constraints no matter what.
What's the point? Of course people try to find a balance between spending now and saving, nothing new here.
> If a transition from fiat to bitcoin standard starts happening, this is the path its going to take until the price stabilizes, no? People doubled their money in half a year in 2021 after all.
Yes. But as with most such developments, there's the dynamics that you see at first glance (adoption grows --> people are more confident Bitcoin will become even more valuable --> demand increases --> price increases --> ...) and there's lots more secondary dynamics that will also happen and dampen the obvious dynamic (price increases --> too expensive for some --> demand decreases --> dynamic equilibrium). There's surely more such secondary dynamics and they're important.
> EDIT: his odd comment that he is migrating from anarchism towards supporting benign dictatorships doesn't exact endear him either.
Well, I'm not a fan of dictatorships.
I don't think it's a very useful heuristic to discard all ideas of some person because one doesn't share/like one or a few of their positions.
You'd have to discard the positions of almost every person on the planet then, right?
> Bitcoin is a financial freedom tool for billions of people, the likes of which do not browse Hacker News
These people are most vulnerable of the lot. They live hand to mouth, don't posses computing devices (may be cheap China smartphone). I cannot fathom how this demography manages bitcoin assets, manages to purchase their basic needs (which is all they can afford) using coins and not to mention this market crash when even millionaires are feeling the pinch.
What you describe here is grouping of thousands of different types of demographics into one. The reality is very different depending where you live, and your level of technology access varies. A fleeing Ukrainian is very well versed in Bitcoin - Ukraine has one of the highest levels of adoption. A Nigerian is also very versed in Bitcoin - despite their government's attempt at curtailing use, they still find a way. A kid in Congo may or may not have access to a smart phone - that I have no way of knowing, but I do know that cell phone access is ubiquitous in Africa despite what many imagine or believe. Sure, their needs may be better served by a stable coin, but that does not relieve bitcoin of value. A Salvadorian may or may not understand Bitcoin - but this is like asking the population to understand how your email protocol works - there's a lot to learn. Even in a country like Japan, Bitcoin is becoming a safe haven with the Yen losing 20% of its value when comparing to USD.
Going back to the topic of the "most vulnerable", a bank that you and I take for granted is a luxury in many of Africa's nations. Bitcoin is a permission-less banking system. Does it have technological hurdles for the average person to overcome? Yes. But this is all being worked on right now by people I talk to every day. The same way that most people have no idea how SMTP works, you won't really need to understand behind the scenes of Bitcoin. There are various levels of autonomy and people will fall on the spectrum of where they are comfortable, with the level of privacy / security that most fits their Bitcoin education.
> A kid in Congo may or may not have access to a smart phone - that I have no way of knowing, ... a bank that you and I take for granted is a luxury in many of Africa's nations.
What do you know about the existing problems, that you want to solve? When were you last in the region?
I'll assume that like me, you googled that. So, this is technically correct, but:
30 or 34 m users out of 206m isn't the whole market, not close.
Nigeria is an outlier, with low M-Pesa adoption as:
> The reason why this incredible product (M-Pesa) can’t be replicated in Nigeria with such success is perhaps due to what you and I as Nigerians enjoy today, the Nigerian Interbank Settlement System (NIBSS)
So to sum up, the huge Nigerian domestic market is covered by a SEPA-like product. It's not a bitcoin thing. Omitting that seems intentionally misleading.
Usually when describing something in the face of scrutiny, one describes a use case. If someone questions the validity of hammers, the solution isn't to say "we call this a hammer." It's to show how hammers are used.
I doubt most crypto folks have any idea of credit markets or central banking. What they have expertise in is the manipulation of money. Bitcoin, and all of crypto, is Wall Street's love interest for a reason.
Some of us have read Bastiat (in French!), Mises, Hayek, Rothbart, Solerno, and other "heterodox" Austrian economists, and have a better understanding of how money arises and how central bank interference in monetary and credit markets creates the boom and bust business cycles.
Bitcoin, with its Austrian hard money roots, stands head and shoulders above the crazy scammy mess of all the centralized altcoins (or "crypto" if you lile) that you right to criticize. Please don't lump real technological and computer science innovation in with a the crypto rug-pulls.
Most of them watched some youtube video providing a conspiracy theory view on banking, "fiat" currencies and debt-as-money.
They think they have deep insights when saying "banks create money out of thin air", or "there is not enough money in the economy to pay down all debt". They also use the word "fiat" as if it's bad that a currency is backed by a government.
All the above are strong indication that there is something fundamental about the monetary system that someone fails to understand.
A lot of crypto has been bought because the buyer were under such illusions.
>Sorry this is all too vague. How do you define "broken" and what does this post-debt-driven economy look like?
Look up % of world population living in hyperinlationary environments to get your answer. The post-debt driven economy is one where a handful of people cannot devalue your labor with a press of a button.
> Whats the use case here exactly?
Freedom from corrupt governments that debase your currency into oblivion, only to adopt another currency which suffers from the same ultimate fate. Financial inclusion is the use case. It's broad, it's ambitious and ultimately to entrepreneurial interpretation.
If you look into the details of a hyper-inflation environment (such as Germany in 1922-23), labor tends to retain its value pretty well under such conditions. Laborers would re-negotiate their salary every morning, and tended to do pretty well.
Bank deposits go to 0 though, as would most savings that did not grant control of some inflation-resistent revenue-flow.
Anyway, true hyperinflation is extremely rare. The most recent case I'm aware of, was Venezuela around 2013. To my knowledge, 0% of the pupulation lives under true hyperinflation today.
>Look up % of world population living in hyperinlationary environments to get your answer. The post-debt driven economy is one where a handful of people cannot devalue your labor with a press of a button.
Ok so lets say the production costs increases and drives inflation. How does bitcoin make my life easier in this scenario?
Accept bitcoin for your products and services, and when you run your books, look at it from the perspective of bitcoin to see if you're profitable or not, even if you legally still need to keep your books in your local government's currency. The dollars (and the other fiat currencies) inflate too quickly to be useful monetary measures.
You literally have to go through a regulated exchange to onboard and unload your illicit transactions. Not to mention your entire transaction history is public up to the exchange event. The biggest money launderers of today are literally the world's biggest banks. Go look up Deuche Bank money laundering fines.
I don't know, you'd have to ask the police why they keep funding their police department with seized assets from people without trial or even suspicion.
This is pretty hilarious though, Bitcoin is exactly the same as a variety of other cryptocurrencies, which are carbon copies of it. Identical. But right on cue here come the bitcoin maximalists to explain that theirs is special.
Here's the only reason it's special - brand recognition. That's it. That's what you have over the various forks and clones. First mover advantage.
And this is what tells me that the technology isn't really solving anything, and nobody actually gives a fuck about it - other coins fix problems with BTC, they either make it more anonymous, or resolve transactions faster, or more of them, or all sorts of other things. But BTC still rules the roost because the whole thing is built on hype and sentiment and nothing more.
Actually, what you call brand recognition could be monetary adoption, as every nongovernmental money such as gold or silver had widespread adoption on their merits.
Bitcoin solved the Byzantine generals' problem in adversarial network contexts, by its innovative deployment of proof-of-work. Thus, bitcoin invented thermodynamically secured property rights, and property rights are a fundamental building block for human flourishing. Bitcoin provides a decentralized trustless source of truth, and none of the other cryptos do that because they're not nearly as widely adopted.
Bitcoin is a strong base layer that faster more anonymous payments can be based upon, such as Lightning or Liquid, and things like CoinJoin and PayJoin, which are trust less and noncustodial. You can't start with a squishly base layer and then build stable systems, but if you start with solid fundamentals, privacy and better user experiences can be built on top.
Bitcoin is also currently solving the natural gas industry's problem of flaring methane... portable mining rigs use the methane to generate electricity to provide network security to the Bitcoin network, while making natural gas extraction cleaner. Bitcoin mining is also incentivising and paying for the production of clean renewable energy on larger scales than anyone had figured how to fund. And some people use bitcoin mining to provide home heating in the winter. No other crypto is doing those things.
Its inventors came up with a solution to it, sure, and that is innovative. It's inelegant, it's massively wasteful, but as a technical curiosity it's certainly interesting.
> Thus, bitcoin invented thermodynamically secured property rights
Fucking LOL. You say that as if it tapped into the laws of physics themselves, when actually a quantum computer could cause havoc here. It's using mathematics to achieve consensus, not writing data into the fabric of the universe, and as with all of your other points, it's just first mover advantage again. All of the other cryptocurrencies do the same.
> Bitcoin provides a decentralized trustless source of truth
No, it provides consensus, not truth.
> Bitcoin is a strong base layer
Exactly the same as its clones, forks and children.
> and none of the other cryptos do that because they're not nearly as widely adopted.
They do exactly the same. Adoption is a matter of degree, not absolute.
> Bitcoin mining is also incentivising and paying for the production of clean renewable energy
No, no it isn't. Bitcoin mining is filthy and getting worse.
We don't need more incentives for green energy, the world is already full of those. Bitcoin mining, on the other hand, uses dirty coal in Kazakhstan.
> No other crypto is doing those things.
EVERY other cryptocurrency is doing EXACTLY those same things. It's all just brand recognition.
> Bitcoin does not exhibit any of the ponzi shenanigans
Really? How do you call something where there is no underlying product generating value, and you need to have someone else put money in to get your money out? It's literally the definition of a ponzi pyramid.
Bitcoin is voluntary. The goal is better money. If you take on that big of a challenge, you kinda need people to participate with their "old" money. It's called adoption. Just like internet would have no value if nobody participated, bitcoin has no value if nobody participates. Do you send email to yourself? No. Do you shop from a non-existing platform? no.
"My Ponzi" is voluntary. The goal is better money. If you take on that big of a challenge, you kinda need people to participate with their "old" money. It's called adoption. Just like internet would have no value if nobody participated, "My Ponzi" has no value if nobody participates. Do you send email to yourself? No. Do you shop from a non-existing platform? no.
Except when someone points out it's terrible at that, its goal magically becomes something else. Which it's probably terrible at, and then the goal shifts again.
You're confusing money with currency. Bitcoin is excellent money, the best there is. Currency? not so much due to current fluctuations. With adoption that will subside, so will the yields, and it may start behaving more like currency (or not). It's quite possible it becomes money but not currency with something like a stable coin taking place of currency. That doesn't mean that it won't try or won't make it. When you try to take on the entire finance system of the world, it's obviously going to take time and we may not see the fruit's of Satoshi's labor in our lifetime. The last block is not mined until 2140.
For anyone else reading these comments, HN will not let me reply to all of your as I'm posting too fast. I would love to reply to every comment here. All very valid concerns and criticisms, although misplaced, deeply misunderstood. I don't blame you. If I were a skeptic of something, I would probably not put 1000 hours of educating myself on that subject. I am not here to convince anyone of anything. Don't buy bitcoin. In fact, buy the short ETF out (today?) if you are so convinced it's not going anywhere positive. I really don't care. It would be great if more people were less emotional about Bitcoin just because it has monetary properties and seems like a ponzi, and actually took the time to think about it more deeply - but I understand that you're busy and would rather dismiss it. Fine by me.
No, you're using nonsense distinctions that come from the 'Austrian school', that you think make you smart and you believe gives you an understanding of economics denied to most people, even those who study economics to a high level and make careers in that space. Unfortunately it's a patchwork of old and poor ideas that don't really hold up.
By the way I love the condescending addendum, sure, the only reason that anyone could possibly be negative about Bitcoin is that they haven't learned enough about it. LOL.
> Vote with your conviction.
Any move into the manipulated casino that is cryptocurrency is a bad move.
> No, you're using nonsense distinctions that come from the 'Austrian school',
Do you have an actual rebuttal to anything I've said or will you resort to emotional and ideological attachment to what others have decided for you?
>By the way I love the condescending addendum, sure, the only reason that anyone could possibly be negative about Bitcoin is that they haven't learned enough about it. LOL.
Another reason people might view Bitcoin negatively is because they let others think for them (reaching flawed, uneducated conclusions, passed down onto you).
Or conflict of interest. Financial privilege. Not biting the hand that feeds you. Fitting in with your peers who have the same herd mentality. Take your pick.
I don't need to. Actual mainstream economics is that rebuttal. The Austrian school is a discredited joke.
Most of your points are emotional and idealogical - you call other cryptocurrencies "shitcoins", despite them being technically identical in many cases and superior in some.
> Another reason people might view Bitcoin negatively...
It's funny, you can't even conceive that someone could understand it and come to the conclusion that it's not a perfect miracle handed down directly from saint satoshi, and then you call identical cryptocurrencies "shitcoins", perhaps you don't understand them well enough?
BTC is the same as the others, it just has the big name. They're all shitcoins, I simply understand that about one more coin than you do.
Key factor of Ponzi is that it guarantees you high (height arbitrarily made up by scheme organizer) periodic return on your investment and promises you get your money back eventually.
Bitcoin makes no such promises. It routinely had >80% drops in price.
The author is a bit melodramatic. Yes there are mostly scams in the space, but that is not a bug, its a feature of less regulation.
Most advocates of Crypto like most critics think about Crypto from the perspective of a consumer, which is misguided. How many people, especially technically minded people, know the boring technical intricacies of the financial sector? Not many.
The concepts, if not necessarily the current implementations of them will be used by large financial institutions to generate better margins, help High net worth individuals to avoid taxes better and possibly some other very boring things around decentralized consensus algorithms.
Defi is interesting to Vanguard and Citi, not to the consumer.
It will not revolutionize the world, nor destroy it... like most technology it will create a few successful companies and make some people rich.
PS Just to be clear, it is currently a dumpster fire that needs to be regulated ASAP. But its not going to do much more than pump a bit of cash from poor people to scumbags, that is not new.
Humans are so funny. Blaming the flawed tools we create for the problems caused by using them in all of our flawed manners.
Bitcoin is a tool, like any other. Tools can be used constructively or destructively. The ease and affordability of transferring remittances internationally is the single most useful case for Bitcoin. In those instances value is not kept in BTC except for the duration of the transfer so it is not as susceptible to the market fluctuations. On top of that it is much faster and sometimes cheaper even for more local transactions like invoices for freelancers to be done via BTC.
The banking systems have failed in a lot of ways related to the above use cases. In the US it can still take days for a check or transfer to clear. Red tape and fees abound when transferring large amounts between parties. PayPal will just shutoff your account because they don't want the risk. etc. etc.
In the future I expect to see BTC to mainly utilized for these types of financial transfers and less as a long-term store of value. Of course like any item of value there will always be the speculation side.
> In the future I expect to see BTC to mainly utilized for these types of financial transfers and less as a long-term store of value.
I have, in Sweden, the options of Swish and SEPA to transfer money. Swish is internal to Swedish residents, so to anyone who has Swish tied to their bank account I can instantly send money knowing their phone number.
With SEPA Instant Transfer I can send money anywhere in the EU, up to 100,000€, and it's guaranteed it takes less than 10 seconds.
These have been solved elsewhere, look inside the US who benefits from the fees charged to you, look who controls the lobbying power to keep these fees being charged to you. Boom, you now know that in the US the biggest limitation is always who has more money than you and control the policies you live under.
It's the same in other parts of the world, of course, but so much worse in the US...
Absolutely correct. There are plenty of payment solutions like SEPA coming out in different markets, now. Money transfer is a known problem. These work brilliantly in contries that are not controlled by the most tyrannical and/or non-functional regimes, as long as you stay within the law. (Even China has such systems in Alipay and Wechat Pay)
So what crypto adds (beyond a hypothetical store of value) is the ability to keep your assets and transactins invisible (or nearly invisible) to the government.
> is the ability to keep your assets and transactins invisible (or nearly invisible) to the government.
It's only invisible if you got way out of the way of ergonomics to use cryptocurrencies and try to keep them into an anonymous wallet. The moment your wallet address is figured out all of your transfers in history are an open book, by definition of a public ledger.
So anonymity from government is definitely not a real feature of this usage...
Not all of us have the privilege of having been born un Sweden. Your comment reeks of privilege and dissociation with the rest of the world, where things work very differently.
I wasn't born in Sweden either. If it reeks of privilege is due to your own insecurities, I gave an example of something that already works and exists in the real world.
Just FYI: I come from Brazil where I lived for almost 3 decades, I grew up during hyperinflation, get off your high horse, mate.
Dude, it's a real world example - a personal experience - of how this problem can we well solved, and of how crypto is not the solution. That's what it is. Sorry you don't like it, but that's not relevant. What you might do is try to bring those systems to where you are.
> wise.com is laughing. M-Pesa is laughing. EU SEPA is laughing.
Not sure how SEPA helps an immigrant in the US trying to send money back home. Or a million other situations not involving places that have SEPA.
Your other options are greedy corporations. Wise wants $7 to transfer 1000 bucks to Europe. Bitcoin will continue working if corporations fail, change policies, arbitrarily decide not to do business with you, or jack up prices. Bitcoin is not subject to the whims of a single private organization.
Government sponsored options are also beholden to all sorts of invasive inspection as well. If you want to send more than $10k it can be a lot more work in some places.
> Or a million other situations not involving places that have SEPA.
And the way forward for those places is more like SEPA, than like bitcoin. That's the point. There exist better solutions to these than the US has, many commenters are oblivious, and these solutions don't look like Bitcoin.
A: "The USA's banking infrastructure lags global best practices, and many commenters here do not realise that, assuming that it must be the same or worse elsewhere, and that their proposed solutions or upgrades are relevant, when they are in fact often not. Proof by example of a better way forward exists."
B: "Why do you hate America!!"
This is of course, the kind of reasoned response that you typically get from someone with a strong logical argument.
And part of the problem is that whenever someone points out a way in which it could improve, especially with an proven example from the rest of the world, the mental shutters come crashing down, and it's assumed that you're "hateful". Like trying to help someone do the beneficial thing that other people do is an act of hate now? It makes sense only as pure projection.
> I can also assure you perpetual futures would not be allowed to trade on any exchange inside the legitimate financial system.
I don't disagree that the point of perpetual futures on crypto exchanges is primarily to facilitate speculation and gambling, but they're just delta 1 derivatives (track the underlying 1:1) in the form of a CFD, different in mechanism but no different in use case to regular futures, which themselves are traded widely on traditional exchanges. And these perps are quite useful to temporarily hedge holdings, even more convenient than regular futures since you don't have to bother with rollover. The instrument itself is really cool. The criticism should be directed to the high amounts of leverage which is only ever useful in a gambling context, and the marketing + gamification aspects which are clearly targeted at encouraging gambling behavior. If Binance got rid of their perpetual futures, users could still gamble all the same using Binance's regular futures contracts.
Yeah yeah. Bitcoin is an open financial network that anybody can use and nobody controls and is secured by energy. What an amazing, historical feat of human ingenuity. It's neutral and just like the internet can be used by anybody. We're not going to apologise for its energy use.
>Yeah yeah. Bitcoin is an open financial network that anybody can use and nobody controls and is secured by energy. What an amazing, historical feat of human ingenuity. It's neutral and just like the internet can be used by anybody. We're not going to apologise for its energy use.
If you think the ends justifies the means, I suppose you could do anything.
Bitcoin disappearing tomorrow wouldn't make a dent in our current fossil fuel emissions. Bitcoin mining ASICs don't emit CO2. Take it up with policymakers who subsidize fossil fuels.
Bitcoin mining currently consumes less that 0.2 % of global energy consumption. Smartphone use and the associated radio infrastructure use somewhere between 1% to 2% of global energy.
How much energy do central and commercial banks, auditors, accountants, corporate currency hedge trading desks, and the armies that back fiat currencies use? Way, way more than bitcoin... and they don't provide a way to pay electric grids to build out renewables the way bitcoin mining does.
It looks like supporting two unwinnable, simultaneous wars in the Middle East that cost the country trillions and hundreds of thousands of humans directly and indirectly murdered.
> Bitcoin disappearing tomorrow wouldn't make a dent in our current fossil fuel emissions. Bitcoin mining ASICs don't emit CO2. Take it up with policymakers who subsidize fossil fuels.
This sounds a lot like you're not contesting the assertion that Bitcoin uses lots of energy, but deflecting the issue by saying it is irrelevant that it uses lots of energy and it's more the responsibility of policymakers to make the energy it uses clean instead of dirty. Am I understanding you correctly?
I don't think I've ever heard anyone argue that mining literally emits CO2; the concern is about where the energy itself comes from.
I'm not contesting it no. And I'm saying it's a perfectly valid use of energy. It will use even more energy in future. And it's worth it. Energy use doesn't need defending and isn't a bad thing. Energy secures the financial network, it's doing that work, even if the network isn't useful to you. Disincentivising fossil fuel use for every purpose needs to happen, not just Bitcoin.
> You are worried some tiny fraction of a percent is an issue?
YES.
Adding a whole new country to the map right now, when we don't have enough clean energy to go around, and we are killing our environment with emissions from energy generation, is a BAD idea.
Far from helping to increase demand for clean energy, as is the meme, cryptocurrency mining is incentivising the return of fossil fuel power plants to service (as has happened in the US and other places) and using vast amounts of coal power in places like Kazakhstan. It's the opposite of what we should be doing, which is reducing our power footprint until we have a handle on things.
> There will be 100x, 1000x more energy use in the future in the entire economy.
Maybe, but if that was using our current mix of tech, we'd cook ourselves in the process.
I don't think that's quiet right. To paraphrase Kranzberg, Bitcoin is neither good nor bad; nor is it neutral".
We can debate whether it's good or bad on net, but the fact that crypto provides monetary incentives for mining it (and thus spending electricity and computer equipment) is not up for debate.
But whether that is a bad thing definitely is up for debate. Bitcoin mining is a buyer of last resort for stranded renewable energy. It also incentivises renewable energy capture. Energy isn't fungible, it can't be magically teleported to where it can be used. Energy consumption in itself isn't something to be ashamed of or avoided. Personally I think mining Bitcoin with fossil fuels is wrong, but trying to tell people what they can compute is a dangerous road to go down.
Yes, I keep hearing that it's a buyer of last resort. Is there any info on how true that it? What % of mining is done with last resort energy, and what % is just simply creating more demand. I would guess that most is increasing demand.
This is really hard to answer because mining is a fiercely competitive business, and miners aren't eager to give up this kind of information.
But I would suspect probably not a lot right now. There is some mining that's efficiently burning off nat gas that otherwise would have been inefficiently flared or vented, which is net positive from a GHG emissions perspective, but that's an outlier. Realistically, I suspect there's such a high profit margin that hunting for stranded energy isn't the primary goal right now. Getting cheap ASICs is.
This is why I'm a big proponent of increasing mining regulation. I want to see miners heavily taxed for using carbon sourced electricity and pushed out to the fringes of electricity production. We'll probably need to use regulation to force the industry to actually be the consumer of last resort. Right now, there's just too much low hanging fruit for miners to put in that work voluntarily.
There is a technological foundation that gets lost between all the money games that are being played on top of it and gets ignored or dismissed as a result, so you get opinions like "Bitcoin Is A Hideous Monstrosity Made Out Of Computers And Greed That Must Be Destroyed Before It Devours The World".
There is no room for discussion here, and it's depressing to see how many people want to throw the baby out with the bathwater; instead of asking for it to be regulated in a sane manner they want to outright ban the use of said technology, which I would define as barbaric... imagine banning fire because people got burnt!
The blockchain, smart contracts and NFTs are amazing technologies that could do wonders for mankind if properly used, but too many people, including tech literates, refuse to dig into it after seeing folks being defrauded out of their life savings and ruining their lives because they took a loan for hundreds of thousands of dollars on a jpeg of a badly drawn monkey.
For them crypto is bad, period. There is nothing else to talk about because it's an absolute truth, what subject should there be to discuss? Might as well argue about the possibility of God not existing with religious extremists.
> The blockchain, smart contracts and NFTs are amazing technologies that could do wonders for mankind
Like what? I'm seriously. (Not trolling, not trying to feed fires.)
To me the whole thing seems bad, period, but I'm willing to entertain the idea that I'm wrong.
FWIW, I think "crypto" et. al. (in quotes because to me the term means "cryptography") is pointless because the Earth is small relative to the speed of light. Once we go interplanetary maybe there is a use for blockchain &c., but until then trustworthy centralized systems are obviously better.
You say that trustworthy centralized systems are obviously better simply because even today there is no viable alternative to them, but you can clearly see how that is cause for all types of problems. Most times you don't know who exactly you're trusting, and sometimes you are perfectly aware that those trustworthy individuals/companies are anything but that, but you're left no choice but to """trust""" them and hope they don't screw you over. And even if the company itself can be deemed trustworthy it doesn't mean that its individuals are too! This applies to all aspects of our lives, mainly because centralization up until now has been pretty much unavoidable due to technological constraints.
Enter the blockchain, smart contracts and all kind of buzzwords, and decentralization is finally starting to become a possibility. This blows wide open a whole lot of assumptions we make about our daily lives, so to avoid going into the political, economical, philosophical and moral aspects of what decentralization entails I'll stick to the one thing we know best: the internet.
The web as we know it today is pretty much FUBAR. You can see it on HN too, with plenty of news about websites screwing over their customers due to profit gouging, negligence, scaling/management issues... you name it. You have to trust these centralized websites that are completely closed off from everything else, and the website owner is completely in control of everything on its servers. You go to Google in order to do Google stuff the way that Google intends you to do and you have no choice on the matter. You liked that feature? Too bad, now it's gone because our internal tests found out that by removing it our conversion rate raised by 0.001%. And here, enjoy your new bloated, overdesigned UI. No, you can't switch to the old one. Also, your data is actually theirs', so they can just decide that they don't like you and just outright delete it, or sell it, or god knows what else. What do you mean you want to migrate somewhere else? Are you insane?? ...You get it. This applies to essentially every single website that you use, big and small. The data resides on the website's servers, whose security and management is up to the website's owner, and that's just how things work. In the worst case scenario websites could even act maliciously, as it happened when reddit's /u/spez abused its admin powers to change the content of comments that criticized him. All of this is unavoidable because of centralization, and hey, you agreed to the ToS after all.
That is not the case with Web3, because your data and your activity resides on the blockchain. Dapps access and interact with that data in a decentralized manner, and the resulting "status" of your account and the dapps themselves are the verifiable, unchangeable result of a sequence of actions that users performed on the blockchain through smart contracts. An example of what that means is that if for any reason a dapp you use decides to shut down their website for whatever reason, people would still be able to access and use that dapp by simply hosting the (usually open source) interface on another server and interact with the smart contract as per usual; the data and activity is still there on the blockchain, no one can seize or alter it and it will stay that way forever. You could also build your own website instead of using the official one. Also, dapps can use any other dapps' data with no restriction. To put this in perspective, the current web doesn't let you do that: you could use the provider's APIs, IF they're provided, but even then you would be subject to the limitations imposed, not to mention the provider has to actually stay up and let you access their APIs.
Granted, there is still some degree of trust involved as you could interact with a malicious smart contract, but it's still a _massive_ improvement over what we have now.
Another really cool aspect which makes it all worth it for me is the fact that you can use your account on any dapp without having to register to it with an arbitrary registration system you could be locked out of anytime: your account is just your wallet's keys, and you use those to sign your activity. Simple and effective.
Mind you, this is just the tip of the iceberg and something I wrote off the top of my head. There's a lot of cool stuff to be excited about that doesn't necessary involve money, but of course those take a lot more time and effort to be developed compared to marketing a get rich quick scheme, and certainly generate far less headlines.
We'll see how this pans out in a couple of years, but I'd certainly be gutted to see this die off because of human greed.
> You say that trustworthy centralized systems are obviously better simply because even today there is no viable alternative to them, but you can clearly see how that is cause for all types of problems. Most times you don't know who exactly you're trusting, and sometimes you are perfectly aware that those trustworthy individuals/companies are anything but that, but you're left no choice but to """trust""" them and hope they don't screw you over. And even if the company itself can be deemed trustworthy it doesn't mean that its individuals are too! This applies to all aspects of our lives, mainly because centralization up until now has been pretty much unavoidable due to technological constraints.
There are plenty of examples of betrayed trust in our supposedly trustworthy systems (to me the LIBOR scandal is a good example, or the VW emissions testing cheating scandal, or that time most of the major US tech companies conspired together to cheat their own engineers out of an estimated eight billion dollars of lost wages.)
I agree with you that trust is an open problem, but it's one that I think is getting solved automatically for free by ubiquitous surveillance, if we administer it sanely.
A friend of mine thinks that CEOs and politicians should be required to submit to brain scans to weed out detectable psychological problems.
The advantage of centralization is efficiency.
> Enter the blockchain, smart contracts and all kind of buzzwords, and decentralization is finally starting to become a possibility. This blows wide open a whole lot of assumptions we make about our daily lives, so to avoid going into the political, economical, philosophical and moral aspects of what decentralization entails I'll stick to the one thing we know best: the internet.
Speaking as an open-minded but skeptical outsider, you would have to convince me that the blockchain provides/solves decentralization better than existing alternatives.
> The web as we know it today is pretty much FUBAR. You can see it on HN too, with plenty of news about websites screwing over their customers due to profit gouging, negligence, scaling/management issues... you name it. You have to trust these centralized websites that are completely closed off from everything else, and the website owner is completely in control of everything on its servers. You go to Google in order to do Google stuff the way that Google intends you to do and you have no choice on the matter. You liked that feature? Too bad, now it's gone because our internal tests found out that by removing it our conversion rate raised by 0.001%. And here, enjoy your new bloated, overdesigned UI. No, you can't switch to the old one. Also, your data is actually theirs', so they can just decide that they don't like you and just outright delete it, or sell it, or god knows what else. What do you mean you want to migrate somewhere else? Are you insane?? ...You get it. This applies to essentially every single website that you use, big and small. The data resides on the website's servers, whose security and management is up to the website's owner, and that's just how things work. In the worst case scenario websites could even act maliciously, as it happened when reddit's /u/spez abused its admin powers to change the content of comments that criticized him. All of this is unavoidable because of centralization, and hey, you agreed to the ToS after all.
Preaching to the choir my friend! I feel ya.
> That is not the case with Web3, because your data and your activity resides on the blockchain. Dapps access and interact with that data in a decentralized manner, and the resulting "status" of your account and the dapps themselves are the verifiable, unchangeable result of a sequence of actions that users performed on the blockchain through smart contracts. An example of what that means is that if for any reason a dapp you use decides to shut down their website for whatever reason, people would still be able to access and use that dapp by simply hosting the (usually open source) interface on another server and interact with the smart contract as per usual; the data and activity is still there on the blockchain, no one can seize or alter it and it will stay that way forever. You could also build your own website instead of using the official one. Also, dapps can use any other dapps' data with no restriction. To put this in perspective, the current web doesn't let you do that: you could use the provider's APIs, IF they're provided, but even then you would be subject to the limitations imposed, not to mention the provider has to actually stay up and let you access their APIs.
Again, not to be a spoilsport, but it sounds like I could do a lot of that with git and some cryptography. Maybe I just don't get it?
> Mind you, this is just the tip of the iceberg and something I wrote off the top of my head. There's a lot of cool stuff to be excited about that doesn't necessary involve money, but of course those take a lot more time and effort to be developed compared to marketing a get rich quick scheme, and certainly generate far less headlines.
> We'll see how this pans out in a couple of years, but I'd certainly be gutted to see this die off because of human greed.
On that we both agree. This stuff you're describing sounds interesting, and nothing like the scam-fest "crypto" stuff.
>I agree with you that trust is an open problem, but it's one that I think is getting solved automatically for free by ubiquitous surveillance, if we administer it sanely.
The problem is, who watches the watchmen? And who watches the watchmen who watch the watchmen? And so on, because at some point you have to trust someone not to act maliciously. Not to mention that ubiquitous surveillance is a problem in itself, because again who can we trust to administer it sanely? It all goes back to the same root problem: trust, which is fundamentally incompatible with human nature.
The best course of action, IMO, is to do away with it entirely by using trustless systems.
>The advantage of centralization is efficiency.
Exactly! And because of that a certain degree of centralization is pretty much unavoidable, and it's why decentralization is not a silver bullet, and why the answer lies in the middle. A balance has to be found. A purely decentralized system is very slow to develop, maintain and update compared to a centralized solution; because of the glacial pace of development in the space, lots of detractors say that Bitcoin has been around for 10 years and nothing has changed, but I disagree with that! The ecosystem has matured a lot under the hood in these years, but it took a very long time to get to this point compared to what a centralized could do in the same span of time, with a lot of fragmentation and plenty of time spent coordinating actors towards a common goal. It's the complete opposite of "move fast and break things" :D
>Speaking as an open-minded but skeptical outsider, you would have to convince me that the blockchain provides/solves decentralization better than existing alternatives.
The only decentralized solution I see that works and has adoption is just torrents. Maybe git, if you stretch the definition a bit. But I don't see a way to build and deploy websites that doesn't involve blockchain, for example. What are the alternatives? The fediverse? Someone still has to maintain the instances, and once those go down the content is lost. Scuttlebutt seems to fit the bill, but barely anyone uses it.
>Again, not to be a spoilsport, but it sounds like I could do a lot of that with git and some cryptography. Maybe I just don't get it?
Well yes, but you'd just be reinventing web3 with none of the adoption. git can be thought of as a sorta blockchain, and wallets are simply public-key cryptography. The core issue is making it accessible to everyone and then actually getting people to use it, but luckily (and sadly) there is an economic incentive to drive adoption and usage, which is why crypto has experienced an explosive growth in the last years. Without that you're never going to put any kind of dent into the existing centralized systems, anything one would develop would just be a passion project at best. (again, scuttlebutt)
>On that we both agree. This stuff you're describing sounds interesting, and nothing like the scam-fest "crypto" stuff.
It is! I am one of the few who is unironically in it for the technology. Sure, the money would be a nice bonus, but these are shark infested waters so any money I throw in I just consider it a lost gamble. But it's interesting to see what people are building, there's plenty of people chasing stars and impossible pipe dreams, such as a fully decentralized society down to the government, and it's really hard to discern who is a snake oil salesman and who is actually interested in developing whatever they're peddling, but interesting projects do exist. The hard part is wading through the scams, of which crypto is 99% comprised of because of the lack of regulation.
Hopefully this crash will cleanse the ecosystem and finally let actually useful projects that aren't just overly complicated financial games to shine through.
First off, let me apologize for not writing a more in-depth reply, you've put a lot of thought and effort into this and I appreciate it. I'll try not to waste your time. :)
> The problem is, who watches the watchmen? And who watches the watchmen who watch the watchmen? And so on, because at some point you have to trust someone not to act maliciously.
I've thought about this and I think the likely answer is that the system has to be self-referential (a recursive function, if you will.) The infrastructure and personnel of the panopticon must be subject to the panopticon. E.g. members of the CCP must be subject to the Chinese "social credit" system.
It seems to me that if everyone is subject to the system then we still have a techno-tyranny but it's ruled by Mrs. Grundy. Otherwise, if there are privilege levels to the panopticon, you're going to wind up with masters and slaves.
> Not to mention that ubiquitous surveillance is a problem in itself, because again who can we trust to administer it sanely?
I don't think we can avoid solving that problem, I think ubiquitous surveillance is unavoidable due to economic factors (e.g. the fleet of self-driving cars is a de facto surveillance network. See also "sensing for wi-fi": your router can see you.) It's already happening, eh? Our cell phone track our locations, etc.
> It all goes back to the same root problem: trust, which is fundamentally incompatible with human nature. The best course of action, IMO, is to do away with it entirely by using trustless systems.
Here's where I strongly disagree. I don't accept the "it's human nature" argument against our higher values. I've lived in high-trust and low-trust enclaves and high-trust is just better. It's more efficient, but more importantly it's just fantastic! It feels great! It's just as natural if not more so to love and trust each other as it is to hate or fear each other. The best course of action, IMO, is to foster the higher human values and establish and grow trustworthy regimes within the chaotic larger systems and eventually establish a kind of techno-utopian Golden Age. :)
Cheers! It's not wasted time to have a sane and level headed exchange with someone who is interested in actual discussion. Usually it's just people looking to dunk on those dumb cryptobros for le epic upvotes, so this was a nice change of pace. Thank you! I enjoyed the talk, it has been a while since I geeked out about it.
>E.g. members of the CCP must be subject to the Chinese "social credit" system. It seems to me that if everyone is subject to the system then we still have a techno-tyranny but it's ruled by Mrs. Grundy. Otherwise, if there are privilege levels to the panopticon, you're going to wind up with masters and slaves.
The problem with this, panopticon aside, is that someone is bound to have these rules bent to their will: if the system is centralized then someone will inevitably have more power than someone else, and that someone will inevitably abuse that power. Bonus points if they create a narrative that convinces the public that the abuse was a good thing(tm) and is therefore accepted, swept under the rug or even considered the system working as intended. You know, as it already happens on a daily basis.
In an ideal decentralized system, everyone watches everyone. There is no one who has more power than any other, and everyone is bound to the same system with the same rules with no room for abuse. Of course, this is a utopia and not at all appliable to the real world, but it's an interesting thought experiment: how would such a system work if applied to humanity as a whole and no trust is required in your fellow human being anymore, as that trust is guaranteed by The System? It's not necessarily a good thing, mind you, as we'd have a different kind of panopticon: it might not be abusable by a single person, but it can be abused by the masses... and as we've seen lately that might be even worse.
>I don't think we can avoid solving that problem, I think ubiquitous surveillance is unavoidable due to economic factors (e.g. the fleet of self-driving cars is a de facto surveillance network. See also "sensing for wi-fi": your router can see you.) It's already happening, eh? Our cell phone track our locations, etc.
That's exactly why we need to solve the problem! We can't escape ubiquitous surveillance because it's here, and as long as we have the internet and electricity it will be here to stay. What we need to ensure is that it cannot be abused, bringing us back to my first point of watchmen all the way down.
>Here's where I strongly disagree. I don't accept the "it's human nature" argument against our higher values. I've lived in high-trust and low-trust enclaves and high-trust is just better. It's more efficient, but more importantly it's just fantastic! It feels great! It's just as natural if not more so to love and trust each other as it is to hate or fear each other. The best course of action, IMO, is to foster the higher human values and establish and grow trustworthy regimes within the chaotic larger systems and eventually establish a kind of techno-utopian Golden Age. :)
It's understandable that we disagree on this point, because doing away with trust is to reject part of what makes us humans in the first place. Trustless systems cannot be applied to all aspect of our lives, lest we become meat automatons bound by The System, but it can be applied to critical pieces of societal infrastructure to make lives better for everyone and distribute resources in an efficient manner. How? No idea, because such systems don't exist yet. I often see detractors parrot the "cryptocurrency is a solution looking for a problem" line, and that is partly true. We can fix some of the problems that plague society with cryptocurrencies (or better, tokenized decentralized systems), but we need to analyze these problems first and then create decentralized systems to fix them. Again, I've seen plenty of attempts at tackling such problems in the space; some turned out to be scams, some died, some are currently being worked on, but hopefully, eventually, some will see the light of day and bring some much needed positive change in our life... should it take years, if not decades.
In the meantime, we must do our best to improve society with the tools we have at hand. Even if those tools are often broken.
* But I don't see a way to build and deploy websites in a decentralized manner (as in, you don´t have to host the servers yourself or to a centralized entity like AWS) that doesn't involve the blockchain.
The problem is that the cryptocurrency space is not a homogenous entity. It's like painting the web as a hideous monstrosity because you disapprove of online gambling, Facebook and that the NASDAQ index fell recently. The title refers to Bitcoin but the content relates to Tether, Binance, Terra/Luna, etc.
Interesting that articles like this are coming from everywhere at the moment, now that BTC$ is tanking. But when Bitcoin price was still going up, they were not all that popular, also not on HN.
It seems the moral argument for Bitcoin is positively correlated with its price.
They were pretty popular on HN, always been. I know because I participated in a lot of discussions the past years here about all the stupidity going around the cryptocurrency space.
> the popularity of the criticism is increasing with its recent price drop
This is how theories are proposed, vetted and adopted [1]. Bitcoin was proposed as a solution to a set of problems. Over time, the null hypothesis was refined. We're now seeing, with the tide going out, strong evidence to support it. So people are switching sides, or taking a side for the first time.
In Kuhn's words, a paradigm shift was experimented with and appears to be in the process of being rejected.
That seems... expected? Magical internet money is more on peoples' minds than usual at the moment, so it's natural that stuff about it would get more engagement.
> It seems the moral argument for Bitcoin is positively correlated with its price.
this is specious reasoning. The moral arguments for/against bitcoin have always been there. Judging the validity of arguments based on how often they appear in media is how you get burned/misled.
Many of my Ukraininan/Russian friends would not be alive today if it wasn't for crypto, same goes for many journalists and innocent civilians that escaped controlling governments, war zones, hyperinflation etc. Show me another asset that you can take with you in times of crisis on a usb stick or piece of paper, and transact without middle-men globally. A significant number of people live in places where saying/doing something controversial can get your assets frozen (Canada '22) or much worse.
Sure BTC uses a lot of electricity, but so does the US military which is key to maintaining the $ as global reserve currency. There are many people and projects in crypto trying to do the right thing about energy (https://ethereum.org/en/energy-consumption/).
Dunno why you would fight against a fair, open, censorship-resistant, global financial system, unless you're a dictator. You won't need it, until you do.
> Dunno why you would fight against a fair, open, censorship-resistant, global financial system
If that's all it was then you would be correct, only nasty folks would be against it. But that's not all it is, or even the main thing it is. The same qualities that make it useful for your friends during a war also make it useful for various sorts of crime, but all the time not just under (what should be) highly unusual and dangerous circumstances.
The fight here is all of us against the dictators and warmongers. If we work to create a "fair, open, censorship-resistant, global financial system" together we can do that without enabling scammers and crooks.
> How do you create an “open and censorship resistant system” that blocks only a specific category of people?
The current rise of ubiquitous surveillance is already creating a censorship-resistant system. Whether it's open or not is a matter of policy, rather than technology.
> First we start with scammers and crooks, then fast forward a little, and suddenly now we are doing civil forfeitures?
That's a really good point: I would hope if there were more footage of civil forfeiture it would be harder to get away with it, eh? If everybody can see what everybody else-- including police and politicians --is up to then we can only get away with what everybody (or most everybody) accepts. I call it the "Tyranny of Mrs. Grundy".
You know what's an even worse "hideous monstrosity" than Bitcoin?
The way in which a few hundred million egocentric if not sociopathic people in the global west have allowed themselves to become addicted to excessive consumption of unnecessary trash produced with dirty energy and emitting millions of tons of harmful substances, thereby wrecking the ecosphere on the whole planet.
And then one of these addicts comes along and portrays Bitcoin as if it were the worst of all evil things and "devouring the world" .. all while Bitcoin is using less than 1/700 of the world's energy consumption [1] (and some of that is renewable).
That's about as huge as one can fuck up prioritization of problems.
Someone's hosting a big party somewhere in the middle of nowhere, off-the-grid, so no grid electricity. Summer, sun shining, air is hot like a hair dryer.
They put up a 20 kW generator run on gasoline. It's powering several fridges for cold drinks and ice, sound system, light effects, and so on.
Unfortunately the heat is too much some old person, so they need to be kept cool in a tent and luckily there's an AC unit that could keep the temperature at some tolerable level.
AC would use a few kW. Dang, the generator is maxed out already with all the other stuff.
Aha, someone notices a guy who's plugged in a soldering iron and is burning patterns in pieces of wood.
People start arguing with the guy to stop wasting electricity on his stupid wood art, because it'd be needed for the poor person suffering from the heat.
This is what's happening here.
People don't even think about questioning whether the party should keep going. Whether they should just switch off the fridges. Well, maybe they are questioning, but they still have most of their attention on this one guy using maybe 50 watts.
Meanwhile the sick person in the tent is getting weaker. And people outside are now shouting at this guy to unplug his damned soldering iron or the person in the tent might die.
If you want to save the ecosphere ... you do not go about and divert people's attention - which is very much a limited resource - to minuscule factors of the problem.
You do instead point them to the big pieces of the pie chart.
All the people conflating "bitcoin" with "crypto" are unbelievably ignorant – or simply malicious.
Really goes to show how low hacker news has fallen...
Does crypto have issues? yes. Is it good enough that in occasion it was my preferred payment method? yes.
Crypto community and companies are maybe bad, but if you zoom out into IT overall there is a fair share of greed and misuse. The internet is full of scams, gurus selling courses with false claims, spam emails that drain your grandpa's account, affiliate programs with 70% margin to sell fake products from questionable weight loss ebooks with health-harming diets to fragrances claiming to be perfumes that attract females supported by endless fake video testimonies, online communities encouraging hate, demoralization, and lack of belief in society.
Seem to me that those articles are nothing but status quo bias, does crypto has bad aspects? yes, is it worse than say internet? I don't know.