Cryptocurrency is like taking the worst parts of today's capitalist system(twitter.com)
twitter.com
Cryptocurrency is like taking the worst parts of today's capitalist system
https://twitter.com/ummjackson/status/1415353989323841537
146 comments
Already discussed: https://news.ycombinator.com/item?id=27841947
Cryptocurrency discussions on HN often feel like 90's me discussing how fax machines would be obsolete, not because the Internet offered a better solution at the time, digital signatures were not binding afaik so this was a real barrier, it was because I could see what was down the line, the progression, while sporadic was to a degree predictable, the first time I used video or played games on a phone, I knew other people would want this, same with the first online payment systems, to entertain the idea that the cryptocurrency world in it's entirety is a worthless sham is to miss a lot of very interesting people doing a lot of very interesting work, I hope I'm around to see something worthy come out of the space, it would not surprise me if it takes another 10 years or 6 months.
Look at the history of railways and canals, no one was really disputing that they were game changers, yet the level of fraud, hype and failures is not dissimilar to what we see in this new world, it doesn't automatically mean the idea itself is a dud.
Look at the history of railways and canals, no one was really disputing that they were game changers, yet the level of fraud, hype and failures is not dissimilar to what we see in this new world, it doesn't automatically mean the idea itself is a dud.
The problem with your argumentation is that it's completely disconnected from the merits of the thing we're discussing so you can use it to support any idea, no matter how good or bad.
> X is just like this thing from history that people were skeptical of but succeeded.
Substitute X with a horrible idea and you sound like you're defending it successfully while in reality you aren't saying anything about it.
> X is just like this thing from history that people were skeptical of but succeeded.
Substitute X with a horrible idea and you sound like you're defending it successfully while in reality you aren't saying anything about it.
I think what was meant is that digital payments like you find in games were a really innovative idea back in the day, when the poster mentions discovering them. That is the genesis of all crypto projects. (Remember Flooz, anyone?). Clearly lots of people wanted in on it and it became the hot mess that is NFTs, crypto Ponzis, etc.
I think the takeaway/contribution was that those aspects of digital currency (in game) have done very, very well and made lots of money. So, there might be other uses of digital currency that are also viable.
I think the takeaway/contribution was that those aspects of digital currency (in game) have done very, very well and made lots of money. So, there might be other uses of digital currency that are also viable.
I'm with you that digital currency is the way forward, but it's hard for me to swallow that it'll be "crypto currency".
Also, the space is as you said, rife with fraud - not very different from early internet I suppose (what do I know, I was born in 95).
Also, the space is as you said, rife with fraud - not very different from early internet I suppose (what do I know, I was born in 95).
Exactly. I am starting to believe that the solution to this cryptocurrency problem is a USD stable-coin backed by government and not coinbase/algorithms. Put the whole “we need internet money” arguments coming from the cryptocurrency community.
You know what's a USD stable-coin backed by government?
The USD.
My money is already mostly digital, represented by moving around numbers in databases. I handle cash very rarely.
I don't need my money to be cryptographically secure, I need access to my money to be cryptographically secure.
I think that's something crypto-enthusiasts skip over, they're focusing on a tangential issue.
The USD.
My money is already mostly digital, represented by moving around numbers in databases. I handle cash very rarely.
I don't need my money to be cryptographically secure, I need access to my money to be cryptographically secure.
I think that's something crypto-enthusiasts skip over, they're focusing on a tangential issue.
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A good IT service from government is like communism, it was never tried, but everyone dreams about it, hoping that it will happen by itself.
Excuse me, but what the hell are you talking about?
So, this is the argument I hear all of the time: that there is interesting work being done.
In my noodling around in the space, I haven’t found a project that makes me think “ahh, this is a really compelling use case for the blockchain”. What are the projects you’ve seen that are doing compelling, novel, valuable work? I’m genuinely curious.
In my noodling around in the space, I haven’t found a project that makes me think “ahh, this is a really compelling use case for the blockchain”. What are the projects you’ve seen that are doing compelling, novel, valuable work? I’m genuinely curious.
I’ve been asking this question for years too. Every time the answer is a batch of projects that make grandiose claims of solving very generic problems (e.g. “this is a global knowledge graph that ensures authors are always properly compensated”)… But the actual deployed use cases, if any, turn out to be just some kind of crypto derivatives in drag. In other words, there’s no real world economy bringing money into the system — it’s all just layers upon layers of trading shells where real money ultimately comes from speculators. There is a word for this kind of scheme.
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Monero offers complete privacy and anonymity. It's everything bitcoin was meant to be. It can actually be used as currency right now.
Ethereum is essentially a distributed virtual machine anyone can pay to execute code on. This is world-changing technology. Smart contracts are currently limited by the fact they do not have access to real world data: the Ethereum virtual machine can only use financial data present in the blockchain itself as input. There are projects attempting to address this but none have delivered yet.
Ethereum is essentially a distributed virtual machine anyone can pay to execute code on. This is world-changing technology. Smart contracts are currently limited by the fact they do not have access to real world data: the Ethereum virtual machine can only use financial data present in the blockchain itself as input. There are projects attempting to address this but none have delivered yet.
Decentralized and censorship resistant name routing service?
https://ens.domains/
That's a killer app imo.
That's a killer app imo.
Censorship resistance isn’t worth billions, and how much actual utility does decentralization buy you relative to the inherent performance costs of a decentralized system?
I don’t buy it.
I don’t buy it.
Cool, I don't care if you buy it.
The question asked: "What are the projects you’ve seen that are doing compelling, novel, valuable work?"
ENS fits that category. Peer to peer lending is cool too.
The question asked: "What are the projects you’ve seen that are doing compelling, novel, valuable work?"
ENS fits that category. Peer to peer lending is cool too.
There seems to be around 277 millions dollars in addresses attached to Ethereum Name service[1]. So apparently the data says some people, somewhere, do care.
[1] http://datapeek.org/?explorer_view=quest&quest_id=quest_2021...
[1] http://datapeek.org/?explorer_view=quest&quest_id=quest_2021...
Yes, and individual tulip bulbs were at one point valued at 10x the annual salary of a skilled artisan, so around $1mm each.
Fools and their money.
Fools and their money.
It's a weird argument to make in this sub-thread. You started it by asking for "projects you’ve seen that are doing compelling[...]work". You got an answer.
You questionned its economic value. You got an answer. At this point, there are tons of other valid arguments you could have made ( it's too small, it's only one,etc ).
But you chose "reductio ad tulipum". It doesn't speak well of the strength of your case. Either that or you simply are not open to reconsidering your position, under any circumstance.
You questionned its economic value. You got an answer. At this point, there are tons of other valid arguments you could have made ( it's too small, it's only one,etc ).
But you chose "reductio ad tulipum". It doesn't speak well of the strength of your case. Either that or you simply are not open to reconsidering your position, under any circumstance.
Freenet is a distributed censorship-resistant data store which can do name routing. No blockchain needed.
There's no incentive to run a freenode. The network is extremely censorable/traceable.
For me, a globally distributed database running on open source software is interesting and novel in itself, just because no one can find anything useful to do with it yet doesn't invalidate the novelty, wasn't electrical effects similar, it was discovered prior to people having a use for it.
Oh, yes, fully agree on the novelty. Fountain Codes are also super cool, were totally novel, and had and continue to have limited utility.
While all useful ideas were once novel, the inverse is rarely true.
And that’s problematic when your novel idea has the carbon footprint of several countries.
While all useful ideas were once novel, the inverse is rarely true.
And that’s problematic when your novel idea has the carbon footprint of several countries.
I'm not willing to comment publicly that this or that project is legit, rife with fraud is quite the understatement and I don't have the resources to vet anything, nonetheless, if you use google and follow people rather than projects, there are some really exciting developments on the edges.
How do you judge if something is an "exciting development" if you "don't have the resources to vet anything"? Wouldn't making such a judgement imply that you thought it could be useful? Or is "usefulness" not required for such crypto "exciting developments"? I think that may be the point the GP is making...
I can tell you if a rollercoaster looks exciting without knowing if it's safe, I am being overly cautious perhaps.
This is certainly a good argument and I use it myself (for nuclear fusion, space stuff, etc.), but, in fairness, it did take a long time (100 years?) before regular paper money was widely accepted. So, there's that.
Trustless collateral-backed loans and decentralized prediction markets are two of the coolest projects to me.
For compelling use cases of DLTs take a look at Hedera Hashgraph at https://hedera.com
Admittedly Hedera Hashgraph is not strictly a blockchain but is more energy efficient (millions of times less energy use than Bitcoin for example due to not needing to do proof of work and by virtual voting), orders of magnitude faster than traditional blockchains (BTC, ETH etc), and highly secure (true finality within seconds).
Example use cases (EDIT: with links)
* Tokens for carbon credits - https://hedera.com/users/dovu
* The Coupon Bureau - US Coupon Bureau using tokenised coupons to prevent $billions in coupon fraud - https://hedera.com/users/coupon-bureau
* Australian EFTPos POS payments - https://hedera.com/blog/eftpos-pioneers-new-ecommerce-microp...
* NHS vaccine temperature tracking - https://hedera.com/blog/everyware-and-hedera-hashgraph-enabl...
* Ad-tracking fraud prevention - https://hedera.com/users/adsdax
The list goes on…
Interestingly no one talks about these use cases and massive potential of DLTs on Hacker news when ever crypto discussions come up. But modern DLTs are there slowly doing their thing.
I think there’s a definite disconnect with poor perceptions of cryptocurrencies and DLTs in general. Mostly based on how things were several years ago compared to where things actually stand now. Plenty of unfounded FUD focusing on shitcoins and not a lot of focus on what’s going on with more professional approaches.
For example there are various criticisms of Hedera Hasgraph online stating that it is closed-source, not decentralised, slow for smart contracts and not open source. All incorrect.
The code is either open source or open review.
More decentralised than most cryptos (transparent governance from multiple organisations on different continents and in different industries). Heading towards full permissionless nodes once the network is stable.
Slow smart contracts do exist for backwards compatibility but far faster smart contracts (scheduled etc) can be created at the native layer.
Admittedly Hedera Hashgraph is not strictly a blockchain but is more energy efficient (millions of times less energy use than Bitcoin for example due to not needing to do proof of work and by virtual voting), orders of magnitude faster than traditional blockchains (BTC, ETH etc), and highly secure (true finality within seconds).
Example use cases (EDIT: with links)
* Tokens for carbon credits - https://hedera.com/users/dovu
* The Coupon Bureau - US Coupon Bureau using tokenised coupons to prevent $billions in coupon fraud - https://hedera.com/users/coupon-bureau
* Australian EFTPos POS payments - https://hedera.com/blog/eftpos-pioneers-new-ecommerce-microp...
* NHS vaccine temperature tracking - https://hedera.com/blog/everyware-and-hedera-hashgraph-enabl...
* Ad-tracking fraud prevention - https://hedera.com/users/adsdax
The list goes on…
Interestingly no one talks about these use cases and massive potential of DLTs on Hacker news when ever crypto discussions come up. But modern DLTs are there slowly doing their thing.
I think there’s a definite disconnect with poor perceptions of cryptocurrencies and DLTs in general. Mostly based on how things were several years ago compared to where things actually stand now. Plenty of unfounded FUD focusing on shitcoins and not a lot of focus on what’s going on with more professional approaches.
For example there are various criticisms of Hedera Hasgraph online stating that it is closed-source, not decentralised, slow for smart contracts and not open source. All incorrect.
The code is either open source or open review.
More decentralised than most cryptos (transparent governance from multiple organisations on different continents and in different industries). Heading towards full permissionless nodes once the network is stable.
Slow smart contracts do exist for backwards compatibility but far faster smart contracts (scheduled etc) can be created at the native layer.
Nice piece of shill, mate
The difference between someone making a sensible set of counter-arguments with valid points versus someone who is actually shilling is easily lost on some people.
The list of use cases would be better served, and in most of those cases is already well served, by a single database.
Trusted interpersonal relationships are a feature, not a bug.
Trusted interpersonal relationships are a feature, not a bug.
Trusted data on a network where you don’t have to trust anyone is THE feature of DLTs.
Some links would be useful
btw, "US Coupon Bureau" is not any kind of US official organization, just another crypto startup. And their own website has their name listed as "The Coupon Bureau".
I had to dig a little, but the "NHS vaccine temperature tracking" does at least have a CNBC article about it: https://www.cnbc.com/2021/01/19/uk-hospitals-use-blockchain-...
I had to dig a little, but the "NHS vaccine temperature tracking" does at least have a CNBC article about it: https://www.cnbc.com/2021/01/19/uk-hospitals-use-blockchain-...
Regarding The Coupon Bureau - read this: https://www.prweb.com/releases/single_source_vendor_for_univ...
All the use cases are on https://hedera.com
All the use cases are on https://hedera.com
And the first time you used crypto-currency, you thought, “Ah, I see other people are going to want to do this?”
I certainly didn’t.
I certainly didn’t.
Yes, I imagined a populace having independent control over some form of portable digital secure financial instrument as being an exciting thing. Here's a piece from 2002, https://www.wired.com/2002/01/egold/
I couldn't, and still can't imagine using a network that processes 7 global transactions per second. If we used some secondary chain, the crypto would be solving a problem for banks and not for people.
And how fast do you think the first steam engine went? I think we are all familiar with emerging technology that improves over time.
Wikipedia says:
> Initial release 0.1.0 / 9 January 2009 (12 years ago)
There's already a change in the phrasing from 'currency' to 'store of value' as people are figuring out it doesn't work.
> Initial release 0.1.0 / 9 January 2009 (12 years ago)
There's already a change in the phrasing from 'currency' to 'store of value' as people are figuring out it doesn't work.
He's just right. I can't object to using cryptocurrencies as a financial instrument to make money but all the arguments about technology, economics or freedom are not just wrong but very often the exact opposite is true.
> arguments about technology, economics or freedom are not just wrong but very often the exact opposite is true.
Care to elaborate?
What exactly are the arguments that are wrong?
Care to elaborate?
What exactly are the arguments that are wrong?
Not the OP, but this has been my experience as well.
* "This will decentralize ownership of a currency." Nope, it will move from having government control to having oligarchic control.
* "A strict limit on the number of tokens means that the value isn't stolen away by inflation." If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.
* "These are anonymous transactions." On a public ledger, the most you can do is pseudonymous. Just like TOR, you only need to monitor the exit nodes to map pseudonyms to actual people.
* "Irreversible transactions are a feature." They're definitely a bug. If I buy a TV with a credit card, and receive a box of rocks, I can do a chargeback. If I make that same transaction with cryptocurrencies, I'm SOL unless a fraudster suddenly decides that they really want to make good on it.
* "We don't need banks anymore." is absolutely hilarious when coupled with "Off-chain transactions solve the throughput limits." If there's an organization that holds money in their on-chain accounts on behalf of others, manages a balance of those off-chain accounts backed by deposited assets, and facilitates transactions between those off-chain accounts, that sure sounds like a bank to me.
* "Sure, there's a high electricity cost, but compare it to the entire banking system that it's replacing and it's minimal." This one manages to be both inaccurate and false. A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack. As such, the more it expands in usage, the more much be expended to secure it. We've seen how Bitcoin alone now dwarfs entire countries, let alone the banking sector. And even if the statement were true, it is misleading to compare a payment processor to the entire banking sector. Even if the entire banking sector ran on cryptocurrency, you'd still need somebody to underwrite loans and mortgages.
Overall, every single time I've looked into cryptocurrency over the past decade, I came away thinking that it's a really neat idea, but there are so, so many downsides. In practice, cryptocurrencies are worse than Ponzi schemes, because at least Ponzi schemes only screw over people who invest in them. Cryptocurrencies also screw over anybody who wants to use GPUs for productivity/entertainment, anybody who has higher electricity costs due to increased demand, and anybody downwind of (or on the same warming planet as) coal power plants being reactivated to run transaction validation.
Bitcoin delenda est.
* "This will decentralize ownership of a currency." Nope, it will move from having government control to having oligarchic control.
* "A strict limit on the number of tokens means that the value isn't stolen away by inflation." If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.
* "These are anonymous transactions." On a public ledger, the most you can do is pseudonymous. Just like TOR, you only need to monitor the exit nodes to map pseudonyms to actual people.
* "Irreversible transactions are a feature." They're definitely a bug. If I buy a TV with a credit card, and receive a box of rocks, I can do a chargeback. If I make that same transaction with cryptocurrencies, I'm SOL unless a fraudster suddenly decides that they really want to make good on it.
* "We don't need banks anymore." is absolutely hilarious when coupled with "Off-chain transactions solve the throughput limits." If there's an organization that holds money in their on-chain accounts on behalf of others, manages a balance of those off-chain accounts backed by deposited assets, and facilitates transactions between those off-chain accounts, that sure sounds like a bank to me.
* "Sure, there's a high electricity cost, but compare it to the entire banking system that it's replacing and it's minimal." This one manages to be both inaccurate and false. A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack. As such, the more it expands in usage, the more much be expended to secure it. We've seen how Bitcoin alone now dwarfs entire countries, let alone the banking sector. And even if the statement were true, it is misleading to compare a payment processor to the entire banking sector. Even if the entire banking sector ran on cryptocurrency, you'd still need somebody to underwrite loans and mortgages.
Overall, every single time I've looked into cryptocurrency over the past decade, I came away thinking that it's a really neat idea, but there are so, so many downsides. In practice, cryptocurrencies are worse than Ponzi schemes, because at least Ponzi schemes only screw over people who invest in them. Cryptocurrencies also screw over anybody who wants to use GPUs for productivity/entertainment, anybody who has higher electricity costs due to increased demand, and anybody downwind of (or on the same warming planet as) coal power plants being reactivated to run transaction validation.
Bitcoin delenda est.
> * "This will decentralize ownership of a currency." Nope, it will move from having government control to having oligarchic control.
In most places where oligarchs exist, they largely control their government. That is, they are one in the same, whether this is a formal or informal arrangement. Though they may be different subsets of oligarchs.
In most places where oligarchs exist, they largely control their government. That is, they are one in the same, whether this is a formal or informal arrangement. Though they may be different subsets of oligarchs.
‘Oligarch’ doesn’t mean ‘rich dude’ - an oligarch is by definition someone (a member of a small elite group) who exercises control over a state.
The point of op wasn’t that Bitcoin transfers power from states to existing oligarchs - indeed, that would be nonsensical, as by definition oligarchs already control states - but that it would transfer power from democratic state institutions to oligarchies. Ie it would create new oligarchies and supplant democracy.
The point of op wasn’t that Bitcoin transfers power from states to existing oligarchs - indeed, that would be nonsensical, as by definition oligarchs already control states - but that it would transfer power from democratic state institutions to oligarchies. Ie it would create new oligarchies and supplant democracy.
Isn't having more power brokers healthier for a democracy than fewer? Today, the existing oligarchs control both the currency and all the laws. This at least fragments that further. The existing oligarchs still get the government; that doesn't change. The new ones get the currency.
There are a couple of things that should be pointed out:
> * "Irreversible transactions are a feature."
I can choose to use a reversible transaction or a third party escrow (non-custodial and can require multiple escrow parties) if I want that safety net. This can be done easily, even on a simple chain like Bitcoin.
> * "We don't need banks anymore."
Off-chain doesn’t imply custodial risk. Using a ZKRollup chain, the layer 2 network facilitates transactions but is unable to steal my money by altering my balance without a valid signed transaction or refusing to allow me to withdraw my funds.
Certainly using a custodial off-chain approach is the same as using a bank/exchange, but that isn’t a requirement.
> * "Irreversible transactions are a feature."
I can choose to use a reversible transaction or a third party escrow (non-custodial and can require multiple escrow parties) if I want that safety net. This can be done easily, even on a simple chain like Bitcoin.
> * "We don't need banks anymore."
Off-chain doesn’t imply custodial risk. Using a ZKRollup chain, the layer 2 network facilitates transactions but is unable to steal my money by altering my balance without a valid signed transaction or refusing to allow me to withdraw my funds.
Certainly using a custodial off-chain approach is the same as using a bank/exchange, but that isn’t a requirement.
> "Irreversible transactions are a feature." They're definitely a bug. If I buy a TV with a credit card, and receive a box of rocks, I can do a chargeback. If I make that same transaction with cryptocurrencies, I'm SOL unless a fraudster suddenly decides that they really want to make good on it.
Agree with all you said apart from this - I'm not sure how reversible transactions would help you get money back from a fraudster. With 'legacy' money its eBay/Amazon or your credit card company (or the laws that they operate under), the level above the currency/transaction that gets you your money back. I imagine if Amazon accepted bitcoin they would also provide refunds.
The legal protection provided by using a credit card (in the UK/EU anyway) is by far the biggest reason not to use anything else for transactions on the internet.
Agree with all you said apart from this - I'm not sure how reversible transactions would help you get money back from a fraudster. With 'legacy' money its eBay/Amazon or your credit card company (or the laws that they operate under), the level above the currency/transaction that gets you your money back. I imagine if Amazon accepted bitcoin they would also provide refunds.
The legal protection provided by using a credit card (in the UK/EU anyway) is by far the biggest reason not to use anything else for transactions on the internet.
With reversible transactions, the credit card company can reverse the transaction without the consent and cooperation of a fraudster. With irreversible transactions, the fraudster must initiate a transfer signed by their private key in order to transfer funds back to my account. Even with a court order, if the fraudster is in another country, they can just ignore it and I'm SOL.
I agree that the legal protections are the bigger part of it, but the actions prescribed by those legal protections can only be implemented if transactions are reversible.
Edit: I forgot to add, I'd also put the existence of ransomware as an effect of irreversible transactions. Prior to the rise of bitcoin, the main economic incentive for viruses was to rent out time on a botnet. Afterwards, the irreversible transactions meant that ransoming data from the computer owner was economically viable.
I agree that the legal protections are the bigger part of it, but the actions prescribed by those legal protections can only be implemented if transactions are reversible.
Edit: I forgot to add, I'd also put the existence of ransomware as an effect of irreversible transactions. Prior to the rise of bitcoin, the main economic incentive for viruses was to rent out time on a botnet. Afterwards, the irreversible transactions meant that ransoming data from the computer owner was economically viable.
* "This will decentralize ownership of a currency." Nope, it will move from having government control to having oligarchic control.
-> While not perfect, look at something like DAI. You can buy MKR and then be involved in the process of managing the DAI currency. https://en.wikipedia.org/wiki/Dai_(cryptocurrency)
* "A strict limit on the number of tokens means that the value isn't stolen away by inflation." If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.
-> Not all cryptocurrencies have a max total supply. There is all sorts of experiments going on.
* "These are anonymous transactions." On a public ledger, the most you can do is pseudonymous. Just like TOR, you only need to monitor the exit nodes to map pseudonyms to actual people.
> "Is using monero gui (not through a remote node) safe from tor exit nodes?
> The exit node will see that there is traffic on the XMR port and where the destination > of those packets is (an XMR node). But they won't know where it came from, and with regard to the transaction, they won't know the sender, the recipient, or the amount. Short answer: yes."
https://www.reddit.com/r/Monero/comments/5umdut/monero_safet...
-> Maybe it goes down a rabbit hole of semantics but I think for most people the above (sender, recipient and amount are unknown) constitutes anonymous.
* "Irreversible transactions are a feature." They're definitely a bug. If I buy a TV with a credit card, and receive a box of rocks, I can do a chargeback. If I make that same transaction with cryptocurrencies, I'm SOL unless a fraudster suddenly decides that they really want to make good on it.
-> I think this is pure opinion. I've never charged back something. If it's something you do often you as the user can decide whether it's a feature or bug.
* "We don't need banks anymore." is absolutely hilarious when coupled with "Off-chain transactions solve the throughput limits." If there's an organization that holds money in their on-chain accounts on behalf of others, manages a balance of those off-chain accounts backed by deposited assets, and facilitates transactions between those off-chain accounts, that sure sounds like a bank to me.
-> I assume you're referring to something like Tether or USDC. You are correct for now. Chains like Solana can do 50k TPS today. UST (TerraUSD) is currently securing 2 billion USD equivalent completely on chain. We have the tools to transition but you're correct that we have not transitioned yet.
* "Sure, there's a high electricity cost, but compare it to the entire banking system that it's replacing and it's minimal." This one manages to be both inaccurate and false. A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack. As such, the more it expands in usage, the more much be expended to secure it. We've seen how Bitcoin alone now dwarfs entire countries, let alone the banking sector. And even if the statement were true, it is misleading to compare a payment processor to the entire banking sector. Even if the entire banking sector ran on cryptocurrency, you'd still need somebody to underwrite loans and mortgages.
-> A chain like Solana is running on Proof of stake and uses a fraction of the energy that BTC uses. They currently have around 700 validators and rising fast. Undercollatoralized loans are another challenge which many teams are working on. Keep in mind, the challenge is to replace a system that has been solving issues it ran into for hundreds of years. Cryptocurrencies / DeFi are very new and there is much work ahead.
I understand you're skeptical and have a negative opinion. It's great to be skeptical. Why I firmly believe that there is a big future ahead for these technologies is because the trend I can observe around the globe is a trend towards more technology in everything. Why have a dumb phone when you can have a smart phone? Why have dumb money when you can have smart, programmable money where lending, sending, purchasing can be streamed, fractionalized, automated and whatever else we come up with. Technology has a habit of making tools more performant. I anticipate the same outcome in this area.
-> While not perfect, look at something like DAI. You can buy MKR and then be involved in the process of managing the DAI currency. https://en.wikipedia.org/wiki/Dai_(cryptocurrency)
* "A strict limit on the number of tokens means that the value isn't stolen away by inflation." If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.
-> Not all cryptocurrencies have a max total supply. There is all sorts of experiments going on.
* "These are anonymous transactions." On a public ledger, the most you can do is pseudonymous. Just like TOR, you only need to monitor the exit nodes to map pseudonyms to actual people.
> "Is using monero gui (not through a remote node) safe from tor exit nodes?
> The exit node will see that there is traffic on the XMR port and where the destination > of those packets is (an XMR node). But they won't know where it came from, and with regard to the transaction, they won't know the sender, the recipient, or the amount. Short answer: yes."
https://www.reddit.com/r/Monero/comments/5umdut/monero_safet...
-> Maybe it goes down a rabbit hole of semantics but I think for most people the above (sender, recipient and amount are unknown) constitutes anonymous.
* "Irreversible transactions are a feature." They're definitely a bug. If I buy a TV with a credit card, and receive a box of rocks, I can do a chargeback. If I make that same transaction with cryptocurrencies, I'm SOL unless a fraudster suddenly decides that they really want to make good on it.
-> I think this is pure opinion. I've never charged back something. If it's something you do often you as the user can decide whether it's a feature or bug.
* "We don't need banks anymore." is absolutely hilarious when coupled with "Off-chain transactions solve the throughput limits." If there's an organization that holds money in their on-chain accounts on behalf of others, manages a balance of those off-chain accounts backed by deposited assets, and facilitates transactions between those off-chain accounts, that sure sounds like a bank to me.
-> I assume you're referring to something like Tether or USDC. You are correct for now. Chains like Solana can do 50k TPS today. UST (TerraUSD) is currently securing 2 billion USD equivalent completely on chain. We have the tools to transition but you're correct that we have not transitioned yet.
* "Sure, there's a high electricity cost, but compare it to the entire banking system that it's replacing and it's minimal." This one manages to be both inaccurate and false. A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack. As such, the more it expands in usage, the more much be expended to secure it. We've seen how Bitcoin alone now dwarfs entire countries, let alone the banking sector. And even if the statement were true, it is misleading to compare a payment processor to the entire banking sector. Even if the entire banking sector ran on cryptocurrency, you'd still need somebody to underwrite loans and mortgages.
-> A chain like Solana is running on Proof of stake and uses a fraction of the energy that BTC uses. They currently have around 700 validators and rising fast. Undercollatoralized loans are another challenge which many teams are working on. Keep in mind, the challenge is to replace a system that has been solving issues it ran into for hundreds of years. Cryptocurrencies / DeFi are very new and there is much work ahead.
I understand you're skeptical and have a negative opinion. It's great to be skeptical. Why I firmly believe that there is a big future ahead for these technologies is because the trend I can observe around the globe is a trend towards more technology in everything. Why have a dumb phone when you can have a smart phone? Why have dumb money when you can have smart, programmable money where lending, sending, purchasing can be streamed, fractionalized, automated and whatever else we come up with. Technology has a habit of making tools more performant. I anticipate the same outcome in this area.
I think lot of your comments relate to Bitcoin, and that's a Gen1 cryptocoin. If you have a look at where Cardano (Gen3) is going, you might have a more favorable opinion.
Good point, I missed a few from my list.
* "Proof of stake will save us." Proof of stake embeds the rich getting richer into the very fabric of a currency. It provides a guaranteed net positive return for transaction validation, in the same way that proof of work provides a guaranteed net positive return for electricity usage. In both cases, if the return were not net positive, then transaction validation would not occur, and the "currency" couldn't be spent.
* "Proof of stake is at least better." I'll agree with that one, since it has fewer externalities. But that's like saying that a dumpster fire is better than a car fire. Neither are good, but one of them is less bad. There's also nothing stopping the proof-of-work transaction validators from switching to the next proof-of-work coin, so I don't think the existence of a marginally better alternative will remove the environmental impact of cryptocurrencies.
* "Proof of stake will save us." Proof of stake embeds the rich getting richer into the very fabric of a currency. It provides a guaranteed net positive return for transaction validation, in the same way that proof of work provides a guaranteed net positive return for electricity usage. In both cases, if the return were not net positive, then transaction validation would not occur, and the "currency" couldn't be spent.
* "Proof of stake is at least better." I'll agree with that one, since it has fewer externalities. But that's like saying that a dumpster fire is better than a car fire. Neither are good, but one of them is less bad. There's also nothing stopping the proof-of-work transaction validators from switching to the next proof-of-work coin, so I don't think the existence of a marginally better alternative will remove the environmental impact of cryptocurrencies.
I thank you for making these problems explicit. I am very curious what the wealth distribution of Cardano looks like and will do some analysis.
Don’t people who play video games screw over anyone who wants a graphics card to render 3D graphics for movies by your logic?
Have you looked into how strike.me is using Bitcoin? It’s essentially a Venmo/cash app competitor that is transacting over the bitcoin lightning network. So you keep your balance in usd but because lightning provides instant transactions when you want to spend to another lightning user from strike they will buy bitcoin at the current price and send the transaction on your behalf or vice versa. What’s cool about this is that you don’t know anything about the other end of the transaction. I believe this is the direction Dorsey wants cash app to go in.
Have you looked into how strike.me is using Bitcoin? It’s essentially a Venmo/cash app competitor that is transacting over the bitcoin lightning network. So you keep your balance in usd but because lightning provides instant transactions when you want to spend to another lightning user from strike they will buy bitcoin at the current price and send the transaction on your behalf or vice versa. What’s cool about this is that you don’t know anything about the other end of the transaction. I believe this is the direction Dorsey wants cash app to go in.
> Don’t people who play video games screw over anyone who wants a graphics card to render 3D graphics for movies by your logic?
There is a hard ceiling to the number of GPUs of a given generation that even the most enthusiastic computer game player might realistically want to have at the same time, and it can be counted with the fingers of one hand. This is not the case for cryptocurrency miners.
On the other side of things, people and businesses who render 3D graphics for films may not have a hard ceiling as such, but they certainly face diminishing returns for their investment above a certain number of GPUs, and at a certain point they would incur in downright losses. This is not the case for cryptocurrency miners either.
There is a hard ceiling to the number of GPUs of a given generation that even the most enthusiastic computer game player might realistically want to have at the same time, and it can be counted with the fingers of one hand. This is not the case for cryptocurrency miners.
On the other side of things, people and businesses who render 3D graphics for films may not have a hard ceiling as such, but they certainly face diminishing returns for their investment above a certain number of GPUs, and at a certain point they would incur in downright losses. This is not the case for cryptocurrency miners either.
> Don’t people who play video games screw over anyone who wants a graphics card to render 3D graphics for movies by your logic?
To some extent, yes. In those cases, there is optimization between different types of value being found, and different tradeoffs being made. There is intrinsic value in entertainment, both from video games and movies. There is instrumental value in, for example, machine learning model training. The difference I see with cryptocurrencies is that they provide no significant value, either intrinsic or instrumental. It isn't a matter of tradeoffs, but a choice between producing some value at all, or producing practically none.
I will concede that there is some amount of entertainment value that people may get from watching cryptocurrencies rise and fall, but that same entertainment could be found in any other form of gambling.
> Have you looked into how strike.me is using Bitcoin?
Honestly, I try to avoid the new cryptocurrency product developments in the same way that I avoid reading about new homeopathic "remedies". In both cases, while there are variations, the foundation on which they are built is so fundamentally flawed that the end-product will be flawed as well.
This is the first I'm heard about strike.me. Looking into it, their website is incredibly sparse on details, and your comment gives more information than their FAQ. The main piece is that transactions are resolved using the Lightning network. That's the type I had been referring to as actually being a bank with the off-chain transactions, but skirting all banking regulations. With that, I wouldn't trust any money that's held in a strike.me account, because either strike.me or their Lightning provider is functionally a bank but without any regulations.
To some extent, yes. In those cases, there is optimization between different types of value being found, and different tradeoffs being made. There is intrinsic value in entertainment, both from video games and movies. There is instrumental value in, for example, machine learning model training. The difference I see with cryptocurrencies is that they provide no significant value, either intrinsic or instrumental. It isn't a matter of tradeoffs, but a choice between producing some value at all, or producing practically none.
I will concede that there is some amount of entertainment value that people may get from watching cryptocurrencies rise and fall, but that same entertainment could be found in any other form of gambling.
> Have you looked into how strike.me is using Bitcoin?
Honestly, I try to avoid the new cryptocurrency product developments in the same way that I avoid reading about new homeopathic "remedies". In both cases, while there are variations, the foundation on which they are built is so fundamentally flawed that the end-product will be flawed as well.
This is the first I'm heard about strike.me. Looking into it, their website is incredibly sparse on details, and your comment gives more information than their FAQ. The main piece is that transactions are resolved using the Lightning network. That's the type I had been referring to as actually being a bank with the off-chain transactions, but skirting all banking regulations. With that, I wouldn't trust any money that's held in a strike.me account, because either strike.me or their Lightning provider is functionally a bank but without any regulations.
> move from having government control to having oligarchic control.
Government control is oligarchic control. With the bank bailouts in 2007, it became clear the government wants to keep the oligopoly of banks in charge, instead of freeing the resources to companies worthy of them.
Bitcoin makes no change from this perspective. Taleb says "that the distribution of holdings of bitcoin follows a power law with tail index ≈ 5/4, no different from the distribution of wealth in the U.S." [1]
> If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.
Indeed, the demand is affected by speculative bubbles. I hope that demand stabilizes, and that people realize the potential gain from trading against short-term sentiment.
But the supply might be a good predictor of price. [2]
> A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack.
I agree. PoW expends a ridiculous amount of energy per transaction, and gains security by essentially outspending any attacker. But to some extent, Bitcoin developers are at fault here for refusing to increase the block size (thereby limiting the blockchain space and increasing the reward for miners).
[1] - https://nassimtaleb.org/2021/06/bitcoin-currencies-bubbles/
[2] - https:///@100trillionUSD/modeling-bitcoins-value-with-scarci...
Government control is oligarchic control. With the bank bailouts in 2007, it became clear the government wants to keep the oligopoly of banks in charge, instead of freeing the resources to companies worthy of them.
Bitcoin makes no change from this perspective. Taleb says "that the distribution of holdings of bitcoin follows a power law with tail index ≈ 5/4, no different from the distribution of wealth in the U.S." [1]
> If the supply of currency doesn't keep up with demand, the price skyrockets. This discourages investment, since you get more value just by holding onto it.
Indeed, the demand is affected by speculative bubbles. I hope that demand stabilizes, and that people realize the potential gain from trading against short-term sentiment.
But the supply might be a good predictor of price. [2]
> A proof-of-work cryptocurrency must at all times expend energy proportional to the value represented by the cryptocurrency, or else be vulnerable to attack.
I agree. PoW expends a ridiculous amount of energy per transaction, and gains security by essentially outspending any attacker. But to some extent, Bitcoin developers are at fault here for refusing to increase the block size (thereby limiting the blockchain space and increasing the reward for miners).
[1] - https://nassimtaleb.org/2021/06/bitcoin-currencies-bubbles/
[2] - https:///@100trillionUSD/modeling-bitcoins-value-with-scarci...
Government control is oligarchic control
We have the means (ostensibly) to voice concerns to representatives in an attempt to incite change. Private oligarchies with 0 oversight never act in the user's best interest, and you have no recourse to do anything about it.
We have the means (ostensibly) to voice concerns to representatives in an attempt to incite change. Private oligarchies with 0 oversight never act in the user's best interest, and you have no recourse to do anything about it.
> Bitcoin developers are at fault here for refusing to increase the block size
This, of course, is nonsense; they increased it significantly beyond what some reasonable research showed was safe. The current best-available research shows both that a fee market must exist for long-term Bitcoin security (it is unstable in a post-subsidy scenario without either an uncapped supply/subsidy or a strongly-limited block size.)
Neither is the PoW measurable on a per-transaction basis, since current PoW continues adding protection to all transactions that have ever gone before, Lightning exists, and offchain exchange volume (for Bitcoin) isn't totally faked.
This, of course, is nonsense; they increased it significantly beyond what some reasonable research showed was safe. The current best-available research shows both that a fee market must exist for long-term Bitcoin security (it is unstable in a post-subsidy scenario without either an uncapped supply/subsidy or a strongly-limited block size.)
Neither is the PoW measurable on a per-transaction basis, since current PoW continues adding protection to all transactions that have ever gone before, Lightning exists, and offchain exchange volume (for Bitcoin) isn't totally faked.
Indeed, a fee market exists and should exist. But I would not increase the block space indefinitely, only as long as there are no double-spend attempts that succeed.
The current cost of a 51% attack is roughly $1M per hour [1], which I find an obscenely unnecessary and wasteful amount of security.
[1] - https://www.crypto51.app/
The current cost of a 51% attack is roughly $1M per hour [1], which I find an obscenely unnecessary and wasteful amount of security.
[1] - https://www.crypto51.app/
Basically, crypto and especially Bitcoin is exchanging generally well regulated (central) banks with shady parties operating from extremely power hungry ASIC sheds in China or Iceland.
To be honest, I do not spot the upside for crypto here.
To be honest, I do not spot the upside for crypto here.
not really, though its sad to see the power imbalance grow in crypto, they still have way less power than a central bank that can just make the money printer go brrr.
Yes, some systems are stable, but many others are not;
And most of the criticism applies to POW crypto. Which will hopefully be outpaced by POS soon.
The difference is this:
* "Plain old banks" might have more power over money creation (i.e. unlike Bitcoin, money creation technically has no fixed limit). But they are severely restricted (by regulations and restrictions) from using that power in a too bad way.
* Bitcoin miners have less power over this, but can wield it without restriction as without their power hungry ASIC rigs, Bitcoin will stop working for all practical intents and purposes.
* "Plain old banks" might have more power over money creation (i.e. unlike Bitcoin, money creation technically has no fixed limit). But they are severely restricted (by regulations and restrictions) from using that power in a too bad way.
* Bitcoin miners have less power over this, but can wield it without restriction as without their power hungry ASIC rigs, Bitcoin will stop working for all practical intents and purposes.
regulations and restrictions do not always work; Most of the worlds population live in places where regulations and restrictions are applied by the state on its citizens, not vice versa
System designed by geek anarchists! I don't think it was meant to be "nice", the intention was for it to be neutral to the point it hurts.
Is it neutral, to design a system where those with more resources have more power?
Yes. Those with more resources always have more power. Unless some entity takes those resources away at which point they don't have more resources.
But shouldn’t something have been done to ensure a better initial distribution of those assets? To be a Bitcoin maximalist basically means you want a future in which the Winkelvoss twins, Pompliano et al are the richest people of all time. How is that a future worth fighting for?
>wants to revolutionize the entire system of centralized currency
>can't see any reason why you'd want to challenge the existing distribution of that currency
>can't see any reason why you'd want to challenge the existing distribution of that currency
So, neutrality supports the entities that have more resources. Since it is supporting them, can it really be called "neutral"?
That’s a pretty different take than the grandparent comment where blockchain is disruption brought to you by anarchists.
Why do people not see cryptocurrencies as a pure fraud engine from day 1? The moment I heard of cryptocurrencies and their methods, I was struck with the thought "wow, this is naive. Is this a joke? This is not serious, it can't be, it's a recipe directly out of the Grifter's Handbook!"
Yet, here we are, a good 14 years later and the punchline is still not recognized. This nation needs Critical Thinking in place of Reading, Writing or Basic Math because that super critical ingredient is missing in far too many people.
Yet, here we are, a good 14 years later and the punchline is still not recognized. This nation needs Critical Thinking in place of Reading, Writing or Basic Math because that super critical ingredient is missing in far too many people.
Want to know what is better than cryptocurrencies and actually provides the majority of the benefits crypto fraudulently claims? Barter. A non-cash exchange of services and/or goods between two parties. Barter engages no taxes, no financial transaction. Nobody want to do it because it engages the hardest task known to man: human politics.
Imagine you had 5,000 online bookstores in 1997, and 99.9% of them had some self described great new tech but none of that tech was being used by any publisher, distributor, printer, author, etc.
I did a lot of research on the top 50 cryptocurrencies and distributed ledgers, for quite some time now, and it's appalling how only a handful (really, like 4) have real world use cases at a large scale and might have a future. Of course, what's more appalling is how people will put their money on all the other 4996 crypto and think that because the price was speculated up, it must mean that the tech is good and will be used in the future.
edit: added the might
edit: added the might
Relevant Jared Dillion (former goldman sachs I think, now a newsletter guy) tweet from yesterday:
> This may seem hard to believe, but there is more money to be made being long fraud rather than short fraud in the stock market.
https://twitter.com/dailydirtnap/status/1416796595132243969
> This may seem hard to believe, but there is more money to be made being long fraud rather than short fraud in the stock market.
https://twitter.com/dailydirtnap/status/1416796595132243969
What you described is very similar to the state of affairs of internet companies in the beginning of the 2000s. It is probably a common effect in the early days of any major paradigm shift and a predictor of big changes to come.
One use case he forgot to mention was funneling dark money to political groups which I imagine is the primary way some far right organizations in the US and abroad are being financed.
Yes, let them play with their magic internet money. Keep the USD and EUR out of this.
The difference between magic internet money and USD is the word internet.
All money is based on faith. At least Bitcoin has a cap. Dealing with inflation, even moderate amounts is annoying and risky. I'm sure you'd rather have Bitcoin if you lived in Germany, Zimbabwe, or Venezuela (to make a few hyperinflation events).
I'm anti shitcoins, but at least Bitcoin has trust and scarcity.
All money is based on faith. At least Bitcoin has a cap. Dealing with inflation, even moderate amounts is annoying and risky. I'm sure you'd rather have Bitcoin if you lived in Germany, Zimbabwe, or Venezuela (to make a few hyperinflation events).
I'm anti shitcoins, but at least Bitcoin has trust and scarcity.
You can't run an economy on a fixed-supply currency. We've tried in the past.
Bitcoin's scarcity creates an incentive to get in early and hoard your spot on the blockchain. I don't get how that's productive or helps anyone unless you really manage to convince other people that having a spot on the blockchain is something extremely important.
Bitcoin's scarcity creates an incentive to get in early and hoard your spot on the blockchain. I don't get how that's productive or helps anyone unless you really manage to convince other people that having a spot on the blockchain is something extremely important.
> You can't run an economy on a fixed-supply currency.
This is not a universally accepted truth. In the next decade or three, we may find out that you can’t run an economy on printing presses.
This is not a universally accepted truth. In the next decade or three, we may find out that you can’t run an economy on printing presses.
It's more complicated than "printing press = bad". There's a good argument to be made for how and when monetary supply should be controlled and to what extent. But completely giving up that control is a recipe for disaster. It's like taking away the steering wheel just because your driver made a bad turn.
I'm not sure how many of the people advocating for fixed-supply currencies actually understand history, economic cycles, inflation-deflation and the role of monetary policy. A lot of the argumentation comes from a surface-level understanding of these concepts and knee-jerk reactions that get repeated by the hivemind.
I'm not sure how many of the people advocating for fixed-supply currencies actually understand history, economic cycles, inflation-deflation and the role of monetary policy. A lot of the argumentation comes from a surface-level understanding of these concepts and knee-jerk reactions that get repeated by the hivemind.
I’m familiar with the theory, have read a number of history books on the subject, and have followed modern proponents of various economic schools. I think those in favor of the prevailing theory are overconfident. Time will tell.
The government will literally arrest people who try to avoid using a fiat currency. I mean, you have to admit "this is in your own best interest" is a suspicious argument when it involves printing stacks of cash, giving it to big business/asset owners and prosecuting anyone who seriously tries to use a consistent stick to measure wealth. It looks like a bunch of people believe it isn't in their interest and need to be bought into line by force.
I don't mind if you want a steering wheel, but given that we seem to be driving something of a money printing train I'm not sure what you expect the wheel to do. They're following an exponential curve of money creation. The only surprise is that they keep pretending that at some point they will be able to stop printing.
I don't mind if you want a steering wheel, but given that we seem to be driving something of a money printing train I'm not sure what you expect the wheel to do. They're following an exponential curve of money creation. The only surprise is that they keep pretending that at some point they will be able to stop printing.
Source of this ever happening?
It is fundamental to the tax code. Say someone gets paid some amount of gold, holds on to it for 10 years then tries to barter it for something.
They'll get charged with tax fraud on the theory that their lump of rock is worth more now than it was when they bought it so they should be paying some amount in capital gains tax.
Now I'll accept an argument that we should have some sort of transaction tax, fair enough if you want to believe that.
But the theory that the gold is becoming worth more over time in real terms is blatantly silly. It doesn't change, the supply of gold is increasing faster than population and the arguments that its value is changing are frankly a bit forced. It isn't increasing in real value at a rapid rate like the official numbers suggest it is.
And the US dollar is, by policy, losing value - so the same basic argument will hold for any asset even ignoring the fact that the inflation numbers are wilfully ignoring asset price inflation.
They'll get charged with tax fraud on the theory that their lump of rock is worth more now than it was when they bought it so they should be paying some amount in capital gains tax.
Now I'll accept an argument that we should have some sort of transaction tax, fair enough if you want to believe that.
But the theory that the gold is becoming worth more over time in real terms is blatantly silly. It doesn't change, the supply of gold is increasing faster than population and the arguments that its value is changing are frankly a bit forced. It isn't increasing in real value at a rapid rate like the official numbers suggest it is.
And the US dollar is, by policy, losing value - so the same basic argument will hold for any asset even ignoring the fact that the inflation numbers are wilfully ignoring asset price inflation.
I appreciate how thoughtful this comment is.
Question, in the gold scenario is your issue with the idea of capital gains, or an issue with how it's accounted (given that you think the gold *hasn't* appreciated)?
Question, in the gold scenario is your issue with the idea of capital gains, or an issue with how it's accounted (given that you think the gold *hasn't* appreciated)?
Yeah the gold accounting bit just slipped in through force of habit. Sorry about that, too much time arguing badly on HN.
The key point there is the implementation of capital gains tax. It isn't so much that I have issues with CGT. CGT is ok, if we're going to tax things we may as well tax Capital Gains. But, if someone tries to avoid fiat, they're going to be imprisoned because they can't comply with the IRS when they come to collect the fake capital gains caused by inflation. Ditto income tax now that I think about it.
The point here is that the "[you don't understand] history, economic cycles, inflation-deflation and the role of monetary policy" counter is patronising and pretty obviously wrong. It isn't for our own good, it is because they want to put more of the burden for keeping the country running on savers. That isn't good for savers. And they're doing it that way because if they implemented an equivalent but obvious policy people would point out "hang on, taxing disproportionately from savers seems like it might be a bad idea" and probably carry the debate.
The key point there is the implementation of capital gains tax. It isn't so much that I have issues with CGT. CGT is ok, if we're going to tax things we may as well tax Capital Gains. But, if someone tries to avoid fiat, they're going to be imprisoned because they can't comply with the IRS when they come to collect the fake capital gains caused by inflation. Ditto income tax now that I think about it.
The point here is that the "[you don't understand] history, economic cycles, inflation-deflation and the role of monetary policy" counter is patronising and pretty obviously wrong. It isn't for our own good, it is because they want to put more of the burden for keeping the country running on savers. That isn't good for savers. And they're doing it that way because if they implemented an equivalent but obvious policy people would point out "hang on, taxing disproportionately from savers seems like it might be a bad idea" and probably carry the debate.
Thanks for sharing a source
Well, gold was banned in US not that long ago ( https://en.wikipedia.org/wiki/Gold_Reserve_Act ). Naturally, we could argue whether gold is a currency and whatnot, but for the sake of the argument, I will state that there is absolutely nothing government will not attempt to legislate.
Hell, they can legislate that 2 + 2 = 5. It won't make it accurate, right or even make sense, but they can.
Hell, they can legislate that 2 + 2 = 5. It won't make it accurate, right or even make sense, but they can.
Quantitative easing by the Fed does not involve any printing of money (figuratively, we’re obviously not discussing actual printing presses), though they may like you to think like that. It doesn’t even create money, it just swaps assets for reserves.
> Bitcoin's scarcity creates an incentive to get in early and hoard your spot on the blockchain.
Paradoxically, what got people to get in early was the *early inflation*.
People would not have joined the project if it were released pre-mined, and just sold by its creator. But the fact that it was given away to newcomers (at a symbolic processing power cost) distributed it throughout the world.
What attracts people now is, sadly, the expectation of quick profit. That will burn them - a lot of people have heard of Bitcoin by now, and have invested as much (or as little) as they wanted. There is limited growth left; the returns are diminishing.
Personally, I believe the best use case of crypto is as a hedge against inflation.
After the last halvening, the supply is increasing by 1.8% year-over-year ending July 18th [1]. Contrast that to fiat supply increase: 13.8% year-over-year ending May 2021. [2]
[1] - https://www.blockchain.com/charts/total-bitcoins
[2] - https://fred.stlouisfed.org/series/M2SL
Paradoxically, what got people to get in early was the *early inflation*.
People would not have joined the project if it were released pre-mined, and just sold by its creator. But the fact that it was given away to newcomers (at a symbolic processing power cost) distributed it throughout the world.
What attracts people now is, sadly, the expectation of quick profit. That will burn them - a lot of people have heard of Bitcoin by now, and have invested as much (or as little) as they wanted. There is limited growth left; the returns are diminishing.
Personally, I believe the best use case of crypto is as a hedge against inflation.
After the last halvening, the supply is increasing by 1.8% year-over-year ending July 18th [1]. Contrast that to fiat supply increase: 13.8% year-over-year ending May 2021. [2]
[1] - https://www.blockchain.com/charts/total-bitcoins
[2] - https://fred.stlouisfed.org/series/M2SL
"How much Bitcoin do you have?"
Not enough
I know those crazy libertarians who had 100+ Bitcoin. They mostly sold.
I think you could also argue that infinite supply currency is bad for the lower class.
Not enough
I know those crazy libertarians who had 100+ Bitcoin. They mostly sold.
I think you could also argue that infinite supply currency is bad for the lower class.
[deleted]
inflation in general is good for people that have large debt loads, which tends to be lower class people.
>>You can't run an economy on a fixed-supply currency. We've tried in the past.
1. This is simply not true. The gold standard did not fail. It became inconvenient to political agendas. There were no economic deficiencies in the gold standard era.
2. The crypto world is multi-currency, so you can't draw lessons from a uni-currency past that apply to it.
1. This is simply not true. The gold standard did not fail. It became inconvenient to political agendas. There were no economic deficiencies in the gold standard era.
2. The crypto world is multi-currency, so you can't draw lessons from a uni-currency past that apply to it.
Counter point, what gold really fixed? From a google search:
"Between all of the gold sources in the world, current estimates suggest that roughly 2,500 to 3,000 tons of new gold is mined each year. At present, experts believe that the total amount of above ground gold in the world stands at just over 190,000 tons."
"Between all of the gold sources in the world, current estimates suggest that roughly 2,500 to 3,000 tons of new gold is mined each year. At present, experts believe that the total amount of above ground gold in the world stands at just over 190,000 tons."
So then we're in a situation where people are arguing that deflationary cryptocurrencies won't work, because the deflationary gold standard didn't work, when in fact the gold standard was inflationary and worked.
The gold standard did fail. The main problem with a fixed supply currency is that an economy can't grow - GDP can't increase. Things like the Internet created wealth by growing the GDP and "creating" money. If you have a fixed-supply currency you can't create money. Globally, GDP would be a zero-sum game, someone's increase would mean someone's decrease. Wars have been fought for less.
GDP also depends on the velocity of currency, not just on the supply. If people spend a lot of the supply each year, the GDP is high, otherwise it is low.
And if you "grow" an economy by increasing the number of monetary units, you can't create wealth, because wealth is not money. It just splits the same goods and services into more units.
Printing money benefits whoever gets to spend them first, before the consequent inflation hits (all other things being equal). It re-slices the pie by making all pieces smaller (including the ones people have saved up for, say, retirement).
Paradoxically, a good economy should drive prices *down* ( Moore's law should apply everywhere). As technology and processes improve, it should become easier to offer the old products and services, allowing for more sophisticated ones to appear.
And if you "grow" an economy by increasing the number of monetary units, you can't create wealth, because wealth is not money. It just splits the same goods and services into more units.
Printing money benefits whoever gets to spend them first, before the consequent inflation hits (all other things being equal). It re-slices the pie by making all pieces smaller (including the ones people have saved up for, say, retirement).
Paradoxically, a good economy should drive prices *down* ( Moore's law should apply everywhere). As technology and processes improve, it should become easier to offer the old products and services, allowing for more sophisticated ones to appear.
>>The gold standard did fail. The main problem with a fixed supply currency is that an economy can't grow - GDP can't increase.
Economic and wage growth rates during the gold standard were excellent, so no, it did not fail, regardless of what this widely disseminated and overly simplistic model, that you're presenting now, claims.
I recommend George Selgin's debunking of common myths about the gold standard:
https://www.alt-m.org/2015/06/04/ten-things-every-economist-...
Economic and wage growth rates during the gold standard were excellent, so no, it did not fail, regardless of what this widely disseminated and overly simplistic model, that you're presenting now, claims.
I recommend George Selgin's debunking of common myths about the gold standard:
https://www.alt-m.org/2015/06/04/ten-things-every-economist-...
No they didn’t! Economic growth was anemic compared to what we’ve seen since we left the gold standard. Not to mention the economic panics that occurred every few years - “ From 1880 to 1933, there were at least 5 full-fledged banking panics: 1893, 1907, 1930, 1931, and 1933. Including the savings and loan crisis of the 1980s, in the past half century, there have been two.”
— https://www.moneyandbanking.com/commentary/2016/12/14/why-a-...
— https://www.moneyandbanking.com/commentary/2016/12/14/why-a-...
The graph in the web page you linked to shows the rate of GNP growth was higher in the gold standard era, so you're baselessly claiming the growth was "anemic".
And this is especially impressive given the auto-catalytic nature of technological progress, which has steadily caused the pace of technological innovation to pick up. That the gold standard era was able to outperform the fiat era in GNP growth rate, despite occuring during a more primitive technological era where these autocatalytic effects were less pronounced, would suggest that era's policies were exceptionally conducive to economic development.
The rest of the claims in that paper are debunked in the article I linked above.
And this is especially impressive given the auto-catalytic nature of technological progress, which has steadily caused the pace of technological innovation to pick up. That the gold standard era was able to outperform the fiat era in GNP growth rate, despite occuring during a more primitive technological era where these autocatalytic effects were less pronounced, would suggest that era's policies were exceptionally conducive to economic development.
The rest of the claims in that paper are debunked in the article I linked above.
> The difference between magic internet money and USD is the word internet.
And the fact that one has been the de facto world currency for the better part of the last century, but that's just a detail for crypto enthusiasts
> At least Bitcoin has a cap
btc is slow as fuck and nowhere near fast enough to even remotely come close to replace any other system
And the fact that one has been the de facto world currency for the better part of the last century, but that's just a detail for crypto enthusiasts
> At least Bitcoin has a cap
btc is slow as fuck and nowhere near fast enough to even remotely come close to replace any other system
> The difference between magic internet money and USD is the word internet.
No, the differences are that people denominate prices in USD, there’s a gigantic and mature financial services industry around USD, and finally I have recourse to the courts for most USD transaction.
No, the differences are that people denominate prices in USD, there’s a gigantic and mature financial services industry around USD, and finally I have recourse to the courts for most USD transaction.
>As a Venezuelan, it's not being used.
https://news.ycombinator.com/item?id=27232730
https://news.ycombinator.com/item?id=27232730
Bitcoin is a disaster for the environment.
Only if people use fossil fuels.
Armored bank vehicles are bad for the environment too.
Armored bank vehicles are bad for the environment too.
It is bad regardless what fuel you use. Bitcoin uses a proof-of-waste system which scales to any amount of resources available. If some day we had nearly limitless energy from fusion reactors and ran the economy on Bitcoin, there would be a race to strip mine the planet to build more reactors whose output would be wasted to capture the same fixed slice of the mining pie.
If this conclusion sounds absurd we should reconsider the premise that Bitcoin deserves any kind of place in our society.
> Armored bank vehicles are bad for the environment too.
A negligible part of the traffic on the road are bank vehicles, and they don't carry a large part of global wealth. Dollars can be efficiently transferred over the internet now, because the banking system, however slow and fossilised, actually has incentive to reduce waste, unlike Bitcoin.
If this conclusion sounds absurd we should reconsider the premise that Bitcoin deserves any kind of place in our society.
> Armored bank vehicles are bad for the environment too.
A negligible part of the traffic on the road are bank vehicles, and they don't carry a large part of global wealth. Dollars can be efficiently transferred over the internet now, because the banking system, however slow and fossilised, actually has incentive to reduce waste, unlike Bitcoin.
Fossil fuel plant reactivated and expanded solely to run transaction validation for cryptocurrencies.
https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-p...
https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-p...
There is a convincing argument that the reverse is true.
Namely that "Bitcoin incentivices renewable energy": https://assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlT...
Namely that "Bitcoin incentivices renewable energy": https://assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlT...
It's a convincing lie. The reality is:
* Bitcoin incentivises _cheap energy_. If burning coal is 10 times cheaper than renewables, shitcoiners will burn coal
* The renewables that may be built are not built for the greater good, for public usage. Only to mine more coin, to make more money, to make more solar panels, to mine more coins, etc. The carbon cost of these renewables is abysmal.
* The only positive point it _may_ bring would be making renewables cheaper, but considering the shitcoin vultures are trying to go waste electricity from any source, including attempting to screw Iceland over, the likelihood of this happening is close to zero.
* Bitcoin incentivises _cheap energy_. If burning coal is 10 times cheaper than renewables, shitcoiners will burn coal
* The renewables that may be built are not built for the greater good, for public usage. Only to mine more coin, to make more money, to make more solar panels, to mine more coins, etc. The carbon cost of these renewables is abysmal.
* The only positive point it _may_ bring would be making renewables cheaper, but considering the shitcoin vultures are trying to go waste electricity from any source, including attempting to screw Iceland over, the likelihood of this happening is close to zero.
I bet 30 years from now, Square's pro-crypto whitepapers will be seen in the same light as the pro-cigarette ads from yesteryear arguing that, actually, smoking is good for you and second-hand smoke is not harmful.
From the linked resource:
"Without bitcoin mining, solar - an intermittent energy source - could supply only 40% of grid power before utilities would face the need to fund significant investments with higher electricity prices. With bitcoin mining integrated into a solar system however, energy providers - whether utilities or independent entities - would have the ability to play the arbitrage between electricity prices and bitcoin prices, as well as potentially sell the “surplus” solar and supply almost all grid power demands without lowering profitability."
"Without bitcoin mining, solar - an intermittent energy source - could supply only 40% of grid power before utilities would face the need to fund significant investments with higher electricity prices. With bitcoin mining integrated into a solar system however, energy providers - whether utilities or independent entities - would have the ability to play the arbitrage between electricity prices and bitcoin prices, as well as potentially sell the “surplus” solar and supply almost all grid power demands without lowering profitability."
I just really don't understand how you can have grown up over the past 30 years and think the government will save you.
You've been forever priced out of owning a house, you probably would have been able to afford one 10 years ago if you hadn't been taxed so high but you're only now at the level where you have the deposit because of that but now the prices are so high your salary isn't enough anyway.
Maybe I'm just one of those people who's brain has been broken by Bitcoin, but I look at how hard the government fights to prevent me building savings, I look at how taxes are so aggressive they prevent working class from building wealth and becoming middle class, they prevent middle class from gaining any form of independence and the narrative from many people like this Twitter account is that the billionaires are to blame. I can't be the only one who thinks, even if you could make them pay which I think is naive, that money would just still be sucked up into the government because they have zero accountability for spending and my taxes wouldn't go down at all.
But finally we do have an escape hatch.
You've been forever priced out of owning a house, you probably would have been able to afford one 10 years ago if you hadn't been taxed so high but you're only now at the level where you have the deposit because of that but now the prices are so high your salary isn't enough anyway.
Maybe I'm just one of those people who's brain has been broken by Bitcoin, but I look at how hard the government fights to prevent me building savings, I look at how taxes are so aggressive they prevent working class from building wealth and becoming middle class, they prevent middle class from gaining any form of independence and the narrative from many people like this Twitter account is that the billionaires are to blame. I can't be the only one who thinks, even if you could make them pay which I think is naive, that money would just still be sucked up into the government because they have zero accountability for spending and my taxes wouldn't go down at all.
But finally we do have an escape hatch.
You think the government is what is keeping you from being able to afford a house? Is the government responsible for most of the job opportunities accumulating in metro areas causing people to move to cities, driving up demand and therefore value? Is the government responsible for the sky high salaries of FAANG and Silicon Valley unicorns that are also driving up prices in most cities? Or the fact that salaries haven't kept up with increases in cost of living? If you think the government and taxes are responsible for the weakening of the middle class, you are sorely mistaken.
The government is far from efficient, but you have roads right? And fire departments and public utilities and basic protections like the fact that a company can't pay you by giving your coupons that can only be used at stores they own.
> hey have zero accountability for spending Zero accountability, really? And you think bitcoin, the cryptocurrency that has had wild swings in price caused by a few unknown actors, has better accountability?
The government is far from efficient, but you have roads right? And fire departments and public utilities and basic protections like the fact that a company can't pay you by giving your coupons that can only be used at stores they own.
> hey have zero accountability for spending Zero accountability, really? And you think bitcoin, the cryptocurrency that has had wild swings in price caused by a few unknown actors, has better accountability?
>If you think the government and taxes are responsible for the weakening of the middle class, you are sorely mistaken
Yes I do think the $4100 in taxes I pay a month in Europe does affect my life, my future and my home ownership ability if that is the question.
Yes I do think the $4100 in taxes I pay a month in Europe does affect my life, my future and my home ownership ability if that is the question.
[deleted]
Then why can't i stop working on it for free? I've never been so passionate about working on open source; it's a compulsion at this point.
I've called a lot of the present-day cryptocurrency ecosystem a "parody of financial capitalism." It's ironic to me because the whole movement started as a kind of cypherpunk revolt against financial capitalism, but ended up becoming it.
It's the old "never fight against" principle. Fight against something as opposed to for something and you tend to mimic the thing you are fighting.
It's the old "never fight against" principle. Fight against something as opposed to for something and you tend to mimic the thing you are fighting.
It is sad how this person is giving off of "cryptocurrency" because the answer to most of his complaints is... a cryptocurrency, if not, THE only cryptocurrency worth mentioning here.. Which is Bitcoin of course.
> After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.
Nonsense, if I bought old-school gold or silver coins I could dodge taxes just as easily. "Artificially enforced scarcity" is the whole point of Bitcoin... If you like money that can be printed out of thin air, just used the Zimbabwe dollar ha ha.
> Despite claims of “decentralization”, the cryptocurrency industry is controlled by a powerful cartel of wealthy figures who, with time, have evolved to incorporate many of the same institutions tied to the existing centralized financial system they supposedly set out to replace.
Like I said, most "crypto currencies" are scams, Bitcoin does not have the stated above drawbacks.
> The cryptocurrency industry leverages a network of shady business connections, bought influencers and pay-for-play media outlets to perpetuate a cult-like “get rich quick” funnel designed to extract new money from the financially desperate and naive.
Same: Bitcoin does not have these drawbacks... other shady "crypto's" unfortunately, do.
> Financial exploitation undoubtedly existed before cryptocurrency, but cryptocurrency is almost purpose built to make the funnel of profiteering more efficient for those at the top and less safeguarded for the vulnerable.
This is a Cold War propaganda tactic: he is saying the OPPOSITE of that is true... Bitcoin helps people who are to poor to have access to a bank account have access to something even better: sound and nonconfiscateable money, right on their mobile devices. Look at the new legislation in Paraguay.
> Cryptocurrency is like taking the worst parts of today's capitalist system (eg. corruption, fraud, inequality) and using software to technically limit the use of interventions (eg. audits, regulation, taxation) which serve as protections or safety nets for the average person.
Again, Cold War tactics by spinning the truth upside down... How much more transparency and audit-ability then in a PUBLIC ledger (blockchain) could you possibly want? Again, this is standard in Bitcoin.
> Lose your savings account password? Your fault. Fall victim to a scam? Your fault. Billionaires manipulating markets? They’re geniuses. This is the type of dangerous “free for all” capitalism cryptocurrency was unfortunately architected to facilitate since its inception.
Again, Cold War "spin the truth upside down" tactics here. How many bankers, brokers and traders went to jail after 2008? I believe one guy, in Iceland... So the old system is shielding corruption, not the new system.
About losing acces to your bank account? Tell that to the people of Cyprus or Greece, where the government decided to do a "haircut" which is in Orwells street of language mis-use... It means they confiscate parts of your savings without you doing anything wrong at all!
> After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.
Nonsense, if I bought old-school gold or silver coins I could dodge taxes just as easily. "Artificially enforced scarcity" is the whole point of Bitcoin... If you like money that can be printed out of thin air, just used the Zimbabwe dollar ha ha.
> Despite claims of “decentralization”, the cryptocurrency industry is controlled by a powerful cartel of wealthy figures who, with time, have evolved to incorporate many of the same institutions tied to the existing centralized financial system they supposedly set out to replace.
Like I said, most "crypto currencies" are scams, Bitcoin does not have the stated above drawbacks.
> The cryptocurrency industry leverages a network of shady business connections, bought influencers and pay-for-play media outlets to perpetuate a cult-like “get rich quick” funnel designed to extract new money from the financially desperate and naive.
Same: Bitcoin does not have these drawbacks... other shady "crypto's" unfortunately, do.
> Financial exploitation undoubtedly existed before cryptocurrency, but cryptocurrency is almost purpose built to make the funnel of profiteering more efficient for those at the top and less safeguarded for the vulnerable.
This is a Cold War propaganda tactic: he is saying the OPPOSITE of that is true... Bitcoin helps people who are to poor to have access to a bank account have access to something even better: sound and nonconfiscateable money, right on their mobile devices. Look at the new legislation in Paraguay.
> Cryptocurrency is like taking the worst parts of today's capitalist system (eg. corruption, fraud, inequality) and using software to technically limit the use of interventions (eg. audits, regulation, taxation) which serve as protections or safety nets for the average person.
Again, Cold War tactics by spinning the truth upside down... How much more transparency and audit-ability then in a PUBLIC ledger (blockchain) could you possibly want? Again, this is standard in Bitcoin.
> Lose your savings account password? Your fault. Fall victim to a scam? Your fault. Billionaires manipulating markets? They’re geniuses. This is the type of dangerous “free for all” capitalism cryptocurrency was unfortunately architected to facilitate since its inception.
Again, Cold War "spin the truth upside down" tactics here. How many bankers, brokers and traders went to jail after 2008? I believe one guy, in Iceland... So the old system is shielding corruption, not the new system.
About losing acces to your bank account? Tell that to the people of Cyprus or Greece, where the government decided to do a "haircut" which is in Orwells street of language mis-use... It means they confiscate parts of your savings without you doing anything wrong at all!
> After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.
Yes, not even surprised.
The FBI is actively seeking experts who can trace transactions, I'm pretty sure BTC is actively being used to launder money. I really don't see how BTC could be so high.
Yes, not even surprised.
The FBI is actively seeking experts who can trace transactions, I'm pretty sure BTC is actively being used to launder money. I really don't see how BTC could be so high.
Everything is used to launder money
Anyone who says Bitcoin is used for illegal purposes should be ignored. They obviously are newbies learning about Bitcoin for the first time.
What the hell are you talking about? How is it remotely controversial to say that Bitcoin is used for illegal purposes? Have you ever heard of the dark web?
Cash is used for illegal purposes. Barter is used for illegal purposes.
Bitcoin is being used for illegal purposes. Ramen is used for illegal purposes.
Ban ramen, Bitcoin, prison yogurt, barter, USD.
Bitcoin is significantly easier to track than cash or Ramen. If you want to get rid of illegal Bitcoin transactions you simply need the government to care. But the real risk is the ramen/USD trade, that can't be tracked. Ban Ramen?
Bitcoin is being used for illegal purposes. Ramen is used for illegal purposes.
Ban ramen, Bitcoin, prison yogurt, barter, USD.
Bitcoin is significantly easier to track than cash or Ramen. If you want to get rid of illegal Bitcoin transactions you simply need the government to care. But the real risk is the ramen/USD trade, that can't be tracked. Ban Ramen?
You can't exchange physical goods online in order to pay drug dealers.
I agree that people should be more specific.
Financial crime is not the only possible use of cryptocurrencies, but it is the only use case where it is potentially better than dollars.
Financial crime is not the only possible use of cryptocurrencies, but it is the only use case where it is potentially better than dollars.
artificially enforced scarcity is something I wholly agree with, at anytime in the future the MAX_MONEY could change.
https://github.com/bitcoin/bitcoin/blob/7fcf53f7b4524572d1d0...
Code is not immutable. If there was a algorithm for MAX_SUPPLY immutability that would be something of interest.
https://github.com/bitcoin/bitcoin/blob/7fcf53f7b4524572d1d0...
Code is not immutable. If there was a algorithm for MAX_SUPPLY immutability that would be something of interest.
There wouldn't be a need for alternatives if gov. regulators were doing such a marvelous job centrally planning economies.
I get it. People hate "greedy capitalists" and need someone to blame. The Monopoly Man trope is tired. I don't understand the lack of focus on those who are currently manipulating markets.
The best part of crypotcurrency is that is entirely voluntary. You're not coerced to participate. The author is free to not use it. Compare that to bailouts, bail-ins, "economic stimulus", Cantillon effects and wholesale debasement of state issued currency.
Have problems with centralization and manipulation driven by popular exchanges? Why not examine the regulations prohibiting competition in this space instead of blaming a straw-man vision of capitalism? The author strikes out at capitalism, but in a laissez-faire system there would be greater competition, preventing these issues.
I get it. People hate "greedy capitalists" and need someone to blame. The Monopoly Man trope is tired. I don't understand the lack of focus on those who are currently manipulating markets.
The best part of crypotcurrency is that is entirely voluntary. You're not coerced to participate. The author is free to not use it. Compare that to bailouts, bail-ins, "economic stimulus", Cantillon effects and wholesale debasement of state issued currency.
Have problems with centralization and manipulation driven by popular exchanges? Why not examine the regulations prohibiting competition in this space instead of blaming a straw-man vision of capitalism? The author strikes out at capitalism, but in a laissez-faire system there would be greater competition, preventing these issues.
>The author is free to not use it
Sure, but he's not free from the consequences to the climate.
Sure, but he's not free from the consequences to the climate.