Why are all my friends buying an overhyped digital currency?(theoutline.com)
theoutline.com
Why are all my friends buying an overhyped digital currency?
https://theoutline.com/post/1924/why-are-all-my-friends-buying-an-overhyped-digital-currency
83 comments
>I find the recent popularity of cryptocurrencies very interesting as I spent a lot of time in 2007-2008 studying and researching Bitcoin from the academic perspective of economics (My undergraduate degree).
>In 2008 I downloaded a BTC miner and had everything set up but then never started the machine because I was running folding@home and thought that was a better use of my distributed compute. Doh!
The first version of the bitcoin software was released in 2009, the white paper was published in October 2008.
>In 2008 I downloaded a BTC miner and had everything set up but then never started the machine because I was running folding@home and thought that was a better use of my distributed compute. Doh!
The first version of the bitcoin software was released in 2009, the white paper was published in October 2008.
Ok, 2009 then, whenever it was first available. My memory fails me sometimes.
If a blog network were driven by a contract that took away credibility tokens when enough fake-news tokens are amassed the token would have actual heft.
Currently even a billion dislikes has no heft ad they can be ignored. Initial credibility can be gained via proof of stake like how banks used to be so luxurious. The stake that is most valuable is that which is most flexible and can be converted into other tokens with least hops. That would be USD currently but with other countries growing in power a distributed token recognized by all countries maytaje its place. (It may be adopted rather than designed just like may tourist industries have adopted the dollar)
Dollars fundamentally express a combination of values but because it is one token, the resolution of the values blur together. Tokens increase the resolution to kaleidiscope levels at the cost of confusion. Instead of being able to hold onto one type of token with consistent power holders need to constantly evaluate what combination of tokens allows them to trade for what they want with least hops.
The USD lost a lot of trust via bailouts and inflation that reduced wealth for the token holders. Fundamentally there was loss of trust in competence. (which can be made up with increased confidence in military ability!)
Ethereum is driven by trust in geniuses. Bitcoin is driven by trust in age. Many altcoins are driven by trust in their respective ideas. Interestingly I think the success of coins is all about building trust rather than technicals (though it's so early that the technical implementation is still very important!) The drum of marketing needs to be consistent for a long time but builds exponentially. Bitcoin currently has the most leverage from this perspective but as the earliest coin it may be saddled with too much baggage to get over the core necessary technical hurdles without splintering. (splintering causes it to become new, destroying the built up age trust!)
Currently even a billion dislikes has no heft ad they can be ignored. Initial credibility can be gained via proof of stake like how banks used to be so luxurious. The stake that is most valuable is that which is most flexible and can be converted into other tokens with least hops. That would be USD currently but with other countries growing in power a distributed token recognized by all countries maytaje its place. (It may be adopted rather than designed just like may tourist industries have adopted the dollar)
Dollars fundamentally express a combination of values but because it is one token, the resolution of the values blur together. Tokens increase the resolution to kaleidiscope levels at the cost of confusion. Instead of being able to hold onto one type of token with consistent power holders need to constantly evaluate what combination of tokens allows them to trade for what they want with least hops.
The USD lost a lot of trust via bailouts and inflation that reduced wealth for the token holders. Fundamentally there was loss of trust in competence. (which can be made up with increased confidence in military ability!)
Ethereum is driven by trust in geniuses. Bitcoin is driven by trust in age. Many altcoins are driven by trust in their respective ideas. Interestingly I think the success of coins is all about building trust rather than technicals (though it's so early that the technical implementation is still very important!) The drum of marketing needs to be consistent for a long time but builds exponentially. Bitcoin currently has the most leverage from this perspective but as the earliest coin it may be saddled with too much baggage to get over the core necessary technical hurdles without splintering. (splintering causes it to become new, destroying the built up age trust!)
It doesn't have to have a coercive power behind it enforcing it's use. It has a natural benefit, which is anonymity (when used the right way). People want to use Bitcoin as a currency. It doesn't need to supplant normal money, just be an addition to it.
It's dangerous to push anonymity as a benefit of the current implementations: if you make a mistake or traffic analysis links you to any transaction, every transaction you've ever made is de-anonymized. That's a far worse failure mode than cash and it'll take more than a tumbler to fix to the point of confidence.
I did say "when used the right way".
For various activities it allows you to mask your identity while making purchases online far better than the alternative of using your credit card or PayPal or something.
For various activities it allows you to mask your identity while making purchases online far better than the alternative of using your credit card or PayPal or something.
What do you define as “the right way” and how hard is it for the average person to follow?
Given the high opsec requirements, I think it's irresponsible to advertise an anonymity service which fails in a way which provides an irrevocable public record of every transaction.
Given the high opsec requirements, I think it's irresponsible to advertise an anonymity service which fails in a way which provides an irrevocable public record of every transaction.
Except it's not anonymous, in fact it's LESS anonymous than cash, by a significant margin.
https://en.bitcoin.it/wiki/Anonymity
https://en.bitcoin.it/wiki/Anonymity
People seem to believe that cryptocurrencies are either a scam/waste/bubble or that they are an amazing technology that the future of financial tech will be built upon. And there is this battle between the sides.
I think that both are equally true! Prices are obviously driven by speculation, there is tonnes of fraud, and no regulation. It is a wild wild west goldrush situation right now. Maybe this is unfortunate but I'm also not surprised by it. Isn't this how all markets get started? I don't have great sources but I think the situation was similar for the securities markets for many years.
I also think the blockchain is an incredibly remarkable piece of technology that it will be put to use in increasingly important and useful roles and that cryptocurrencies are here to stay. Both can be true.
I think that both are equally true! Prices are obviously driven by speculation, there is tonnes of fraud, and no regulation. It is a wild wild west goldrush situation right now. Maybe this is unfortunate but I'm also not surprised by it. Isn't this how all markets get started? I don't have great sources but I think the situation was similar for the securities markets for many years.
I also think the blockchain is an incredibly remarkable piece of technology that it will be put to use in increasingly important and useful roles and that cryptocurrencies are here to stay. Both can be true.
Sure there's lots of fraud, excitement, and ignorance right now in cryotocurrencies, but there are also fundamental problems with the current attempts. Distributed consensus means eventual consistency and/or slow unreliable transactions, I'm not convinced that's a good idea for a payments network.
The article makes the point that many people putting money into these schemes know nothing about the tech involved or the possible applications/drawbacks, they're gambling based on hearsay.
As with most bubbles, what comes after probably won't resemble what got everyone excited, and early investors will lose their money. So it's understandable many are sceptical.
The article makes the point that many people putting money into these schemes know nothing about the tech involved or the possible applications/drawbacks, they're gambling based on hearsay.
As with most bubbles, what comes after probably won't resemble what got everyone excited, and early investors will lose their money. So it's understandable many are sceptical.
There are designs for much better implementations that are completed or in the works.
Cryptocurrency is here to stay, whether or not it will be Bitcoin specifically is another question.
Cryptocurrency is here to stay, whether or not it will be Bitcoin specifically is another question.
I wonder if a sacrifice is always necessary for certain types of improvement. (e.g. the titantic had to crash for safer boats, WWII had to happen for less war, etc...)
Shoeshine boy indicator is flashing red for me [1]. Some chaps are calling me at midnight to lure me into the last occasion to become awful rich by buying some one/das/last-coin mining licenses. After quick research it seems their "cryptocurrencies" are not even distributed but hosted at "secure datacenter". Speechless, I had a same feeling pre-2007 when overnight trained advisors tried to get me into some miracle funds.
Cryptocurrencies have a future but euphoria period is usually followed by crash and purification phase - lots of money will be lost, but the proven solution will stay.
[1] http://archive.fortune.com/magazines/fortune/fortune_archive...
[1] http://archive.fortune.com/magazines/fortune/fortune_archive...
Ignoring the opinionated part of the title for a moment: because there's money in it, pure and simple. That money comes from the buyers, in a kind of pseudo-Ponzi scheme, but it's still the basic motivator for getting involved in ETH.
Absolutely, I wish people would call it out as a Ponzi scheme more.
A good example is if ETH or some other ccy takes off and BTC withers. What is a BTC worth? nothing. But people are buying it because it'll be worth more in the future. That is the definition of a bubble. Given that the original owners make the money from new entrants - that is the definition of a pyramid scheme.
A good example is if ETH or some other ccy takes off and BTC withers. What is a BTC worth? nothing. But people are buying it because it'll be worth more in the future. That is the definition of a bubble. Given that the original owners make the money from new entrants - that is the definition of a pyramid scheme.
>Given that the original owners make the money from new entrants - that is the definition of a pyramid scheme.
By that criteria, any company that undergoes an IPO is also a pyramid scheme.
By that criteria, any company that undergoes an IPO is also a pyramid scheme.
A company has real assets, and profits that can be distributed to owners. Crypto currencies have neither.
Yes, but what defines a pyramid scheme is its unsustainability from a mathematical standpoint, not necessarily the fact that original owners and early adopters make money off of new investors. I think the latter property is present in almost all financial markets -- the "smart money" phenomenon.
I agree that the entire cryptocurrency market is in a bit of a bubble, but to write it all off as a pyramid scheme seems a bit of stretch to me.
edit: also, "pyramid scheme" to me is a very loaded term with a specific legal meaning to it as it applies to one single entity, i.e. the person or company operating at the "top" of the pyramid. There isn't really such an entity at the top of the entire cryptocurrency market, so I think it's much more apt to call it an asset or asset class bubble rather than toss around such contentious terms.
I agree that the entire cryptocurrency market is in a bit of a bubble, but to write it all off as a pyramid scheme seems a bit of stretch to me.
edit: also, "pyramid scheme" to me is a very loaded term with a specific legal meaning to it as it applies to one single entity, i.e. the person or company operating at the "top" of the pyramid. There isn't really such an entity at the top of the entire cryptocurrency market, so I think it's much more apt to call it an asset or asset class bubble rather than toss around such contentious terms.
A Ponzi scheme can provide necessary initial energy though. Many social networks for example gained initial energy by being something entirely different before pivoting.
With cryptocurrencies this is driven by excess trust for the leaders in the space and for each coin. Probably driven a lot by "technology eating the world" and "young genius" mythologies.
Anything that is grown organically rather than designed top down (like USD) needs some sort of bootstrapped energy source to amass energy/capital for maneuvers. The USD uses proof of military power to arbitrarily generate capital but many altcoins only stake the reputation of their creators which many people would willingly give up for millions.
So while ponzi schemes definitely have their downsides due to lack of sufficient proof of stake, the structure is very similar to many organic methods of amassing energy. Startup funding is similar though safer because there is supposed vetting by smart people (angels/VCs)
So I actually think that ponzi structures are rather important as an organic energy source. However they need to be vetted by asking questions look like "what are you going to do with this energy?" and "what is your proof if stake?"
What strikes be about altcoins is that it's unclear how the energy will be used. It reminds me of throwing money at the TSA for ridiculous theater because too many people think throwing money at problems solves them. (an extension of military minded brute force IMO)
Once the technical fundamentals start becoming solid I'd place a bet on the coin that has the strongest marketing as the increased mind share would directly increase the stability and trust in the coin. Btc/eth may be sacrificial lanbs like pets.com as this new space is explored. (or may be Amazon/Google, who knows. )
With cryptocurrencies this is driven by excess trust for the leaders in the space and for each coin. Probably driven a lot by "technology eating the world" and "young genius" mythologies.
Anything that is grown organically rather than designed top down (like USD) needs some sort of bootstrapped energy source to amass energy/capital for maneuvers. The USD uses proof of military power to arbitrarily generate capital but many altcoins only stake the reputation of their creators which many people would willingly give up for millions.
So while ponzi schemes definitely have their downsides due to lack of sufficient proof of stake, the structure is very similar to many organic methods of amassing energy. Startup funding is similar though safer because there is supposed vetting by smart people (angels/VCs)
So I actually think that ponzi structures are rather important as an organic energy source. However they need to be vetted by asking questions look like "what are you going to do with this energy?" and "what is your proof if stake?"
What strikes be about altcoins is that it's unclear how the energy will be used. It reminds me of throwing money at the TSA for ridiculous theater because too many people think throwing money at problems solves them. (an extension of military minded brute force IMO)
Once the technical fundamentals start becoming solid I'd place a bet on the coin that has the strongest marketing as the increased mind share would directly increase the stability and trust in the coin. Btc/eth may be sacrificial lanbs like pets.com as this new space is explored. (or may be Amazon/Google, who knows. )
I'm OK with pseudo-Ponzi scheme, but if you just call it a Ponzi scheme them people will assume you just haven't understood the tech. The tech is novel and interesting and even somewhat useful.
I don't think you know what a Ponzi scheme is.
That's what got me interested. The tech itself seems cool, but I bought in at $100 because I wanted to sell around $300, which is what I did.
I wonder how many people who buy ETH are doing it because they believe in the future of the tech versus just gambling (which is basically what I did). All the hacks and scams involved have kept me away from keeping any money in it long-term.
I wonder how many people who buy ETH are doing it because they believe in the future of the tech versus just gambling (which is basically what I did). All the hacks and scams involved have kept me away from keeping any money in it long-term.
This is it. I took some disposable income and invested in ether during the initial EEA announcement. I know little of the fundamentals of ethereum. I bought in at $16, and it's now at $230. Talk about a ridiculous return. Pulled out my principle and some gains, and the rest is along for the roller coaster ride.
I'll be the first to admit that I'm probably the type of investor whom people will point to as an example of an ethereum bubble (someone who knows little of the technicals behind ethereum, but is in it 'for a quick buck').
It truly scares me to hear about cases where somebody invests a large portion of their worth into something as volatile as crypto currency.
I'll be the first to admit that I'm probably the type of investor whom people will point to as an example of an ethereum bubble (someone who knows little of the technicals behind ethereum, but is in it 'for a quick buck').
It truly scares me to hear about cases where somebody invests a large portion of their worth into something as volatile as crypto currency.
>I'm probably the type of investor whom people will point to as an example of an ethereum bubble (someone who knows little of the technicals behind ethereum, but is in it 'for a quick buck').
I always see "traditional" investors point to this and say "How could you possibly invest money into something you don't fully understand?"
I'm personally not invested in crypto at the moment but I can understand the draw- my response is this: When you look through your 401k, how many of those companies are even recognizable? If I were to ask extremely basic questions about any of their financials, could that person speak to them? The answer is almost unanimously "No", but it's completely accepted (beyond accepted really, it's pushed on you) to invest into companies that people don't fully understand, yet shamed if someone takes a gamble on crypto.
I always see "traditional" investors point to this and say "How could you possibly invest money into something you don't fully understand?"
I'm personally not invested in crypto at the moment but I can understand the draw- my response is this: When you look through your 401k, how many of those companies are even recognizable? If I were to ask extremely basic questions about any of their financials, could that person speak to them? The answer is almost unanimously "No", but it's completely accepted (beyond accepted really, it's pushed on you) to invest into companies that people don't fully understand, yet shamed if someone takes a gamble on crypto.
It would also be unwise to fill a 401k with a handful of stocks because a friend of a friend recommended them.
That's why the general advice is for people to fill their 401k's with a few index funds (and chasing average market returns) rather than trying to get lucky by picking the next FB, AAPL or GOOG.
That's why the general advice is for people to fill their 401k's with a few index funds (and chasing average market returns) rather than trying to get lucky by picking the next FB, AAPL or GOOG.
I'm curious why so many people are so vehemently opposed to cryptocurrencies, and in particular ETH.
If you believe it's a big scam/bubble and won't turn into anything, then don't purchase any. But what's with the influx of "ETH is the worst and you're stupid if you buy any" articles? They add 0 value to the blockchain culture and development, and only seem to be thinly veiled "I told you so/I'm smarter than you" think pieces.
If you believe it's a big scam/bubble and won't turn into anything, then don't purchase any. But what's with the influx of "ETH is the worst and you're stupid if you buy any" articles? They add 0 value to the blockchain culture and development, and only seem to be thinly veiled "I told you so/I'm smarter than you" think pieces.
I'm opposed to BTC as it is evangelised - as a payment method better than credit card, as a currency better than fiat, and as an investment.
I'm opposed to it for a variety of reasons. As a payment method it is wanting because of the long confirmation times, lack of reversibility and low volumes. As a currency to be used on a country scale it is wanting because of the fixed amount, necessitating deflation, which is bad in itself, and the idea of handing huge parts of the economy to a few early adopters. As an investment, well, it's not really an investment as "investing" in BTC doesn't put money into the economy like investing in a company would, it's more akin to sitting on gold. And all this is before we get into the "competing to burn the most energy" aspects of mining, which are only really necessary to support the decentralised nature of the system - not something most people give much of a crap about.
How or if these criticisms apply to Ether I'm not sure.
I'm opposed to it for a variety of reasons. As a payment method it is wanting because of the long confirmation times, lack of reversibility and low volumes. As a currency to be used on a country scale it is wanting because of the fixed amount, necessitating deflation, which is bad in itself, and the idea of handing huge parts of the economy to a few early adopters. As an investment, well, it's not really an investment as "investing" in BTC doesn't put money into the economy like investing in a company would, it's more akin to sitting on gold. And all this is before we get into the "competing to burn the most energy" aspects of mining, which are only really necessary to support the decentralised nature of the system - not something most people give much of a crap about.
How or if these criticisms apply to Ether I'm not sure.
Ether's block times are way shorter (17 seconds) I don't know if transaction times are shorter because of that though.
I had heard similar, but I haven't read enough about it to know the full extent of the differences yet.
I know they're also looking into "proof of stake" either as a replacement or an adjunct to "proof of work", which may cover some of the energy concerns, but again I don't understand PoS well enough yet.
I know they're also looking into "proof of stake" either as a replacement or an adjunct to "proof of work", which may cover some of the energy concerns, but again I don't understand PoS well enough yet.
For me at least, it's because it smells like the dot-com bubble.
Lots of people investing money in things they don't understand the fundamentals of, looking to get rich quick. It'll happen to some people, but many others will get bitten. Money that they could have reasonably spent elsewhere on things they need, or invested in things that are less risky.
Sure, you might win it big, but you probably won't, you'll probably lose your money, it's a gamble. People are going around saying that playing blackjack is a way to make easy money, and I'm raising an eyebrow and saying "Hmm, are you sure?"
Lots of people investing money in things they don't understand the fundamentals of, looking to get rich quick. It'll happen to some people, but many others will get bitten. Money that they could have reasonably spent elsewhere on things they need, or invested in things that are less risky.
Sure, you might win it big, but you probably won't, you'll probably lose your money, it's a gamble. People are going around saying that playing blackjack is a way to make easy money, and I'm raising an eyebrow and saying "Hmm, are you sure?"
Dot-com was a bubble but fifteen years later here we are, doing everything on the Web, with some of those dot-coms now the most successful companies in the world.
I feel exactly the same about the crypto space.
Yes, there's tons of hype, nonsense and even scams, but the cream will eventually rise to the top, and the best ideas will survive. I've listened recently to some podcasts with Olaf Carlson-Wee, someone who has thought long and deep about the implications of having funding at the protocol-level of the internet, and how it could swing the balance away from large, centralised web monopolies who capture most of the value, towards the users of the network[1]. Union Square ventures also have some interesting ideas as to where the future of the internet might be heading.[2]
It's hard to see where we're heading with all the short term price boom and busts though, which I agree are unconnected with reality (currently).
[1] Two podcasts + notes with Carlson-Wee- http://buynhodl.com/ethereum-investment/ether-investor-focus...
[2] https://news.ycombinator.com/item?id=12247892
Yes, there's tons of hype, nonsense and even scams, but the cream will eventually rise to the top, and the best ideas will survive. I've listened recently to some podcasts with Olaf Carlson-Wee, someone who has thought long and deep about the implications of having funding at the protocol-level of the internet, and how it could swing the balance away from large, centralised web monopolies who capture most of the value, towards the users of the network[1]. Union Square ventures also have some interesting ideas as to where the future of the internet might be heading.[2]
It's hard to see where we're heading with all the short term price boom and busts though, which I agree are unconnected with reality (currently).
[1] Two podcasts + notes with Carlson-Wee- http://buynhodl.com/ethereum-investment/ether-investor-focus...
[2] https://news.ycombinator.com/item?id=12247892
I think once it goes through this bubble we're going to see it's real applications. It's like what Wired Founder Kevin Kelly often says, you have to look at the stuff that was the "next big thing" five years ago. Social networks didn't really take off until Friendster and Myspace moved first and failed. I think it's the same with Bitcoin.
Exactly. It takes the first mover to discover there's some value in new space, like early social media or Bitcoin. Because there's no roadmap, they early efforts often fail, and the later arrivals take the core, good idea and learn from the failures.
I think in the crypto space, much of the value will not actually be in P2P cash systems, but in P2P decentralised apps that will enable a decentralised web to emerge, and early adopters and network users will capture most of the value in these networks (instead of large centralised companies).
Also, having a new funding model (crowd funded token sales) could unlock massive amounts of capital to fund new projects. The implications of this could be unprecedented - so many ideas and talent, particularly outside the US, currently goes unfunded. I doubt that anybody, up till a few years ago expected to see a way that traditional funding models for new companies would emerge, literally out of the ether. Turns out there's a torrent of speculative cash waiting for founding teams (yes, at some point there will be a massive crash, but like venture funding post the dotcom, lessons will be learned and the valuable ideas retained).
I think in the crypto space, much of the value will not actually be in P2P cash systems, but in P2P decentralised apps that will enable a decentralised web to emerge, and early adopters and network users will capture most of the value in these networks (instead of large centralised companies).
Also, having a new funding model (crowd funded token sales) could unlock massive amounts of capital to fund new projects. The implications of this could be unprecedented - so many ideas and talent, particularly outside the US, currently goes unfunded. I doubt that anybody, up till a few years ago expected to see a way that traditional funding models for new companies would emerge, literally out of the ether. Turns out there's a torrent of speculative cash waiting for founding teams (yes, at some point there will be a massive crash, but like venture funding post the dotcom, lessons will be learned and the valuable ideas retained).
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> I'm curious why so many people are so vehemently opposed to cryptocurrencies, and in particular ETH.
I wouldn't say I'm vehemently opposed, but I do kind of regard the whole thing as a bit of a joke. If you're curious for my two cents:
* There are no regulatory bodies or any kind of oversight; little legal recourse or way to insure your investment
* There is no predictability of any kind in relation to the value; it goes up and down as it likes, often by large amounts, for literally no reason
* Mining the various coins consumes a massive amount of energy, essentially computer busywork and in most cases (not BTC or ETH) the result is utterly worthless
Honestly these things feel more like a tech-bro exclusive version of the lottery than anything; sure your 10,000 redcoin is worthless today, but someday it might be worth millions! Granted you probably have much better odds with Redcoin than Powerball but it still feels like the same sort of thing.
I wouldn't say I'm vehemently opposed, but I do kind of regard the whole thing as a bit of a joke. If you're curious for my two cents:
* There are no regulatory bodies or any kind of oversight; little legal recourse or way to insure your investment
* There is no predictability of any kind in relation to the value; it goes up and down as it likes, often by large amounts, for literally no reason
* Mining the various coins consumes a massive amount of energy, essentially computer busywork and in most cases (not BTC or ETH) the result is utterly worthless
Honestly these things feel more like a tech-bro exclusive version of the lottery than anything; sure your 10,000 redcoin is worthless today, but someday it might be worth millions! Granted you probably have much better odds with Redcoin than Powerball but it still feels like the same sort of thing.
> There are no regulatory bodies or any kind of oversight; little legal recourse or way to insure your investment
It is kind of fun watching a bunch of libertarians suddenly figure out why laws and regulatory bodies exist when every crash or major theft happens.
It is kind of fun watching a bunch of libertarians suddenly figure out why laws and regulatory bodies exist when every crash or major theft happens.
Indeed. I lean towards Libertarianism for most things, i.e. deregulation, but many regulations were put in place for a very good reason. A lot of Libertarians that I talk to though usually argue for the ability to opt-out of whatever system, which IMHO is perfectly fine. If you don't pay for the firefighters though, you don't get to be angry when they don't put your house out type of thing.
Here's why that's stupid: a nation is not build so simply. There are places where having firefighters would not be economically viable. Does that mean that the people in those areas don't deserve firefighters?
Libertarianism is a nice idea, but it needs to be balanced out with some compassion. You pay into something that you might never use, because someone else might need it, and they do the same for you elsewhere.
Libertarian socialism is where it's at.
Libertarianism is a nice idea, but it needs to be balanced out with some compassion. You pay into something that you might never use, because someone else might need it, and they do the same for you elsewhere.
Libertarian socialism is where it's at.
> Here's why that's stupid: a nation is not build so simply. There are places where having firefighters would not be economically viable. Does that mean that the people in those areas don't deserve firefighters?
When on Earth did I say anything like that? First of all I was implying opting out of the taxes for whatever community, not paying for fire fighters directly. Also, it's worth pointing out that in many rural communities (and more prominently, the area between them) paying for fire fighting service is not uncommon precisely because it's not viable for the communities in the nearby area to cover them as well without being compensated.
But besides all of that:
> Libertarianism is a nice idea, but it needs to be balanced out with some compassion. You pay into something that you might never use, because someone else might need it, and they do the same for you elsewhere.
I completely agree, this is what I was attempting to get at.
When on Earth did I say anything like that? First of all I was implying opting out of the taxes for whatever community, not paying for fire fighters directly. Also, it's worth pointing out that in many rural communities (and more prominently, the area between them) paying for fire fighting service is not uncommon precisely because it's not viable for the communities in the nearby area to cover them as well without being compensated.
But besides all of that:
> Libertarianism is a nice idea, but it needs to be balanced out with some compassion. You pay into something that you might never use, because someone else might need it, and they do the same for you elsewhere.
I completely agree, this is what I was attempting to get at.
If your decisions affected nobody but yourself, sure. But you suddenly being bankrupt puts a much larger cost on society than the strain of you having to pay for firefighters. Further, if everyone thought like that and we had too little money to pay for firefighters at all...
Edit: In other words, don't think of it as protecting you from your own bankruptcy; think of it as society protecting itself from your bankruptcy.
Edit: In other words, don't think of it as protecting you from your own bankruptcy; think of it as society protecting itself from your bankruptcy.
That's odd because what about all the massive fraud and theft happening with regular fiat, despite regulations?
Ah yes, the narrative where libertarians finally see the value in politicians and crawl to them for help. Unfortunately for your fantasy, that's the opposite of what's happening. We're leaving the politicians at home and building technical solutions. What a world huh?
I think they are all a bit silly equally, nothing special to ETH.
I believe it is a scam/bubble.. but I don't really care if people waste their money on it. I see it like I see getting your Tarot cards read for $500 a session or buying a lottery ticket. A pretty poor use of money there are many others ;)
I believe it is a scam/bubble.. but I don't really care if people waste their money on it. I see it like I see getting your Tarot cards read for $500 a session or buying a lottery ticket. A pretty poor use of money there are many others ;)
If you see it as a bubble/scam, why wouldn't you warn people away from it? Especially your friends and people like them?
Also, bubbles that grow large enough can have an impact on the larger economy when they burst. Probably the Ethereum bubble, assuming there is one, won't get anywhere near that large before it bursts. But if it's successful, it will be replicated on a larger scale. (By successful, I'm not talking about the value of ETH, I mean that financial players make lots of money without significant consequences.)
Also, bubbles that grow large enough can have an impact on the larger economy when they burst. Probably the Ethereum bubble, assuming there is one, won't get anywhere near that large before it bursts. But if it's successful, it will be replicated on a larger scale. (By successful, I'm not talking about the value of ETH, I mean that financial players make lots of money without significant consequences.)
The hackernews community in general is opposed to change which is ironic given that change is ultimately what has paid / is paying for their salaries.
Some people feel very threatened by the idea of the disruption of money and all of it's controls to the extent they simply won't even entertain the idea of something new coming along.
Take VC funding / angel investing - it's being blown to pieces by cryptocurrency as we speak and that's merely one example of what a cryptocurrency can do...
Some people feel very threatened by the idea of the disruption of money and all of it's controls to the extent they simply won't even entertain the idea of something new coming along.
Take VC funding / angel investing - it's being blown to pieces by cryptocurrency as we speak and that's merely one example of what a cryptocurrency can do...
> The hackernews community in general is opposed to change which is ironic given that change is ultimately what has paid / is paying for their salaries.
That would be ironic if it were true but it's simply not. If you read the threads here, the heat comes from two camps: people who are pushing The Future of Economics!!! Get Rich Quick!!! and people who actually understand economics, have enough life experience to recognize bubbles, and are asking questions which the sales guys would prefer not to answer.
There are plenty of good technical discussions about distributed trust here but they don't start from the breathless boosterism. They especially do not start from someone responding to serious criticism with “you just don't like change” rather than addressing it.
That would be ironic if it were true but it's simply not. If you read the threads here, the heat comes from two camps: people who are pushing The Future of Economics!!! Get Rich Quick!!! and people who actually understand economics, have enough life experience to recognize bubbles, and are asking questions which the sales guys would prefer not to answer.
There are plenty of good technical discussions about distributed trust here but they don't start from the breathless boosterism. They especially do not start from someone responding to serious criticism with “you just don't like change” rather than addressing it.
Well, from first principles, cryptocurrencies are either in a bubble, or there are enough transactions that make them worth keeping as payment medium. The answer seems somewhat clear to me, but the actual size of the bubble is hard to measure.
On a second level, no cryptocurrency seems able to support a reasonable transaction volume, so it could replace money in large scale. All of the current algorithms have scalability issues that come from the kernel idea of a distributed single truth.
Another level up, distributed cryptocurrencies are so inefficient that it's a wonder they even got so far. The only thing holding them up is the complete anachronism of every government on Earth that didn't create any viable centralized cryptocurrency. That can't last forever. At a minimum, some company must get it right at some point, and in all likelihood the UN will eventually settle on a shared protocol among everybody.
That said, I don't often go out there writing stuff opposing cryptocurrencies. So, I'm probably not among that vehement opposition you cited.
On a second level, no cryptocurrency seems able to support a reasonable transaction volume, so it could replace money in large scale. All of the current algorithms have scalability issues that come from the kernel idea of a distributed single truth.
Another level up, distributed cryptocurrencies are so inefficient that it's a wonder they even got so far. The only thing holding them up is the complete anachronism of every government on Earth that didn't create any viable centralized cryptocurrency. That can't last forever. At a minimum, some company must get it right at some point, and in all likelihood the UN will eventually settle on a shared protocol among everybody.
That said, I don't often go out there writing stuff opposing cryptocurrencies. So, I'm probably not among that vehement opposition you cited.
I believe in democracy and traditional government, for all its flaws. I think the ability of the human community to outlaw things, even when there's Pareto profit in those things, is a really important safety net.
Cryptocurrency takes that away, and there is no way of getting it back. If cryptocurrency becomes widespread and socially acceptable, then you better hope all the things that people want to buy and other people want to sell are good for society, because there will no longer be anything society can do about the ones that aren't. It's not just a worthless bubble, it's a genuine threat to civilization.
Cryptocurrency takes that away, and there is no way of getting it back. If cryptocurrency becomes widespread and socially acceptable, then you better hope all the things that people want to buy and other people want to sell are good for society, because there will no longer be anything society can do about the ones that aren't. It's not just a worthless bubble, it's a genuine threat to civilization.
What about cryptocurrency prevents things from being outlawed? And how has government eliminated illicit goods and services from being sold right now? As long as there's a market and the money is greater than the deterrent, people will buy and sell things that are bad for society.
> a genuine threat to civilization
Hyperbole.
> a genuine threat to civilization
Hyperbole.
> As long as there's a market and the money is greater than the deterrent, people will buy and sell things that are bad for society.
As long as such transactions are inconvenient/costly, people will do less of them; if the inconvenience/cost is high enough to make the transaction unprofitable then it won't happen.
As long as such transactions are inconvenient/costly, people will do less of them; if the inconvenience/cost is high enough to make the transaction unprofitable then it won't happen.
>you better hope all the things that people want to buy and other people want to sell are good for society
What are you even on about? Things that weren't acceptable to buy and sell fifty years ago are now. What is good for society anyway and more importantly who should decide that?
What are you even on about? Things that weren't acceptable to buy and sell fifty years ago are now. What is good for society anyway and more importantly who should decide that?
> What is good for society anyway and more importantly who should decide that?
The people, through the democratic system. I'm not talking about trying to lay down some fixed rules for all time, but the populace as a whole should have the ability to outlaw things.
The people, through the democratic system. I'm not talking about trying to lay down some fixed rules for all time, but the populace as a whole should have the ability to outlaw things.
People have to be willing to sell it and/or market it.
Just because you have the means doesn't mean that you have the availability.
Just because you have the means doesn't mean that you have the availability.
How does cash not do the same thing? Is it only for its locality requirement?
Cash does the same thing, though to a lesser extent as it's less convenient. But yes, cash is antisocial and mainly benefits those who are undermining society (e.g. paying "cash in hand" to help tax-evading small businesses).
People don't understand its appeal but are irritated that others do.
I think lots of people completely understand the appeal of ETH but also realise it has so many issues the market cap is completely imaginary.
Decentralised anything is an awful market strategy, it works for some things where regulation gets in the way (AKA issues that are hard to solve in a legal way).
Ironically, p2p crowdfunding has been the killer application of cryptocurrency so far, since it's tricky to do that legally and it turns out if you ICO with crypto you can just take the money and run.
I don't believe ETH will succeed to the extent people are hoping it to, long term, I think the real market cap should be a fraction of what it is today. But I'm not stupid; I still made a bunch of money trading it and riding the hype.
Decentralised anything is an awful market strategy, it works for some things where regulation gets in the way (AKA issues that are hard to solve in a legal way).
Ironically, p2p crowdfunding has been the killer application of cryptocurrency so far, since it's tricky to do that legally and it turns out if you ICO with crypto you can just take the money and run.
I don't believe ETH will succeed to the extent people are hoping it to, long term, I think the real market cap should be a fraction of what it is today. But I'm not stupid; I still made a bunch of money trading it and riding the hype.
I'm speaking on a broader more long term view. Crypto currencies have the possibility to expand into what is arguably the biggest market of them all, money. In the same sense that many previous distruptive technologies did (mp3, video codecs for music/entertainment). Many mp3 based startups failed, so did many streaming/content selling startups but the trend was ultimately sound.
Nobody really knows what bets will pay off but people are placing bets none the less in the same way they placed bets on startups before.
Nobody really knows what bets will pay off but people are placing bets none the less in the same way they placed bets on startups before.
I assume these articles are astroturfing by companies or governments that are legitimately terrified of losing the control they have over the economy.
That's wishful thinking. All evidence suggests that governments worldwide couldn't care less about cryptocurrencies. At this point, cryptocurrencies are just taxable Internet points with delusions of grandeur.
I really doubt it. If you think there aren't plenty of people who view this stuff like tulips then I think you're too far down the rabbit hole.
I assume a lot of the pro-cryptocurrency comments and articles are crypto-holders trying to pump the market.
> But what's with the influx of "ETH is the worst and you're stupid if you buy any" articles?
They get people on the page and counting towards their ad revenue. In a word: clickbait.
On that note, I hadn't seen The Outline before and today I've already seen two articles on HN from that site. I noticed because they have one of the worst reading experiences for an article that I've seen in a while. Embedded ads, mobile un-friendly to the point that I had to quit my news app in order to back out of the article, and distracting animated horizontal rules.
They get people on the page and counting towards their ad revenue. In a word: clickbait.
On that note, I hadn't seen The Outline before and today I've already seen two articles on HN from that site. I noticed because they have one of the worst reading experiences for an article that I've seen in a while. Embedded ads, mobile un-friendly to the point that I had to quit my news app in order to back out of the article, and distracting animated horizontal rules.
Well we're most certainly in a bubble and it is not the first nor the last one in cryptospace. It often happens when there is such a big influx of new agents on the market. Seeing crypto hype/doom articles on your random facebook feeds from friends who recently weren't remotely interested in crypto is quite a big signal of an impending correction. Basic fear/greed.
Disclaimer: I own cryptos
Disclaimer: I own cryptos
My main beef with most crypto is that there are no sound logical factors driving price swings. That said, I am a sucker and have a disposable amount of money invested in them.
However looking at fundamentals (low volume of transactions, niche utility, liquidity, high-hype levels, etc), there are tons of signs of bubble in crypto now (and have been for ages).
However looking at fundamentals (low volume of transactions, niche utility, liquidity, high-hype levels, etc), there are tons of signs of bubble in crypto now (and have been for ages).
It's also eventually they're going to hit a ceiling and be worthless once they're all mined. It seems like a huge bet, trying to guess when Bitcoin value will hit 0.
> It's also eventually they're going to hit a ceiling and be worthless once they're all mined.
There may be huge bubble, but that comment is a complete misunderstanding. Suppose all the gold in the world had been mined. Would all the existing gold become worthless? If you think about it, you'll see that just the opposite will happen. The world supply of gold (or Bitcoin) will become more valuable.
I repeat: I'm not saying that there is no bubble.
An aside: Maybe you're thinking that if no more Bitcoin is being mined, then the market can't grow or that there won't be enough Bitcoin to support more transactions. However, there's a plan for that since the original Bitcoin paper. Bitcoin is finely divisible and the idea is that people will use smaller and smaller units for a certain value.
There may be huge bubble, but that comment is a complete misunderstanding. Suppose all the gold in the world had been mined. Would all the existing gold become worthless? If you think about it, you'll see that just the opposite will happen. The world supply of gold (or Bitcoin) will become more valuable.
I repeat: I'm not saying that there is no bubble.
An aside: Maybe you're thinking that if no more Bitcoin is being mined, then the market can't grow or that there won't be enough Bitcoin to support more transactions. However, there's a plan for that since the original Bitcoin paper. Bitcoin is finely divisible and the idea is that people will use smaller and smaller units for a certain value.
Doesn't the Bitcoin network depend on miners to process transactions? Like, no miners = no transactions processed?
Miners will be compensated with transaction fees when there is nothing left to mine.
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The last bitcoin being mined is not automatically going to make it all worthless. If a large enough number of people accept bitcoin in exchange for goods, it will continue to have value, and the transaction fees will incentivize miners to sustain the blockchain.
As far as I understand it, there's not a finite number of coins that can be mined. What could happen is the cost of mining could exceed the value derived from it. This already happened for some classes of miners (e.g., those without powerful GPUs)
There is a set quantity of bitcoin that can ever exist, and mining rewards reduce over time until it is all mined.
I was recently invited over a friends house to get together with a few others to discuss bitcoin and bitcoin opportunities. All mid 30s, non tech day jobs and people I would consider intelligent. They had no experience with equities, no experience with forex, and were heavily researching bitcoin mining systems. It seemed as if bitcoin just popped up on their radar and really had no understanding of bitcoin or other cryptocurrencies and I got the sense that they felt like they were getting in on the ground floor. Maybe?
+1 to the shoeshine boy indicator reference in this thread.
+1 to the shoeshine boy indicator reference in this thread.
People are calling cryptocurrency vaporware, but its only partly true, and definitely not for Ethereum. Check out the hard problems worked on by the ethereum team - https://github.com/ethereum/research/wiki/Problems
Each one of those would result in multiple patents if solved by a traditional corporation.
Each one of those would result in multiple patents if solved by a traditional corporation.
Because right now it's on sale!
I guess it depends on whether people believe cryptocurrencies have a future, and if they're confident Ethereum will still exist 10 years from now. I don't care if the price falls temporarily, it has the potential to make a major impact on the world and I think engineers will be able to surmount the challenges it faces today. It's as simple as that for me.
Because land prices have detached from land and people are desperate to get a lottery ticket as their only way to escape wage slavery.
The casino economy where "investors" roll the dice to the muffled cry of "efficient allocation of resources".
The casino economy where "investors" roll the dice to the muffled cry of "efficient allocation of resources".
That author was me with bitcoin, I perhaps understood it on a technical level better than my friends, but I thought it was silly, they didn't and now they're bitcoin millionaires.
Greed.
In 2009^ I downloaded a BTC miner and had everything set up but then never started the machine because I was running folding@home and thought that was a better use of my distributed compute. Doh!
In my mind you can look at cryptocurrencies, and the idea of blockchain generally, in two ways. Either you evaluate it as how well it acts as Money or what it can do as a distributed ledgering system.
In the former case you need a comprehensive understanding of:
1. The history of money, which comes down to war and politics,
2. A deep understanding of what makes money work in it's three uses (store of value, medium of exchange, unit of accounting)
3. How it forms a scaffold in a modern economy.
The cryptocurrency-as-money perspective fundamentally has no legs, for numerous reasons, but primarily because it has no coercive power behind it enforcing it's use like all other currencies. A few people are trying it but it's no serious contender for legal tender anytime soon.
All of the "coin" that is created in these markets is effectively derivatives trading and should be avoided at all costs in my opinion.
From the digital ledger perspective there seems to be real value in that use case.
^Corrected year