If anything, I think stablecoins are way more dangerous than the author indicates.
People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them in all sorts of settings as a result.
When dollar-denominated assets appear, they always run the risk of being considered a dollar-equivalent. For example, bank deposits are dollar-denominated, and are considered dollar-equivalent (even dollar-superior, in the sense that there are transactions that you can't legally do with specie, only with bank deposits, like buy stocks). That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whole. See Savings & Loan Crisis, the GFC, LTCG, etc., etc.
Stablecoins piggyback on the legal aspects of dollars, and as long as you treat them as dollar-denominated assets, you're fine. The second you treat them as dollar-equivalents, you run the risk of a change in the value of that asset being something that the government is forced into supporting.
I was just thinking the same thing. I was looking into [Gemini Dollar](https://www.gemini.com/dollar) yesterday. It's a stable coin that gives the patina of being FDIC secured. Their website says, "Gemini is a U.S. company regulated by the New York Department of Financial Services. GUSD reserves are eligible for FDIC insurance up to $250,000 per user while custodied with State Street Bank and Trust.¹" Furthermore, Gemini offers 8% interest deposits of their Gemini Dollar. This sounds like a safe bet to an unassuming person. Easy 8% returns with no risk since your initial deposit is FDIC insured, so it's just like any other savings account. BUT ITS NOT. The fine print reads, "FDIC insurance applies only to the USD reserve funds. GUSD exist as ERC-20 tokens on the Ethereum blockchain; tokens are under the user’s self-custody, and are not insured through Gemini."
And this is coming from a reputable backer, relative to other stable coins. Then you have Tether which is a ponzi scheme tire fire years in the making and done almost entirely in the open with no consequences. Given that stablecoins like these are used to underpin a lot of the crypto markets, if one of these were to falter I don't see how it couldn't trigger knock on effects bringing down the others and the entire crypto market with it.
> That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whol
The federal government also charges the banks for that insurance. It usually is not a loss for the government.
I wonder how much of the Crypto hype is because the US banking system still lives in the 1980s or thereabouts.
If everybody in the US had access to bank accounts with easy electronic transfers within 5 seconds for no charge, no chargebacks and so on, as people are used to in the EU, would people still be excited about Bitcoin?
I think that's certainly a part of it, but it's not the whole story, and I suspect it's perhaps responsible for 1/3 of the story.
A bigger motivation, and perhaps the most quixotic one, is financial security.
No, I don't mean that cryptocurrencies haven't been highly unstable in value.
But the more that the cabal chooses to truly enter the 21st century, the greater the danger of that technology being used as a means of coercion. This has already been seen in the porn industry (both amateur and commercial) and, say what you want about the possible ethical issues with it, but people have the right to produce pornography in the United States and also participate in the same economic system as everyone else. The danger of companies like Visa and Paypal exercising political control over their customers for other reasons is non-zero, and I would even predict that the danger is at least moderate.
Whether you agree with that perspective is another thing. Many crypto enthusiasts, whether they are explicit about it or not, like the idea of creating an economic system that everyone can participate in that doesn't involve countless middle-men. If that wasn't the case, there wouldn't be a big push to create the Lightning network.
The other part of the desire for crypto, from my perspective, is a desire to be a part of a new frontier. We had the personal computing revolution, the internet, the web, web 2.0... and for those who missed out on those or merely miss them, crypto fills that void and provides a new realm of possibilities to explore.
So the US has an antiquated payments system vis-a-vis Europe, but crypto solves none of those problems. I don't see it. I see FOMO, groupthink and greed.
Crypto is used as a commodity and for scams, very rarely as a currency. Given that transferring crypto is hard, slower, more expensive, riskier, public, and more wasteful than real banking, I don’t see why these would be related.
Yes of course they'd be excited about it. It's gambling, and people really like gambling.
To be blunt, they fucking love it. Like they’ll build an entire city in the middle of an uninhabitable desert just to do it. They’ll give up their kids future for it. People making $7.25 an hour will spend hundreds of dollars a week on scratch off lottery tickets in order to participate in it.
An endless demand for new ways to gamble is the least fucking confusing cultural development to ever happen.
Put people in a prison and they’ll do it with cigarettes. Give a bunch of construction workers a lunch break and they’ll bet on which pigeon is gonna to take off first. Hand a group of people a round ball or a deck of cards and they’ll figure out how to do it.
Beanie babies, little ceramic figures, baseball cards, coins. The desire for people to speculate on synthetically created scarcity is boundless, spanning generations.
Speculation is common to every culture in every era of human history. It's an amazing use case for a new technology with billions and billions of dollars in pent-up demand.
Crypto (and NFT's) are a gambling fad. People will keep doing it until it’s banned, matures, or gets replaced by the next gambling craze.
Then you would expect people in the EU to not be interested in crypto, yet it's the opposite. You can pull up search volume for "Bitcoin" across the world (using Google Trends), many European nations are at the top.
As a matter of fact, their search volume is higher than US.
The technology doesn't really matter that much. If the US banking system wants to compete, it could try paying yield on savings. That's one weird trick that has made banking attractive for well over 1,000 years. A banking system that does not pay yields to savers is just a glorified collection of ledgers.
The problem with bank accounts is the banks. The promise of crypto is that you don't need to trust any institution, such as a bank, to keep track of your money.
> If everybody in the US had access to bank accounts with easy electronic transfers within 5 seconds for no charge, no chargebacks and so on, as people are used to in the EU, would people still be excited about Bitcoin?
As someone born in the EU (now living in South-East Asia) I am still excited about Bitcoin. Because I feel it's the only safe haven for my honestly earned money out of reach of governments and banks. I feel Bitcoin is a too important technology to fail, especially as the world will slowly move towards Central Bank Digital Currencies that will have the same problems as fiat right now.
I view inflation as something bad for society (a hidden tax and form of theft) and CBDCs will be inflationary currencies. I also don't like that governments and central banks will get even more control over people's lives once physical currencies are gone. If you behave bad through the eyes of governments or banks (e.g. using too much electricity, eat too much meat, work as a prostitute, etc...) they might be able to take restrict your earning potential or spending. That is not a world that I'd like to live in.
"Modern" banking systems still suck if you want to move large amounts of money, move money globally, move money without asking for regulatory permission and waiting for regulatory delays, avoid having your assets temporarily seized because the comptroller makes a paperwork error, etc. etc.
Quite a bit of it also comes from the fact that people are tired from the fed printing money at will, devaluing people's hard work they put in for years to save some money.
Secondly, people in the EU are also excited about bitcoin regardless of the fact that they have what you mentioned.
If PayPal would have realized the vision of Elon Musk, there would be no banks anymore. In that scenario, it would be really hard for crypto to emerge.
Most people on HN are rational people who look at the world in a rational way. Bitcoin and friends are not operating in a rational market, therefore we don't understand them, and most of us would probably be pretty lousy investors since we would try to make decisions rationally instead of memeing and YOLOing.
But, and this is a key point, that doesn't make us right and them wrong. It's just a different kind of market, one that I am not very good at, but it is for sure possible to make money in it. You just need to be a different kind of person. We can say our way is "better", but who are we to decide that?
This particular source is extremely low quality and is motivated by the author's undisclosed competing product. I would like to see higher quality sources on the front page of hacker news one day.
Not being pegged to a centralized, state-controlled currency is a dealbreaker for me. It's still in infancy and it's true that 99% of the projects are get-rich-quick schemes with no intrinsic value. Though, I think the author lives in a country with a trustworthy government because that's not the case for many people including me. In the last two days my country's currency has shaken much more than crypto and I don't trust a single word my government says. In this case, crypto really shines. In addition, as more services get integrated into crypto ecosystem and as get-rich bubbles wear off, combined with solutions to scalability and speed problems, many will see much more value in crypto.
12 years is nothing when reinventing fundamental workings of economics is at stake. Give it more time.
I think the biggest lesson here is that people really, really love unregulated gambling. The same way they love doing drugs, making narcotics an extremely profitable business.
If we don’t legalize the things our population deeply desire, the criminal elements are more than happy to step up and provide said services.
The authors example use cases about a database doing everything except crime summarizes it well. One persons crime is another persons freedom. If you rephrased it as saying, the only thing blockchains provide that a database doesn't is freedom, I think the resounding response would be: Yes.
What I think anti-crypto people object to is the freedom of others, because it represents a limit and undermines the necessary absolute and total Hobbesian sovereignty and dominion of the systems that provide them with their own status, which is based on something other than consent and desire, and when I read these objections, most of what I interpret is that implicit humiliation.
Gambling provides opportunity for people to live independent of being subordinate to an employer, as if your employees suddenly don't have to work for you, it's hard to build and scale social stability and wealth. I sympathize with the morality of reducing gambling as being appropriate for over a thousand years ago, but today? You also can't use shame to control people who can afford to walk away.
The current financial system is designed by-and-for creditors as a means of leverage over debtors, and crypto is explicitly not. The only problems of gambling are really problems with debts, and better laws limiting the power of creditors would solve that. The interests behind the criticisms are clear, but to me dressing them up and carting them around as moral is a bit much.
> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.
After all as we all know: If you've got nothing to hide, you've got nothing to fear.
And look at how inefficient all these permissionless, trustless protocols are! What a waste! Let's just all trust a central authority and think of the savings and the children.
I think a lot of discussions around the utility of blockchains misses (or just ignores) a really subtle but important point: smart contract networks (like Ethereum) could be thought of like public utilities that are implemented via markets. And I think that perspective can unlock a lot of innovation.
If I want to launch a startup, I have to cover hosting costs, manage infrastructure (terraform, AWS/DigitalOcean, Docker, DNS, etc) and handle lots of other complexity that is incidental to what I'm actually trying to build. It really helps to have VC money to ease that pain - but VC money is a dangerous train to get on.
But if I can build my app using smart contracts, then they are always available to execute when needed - just pay to write/execute. I don't need to cover hosting costs or much infrastructure beyond some web interface (which I could just put on Netlify). That simplicity reduces the need for funding.
Any data or infrastructure that I put in place is - by default - still available if my startup fails, so users who put their content into the system can still get access to it even if I can't afford to pay the bills anymore.
And of course, other startups could immediately build on top of whatever I've created.
Honestly, using blockchains for money - while essential for some of this - is not the most interesting application.
Stephen is mostly likely right that the decentralized nature of Crypto is not really a benefit. That said digital cash and tokens and NFTs do have value and I expect them to get even more popular.
I am reminded of the P2P/decentralized nature of Napster and how it was going to be a revolution.
Napter's P2P infrastructure (and later Gnutelle and Bittorrent) allowed it to operate in a legal gray zone or at least have deniability. But Napster's lasting innovation wasn't P2P, it was showing how popular digital music was when it was being fought by the powers that be (and Bittorrent showed how popular digital films would be.)
BitTorrent is still around, primarily for pirating content. It is no where near as popular as the legal means of accessing and distributing digital music and video though -- Netflix, Apple Music, Spotify, Disney+ have grabbed the main innovation and separated it from the decentralized P2P infrastructure that first enabled it.
I think crypto is likely going in that direction. People want digital cash. People want NFTs. But they do not need this wasteful decentralized infrastructure and the complete anonymity that it is designed around.
That said, I think the criminal needs will keep decentralized crypto around forever, even after it is likely banned in most places, just like BitTorrent continues today.
Crypto servers a great purpose just like Napster/Gnutella and Bitorrent did -- it is forcing us to modernize our traditional banking infrastructure to compete with these wildcat currencies.
Digital cash versions of each major currency will exist, be formally blessed by the powers that be, they will probably have at least semi-centralized infrastructure, KYC and rollback capabilities and near 0 gas fees. KYC and rollback capabilities are key for reducing crime.
Dogecoin started out as an explicitly value-free "let's play with this without risk or seriousness" fork of Bitcoin. The speed with which the scams took it over was instructive and I think indicative of everything that's played out since then... In that sense, Dogecoin was a rousing, complete, wonderful success.
I remember reports telling Dogecoin was one of the safest cryptos to invest in, as it doesn't promise anything, accepts itself existing only for a meme, and all the reports were underlying its honesty, telling "it is what it is". Then it skyrocketed and became a purely speculative one, of course it's not Dogecoin's fault but more like Elon's.
When it comes to crypto I am completely uninformed. In my uninformed opinion, I think there is probably something of value in crypto and the blockchain but I can't see it under the intense amount of bullshit the crypto community comes up with and I am not willing to dig through that mountain.
I'm in a similar boat. I could see ... something of value coming out of all this, perhaps something unexpected. But I certainly don't want to get involved with all the grifters, scammers, hucksters, confidence men, cryptobros and their various and sundry schemes. Knowing that I don't know much about the details of it... I think of "if you're playing a poker game and you look around the table and and can't tell who the sucker is, it's you" and know that I'd be the sucker, so the winning move is not to play.
As someone who is interested in this space, you have a proper way of looking at it. Most tokens are just scams outright, or if not scams, have communities which are totally unwilling to solve the technological problems inherent of their coins (see Bitcoin's high fees, limited block size, lack of privacy). One example of a decent currency which runs counter to this trend is privacy-focused Monero, though the developers/community don't bother to market it in the same manner as many other coins, to a point that on of the main criticisms of it is its comparable lack of volatility, amusingly enough.
tl;dr There are quite a few innovations that have been made by various actors in the cryptographic currency space, most of which are entirely drowned out by a torrent of mind-numbing get-rich-quick scams and stubborn, close-minded speculators.
Exactly the same as dot-com bubble where bs companies with just a domain name were the hot thing, if you just looked at that and wrote off tech, you would have made the wrong decision. Being on HN probably means you're technical enough to sort through the noise and find the actual value for yourself until the market does it for you.
> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.
Governments, world-wide, may end up emulating China, which is planning to outlaw other crypto-currencies while providing its own. The information gathered by a national government monopolizing crypto-currency is simply too appealing to those that would like to deter crime, stop tax-avoidance, or even understand in real-time what is going on in their economies. After China, I believe that other nations are likely to do the same thing and outlaw or heavily regulate crypto.
The author of this article makes specious claims that can each be refuted.
>Any application that could be done on a blockchain could be better done on a centralized database. Except crime.
That's simply not true. First he doesn't define "better" which is incredibly important when making such a claim. I would agree that centralized databases can do things "more quickly" and "with less overhead" but you'd lose the most important quality of what make cryptocurrencies important: "without permission, consent, or control of anyone else."
Centralized systems can make changes to your data without your knowledge or consent. They can freeze/edit/delete your records without your say. Decentralized systems that use blockchains are immune to this, and for people who prioritize privacy or use of a system without consent from some over-arching 3rd party, they would definitely say blockchain-based systems are "better"
>crypto assets have no claim to be currencies because their deflationary properties and volatility don’t fulfill the theoretical or even practical function of money
This is untrue. There are government-issued currencies that are far more volatile than cryptocurrencies are. There are 3 functions of money: store of value, unit of account, and medium of exchange. Cryptocurrencies like Bitcoin fulfill all 3.
>They aren’t commodities because they have no non-circular economic use case.
Again untrue. ENS and Handshake allow registration of domains without a centralized DNS registrar. Helium tokens allow access to a global decentralized sensor/relay network without relying on centralized telecoms. ETH and AKT allow you to code and deploy a program that does not rely on any centralized servers in two different formats. Sentinel (DVPN) lets you pay for and access a decentralized VPN without relying on a centralized party.
Each of these projects - and many many others - have economic use cases that are not circular.
The author has twisted facts to conform to his own predetermined reality.
> There is a somewhat coherent proposition that crypto assets are effectively unregistered securities contracts, basically like stock in an empty company that doesn’t do anything except promote the sale of its own stock.
I sometimes think that when anthropologists from the future look back at today, the primary lessons they'll draw from us won't have to do with our technological cleverness, but rather our financial imagination. Greed is at work in the world, and it is a strong force of propulsion in terms of how the world we are living in is changing. Perhaps dramatically more so than technology, in a given period of time.
The willingness to speculate in a manner that is completely unhinged from reality: that is the dark heart of cryptocurrencies. It is rent-seeking behavior taken to its brutally logical conclusion. And it is not unique to crypto. Look at people's behavior in the stock market, or the housing market. It isn't that these assets are actually appreciating that much in the real world, so much as investors are simply trying to find a place to put their money and get a return.
In that sense, the speculative utility that <meme stonks/Vancouver condos/cryptocoins> provide, as a store of financial value, has become orthogonal to reality. In some markets, I'd argue that we're even seeing a weird parasitic effect, where the host is kept alive simply to serve as a form of blue sky contract by the force of our collective willingness to play Russian Roulette speculative games with each other. GameStop is a good example.
They're really hammering away at the narrative these days. Every one of these articles i see reference one another. If this issue is so contentious as they claim every time, why is it that they can only seem to find a handful of people to reference each other? Seems like a group of people that for whatever assortment of reasons (probably their stated ones) don't like cryptocurrency and are crafting and hammering away at a narrative.
I don't disagree with a lot of what's said in the article. But there's a lot that is ignored, and a lot that isn't put into context. Yes, this entire system is designed to put financial interaction outside the purview of regulators. This is 100% true. But that's a selling point, at least to those who see it as a positive. That doesn't equate to "crime" though (although it includes crime as a subset) unless you blanked define all financial activity outside the reach of regulation as "crime", which is circular logic.
I work in fintech and I don't see how a run on Tether will result in everyone getting their money back. The people financing it are hidden behind shell corps in shady countries with loose reporting and have not been playing ball with regulators. It's not reasonable to believe they have the reserves.
The systems of payments we have today are social systems. They're built on a system of obligations, credits, debits, and liabilities. The technology used to facilitate modern systems is merely a reflection of that system.
The entire reason for the crypto ecosystem to exist is to have a financial system free of that regulation and governance.
I loved this article. I am almost in complete agreement.
Reading the comments here is very worrying. So little understanding of simple economic ideas, like what a Ponzi scheme is.
Truly amazed that people think that Bitcoin is comparable to gold. I am not a fan of gold as an investment, they have that in common. But nothing else.
It is a tragedy that so much energy is used, in times like these, for something so useless.
Crypto is all about decentralized proof of trust yet somehow this eludes people who should know better. Please show me how you solve decentralized proof of trust (double spend) with postgres.
Indeed, crime did have a need for anonymous proof of trust that crypto solved. Why did crime have a need for that? Because crime lies beyond the realm of the status quo.
Criminals are to the status quo as pioneers and revolutionaries are.
In the "normal world", centralization gives us the situation where the organization in charge of authentication is the same organization that has the monopoly on violence. Indeed within the rules of this story we built crypto seems to be "a solution looking for a problem", as another stereotype argument goes. The problem is all around you.
It's understood, but not desirable. Proof of Authority is preferable. Double spend is somewhat separate from proof of trust one you change the consensus algo and make it a permissioned system.
[+] [-] andrewla|4 years ago|reply
People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them in all sorts of settings as a result.
When dollar-denominated assets appear, they always run the risk of being considered a dollar-equivalent. For example, bank deposits are dollar-denominated, and are considered dollar-equivalent (even dollar-superior, in the sense that there are transactions that you can't legally do with specie, only with bank deposits, like buy stocks). That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whole. See Savings & Loan Crisis, the GFC, LTCG, etc., etc.
Stablecoins piggyback on the legal aspects of dollars, and as long as you treat them as dollar-denominated assets, you're fine. The second you treat them as dollar-equivalents, you run the risk of a change in the value of that asset being something that the government is forced into supporting.
[+] [-] TSiege|4 years ago|reply
And this is coming from a reputable backer, relative to other stable coins. Then you have Tether which is a ponzi scheme tire fire years in the making and done almost entirely in the open with no consequences. Given that stablecoins like these are used to underpin a lot of the crypto markets, if one of these were to falter I don't see how it couldn't trigger knock on effects bringing down the others and the entire crypto market with it.
[+] [-] HWR_14|4 years ago|reply
The federal government also charges the banks for that insurance. It usually is not a loss for the government.
[+] [-] weego|4 years ago|reply
No, they're competitors for the stores of sovereign wealth that are the backing of sovereign currencies.
[+] [-] Scarblac|4 years ago|reply
If everybody in the US had access to bank accounts with easy electronic transfers within 5 seconds for no charge, no chargebacks and so on, as people are used to in the EU, would people still be excited about Bitcoin?
[+] [-] ravenstine|4 years ago|reply
A bigger motivation, and perhaps the most quixotic one, is financial security.
No, I don't mean that cryptocurrencies haven't been highly unstable in value.
But the more that the cabal chooses to truly enter the 21st century, the greater the danger of that technology being used as a means of coercion. This has already been seen in the porn industry (both amateur and commercial) and, say what you want about the possible ethical issues with it, but people have the right to produce pornography in the United States and also participate in the same economic system as everyone else. The danger of companies like Visa and Paypal exercising political control over their customers for other reasons is non-zero, and I would even predict that the danger is at least moderate.
Whether you agree with that perspective is another thing. Many crypto enthusiasts, whether they are explicit about it or not, like the idea of creating an economic system that everyone can participate in that doesn't involve countless middle-men. If that wasn't the case, there wouldn't be a big push to create the Lightning network.
The other part of the desire for crypto, from my perspective, is a desire to be a part of a new frontier. We had the personal computing revolution, the internet, the web, web 2.0... and for those who missed out on those or merely miss them, crypto fills that void and provides a new realm of possibilities to explore.
[+] [-] JackFr|4 years ago|reply
[+] [-] stevebmark|4 years ago|reply
[+] [-] CPLX|4 years ago|reply
To be blunt, they fucking love it. Like they’ll build an entire city in the middle of an uninhabitable desert just to do it. They’ll give up their kids future for it. People making $7.25 an hour will spend hundreds of dollars a week on scratch off lottery tickets in order to participate in it.
An endless demand for new ways to gamble is the least fucking confusing cultural development to ever happen.
Put people in a prison and they’ll do it with cigarettes. Give a bunch of construction workers a lunch break and they’ll bet on which pigeon is gonna to take off first. Hand a group of people a round ball or a deck of cards and they’ll figure out how to do it.
Beanie babies, little ceramic figures, baseball cards, coins. The desire for people to speculate on synthetically created scarcity is boundless, spanning generations.
Speculation is common to every culture in every era of human history. It's an amazing use case for a new technology with billions and billions of dollars in pent-up demand.
Crypto (and NFT's) are a gambling fad. People will keep doing it until it’s banned, matures, or gets replaced by the next gambling craze.
[+] [-] freewilly1040|4 years ago|reply
[+] [-] rawtxapp|4 years ago|reply
As a matter of fact, their search volume is higher than US.
[+] [-] rchowe|4 years ago|reply
[+] [-] mountainb|4 years ago|reply
[+] [-] Kaytaro|4 years ago|reply
[+] [-] mitchdoogle|4 years ago|reply
[+] [-] wsc981|4 years ago|reply
As someone born in the EU (now living in South-East Asia) I am still excited about Bitcoin. Because I feel it's the only safe haven for my honestly earned money out of reach of governments and banks. I feel Bitcoin is a too important technology to fail, especially as the world will slowly move towards Central Bank Digital Currencies that will have the same problems as fiat right now.
I view inflation as something bad for society (a hidden tax and form of theft) and CBDCs will be inflationary currencies. I also don't like that governments and central banks will get even more control over people's lives once physical currencies are gone. If you behave bad through the eyes of governments or banks (e.g. using too much electricity, eat too much meat, work as a prostitute, etc...) they might be able to take restrict your earning potential or spending. That is not a world that I'd like to live in.
[+] [-] wyager|4 years ago|reply
[+] [-] azth|4 years ago|reply
Secondly, people in the EU are also excited about bitcoin regardless of the fact that they have what you mentioned.
[+] [-] Eduard|4 years ago|reply
Um, no. I'm not used to that. My latest online German-bank-to-German-bank giro transfer took the usual two-to-three business days.
[+] [-] tim333|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] koonsolo|4 years ago|reply
But right now, that market is fully open.
[+] [-] llimos|4 years ago|reply
But, and this is a key point, that doesn't make us right and them wrong. It's just a different kind of market, one that I am not very good at, but it is for sure possible to make money in it. You just need to be a different kind of person. We can say our way is "better", but who are we to decide that?
[+] [-] anonymoushn|4 years ago|reply
[+] [-] can16358p|4 years ago|reply
12 years is nothing when reinventing fundamental workings of economics is at stake. Give it more time.
[+] [-] nikanj|4 years ago|reply
If we don’t legalize the things our population deeply desire, the criminal elements are more than happy to step up and provide said services.
[+] [-] motohagiography|4 years ago|reply
What I think anti-crypto people object to is the freedom of others, because it represents a limit and undermines the necessary absolute and total Hobbesian sovereignty and dominion of the systems that provide them with their own status, which is based on something other than consent and desire, and when I read these objections, most of what I interpret is that implicit humiliation.
Gambling provides opportunity for people to live independent of being subordinate to an employer, as if your employees suddenly don't have to work for you, it's hard to build and scale social stability and wealth. I sympathize with the morality of reducing gambling as being appropriate for over a thousand years ago, but today? You also can't use shame to control people who can afford to walk away.
The current financial system is designed by-and-for creditors as a means of leverage over debtors, and crypto is explicitly not. The only problems of gambling are really problems with debts, and better laws limiting the power of creditors would solve that. The interests behind the criticisms are clear, but to me dressing them up and carting them around as moral is a bit much.
[+] [-] IronIvan|4 years ago|reply
After all as we all know: If you've got nothing to hide, you've got nothing to fear.
And look at how inefficient all these permissionless, trustless protocols are! What a waste! Let's just all trust a central authority and think of the savings and the children.
[+] [-] joshmarlow|4 years ago|reply
If I want to launch a startup, I have to cover hosting costs, manage infrastructure (terraform, AWS/DigitalOcean, Docker, DNS, etc) and handle lots of other complexity that is incidental to what I'm actually trying to build. It really helps to have VC money to ease that pain - but VC money is a dangerous train to get on.
But if I can build my app using smart contracts, then they are always available to execute when needed - just pay to write/execute. I don't need to cover hosting costs or much infrastructure beyond some web interface (which I could just put on Netlify). That simplicity reduces the need for funding.
Any data or infrastructure that I put in place is - by default - still available if my startup fails, so users who put their content into the system can still get access to it even if I can't afford to pay the bills anymore.
And of course, other startups could immediately build on top of whatever I've created.
Honestly, using blockchains for money - while essential for some of this - is not the most interesting application.
[+] [-] bhouston|4 years ago|reply
I am reminded of the P2P/decentralized nature of Napster and how it was going to be a revolution.
Napter's P2P infrastructure (and later Gnutelle and Bittorrent) allowed it to operate in a legal gray zone or at least have deniability. But Napster's lasting innovation wasn't P2P, it was showing how popular digital music was when it was being fought by the powers that be (and Bittorrent showed how popular digital films would be.)
BitTorrent is still around, primarily for pirating content. It is no where near as popular as the legal means of accessing and distributing digital music and video though -- Netflix, Apple Music, Spotify, Disney+ have grabbed the main innovation and separated it from the decentralized P2P infrastructure that first enabled it.
I think crypto is likely going in that direction. People want digital cash. People want NFTs. But they do not need this wasteful decentralized infrastructure and the complete anonymity that it is designed around.
That said, I think the criminal needs will keep decentralized crypto around forever, even after it is likely banned in most places, just like BitTorrent continues today.
Crypto servers a great purpose just like Napster/Gnutella and Bitorrent did -- it is forcing us to modernize our traditional banking infrastructure to compete with these wildcat currencies.
Digital cash versions of each major currency will exist, be formally blessed by the powers that be, they will probably have at least semi-centralized infrastructure, KYC and rollback capabilities and near 0 gas fees. KYC and rollback capabilities are key for reducing crime.
[+] [-] h2odragon|4 years ago|reply
[+] [-] can16358p|4 years ago|reply
[+] [-] BoysenberryPi|4 years ago|reply
[+] [-] davidw|4 years ago|reply
[+] [-] discordianfish|4 years ago|reply
[+] [-] sweetbitter|4 years ago|reply
tl;dr There are quite a few innovations that have been made by various actors in the cryptographic currency space, most of which are entirely drowned out by a torrent of mind-numbing get-rich-quick scams and stubborn, close-minded speculators.
[+] [-] rawtxapp|4 years ago|reply
[+] [-] dvh1990|4 years ago|reply
So you're saying there IS a use case :)
[+] [-] nikanj|4 years ago|reply
[+] [-] throwawayffffas|4 years ago|reply
[+] [-] todd8|4 years ago|reply
> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.
Governments, world-wide, may end up emulating China, which is planning to outlaw other crypto-currencies while providing its own. The information gathered by a national government monopolizing crypto-currency is simply too appealing to those that would like to deter crime, stop tax-avoidance, or even understand in real-time what is going on in their economies. After China, I believe that other nations are likely to do the same thing and outlaw or heavily regulate crypto.
[+] [-] tigereyeTO|4 years ago|reply
>Any application that could be done on a blockchain could be better done on a centralized database. Except crime.
That's simply not true. First he doesn't define "better" which is incredibly important when making such a claim. I would agree that centralized databases can do things "more quickly" and "with less overhead" but you'd lose the most important quality of what make cryptocurrencies important: "without permission, consent, or control of anyone else."
Centralized systems can make changes to your data without your knowledge or consent. They can freeze/edit/delete your records without your say. Decentralized systems that use blockchains are immune to this, and for people who prioritize privacy or use of a system without consent from some over-arching 3rd party, they would definitely say blockchain-based systems are "better"
>crypto assets have no claim to be currencies because their deflationary properties and volatility don’t fulfill the theoretical or even practical function of money
This is untrue. There are government-issued currencies that are far more volatile than cryptocurrencies are. There are 3 functions of money: store of value, unit of account, and medium of exchange. Cryptocurrencies like Bitcoin fulfill all 3.
>They aren’t commodities because they have no non-circular economic use case.
Again untrue. ENS and Handshake allow registration of domains without a centralized DNS registrar. Helium tokens allow access to a global decentralized sensor/relay network without relying on centralized telecoms. ETH and AKT allow you to code and deploy a program that does not rely on any centralized servers in two different formats. Sentinel (DVPN) lets you pay for and access a decentralized VPN without relying on a centralized party. Each of these projects - and many many others - have economic use cases that are not circular.
The author has twisted facts to conform to his own predetermined reality.
[+] [-] notpachet|4 years ago|reply
I sometimes think that when anthropologists from the future look back at today, the primary lessons they'll draw from us won't have to do with our technological cleverness, but rather our financial imagination. Greed is at work in the world, and it is a strong force of propulsion in terms of how the world we are living in is changing. Perhaps dramatically more so than technology, in a given period of time.
The willingness to speculate in a manner that is completely unhinged from reality: that is the dark heart of cryptocurrencies. It is rent-seeking behavior taken to its brutally logical conclusion. And it is not unique to crypto. Look at people's behavior in the stock market, or the housing market. It isn't that these assets are actually appreciating that much in the real world, so much as investors are simply trying to find a place to put their money and get a return.
In that sense, the speculative utility that <meme stonks/Vancouver condos/cryptocoins> provide, as a store of financial value, has become orthogonal to reality. In some markets, I'd argue that we're even seeing a weird parasitic effect, where the host is kept alive simply to serve as a form of blue sky contract by the force of our collective willingness to play Russian Roulette speculative games with each other. GameStop is a good example.
[+] [-] alcio|4 years ago|reply
In a weird way, this quote is a good explanation of why cryptos exist: they give the possibility of creating systems evading state controls.
Crime is a relative thing: moving money outside of certain countries is prohibited, in others it's owning property for certain category of people.
[+] [-] betwixthewires|4 years ago|reply
I don't disagree with a lot of what's said in the article. But there's a lot that is ignored, and a lot that isn't put into context. Yes, this entire system is designed to put financial interaction outside the purview of regulators. This is 100% true. But that's a selling point, at least to those who see it as a positive. That doesn't equate to "crime" though (although it includes crime as a subset) unless you blanked define all financial activity outside the reach of regulation as "crime", which is circular logic.
[+] [-] agentultra|4 years ago|reply
The systems of payments we have today are social systems. They're built on a system of obligations, credits, debits, and liabilities. The technology used to facilitate modern systems is merely a reflection of that system.
The entire reason for the crypto ecosystem to exist is to have a financial system free of that regulation and governance.
[+] [-] worik|4 years ago|reply
Reading the comments here is very worrying. So little understanding of simple economic ideas, like what a Ponzi scheme is.
Truly amazed that people think that Bitcoin is comparable to gold. I am not a fan of gold as an investment, they have that in common. But nothing else.
It is a tragedy that so much energy is used, in times like these, for something so useless.
128 TWh in a year. https://www.sciencealert.com/bitcoin-could-soon-consume-0-6-...
[+] [-] pennaMan|4 years ago|reply
Indeed, crime did have a need for anonymous proof of trust that crypto solved. Why did crime have a need for that? Because crime lies beyond the realm of the status quo.
Criminals are to the status quo as pioneers and revolutionaries are.
In the "normal world", centralization gives us the situation where the organization in charge of authentication is the same organization that has the monopoly on violence. Indeed within the rules of this story we built crypto seems to be "a solution looking for a problem", as another stereotype argument goes. The problem is all around you.
[+] [-] nice_byte|4 years ago|reply
[+] [-] verdverm|4 years ago|reply