Crypto cannot create wealth, only move it around. If too many people become crypto-rich and try to spend it on real-world assets, the assets will just inflate in price.
What can happen is that crypto could replace other forms of money. Governments will likely fight this tooth and nail however, because crypto is currently an anti-government technology.
Crypto lets governments track every citizen's purchase ever made, forever. KYC ensures that a wallet is tied to a person. I am surprised governments haven't yet jumped on this fully (without proof of work, just a government run digital currency and a blockchain).
No, I disagree. That’s like saying an isp can’t create information, only move it around. Metadata is value, such as on-chain data being an expression of trade volumes etc, and this itself is a second order value, beyond the utility of trustless censorship resistant payments, that in itself is worth percents of the total value transacted.
Yes, it is a protocol, but TCP/IP made many fortunes also. Even though it just moves bits around the globe.
> Governments will likely fight this tooth and nail however, because crypto is currently an anti-government technology.
Democratic governments represent the will of the people, and I don't think a technology can be pro-government or anti-government, it ultimately depends on what the people what. I think you are correct though for autocratic governments. Would you for example say that guns are clearly anti-government or pro-government?
Bitcoin was created from scratch and is worth >500B today. And by worth, I mean you can literally sell your bitcoin on one of the crypto exchanges and get real dollars back. If that is not wealth creation, I don't know what your definition of wealth creation is.
When we look at all the crypto coins, the combines value creation is >1.2 Trillion USD as per https://coinmarketcap.com/.
The issue here is actually pretty easy to grok. Crypto is a new market, so there is a historical amount of information asymmetry between consumers and producers. This brings a lot of scammers to the space. A lot of crypto is definitely bullshit, but there are some use-cases that I admire that aren’t just gambling on Shit coins.
> On Monday, the Financial Times published an interview with Sam Bankman-Fried, the founder of the FTX crypto-trading exchange, in which he said bitcoin doesn’t have a future as a means of payment because it is too complicated and environmentally costly.
If crypto goes down in value to ten percent, or one percent of its current value, will people who believe in it admit it was a grift?
If it goes up in value again, 2x or 10x its current value, will people who said it was a grift admit it was more than that?
I would bet money (fiat or digital) that, in either case, most people on either side will just say "I haven't been proven right yet", because it's just camps yelling at each other at this point.
The best crypto grift was the neobank startups that were front ends for investing in anchor, a 20%APY crypto ponzi. Anchor crashed with Luna and all those startups kept their money in failed stable coins and have folded and failed to make payroll. They lost all of their money and all of their customers money. Woof
How are the founders of these apps not in prison? I remember getting hundreds of “replace your savings account” ads that abruptly ended with the Luna collapse.
I think cryptocurrencies/nfts are crap and have no value, but to play devil’s advocate here; for all the people saying this is all doomed, the top cryptocurrency assets seem to more or less look like the tech market and BTC is doing better than, say Netflix. Netflix actually makes things and is 76% down from ath, while btc only 66%. So why is it so resilient? When will it die if it indeed has no value? Are we just grumpy tech people who are kicking ‘evil’ things that will never change or go away?
Cannot read your mind but I'll make a guess based on the fact that you are comparing it to a tech stock and the fact that most people on this website make this mistake: You are viewing Bitcoin as a technical project rather than an economic one.
Bitcoin is not technically interesting - it is economically genius. Undergrad cryptographers have learnt enough to re-implement the Bitcoin protocol, but understanding the genius of the composition of those simple primitives is a practice of game theory and economics. Historians of money who know not how to program have far more authority than a bitter techie when it comes to analyzing Bitcoin.
Crypto crashes every couple years and of course it has grown immensely since the last crash so the scale and scope of these kinds of “analyses” grow with it. I’d imagine in 5 years in the next big crash it will be the top news around the global for many weeks.
No, I think there is a natural limit - eventually you have enough people burned by the scams, crashes, hacks etc. who will keep away, to the point that you don't have enough new entrants to put enough money in to have continuing growth.
Unless there was an actual crypto economy, but at this point, there's not much more than speculation.
It boomed and busted in 2017. Then wasn't going anywhere for years until central banks generated massive liquidity and all assets jumped (because cash went to zero and pushed everyone out on the risk curve). That's direct cause and effect.
Given the liquidity is being taken away, what is going to save the day for Crypto next? What would cause it to recover to previous highs? I don't think recovery is predestined.
Anyway, what is to say bitcoin shouldn't be $10,000? Or $1000? Or $1?
Making predictions about something that’s only been around in any significant way for a decade and is subject to so many social, political, and economic pressures (extremely chaotic in themselves) is probably pretty fraught.
Interesting economic theory… “What happened yesterday will happen tomorrow”… hang on, I have a lot of money to move around before markets open tomorrow!
> As an inevitable crash occurs, many of the swindles and alleged swindles are coming to light.
Yeah, bubbles make overvalued prices. Crashes occur. Losers fail. Winners gain bigger marketshare and mindshare.
Spectacular failures are actually a sign of a functioning market. The worst possible thing that could have happened last week would be the federal reserve offering Do Kwon a very cheap bridge loan to stabilize his section of the crypto economy, lest we risk broader market contagion.
Crypto failures are fast and painful as opposed to long and corrupt. This is a feature, not a bug.
Also, ironically, this author has spilled a fair amount of ink over all the market crises of the years. He wrote a whole book on the dot-com bust. The Luna saga was over in about 3 days.
> The list includes some traditional tactics for illicitly relieving rubes of their money, such as pump-and-dump schemes and phishing for passwords. It also describes new, more novel schemes, including the “pig butchering” crypto scam, which often involves an attractive person approaching you online and offering you spectacularly lucrative crypto investments.
Sure, I get these DMs on discord too. Don't fall for scammers. They were doing the same nonsense with "Double your Square Cash!" scams shortly before the crypto boom. Or offering great deals on "GPUs" during the shortage. This is not a crypto problem in the slightest and crypto probably makes these lower end scammers easy to prosecute.
> The over-all aim was to make crypto investing seem mainstream and draw in gullible investors who feared they were being left on the sidelines.
Does anyone seriously believe that etrade or robinhood advertising options trading to me is somehow different? There are constant commercials for precious metals and ETFs and all kinds of things.
I know a fair amount of bitcoin millionaires, all of whom were called "gullible investors" at the time.
What really bothers me is the incredible amount of ignorance I see in the comments section about crypto, blockchain technologies, poor understandings of economics, etc.
Wtf HN. Do better. I feel like I'm watching my peers get old and resistant to change and dismissive of new technologies and exciting possibilities.
Also, if you appreciate my contrarian (for HN?) view and are looking to take on more risk, now is the time to build for web3. The people chasing easy money will give up and the people moving the tech forward will build while no one is watching.
The reason is because it's very closely related to gambling and triggers the same obsessive thinking as gambling does - based on my observations of how I felt and thought when I did some crypto investing - I found myself constantly checking prices and devoting huge amounts of thought to it - I even wrote a crypto trading bot to analyse strategies. If you know anyone into crypto you would know they talk about it non stop.
There are HUGE numbers of people who's brains are deeply involved with crypto. They'll be back for more.
Crypto had a big crash only recently - about 12 to 18 months ago I think, when Elon Musk made some comments that crashed the market. That crash was rapidly forgotten and people piled back in. Same thing will happen here.
Logic is not the driver of people's behavior.
Crypto is essentially legal, consensual large scale ponzi scheme participation - if you understand that then you might be able to win big.
The Great Finance/Startup/Stock/Housing/Everything Grift May Be Unwinding. They will bottom, then all wind up again. The same structure will generate the same outputs again and again.
There is absolutely zero legal usecase for cryptocurrencies. None. "oh but it might be useful for doing-" you are wrong. Full stop.
"but what about censorship" Circumventing government censorship is, by definition, illegal.
"but what about trustless" We do not live in a world where there is nobody that can be trusted. And if we did, why the hell would you want a currency where nothing can ever be reversed?
"but what about NFTs/smart contracts/DAO" All of these are useless and have resulted in nothing but blatant scams and illegal activity (because that's all cryptocurrency is useful for)
Cryptocurrencies have many great uses. You can gamble with them, you can buy drugs with them, you can pay ransom on software that just locked down your entire business for a day, as well as many other illegal activities. EVERY SINGLE OTHER USE, WITHOUT EXCEPTION, is something that centralized systems already do well. And if someone is trying to convince you otherwise, they are either trying to pass the bag to you or make you a part of their scam.
there aren’t any that have been here a while and bother to chime in any more because every comment section on a crypto related story here is essentially exactly the same and has been for about 6 years, maybe more.
If this is the obit that sticks, the HN crypto commentariat can line up for their certificates of honor from the Being Right After All Foundation. Unfortunately, these will be distributed as NFTs
If you really believe it doesn't have "any value at all" then I invite you to sell it short. That's a free $30,000. The nice thing about markets is that you can express your opinion, and that market opinions without corresponding positions can be ignored.
Just watching all this collegial self-agreement among people who don't fully understand the subject, because what they know, they learned from writers who don't understand the subject, like the author of the laughable media piece posted here.
BTC is down 53% from ATH. NFLX is down almost 75%. PTON is down over 91%. You'd actually be better off investing in BTC than in many tech darlings. I don't own any crypto, but I don't think it's fair to single out crypto in the middle of a broad tech downturn.
Bitcoin’s “killer app” and underlying utility is illegal transactions. Money laundering and drug purchasing. As long as the government allows it; crypto will have a base value in that.
[+] [-] etaioinshrdlu|3 years ago|reply
What can happen is that crypto could replace other forms of money. Governments will likely fight this tooth and nail however, because crypto is currently an anti-government technology.
[+] [-] dpweb|3 years ago|reply
If my bank goes under I’m protected by the FDIC. If Coinbase goes under they have the right to use my money to pay their creditors.
[+] [-] 10x-dev|3 years ago|reply
[+] [-] randomhodler84|3 years ago|reply
Yes, it is a protocol, but TCP/IP made many fortunes also. Even though it just moves bits around the globe.
[+] [-] datadata|3 years ago|reply
Democratic governments represent the will of the people, and I don't think a technology can be pro-government or anti-government, it ultimately depends on what the people what. I think you are correct though for autocratic governments. Would you for example say that guns are clearly anti-government or pro-government?
[+] [-] RestlessMind|3 years ago|reply
When we look at all the crypto coins, the combines value creation is >1.2 Trillion USD as per https://coinmarketcap.com/.
[+] [-] GartzenDeHaes|3 years ago|reply
https://www.zdnet.com/article/ransomware-has-gone-down-becau...
[+] [-] unclebucknasty|3 years ago|reply
Not really understanding this. If crypto is just moving wealth around, then how can "too many" people become crypto-rich?
[+] [-] thfuran|3 years ago|reply
What's the difference? My employer doesn't create money, they just move it from clients to me. We're both still getting money out of it.
[+] [-] WFHRenaissance|3 years ago|reply
[+] [-] latchkey|3 years ago|reply
https://twitter.com/SBF_FTX/status/1526098754163687424
[+] [-] karaterobot|3 years ago|reply
If it goes up in value again, 2x or 10x its current value, will people who said it was a grift admit it was more than that?
I would bet money (fiat or digital) that, in either case, most people on either side will just say "I haven't been proven right yet", because it's just camps yelling at each other at this point.
[+] [-] arcticbull|3 years ago|reply
I've called it a grift since 2017 so yeah. Being a grift has nothing to do with its price and everything to do with its fundamental structure.
[+] [-] adastra22|3 years ago|reply
The value proposition of decentralized cryptocurrency remains the same whether the value is $62k or $0.62.
[+] [-] draw_down|3 years ago|reply
[deleted]
[+] [-] 0xB31B1B|3 years ago|reply
[+] [-] arikr|3 years ago|reply
[+] [-] charcircuit|3 years ago|reply
What do you mean? It is still working and has an 18% APY for UST. UST may have failed to be a stable coin, but Anchor still works.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] sebmellen|3 years ago|reply
[+] [-] tluyben2|3 years ago|reply
[+] [-] mattwilsonn888|3 years ago|reply
Bitcoin is not technically interesting - it is economically genius. Undergrad cryptographers have learnt enough to re-implement the Bitcoin protocol, but understanding the genius of the composition of those simple primitives is a practice of game theory and economics. Historians of money who know not how to program have far more authority than a bitter techie when it comes to analyzing Bitcoin.
[+] [-] nradov|3 years ago|reply
[+] [-] gfodor|3 years ago|reply
[+] [-] stephen_g|3 years ago|reply
Unless there was an actual crypto economy, but at this point, there's not much more than speculation.
[+] [-] HFguy|3 years ago|reply
It boomed and busted in 2017. Then wasn't going anywhere for years until central banks generated massive liquidity and all assets jumped (because cash went to zero and pushed everyone out on the risk curve). That's direct cause and effect.
Given the liquidity is being taken away, what is going to save the day for Crypto next? What would cause it to recover to previous highs? I don't think recovery is predestined.
Anyway, what is to say bitcoin shouldn't be $10,000? Or $1000? Or $1?
[+] [-] boardwaalk|3 years ago|reply
[+] [-] SV_BubbleTime|3 years ago|reply
[+] [-] anon9001|3 years ago|reply
Yeah, bubbles make overvalued prices. Crashes occur. Losers fail. Winners gain bigger marketshare and mindshare.
Spectacular failures are actually a sign of a functioning market. The worst possible thing that could have happened last week would be the federal reserve offering Do Kwon a very cheap bridge loan to stabilize his section of the crypto economy, lest we risk broader market contagion.
Crypto failures are fast and painful as opposed to long and corrupt. This is a feature, not a bug.
Also, ironically, this author has spilled a fair amount of ink over all the market crises of the years. He wrote a whole book on the dot-com bust. The Luna saga was over in about 3 days.
> The list includes some traditional tactics for illicitly relieving rubes of their money, such as pump-and-dump schemes and phishing for passwords. It also describes new, more novel schemes, including the “pig butchering” crypto scam, which often involves an attractive person approaching you online and offering you spectacularly lucrative crypto investments.
Sure, I get these DMs on discord too. Don't fall for scammers. They were doing the same nonsense with "Double your Square Cash!" scams shortly before the crypto boom. Or offering great deals on "GPUs" during the shortage. This is not a crypto problem in the slightest and crypto probably makes these lower end scammers easy to prosecute.
> The over-all aim was to make crypto investing seem mainstream and draw in gullible investors who feared they were being left on the sidelines.
Does anyone seriously believe that etrade or robinhood advertising options trading to me is somehow different? There are constant commercials for precious metals and ETFs and all kinds of things.
I know a fair amount of bitcoin millionaires, all of whom were called "gullible investors" at the time.
What really bothers me is the incredible amount of ignorance I see in the comments section about crypto, blockchain technologies, poor understandings of economics, etc.
Wtf HN. Do better. I feel like I'm watching my peers get old and resistant to change and dismissive of new technologies and exciting possibilities.
Also, if you appreciate my contrarian (for HN?) view and are looking to take on more risk, now is the time to build for web3. The people chasing easy money will give up and the people moving the tech forward will build while no one is watching.
[+] [-] andrewstuart|3 years ago|reply
The reason is because it's very closely related to gambling and triggers the same obsessive thinking as gambling does - based on my observations of how I felt and thought when I did some crypto investing - I found myself constantly checking prices and devoting huge amounts of thought to it - I even wrote a crypto trading bot to analyse strategies. If you know anyone into crypto you would know they talk about it non stop.
There are HUGE numbers of people who's brains are deeply involved with crypto. They'll be back for more.
Crypto had a big crash only recently - about 12 to 18 months ago I think, when Elon Musk made some comments that crashed the market. That crash was rapidly forgotten and people piled back in. Same thing will happen here.
Logic is not the driver of people's behavior.
Crypto is essentially legal, consensual large scale ponzi scheme participation - if you understand that then you might be able to win big.
[+] [-] jwmoz|3 years ago|reply
[+] [-] DrBazza|3 years ago|reply
https://en.wikipedia.org/wiki/Tulip_mania
[+] [-] RichardHeart|3 years ago|reply
[+] [-] anm89|3 years ago|reply
[+] [-] jmartin2683|3 years ago|reply
[+] [-] floatinglotus|3 years ago|reply
Call me old fashioned, but I want to store my money in something safe and reliable like Beanie Babies.
[+] [-] mountainriver|3 years ago|reply
[+] [-] tropicalfruit|3 years ago|reply
but the fiat value of cryptocurrencies is a speculative bubble i'm sure. without belabouring the whataboutism that usually follows this argument.
lines between blockchain the tech and crypto the casino are blurry.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] alexb_|3 years ago|reply
"but what about censorship" Circumventing government censorship is, by definition, illegal.
"but what about trustless" We do not live in a world where there is nobody that can be trusted. And if we did, why the hell would you want a currency where nothing can ever be reversed?
"but what about NFTs/smart contracts/DAO" All of these are useless and have resulted in nothing but blatant scams and illegal activity (because that's all cryptocurrency is useful for)
Cryptocurrencies have many great uses. You can gamble with them, you can buy drugs with them, you can pay ransom on software that just locked down your entire business for a day, as well as many other illegal activities. EVERY SINGLE OTHER USE, WITHOUT EXCEPTION, is something that centralized systems already do well. And if someone is trying to convince you otherwise, they are either trying to pass the bag to you or make you a part of their scam.
[+] [-] formerkrogemp|3 years ago|reply
[deleted]
[+] [-] jraines|3 years ago|reply
If this is the obit that sticks, the HN crypto commentariat can line up for their certificates of honor from the Being Right After All Foundation. Unfortunately, these will be distributed as NFTs
[+] [-] landa|3 years ago|reply
[+] [-] stblack|3 years ago|reply
Just watching all this collegial self-agreement among people who don't fully understand the subject, because what they know, they learned from writers who don't understand the subject, like the author of the laughable media piece posted here.
[+] [-] DANK_YACHT|3 years ago|reply
[+] [-] adam_arthur|3 years ago|reply
Great to see all these idiot fueled bubbles popping
[+] [-] Animats|3 years ago|reply
[+] [-] fictionfuture|3 years ago|reply
[+] [-] gjs278|3 years ago|reply
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