Re: It's time for us in the tech world to speak out about cryptocurrency(len.falken.ink)
len.falken.ink
Re: It's time for us in the tech world to speak out about cryptocurrency
http://len.falken.ink/philosophy/re:its-time-for-tech-to-speak-up-about-cryptocurrency.txt
22 comments
There is nothing significant. Maybe timestamping documents on the Bitcoin blockchain. Otherwise only use for the technology is payments
The payments use case has some utility for sure. Opponents of cryptocurrency over-argue their case when they say it has absolutely no utility. The problem is that this one use case is not sufficient to make its present valuation or the cost of PoW anywhere near rational.
The volume of actual commerce could probably support no more than 10% of current valuation and cost, and that is generous. I suspect the number is more like 2%. The valuation wasn’t that unreasonable until 2017 when all hell broke loose. Current valuation is batshit insane.
Some of the tech also has value and does contain some novel ideas. Some of these could be useful elsewhere.
The volume of actual commerce could probably support no more than 10% of current valuation and cost, and that is generous. I suspect the number is more like 2%. The valuation wasn’t that unreasonable until 2017 when all hell broke loose. Current valuation is batshit insane.
Some of the tech also has value and does contain some novel ideas. Some of these could be useful elsewhere.
So, the bar you've established is arguably the single greatest invention of the past 50 years?
Sheesh, there really is no pleasing some people.
>For the Internet I could have sent you thousands of examples of such things a few months after the first public ISP appeared. DARPAnet and the other predecessors of the Internet were immediately useful in countless ways...
As stated in the previous thread, I strongly disagree. Nerds like us found it useful, nearly everyone else found it clunky and boring [0].
Here's further context, with the benefit of hindsight:
> ... in many ways, Cliff Stoll wasn't wrong. The Internet really did suck then, and it really was a huckster's paradise. But the fatal flaw in his argument was his assumption that it was never going to get any better. [1]
Sound familiar?
I'm not equating Bitcoin with the early Internet. That's apples to oranges. I'm only disputing your emphatic (based on the previous thread) claim that the early Internet was useful or interesting to anything beyond a relatively small group of people. That was true up until the late 90's (internet "age" at that time ~ 16-17 years).
I lived through that era.... the way you're describing it sounds a lot like revisionist history to me.
[0] https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirv... [1] https://www.newsweek.com/lets-talk-about-1995-newsweek-piece...
Sheesh, there really is no pleasing some people.
>For the Internet I could have sent you thousands of examples of such things a few months after the first public ISP appeared. DARPAnet and the other predecessors of the Internet were immediately useful in countless ways...
As stated in the previous thread, I strongly disagree. Nerds like us found it useful, nearly everyone else found it clunky and boring [0].
Here's further context, with the benefit of hindsight:
> ... in many ways, Cliff Stoll wasn't wrong. The Internet really did suck then, and it really was a huckster's paradise. But the fatal flaw in his argument was his assumption that it was never going to get any better. [1]
Sound familiar?
I'm not equating Bitcoin with the early Internet. That's apples to oranges. I'm only disputing your emphatic (based on the previous thread) claim that the early Internet was useful or interesting to anything beyond a relatively small group of people. That was true up until the late 90's (internet "age" at that time ~ 16-17 years).
I lived through that era.... the way you're describing it sounds a lot like revisionist history to me.
[0] https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirv... [1] https://www.newsweek.com/lets-talk-about-1995-newsweek-piece...
> So, the bar you've established is arguably the single greatest invention of the past 50 years?
The bar was _three_ useful, practical, ideas.
I lived through the era too, and while critics we saying how it won't be a panacea of anything, many of us were actually _living_ it.
The bar was _three_ useful, practical, ideas.
I lived through the era too, and while critics we saying how it won't be a panacea of anything, many of us were actually _living_ it.
I've only been vaguely following cryptocurrency for the last few years after messing with it a while back, but I think the Ethereum Name System should count as one of your 3 requested compelling cases.
Trustless, decentralized DNS with pretty much perfectly fair auctions. No messing with registrars, or having it taken away or censored by a government, or being front-run by GoDaddy.
It was always one of the coolest uses I saw, and an example I always give to explain why smart contracts are useful.
https://ens.domains/
Trustless, decentralized DNS with pretty much perfectly fair auctions. No messing with registrars, or having it taken away or censored by a government, or being front-run by GoDaddy.
It was always one of the coolest uses I saw, and an example I always give to explain why smart contracts are useful.
https://ens.domains/
I guess I’ll take it. Honestly I think there are a lot more potential uses like that but they have not been explored because speculation and gambling have sucked all the air out of the room.
Why isn't the original simple payment use case not compelling enough?
Why does currency have to ALSO do all this other stuff? Why can't it just be... money?
My dream for crypto is to one day have a safe place to put my money where it:
1. Can't be lost or stolen
2. Can't be tracked or taxed without consent
3. Is stable and holds its relative value globally, regardless of government or private influence
4. Is instantaneous to transact
5. Can handle millions of transactions per second, so it can truly operate on a global scale
6. Is free to use
7. Can be easily and cheaply converted into other currencies
As far as I know, there are zero crypto projects that meet all of these requirements, but there are a number of them that have been iterating towards these goals. I believe we will eventually end up with the dream being realized, but these are all hard problems to solve and it might take a while.
Why does currency have to ALSO do all this other stuff? Why can't it just be... money?
My dream for crypto is to one day have a safe place to put my money where it:
1. Can't be lost or stolen
2. Can't be tracked or taxed without consent
3. Is stable and holds its relative value globally, regardless of government or private influence
4. Is instantaneous to transact
5. Can handle millions of transactions per second, so it can truly operate on a global scale
6. Is free to use
7. Can be easily and cheaply converted into other currencies
As far as I know, there are zero crypto projects that meet all of these requirements, but there are a number of them that have been iterating towards these goals. I believe we will eventually end up with the dream being realized, but these are all hard problems to solve and it might take a while.
The problem is that cryptocurrency is terrible money because it's hyperdeflationary, or at least the most popular coins are. Bitcoin is far more deflationary than gold since with gold you can't lose your key and render your gold non-existent. We don't even know how much Bitcoin has been lost to "breakage."
The insanely deflationary nature of these currencies makes them prone to wild swings in value, which is not something you want in money. It also attracts a lot of Ponzi schemers and get rich quick types.
The insanely deflationary nature of these currencies makes them prone to wild swings in value, which is not something you want in money. It also attracts a lot of Ponzi schemers and get rich quick types.
Oh, trust me, I’ve been saying Bitcoin is fundamentally broken since day one.
That doesn’t mean all crypto coins are scams though. There are a number of stable coins that are in development that look really interesting, but a lot of them suffer from various faults. We still haven’t figured out the perfect coin yet, but I do believe it’s only a matter of time.
That doesn’t mean all crypto coins are scams though. There are a number of stable coins that are in development that look really interesting, but a lot of them suffer from various faults. We still haven’t figured out the perfect coin yet, but I do believe it’s only a matter of time.
The following two claims cannot both simultaneously be true:
> I'm not sure what they are talking about either about running around regulations: know-your-customer and anti-money laundering is practically required at all exchanges and brokers. There have been reports of this actually working to stop crime money from moving, or stolen money from being sold off.
and
> I can tell people who enjoyed this they can send money to bc1qeqc0rt4476ffuet6cl6r3a4ft5wts6ra0jhh7f, and they can do so, from anywhere in the world, at any time of the day, from any device, using software of their choice, and any amount they wish, with no restrictions applied.
It may be true that most people who enjoyed this can send money to that address with no restrictions, and that anti-money-laundering regulations still have teeth. But that's not specific to cryptocurrency. I can say the same about fiat currency: almost anyone can send US dollars to $geofft on Cash App (or send to me on PayPal, or do an international bank transfer, or whatever).
If it is true that literally everyone can send literally any amount they wish to that address with literally no restrictions, then restrictions on the flow of money such as anti-money-laundering laws, attempts to recover stolen money, embargoes, or simply taxes (which, to be clear, I'm not taking a universal moral stance on, there are some that are good and some that are bad) plainly cannot be enforced.
Perhaps the argument is that in the short term, cryptocurrency is subject to those laws because people use it as a transfer mechanism for money they ultimately want to receive and spend as fiat currency, and at those boundaries, the laws of the fiat provider apply. But treating that as an essential long-term property of cryptocurrency undermines so much of the argument towards using cryptocurrency.
Or put another way: it is baffling to see KYC/AML compliance touted as a feature of cryptocurrency to appeal to political interests when any mandatory compliance to any one country's monetary laws would so obviously be a bug in technical terms.
> I'm not sure what they are talking about either about running around regulations: know-your-customer and anti-money laundering is practically required at all exchanges and brokers. There have been reports of this actually working to stop crime money from moving, or stolen money from being sold off.
and
> I can tell people who enjoyed this they can send money to bc1qeqc0rt4476ffuet6cl6r3a4ft5wts6ra0jhh7f, and they can do so, from anywhere in the world, at any time of the day, from any device, using software of their choice, and any amount they wish, with no restrictions applied.
It may be true that most people who enjoyed this can send money to that address with no restrictions, and that anti-money-laundering regulations still have teeth. But that's not specific to cryptocurrency. I can say the same about fiat currency: almost anyone can send US dollars to $geofft on Cash App (or send to me on PayPal, or do an international bank transfer, or whatever).
If it is true that literally everyone can send literally any amount they wish to that address with literally no restrictions, then restrictions on the flow of money such as anti-money-laundering laws, attempts to recover stolen money, embargoes, or simply taxes (which, to be clear, I'm not taking a universal moral stance on, there are some that are good and some that are bad) plainly cannot be enforced.
Perhaps the argument is that in the short term, cryptocurrency is subject to those laws because people use it as a transfer mechanism for money they ultimately want to receive and spend as fiat currency, and at those boundaries, the laws of the fiat provider apply. But treating that as an essential long-term property of cryptocurrency undermines so much of the argument towards using cryptocurrency.
Or put another way: it is baffling to see KYC/AML compliance touted as a feature of cryptocurrency to appeal to political interests when any mandatory compliance to any one country's monetary laws would so obviously be a bug in technical terms.
I have said this before and was heavily downvoted.
If you don't agree with the counterargument of the parent, the simplest way to speak out against cryptocurrency is to stop using the word "invest" and substitute it with "gamble" or "gamble with whales".
If you don't agree with the counterargument of the parent, the simplest way to speak out against cryptocurrency is to stop using the word "invest" and substitute it with "gamble" or "gamble with whales".
While we're not 100% in agreement on this topic, I just wanted to say that the courage you've shown by posting this comment after being previously downvoted is deeply inspiring. If this one proves more popular, I suggest that you frequently refer to it "as I've previously commented" on similar submissions. Stand by your record, love it!
This was a contentless response.
The author literally rehashed _every single point_ us crypto detractors have been claiming since forever. Phrases such as:
"If you are going to invest in cryptocurrency, you invest for the reasons which make it technologically superior to the current system, not the potential value it will give you in 3 months."
In which some of us have been waiting for a decade to see said innovations actually make a dent. To give you some perspective, in that span of time we went from DOOM to Half-Life 2, from Altavista's launch to Google's IPO, and so on. The pace of uptake of crypto for its stated purposes is _appalling_ as a supposedly state-of-the-art tech.
"These properties of cryptocurrency give people reason to buy into and transact with it. The people who find value in cryptocurrency are the ones who actually use it. Remember there was a short period when people could buy games off Playstation Network and Steam, and still there are some services offering to purchase items in cryptocurrency."
And you basically can't buy any consumer good with crypto, because it turns out most of it is pretty bad for that. It says something when digital wallets and finance products dominate over, you know, actually transacting with said digital currency.
"Back on topic: the decentralization issue will soon be resolved when systems like proof of stake begin to dominate (hello Ethereum 2 again). China is most likely contains the largest mining pools because they manufacture the ASICs there."
And again with this trite. There's always some magical tech in the future of crypto which will suddenly solve its most salient problems preventing it from fulfilling its stated purpose.
I've been around the block. I've seen how economic incentives push research. It's simple: if people were actually interested in transacting with crypto, you'd see all the people building the thousandth wallet app actually working on solving these problems.
But they don't.
Because speculative trading and parting fools with their money is a greater incentive than building an actually useful technology.
"How Pinboard can say it's not a store of value is dumbfounding. I feel like staring at a wall. How is something where people have literally stored billions of dollars into, not a store of value."
This means the author doesn't know what a store of value is.
The part about his counter-critiques to smart contracts is hilarious. _This time_ we'll have flawless, formally verified, bug-free software and auditors that can competently find all bugs.
The author literally rehashed _every single point_ us crypto detractors have been claiming since forever. Phrases such as:
"If you are going to invest in cryptocurrency, you invest for the reasons which make it technologically superior to the current system, not the potential value it will give you in 3 months."
In which some of us have been waiting for a decade to see said innovations actually make a dent. To give you some perspective, in that span of time we went from DOOM to Half-Life 2, from Altavista's launch to Google's IPO, and so on. The pace of uptake of crypto for its stated purposes is _appalling_ as a supposedly state-of-the-art tech.
"These properties of cryptocurrency give people reason to buy into and transact with it. The people who find value in cryptocurrency are the ones who actually use it. Remember there was a short period when people could buy games off Playstation Network and Steam, and still there are some services offering to purchase items in cryptocurrency."
And you basically can't buy any consumer good with crypto, because it turns out most of it is pretty bad for that. It says something when digital wallets and finance products dominate over, you know, actually transacting with said digital currency.
"Back on topic: the decentralization issue will soon be resolved when systems like proof of stake begin to dominate (hello Ethereum 2 again). China is most likely contains the largest mining pools because they manufacture the ASICs there."
And again with this trite. There's always some magical tech in the future of crypto which will suddenly solve its most salient problems preventing it from fulfilling its stated purpose.
I've been around the block. I've seen how economic incentives push research. It's simple: if people were actually interested in transacting with crypto, you'd see all the people building the thousandth wallet app actually working on solving these problems.
But they don't.
Because speculative trading and parting fools with their money is a greater incentive than building an actually useful technology.
"How Pinboard can say it's not a store of value is dumbfounding. I feel like staring at a wall. How is something where people have literally stored billions of dollars into, not a store of value."
This means the author doesn't know what a store of value is.
The part about his counter-critiques to smart contracts is hilarious. _This time_ we'll have flawless, formally verified, bug-free software and auditors that can competently find all bugs.
Simple translation: Bitcoin is a failure as a peer-to-peer electronic cash system and has been hijacked to be a store of wealth/value which is not its intended purpose.
There are some other cryptocurrencies out there that are more better and more efficient than Bitcoin.
There are some other cryptocurrencies out there that are more better and more efficient than Bitcoin.
There has been a lot of advancements since Bitcoin:
-Ethereum created a general purpose blockchain
-Algorithmic stablecoins like DAI were derided as impossible until they started working
- DEX’s were slow and useless at first but now functional and doing tons of volume.
- NFT standards like ERC-721, and NFT platforms, have flourished.
-ETH2 promises a 99% reduction in energy vs POW
-Crypto will never go truly mainstream while scaling causes txs to cost hundreds of dollars. Sidechains like Matic are functional and being used by many, and L2s like Arbitum and Optimism are launching this year. I expect to see a real acceleration of use cases and usage by normal users once those things are live.
- Wallet software has improved enormously, with hardware wallets like Ledger and Trevor and software wallets like Rainbow.
-DeFi is innovating like crazy with AAVE, Alchemix, Mirror, etc.
Going from Bitcoin to ETH2 with L2s and stable coins and other primitives took a while, but those innovations were key. Once those are all live, I think the real use cases will finally start to take off.
-Ethereum created a general purpose blockchain
-Algorithmic stablecoins like DAI were derided as impossible until they started working
- DEX’s were slow and useless at first but now functional and doing tons of volume.
- NFT standards like ERC-721, and NFT platforms, have flourished.
-ETH2 promises a 99% reduction in energy vs POW
-Crypto will never go truly mainstream while scaling causes txs to cost hundreds of dollars. Sidechains like Matic are functional and being used by many, and L2s like Arbitum and Optimism are launching this year. I expect to see a real acceleration of use cases and usage by normal users once those things are live.
- Wallet software has improved enormously, with hardware wallets like Ledger and Trevor and software wallets like Rainbow.
-DeFi is innovating like crazy with AAVE, Alchemix, Mirror, etc.
Going from Bitcoin to ETH2 with L2s and stable coins and other primitives took a while, but those innovations were key. Once those are all live, I think the real use cases will finally start to take off.
Comments like this are really all anyone needs to look at to understand what a scam it all is. Nothing personal, what I mean is the list of semi-technical nonsense promising how something worthwhile is just around the corner. It's the same pattern across confidence scams, just a little more and it will all pay off. The same is true in the bigger recent discussion, all you have to do is look at what the proponents are talking about to see what a scam it all is. But I think that's the point of the original article. People who are confident in their technical understanding can easily dismiss this nonsense out of hand, but a layperson sees a list of acronyms and smart sounding absurdities like the above comment and assumes they must be missing something and gets taken in.
Yes, I agree that people should definitely educate themselves and watch out for scams.
While it is true that there are certainly a ton of pump and dump schemes and outright scams in the crypto space, I don't think it's fair to just dismiss all of crypto as a scam.
There is a HUGE demand for an electronic currency that can be freely transacted globally. Because the currency needs to be globally usable, this currency can't be controlled by any particular government. It needs to be owned and controlled democratically by the people actually using it. It needs to have low (or zero fees). It needs to be extremely simple to perform transactions. It should be a safe place to store your money. It should be difficult or impossible to steal. It should be stable.
I could keep going and list a hundred other things, but my point is simply that we aren't there yet. This magical currency does not yet exist, but cryptocurrency is absolutely the closest we have ever gotten to it, and I'm confident that if we keep iterating and trying out different ideas, a winner will eventually arise from the mix.
Or maybe the winning solution will be some combination of different cryptocurrencies? Maybe an inflationary one, a deflationary one, and a stable one? Who knows?
While it is true that there are certainly a ton of pump and dump schemes and outright scams in the crypto space, I don't think it's fair to just dismiss all of crypto as a scam.
There is a HUGE demand for an electronic currency that can be freely transacted globally. Because the currency needs to be globally usable, this currency can't be controlled by any particular government. It needs to be owned and controlled democratically by the people actually using it. It needs to have low (or zero fees). It needs to be extremely simple to perform transactions. It should be a safe place to store your money. It should be difficult or impossible to steal. It should be stable.
I could keep going and list a hundred other things, but my point is simply that we aren't there yet. This magical currency does not yet exist, but cryptocurrency is absolutely the closest we have ever gotten to it, and I'm confident that if we keep iterating and trying out different ideas, a winner will eventually arise from the mix.
Or maybe the winning solution will be some combination of different cryptocurrencies? Maybe an inflationary one, a deflationary one, and a stable one? Who knows?
You're going in around in circles. How is this relevant to actually transacting? How is this relevant to the world outside of cryptocoins? What does this enable that you can't get by a large Postgres instance with decent ownership?
> If you are going to invest in cryptocurrency, you invest for the reasons which make it technologically superior to the current system, not the potential value it will give you in 3 months.
How many people right now are investing in cryptocurrency for the ideals and how many are investing to get rich? Cryptocurrency isn’t even used as currency primarily, it’s an investment vehicle.
How many people right now are investing in cryptocurrency for the ideals and how many are investing to get rich? Cryptocurrency isn’t even used as currency primarily, it’s an investment vehicle.
(1) not just the original simple payment use case, as that was always there.
(2) is not self-referential to the crypto ecosystem, but something useful for doing things entirely outside it.
(3) is not a vehicle for speculation, gambling, or other kinds of fluff or fraud.
I’ve asked this for years on many other forums and have yet to see a single thing that meets all those criteria that I or anyone I know would actually use.
It’s been 13 years since Bitcoin. Show me something I should care about.
For the Internet I could have sent you thousands of examples of such things a few months after the first public ISP appeared. DARPAnet and the other predecessors of the Internet were immediately useful in countless ways that were not self-referential.
Self-referentialness is a huge general bullshit red flag of mine. It’s also a characteristic of pseudoscience and pseudo-profound bullshit in the realm of philosophy. Real things look outward from themselves. Bullshit is self-referential.
Edit: a lot of conventional finance outside basic banking and venture investing also fails the above test. I am not defending financial capitalism. On the contrary I see cryptocurrency as a vector allowing the financial capitalist cancer to infect tech.