Ask HN: What if a new generation of developers is right about Web3?
54 comments
What if this new generation is just repeating the mistakes of former generations?
They talk about decentralization which has been done so often before and only worked for niche use-cases.
What if crypto is just a big money pump and dump scheme? It‘s sold to the poor to solve their financial situation which mostly don‘t have bank accounts. But the ones loosing the most in crypto crashes is not the new-generation web3 developer earning a good income. It‘s the poor guy somewhere with a bad local currency which was now using crypto which is now not worth anything too.
—-
People are always repeating that many people didn‘t e.g. saw the need in the internet and had been totally wrong in it. But crypto isn‘t new anymore like the internet was at that time! Bitcoin is almost 13 years old and Etherum 6! The internet had already shown very good usecases after that time and crypto is still searching for it‘s _one_ use case than money speculation on a highly volatile asset which doesn‘t have any real money.
More interesting what will happen to crypto in a real world economy crash like 2008!
They talk about decentralization which has been done so often before and only worked for niche use-cases.
What if crypto is just a big money pump and dump scheme? It‘s sold to the poor to solve their financial situation which mostly don‘t have bank accounts. But the ones loosing the most in crypto crashes is not the new-generation web3 developer earning a good income. It‘s the poor guy somewhere with a bad local currency which was now using crypto which is now not worth anything too.
—-
People are always repeating that many people didn‘t e.g. saw the need in the internet and had been totally wrong in it. But crypto isn‘t new anymore like the internet was at that time! Bitcoin is almost 13 years old and Etherum 6! The internet had already shown very good usecases after that time and crypto is still searching for it‘s _one_ use case than money speculation on a highly volatile asset which doesn‘t have any real money.
More interesting what will happen to crypto in a real world economy crash like 2008!
> They talk about decentralization which has been done so often before
What’s an example from earlier generations?
What’s an example from earlier generations?
Diaspora and Mastodon. These are the prime example what the web 3 generation wants: no central company, everyone runs it‘s own server, user is in control of all it‘s data
And they are a total empty space. Because it‘s complex to use ans is missing the network effect which is really really hard to get without a central company doing marketing in some form
And they are a total empty space. Because it‘s complex to use ans is missing the network effect which is really really hard to get without a central company doing marketing in some form
Got it I see what you mean. In my mind though, the real innovation in web3 is native ability to move money around, and turing complete (ish) programmability. Comparisons to social networks seems like apples and oranges.
It’s not a product that needs to be marketed to end users. Think AWS not Amazon.com. The people building products on it will do the marketing.
It’s not a product that needs to be marketed to end users. Think AWS not Amazon.com. The people building products on it will do the marketing.
AWS does not have any trouble moving money around or writing programs to move money around. Finance has been digitized for ages.
You might say "those are just digital abstractions — this is native." But so what? What does it matter if my money transfer routine talks to a bank or broadcasts a new block? It does the same thing in the end, except that the blockchain version is slower and more expensive.
Blockchain offers no concrete advantages over traditional finance except for decreased regulation. That's why it's so hard to argue in favour of blockchain as a replacement for traditional financial systems. You end up constructing weak arguments, because you can't play to blockchain's strengths.
Let me present the strong argument in favour of blockchain: "Blockchain helps you make lots of anonymous money through pump & dumps, ransomware, and other assorted scams." This is an unethical argument, but a concretely fact-based one. The track record speaks for itself.
Look how much more robust the strong argument is than any argument about decentralization for its own sake, or about the "native"ness of bitcoin transfers. Occam's razor suggests that the strong argument is the driving force behind blockchain adoption, not the weak ones. Nobody cares about decentralization. They just wanna make a buck.
You might say "those are just digital abstractions — this is native." But so what? What does it matter if my money transfer routine talks to a bank or broadcasts a new block? It does the same thing in the end, except that the blockchain version is slower and more expensive.
Blockchain offers no concrete advantages over traditional finance except for decreased regulation. That's why it's so hard to argue in favour of blockchain as a replacement for traditional financial systems. You end up constructing weak arguments, because you can't play to blockchain's strengths.
Let me present the strong argument in favour of blockchain: "Blockchain helps you make lots of anonymous money through pump & dumps, ransomware, and other assorted scams." This is an unethical argument, but a concretely fact-based one. The track record speaks for itself.
Look how much more robust the strong argument is than any argument about decentralization for its own sake, or about the "native"ness of bitcoin transfers. Occam's razor suggests that the strong argument is the driving force behind blockchain adoption, not the weak ones. Nobody cares about decentralization. They just wanna make a buck.
The value of nativeness combined with a totally neutral execution environment is that money can be directly controlled by software, with no practical human override. Suddenly the cost and risk of transactions goes down, as I don’t need to worry about whether I will get paid, or whether the intermediary actually handling the money will arbitrarily decide to freeze my account.
Obviously this is a double edged sword; having no human override is actually a very bad thing for many things. You can code in human overrides of course, but they are transparent to all parties. When you make a bank transfer or a PayPal transaction, it’s 100% opaque. The terms are not truly binding and it can be reverted or altered for any or no reason.
I’m not arguing this is the reason for valuations currently, but I find it pretty surprising how many people can’t or won’t understand the value of a neutral execution environment for financial transactions. It is not something that exists elsewhere.
Obviously this is a double edged sword; having no human override is actually a very bad thing for many things. You can code in human overrides of course, but they are transparent to all parties. When you make a bank transfer or a PayPal transaction, it’s 100% opaque. The terms are not truly binding and it can be reverted or altered for any or no reason.
I’m not arguing this is the reason for valuations currently, but I find it pretty surprising how many people can’t or won’t understand the value of a neutral execution environment for financial transactions. It is not something that exists elsewhere.
> When you make a bank transfer or a PayPal transaction, it’s 100% opaque. The terms are not truly binding and it can be reverted or altered for any or no reason.
Yeah, they can tell that to my lawyer. Banks don't make the rules — regulators do, and I can file suit to have a judge enforce those rules. If my money disappears, I can hold my bank to account.
But a judge can't rewrite the blockchain, so cryptocurrency has become a safe haven for fraud. You've got it exactly backwards: It's blockchain-based banking that puts customers at risk of predation.
> I find it pretty surprising how many people can’t or won’t understand the value of a neutral execution environment for financial transactions
If it had value for banks, banks would be using it. If it has value for customers, then tell me: As a customer, which desirable guarantees does blockchain provide me that banking regulations don't?
Yeah, they can tell that to my lawyer. Banks don't make the rules — regulators do, and I can file suit to have a judge enforce those rules. If my money disappears, I can hold my bank to account.
But a judge can't rewrite the blockchain, so cryptocurrency has become a safe haven for fraud. You've got it exactly backwards: It's blockchain-based banking that puts customers at risk of predation.
> I find it pretty surprising how many people can’t or won’t understand the value of a neutral execution environment for financial transactions
If it had value for banks, banks would be using it. If it has value for customers, then tell me: As a customer, which desirable guarantees does blockchain provide me that banking regulations don't?
I’m in my 50’s and not getting paid or having account get frozen has never happened to me during my entire life, and is not something I’m concerned about. If would be cool if defi was solving an actual problem most people have, but I’m still not seeing it.
1. It’s actually pretty common, my PayPal account is frozen for no reason, I would need to send passport scans to unlock it which I won’t do.
2. We aren’t necessarily the target market. Think more large investment / B2B transactions not consumer payments.
2. We aren’t necessarily the target market. Think more large investment / B2B transactions not consumer payments.
internet 1.0, post AOL, pre dot com crash. You had to roll everything and could even run a server with little fanfare from your home because ISPs allowed you to run your own servers. Now most prohibit or outright block it without a higher tier plan. There were problems with this approach though, spam, malware, etc.
It's only with Web 2 that we became addicted to offloading everything to central providers. Their siren call was too much to resist and now they have all our data. It wasn't designed to be like this, we can just go back but a lot lack the skills to roll the full stack now sans AWS/Google Cloud.
It's only with Web 2 that we became addicted to offloading everything to central providers. Their siren call was too much to resist and now they have all our data. It wasn't designed to be like this, we can just go back but a lot lack the skills to roll the full stack now sans AWS/Google Cloud.
A general rule I've found to be very true is: if you can't explain a concept to somebody else fully, clearly, and concisely -- then you don't _really_ understand the concept yourself (i.e. if you can't explain it to a 5 year old, then you don't really understand it).
"Imagine ... that they're not very good at articulating what the intuitively feel to be right about web3. When they talk about decentralization it much less about technology than routing around the central locus of control that serve as gatekeepers to keep people down."
And this describes exactly people who haven't really thought through the web3 concept -- especially indicated by the emotional perspectives of "feels rights" that the status quo is filled with "gatekeepers to keep people down". This makes it seem like a trend amongst the cool kids, which to me is what it actually is at this point.
"Imagine ... that they're not very good at articulating what the intuitively feel to be right about web3. When they talk about decentralization it much less about technology than routing around the central locus of control that serve as gatekeepers to keep people down."
And this describes exactly people who haven't really thought through the web3 concept -- especially indicated by the emotional perspectives of "feels rights" that the status quo is filled with "gatekeepers to keep people down". This makes it seem like a trend amongst the cool kids, which to me is what it actually is at this point.
I assosciate your rule with Richard Feynman [1] but I'm trying to strip away the hustle and hype to get to something true at the core that may be worth looking at. There was a lot of b.s. in the late 90's but turns out there were acorns of good ideas there waiting to grow into mighty oaks. I'd hate to be an old codger yelling at kids to get off my lawn. It's not a good way to live.
[1] https://morksensei.com/learning-deeply-by-explaining-the-fey...
[1] https://morksensei.com/learning-deeply-by-explaining-the-fey...
Note: not super versed in this space. My main info is from a Johnny Harris video where he debates himself on the subject of crypto. And I've looked into the tech a bit.
I don't think I follow how crypto would help in your situation. At least your father could get a loan from the bank--and he got that loan because the bank looked at his history, trusted him, and took a bet he would succeed. And he can trust the bank, because it has authority and governmental checks and balances to hold it accountable. There is no trust in crypto as far as I understand it. In fact being trust-less is one of the designing principles of the block chain. Can loans exist in crypto? Wouldn't this be significantly more difficult for someone like your father to break into? And significantly more risk-y? Whereas he could get a loan from a bank with relatively little financial investment and risk, how much time & money would he need to invest in a cryptocurrency before he has enough to do what he wants with the finances? What's the risk?
Sorry if I'm missing something here, my econ-fu is weak.
I don't think I follow how crypto would help in your situation. At least your father could get a loan from the bank--and he got that loan because the bank looked at his history, trusted him, and took a bet he would succeed. And he can trust the bank, because it has authority and governmental checks and balances to hold it accountable. There is no trust in crypto as far as I understand it. In fact being trust-less is one of the designing principles of the block chain. Can loans exist in crypto? Wouldn't this be significantly more difficult for someone like your father to break into? And significantly more risk-y? Whereas he could get a loan from a bank with relatively little financial investment and risk, how much time & money would he need to invest in a cryptocurrency before he has enough to do what he wants with the finances? What's the risk?
Sorry if I'm missing something here, my econ-fu is weak.
My Dad couldn't get a loan from the bank because he had a bunch of kids and a moderatly paying job. He wasn't able to implement his ideas without capital. First generations of immigrants to this country solve this by pooling thier money. Some cultures in America still do this. I'm thinking that web3 is an attempt to recreate those informal pools of captial. GoFundMe, Kickstarter and Patreon were a good start but they still act as gate keepers. I'm just tryint to get a feel for where the enthusiasm is coming from when you look behind the plebes who are getting ripped off to the thinkers with an actual strategy.
I would highly recommend this Johnny Harris video: https://www.youtube.com/watch?v=v0V_zkng4go . It does a great job of summarizing all the (too many!) points in the debate from a neutral standpoint--including enthusiasm. It's so neutral, that it actually leaves you feeling a little lost at the end :P Which I think is the state of the debate, unfortunately. But it'll probably get you closer to answers than I will--I'm afraid I don't have any.
This is really well done. Thanks. I should have made it more clear that my focus was on Defi and Dao.
Web3 has become a useless and triggering term.
Web3 has become a useless and triggering term.
Web3 is a fraud. There are no intelligent people working in this space. It is a giant Ponzi scheme run by tech bros who have no material experience working for major companies or corporations. The sooner it fails the better.
What if the guy trying to sell me the Brooklyn Bridge is actually trying to give me a really good deal?
People make good money investing in bridges
https://en.wikipedia.org/wiki/American_Bridge_Company
https://en.wikipedia.org/wiki/American_Bridge_Company
"What if Mr. Ponzi has discovered a totally new way to invest?"
This is not a question...
Anyway, what I see in younger developers (but not only devs) is a lack of history knowledge. They almost know nothing about history, so they often repeat the same mistakes.
Crypto* is fundamentally private money, something already tried with poor results.
If Web3 turns out to be a success, then I’ll just retire and take up woodworking because the entire tech industry has finally gone batshit insane.
(or, better yet, move back into consulting and wait until past wisdom is required, which shouldn’t take long).
(or, better yet, move back into consulting and wait until past wisdom is required, which shouldn’t take long).
How does rambling garbage like this with no information keep getting to the front page lately, what is happening?
Edit: Currently second page, my mistake.
Edit: Currently second page, my mistake.
One person's trash is another person's treasure
Here is a thought experiment. Think what would happen if nothing stopped anyone from doing anything. Whatever peace and privacy and security you enjoy would be gone. No culture or work could be protected from the merest whim of a single nihilist.
Only children and other people with nothing to lose want a world of perfect liberty. Powerful and obsessed people might want that world because they think they are equipped to bend it to their will.
It’s not a paradise, it’s a nightmare. We need social order. We need responsible gatekeepers. I haven’t heard anyone explain how web3 leads to a kinder or safer world.
Only children and other people with nothing to lose want a world of perfect liberty. Powerful and obsessed people might want that world because they think they are equipped to bend it to their will.
It’s not a paradise, it’s a nightmare. We need social order. We need responsible gatekeepers. I haven’t heard anyone explain how web3 leads to a kinder or safer world.
If you are an CS engineer you should be able to call out BS after a few hours reading the "web3" materials.
From what I've seem over past two month it's all about deregulated money, nothing to do w/ decentralization/trustless/demarcation, it's much worse.
Is it a one-in-a-decade career chance? Absolutely, scam unsuspecting plebs, rug dumb coiner/NFTs, be an exchange and be rich, write a mixer/tumbler and laundering blood money. As long as you know when to jump before the heat is too much.
Just...don't lie to yourself. Same stuff, different flavors, world is not going to be a better place because of you, actually, quite the opposite.(Same applies to traditional corps)
From what I've seem over past two month it's all about deregulated money, nothing to do w/ decentralization/trustless/demarcation, it's much worse.
Is it a one-in-a-decade career chance? Absolutely, scam unsuspecting plebs, rug dumb coiner/NFTs, be an exchange and be rich, write a mixer/tumbler and laundering blood money. As long as you know when to jump before the heat is too much.
Just...don't lie to yourself. Same stuff, different flavors, world is not going to be a better place because of you, actually, quite the opposite.(Same applies to traditional corps)
My experience with traditional stock trading has been a $5 flat fee per trade, with no other expenses. In contrast just sending someone some bitcoin, the equivalent of handing a person cash, can easily cost over $10. Not to mention the rampant outright criminality and fraud taking place on crypto exchanges. If an actor who isn't regulated as a bank tries to sell you banking services, be extremely wary.
Crypto is growing twice as fast as the Internet grew in the late 90's.[0] Let's assume history rhymes. There will be a massive crash in a few years time. Everyone will say "I told you so." Then all the crypto kids will be laughing to the DEX as the world catches up to them in the next two decades.
What if blockchains are the best way to conduct personal finance? Digital and physical ownership? What if blockchains are the best way to conduct Big Finance? That's quite a large market, maybe even the largest market there is to conduct. Wouldn't crypto naturally be adopted then? The comparative advantage would make it a "no brainer." It seems to me stranger that we would live in a world where the business of money was perfected in the late 20th century. Do you really think bank transfers are going to take 2 days to clear in the year 2100?
[0] https://jjo.media/articles/cryptocurrency-vs-internet-adopti...
What if blockchains are the best way to conduct personal finance? Digital and physical ownership? What if blockchains are the best way to conduct Big Finance? That's quite a large market, maybe even the largest market there is to conduct. Wouldn't crypto naturally be adopted then? The comparative advantage would make it a "no brainer." It seems to me stranger that we would live in a world where the business of money was perfected in the late 20th century. Do you really think bank transfers are going to take 2 days to clear in the year 2100?
[0] https://jjo.media/articles/cryptocurrency-vs-internet-adopti...
Things that make me pause. One of the loudest web3 critics is Stephen Deihl, who works on a private blockchain in London, presumably for traditional financiers. He doesn't advertise this. Why all the hate for work done by the new generation? Does he see them as the barbarians at the gate?
https://twitter.com/dystopiabreaker/status/14701269278180679...
https://twitter.com/dystopiabreaker/status/14701269278180679...
The early crypto holders and their families will become the new 1%. They will cloak their wealth and power behind god and government and keep this whole thing going. What is past is prologue.
> routing around the central locus of control that serve as gatekeepers to keep people down
Huh? Routing around? You are advocating for the "central locus of control that serve as gatekeepers to keep people down". You don't eliminate that by "routing around" it. You eliminate it by organization, education and then agitation around it. Advocating that people unhappy with this scurry about trying to "route around" their central locus of control is exactly what they want.
Huh? Routing around? You are advocating for the "central locus of control that serve as gatekeepers to keep people down". You don't eliminate that by "routing around" it. You eliminate it by organization, education and then agitation around it. Advocating that people unhappy with this scurry about trying to "route around" their central locus of control is exactly what they want.
I remember when you couldn't hook anything up to your phone line with permission from AT&T, which we not so affectionally called Ma Bell. How'd that work out for them?
Related: "The peer-to-peer decentralised world we see unfolding is a result of the relentless dedication of a group of builders, mathematicians, misfits, and hackers. They’ve built over generations, and now the baton has been passed to us. #web3
https://threadreaderapp.com/thread/1482321213045489668.html
https://threadreaderapp.com/thread/1482321213045489668.html
web3 is a recycled 5 year old meme from the ico craze. it worked back then to separate the ignorant from bitcoin. try not to let web3 memes distract you from understanding how the emergence of peer to peer electronic cash and a new base layer money will actually affect you moving forward
Doesn't the current locus of control have enough computing resources to takeover >50% anyway, assuming it hasn't already?
Nope it’s just trading one set of gatekeepers for another. The new gatekeepers are also much less honest about their being gatekeepers.
[deleted]
Given your use of the phrase "the plebes who are getting ripped off" in a comment, I suspect your sympathies aren't really with the unbanked and the lower classes, but I will nevertheless try to give an answer as if the question was asked in good faith.
No one can really predict the future, but if I had to put money down on it, I would bet that if Web3 attains its technological goals, it will not attain its social goals. If dapps replace web sites, the infrastructure becomes truly decentralized, cryptocurrencies supplant fiat currencies, and people accept the legitimacy of digital scarcity through NFTs, it will probably be a net benefit to some people, but leave most people worse off.
The impacts will be felt differently between the US, the rest of the developed world, and the developing world. I'll start with the US.
Assuming your father was working class in the United States, and assuming that he was unable to secure a business loan from a bank or attract investment money, prior to crpytocurrencies, his only option for securing a loan would be a loan shark. If this was the 1990s or the 2000s, that loan shark could come in the form of a payday loan service. These services are the logical conclusion of unregulated capitalism for a financially struggling working class. Before they were regulated, they would give out loans with interest rates in the hundreds of percent. These rates were a response to the incredible financial risk the lenders took in lending to people who could not get traditional loans. Many would disappear or file for personal bankruptcy to avoid repayment, so they had to make as much money as they could from the people who made repayments.
Nowadays, payday loans are regulated at the still incredibly high rate of 36%, but if crypto projects like Web3 succeed in circumventing government regulations, I suspect we'll see a return to the hundreds of percent loans that were once ubiquitous across the US. Lenders aren't going to get stupider just because they're lending cryptocurrencies. They're still going to calculate the risks of lending money to people like your father and act accordingly. We know this is how they'll act in the absence of regulation because it's how they acted in the absence of regulation in the recent past. Specifically, the ability to take out loans will not improve for those with little or no capital from what it was before.
For the US and the rest of the developed world, ubiquitous cryptocurrencies will cause an increase in money laundering, scams, and robberies. For whose with access to banking, deposits are insured up to a certain amount. This benefit is largely theoretical for the unbanked, and it doesn't cover enough for the upper classes, but it's typically a good amount of protection for the admittedly shrinking middle class. Storing money in cryptocurrencies loses people that protection. Cryptocurrencies also don't have chargebacks or protections against certain kinds of scams. If cryptocurrencies supplant banks, banking becomes much riskier to the middle class, and thefts and scams will accelerate the decline of the middle class, widening the wealth gap.
The ease at which cryptocurrencies can be stolen and laundered is already helping rouge nations like North Korea to finance weapons development and oppressive regimes. It's not that these regimes couldn't and haven't stolen money in other ways, but the mere existence of cryptocurrencies is making these nations richer than they otherwise would be, and I suspect that will have very negative international consequences. [1] For that matter, the existence of cryptocurrencies is fueling ransomware attacks against hospitals, governments, and infrastructure. I expect those will increase as well.
For the developing world, I'm not sure what the net effect will be. I'm not knowledgeable enough to know the details issues facing people in these countries. If I had to guess though, I suspect that crypto will offer them not much more than false hope. El Salvador's bitcoin program is basically a desperation play. Their own currency failed, and they're having lots of issues using the US dollar as a currency, because they have so little control over it. I can see why they felt like they had no choice but to try bitcoin, but I think the same lack of control over bitcoin will lead to similar issues in the long run. For countries which see cryptocurrencies as a threat, I don't think it would be difficult for them to crack down on mining and trading operations in their country. For countries that are indifferent to it, their residents can be crypto millionaires on paper, but if they try to actually import any of that wealth to the country in the form of goods and services, the governments will take notice and tax or seize it.
Some may be able to use cryptocurrencies to migrate to the developed world and establish themselves, but I imagine this will become harder and harder the more cryptocurrencies proliferate. Once the general public get use to them, figure out how they work, they'll start to move them around in the same patterns as fiat currency. The developed world isn't going to start gifting wealth to the developing world and the lower classes just because the money is free from government control.
Similarly, in the US, I know some trans people who got in on bitcoin or etherium early and were able to use it to fund health care that they wouldn't otherwise be able to afford. This is absolutely a net good, but I suspect this too will become more difficult as Web3 ascends. It was only possible because they got in early. But more importantly, it was only necessary because the US doesn't have universal healthcare, and they were financial losers in capitalism.
The core problem with Web3 and cryptocurrencies is that they're more capitalism. I've blogged about this [2], but in short, the fact that your father couldn't get a loan was a consequence of capitalism. Whether that's a feature or a bug of capitalism is up to interpretation, but you can't change capitalism with more capitalism. You can't fix capitalism's flaws with more capitalism. If you really want to improve the ability of anyone to be an entrepreneur no matter their financial status, you have to look to non-capitalist systems like universal basic income, universal healthcare, and other socialist initiatives.
1: https://www.wired.com/story/north-korea-cryptocurrency-theft... 2: https://meipouchou.com/blog/web3-metaverse-lain/
No one can really predict the future, but if I had to put money down on it, I would bet that if Web3 attains its technological goals, it will not attain its social goals. If dapps replace web sites, the infrastructure becomes truly decentralized, cryptocurrencies supplant fiat currencies, and people accept the legitimacy of digital scarcity through NFTs, it will probably be a net benefit to some people, but leave most people worse off.
The impacts will be felt differently between the US, the rest of the developed world, and the developing world. I'll start with the US.
Assuming your father was working class in the United States, and assuming that he was unable to secure a business loan from a bank or attract investment money, prior to crpytocurrencies, his only option for securing a loan would be a loan shark. If this was the 1990s or the 2000s, that loan shark could come in the form of a payday loan service. These services are the logical conclusion of unregulated capitalism for a financially struggling working class. Before they were regulated, they would give out loans with interest rates in the hundreds of percent. These rates were a response to the incredible financial risk the lenders took in lending to people who could not get traditional loans. Many would disappear or file for personal bankruptcy to avoid repayment, so they had to make as much money as they could from the people who made repayments.
Nowadays, payday loans are regulated at the still incredibly high rate of 36%, but if crypto projects like Web3 succeed in circumventing government regulations, I suspect we'll see a return to the hundreds of percent loans that were once ubiquitous across the US. Lenders aren't going to get stupider just because they're lending cryptocurrencies. They're still going to calculate the risks of lending money to people like your father and act accordingly. We know this is how they'll act in the absence of regulation because it's how they acted in the absence of regulation in the recent past. Specifically, the ability to take out loans will not improve for those with little or no capital from what it was before.
For the US and the rest of the developed world, ubiquitous cryptocurrencies will cause an increase in money laundering, scams, and robberies. For whose with access to banking, deposits are insured up to a certain amount. This benefit is largely theoretical for the unbanked, and it doesn't cover enough for the upper classes, but it's typically a good amount of protection for the admittedly shrinking middle class. Storing money in cryptocurrencies loses people that protection. Cryptocurrencies also don't have chargebacks or protections against certain kinds of scams. If cryptocurrencies supplant banks, banking becomes much riskier to the middle class, and thefts and scams will accelerate the decline of the middle class, widening the wealth gap.
The ease at which cryptocurrencies can be stolen and laundered is already helping rouge nations like North Korea to finance weapons development and oppressive regimes. It's not that these regimes couldn't and haven't stolen money in other ways, but the mere existence of cryptocurrencies is making these nations richer than they otherwise would be, and I suspect that will have very negative international consequences. [1] For that matter, the existence of cryptocurrencies is fueling ransomware attacks against hospitals, governments, and infrastructure. I expect those will increase as well.
For the developing world, I'm not sure what the net effect will be. I'm not knowledgeable enough to know the details issues facing people in these countries. If I had to guess though, I suspect that crypto will offer them not much more than false hope. El Salvador's bitcoin program is basically a desperation play. Their own currency failed, and they're having lots of issues using the US dollar as a currency, because they have so little control over it. I can see why they felt like they had no choice but to try bitcoin, but I think the same lack of control over bitcoin will lead to similar issues in the long run. For countries which see cryptocurrencies as a threat, I don't think it would be difficult for them to crack down on mining and trading operations in their country. For countries that are indifferent to it, their residents can be crypto millionaires on paper, but if they try to actually import any of that wealth to the country in the form of goods and services, the governments will take notice and tax or seize it.
Some may be able to use cryptocurrencies to migrate to the developed world and establish themselves, but I imagine this will become harder and harder the more cryptocurrencies proliferate. Once the general public get use to them, figure out how they work, they'll start to move them around in the same patterns as fiat currency. The developed world isn't going to start gifting wealth to the developing world and the lower classes just because the money is free from government control.
Similarly, in the US, I know some trans people who got in on bitcoin or etherium early and were able to use it to fund health care that they wouldn't otherwise be able to afford. This is absolutely a net good, but I suspect this too will become more difficult as Web3 ascends. It was only possible because they got in early. But more importantly, it was only necessary because the US doesn't have universal healthcare, and they were financial losers in capitalism.
The core problem with Web3 and cryptocurrencies is that they're more capitalism. I've blogged about this [2], but in short, the fact that your father couldn't get a loan was a consequence of capitalism. Whether that's a feature or a bug of capitalism is up to interpretation, but you can't change capitalism with more capitalism. You can't fix capitalism's flaws with more capitalism. If you really want to improve the ability of anyone to be an entrepreneur no matter their financial status, you have to look to non-capitalist systems like universal basic income, universal healthcare, and other socialist initiatives.
1: https://www.wired.com/story/north-korea-cryptocurrency-theft... 2: https://meipouchou.com/blog/web3-metaverse-lain/
> I suspect your sympathies aren't really with the unbanked and the lower classes
I guess it wasn't clear I am from a working class background, although I mentioned my father not being able to get a loan, which got down voted in negative territory for some weird reason
By plebe I meant the insufferable working class dudes I grew up with who are anti intellectual and tend towards bullying those around them with their muscle mass. I'm not sad they now think they are crypto experts and losing their shirts.
I thank you for your long response. I will study it and get back to you. I don't want to make an off the cuff remark about it.
I guess it wasn't clear I am from a working class background, although I mentioned my father not being able to get a loan, which got down voted in negative territory for some weird reason
By plebe I meant the insufferable working class dudes I grew up with who are anti intellectual and tend towards bullying those around them with their muscle mass. I'm not sad they now think they are crypto experts and losing their shirts.
I thank you for your long response. I will study it and get back to you. I don't want to make an off the cuff remark about it.
> By plebe I meant the insufferable working class dudes I grew up with who are anti intellectual and tend towards bullying those around them with their muscle mass.
I know the kind of guy who you're talking about, but I've never heard the term pleb used to describe them. In my experience, the term pleb is used by the well-connected, upper-class jerks (and those who want to be like them) to deride anyone in the middle class or lower. It doesn't describe behavior, only social class.
I did see that you said you had come from the working class, but the use of the word "plebe", combined with posting on HN, signaled to me that you now earn enough money to no longer be considered part of the working class, and now saw yourself above them, or were fabricating your background.
If you did not mean to deride the working class with that comment, then I apologize for the misunderstanding.
I know the kind of guy who you're talking about, but I've never heard the term pleb used to describe them. In my experience, the term pleb is used by the well-connected, upper-class jerks (and those who want to be like them) to deride anyone in the middle class or lower. It doesn't describe behavior, only social class.
I did see that you said you had come from the working class, but the use of the word "plebe", combined with posting on HN, signaled to me that you now earn enough money to no longer be considered part of the working class, and now saw yourself above them, or were fabricating your background.
If you did not mean to deride the working class with that comment, then I apologize for the misunderstanding.
labrador(1)
Perhaps the really big idea is that lower middle, working class and poor people have access to the financial system that they never had before, and access to business formation that does not have to satisfy the gatekeepers.
In this new world the large corporations, banks, brokerage firms and financial institutions most supremely symbolized by Wall Street and The City in London will suffer a declining influence as security guards watching and controlling access to the immense wealth of the very rich. This could explain why the ultra rich like Bill Gates, Jamie Dimon and Warren Buffet hate bitcoin.
Put in a historical context, before the printing press people were ignorant. After the printing press, the common folk had access to books and learned to read, democratizing both information and religion. People no longer had to have a priest to read the Bible to them. This knowledge explosion among the ordinary people fueled the industrial revolution.
Before the internet it was difficult to publish your writings. You had to write a letter to the editor, print pamphlets and hand them out, or if you were lucky get someone to publish you. After the internet everyone could publish to the whole world. People began to teach each other. What people learned was that the money system was rigged against them.
web3 is an attempt to decentralize and democratize finance and business.
When I think about my working class father, who had plenty of great ideas, I remember how he had to go to a stuffy bank hat in hand to try to get a personal loan. This was difficult and mostly did not work.
When I think about myself, I was able to participate in the stock market through an IRA, but I had to deal with a broker and buy in lots of 100 usually and pay a fee. I had to park money and couldn't do anything with it.
Now anyone can download an app and buy fractional shares and then trade them like money. A digital coin is essentially a hybrid between a stock and money. DAO's circumvent normal corporations. And so on.
I could be wrong, I could be right