If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if they think it's stolen, and if I report it as stolen I can claw back money from fraudulent purchases.
If I purchase something and don't get what I paid for, I can contest it with customer service or my credit card company.
With crypto, a software flaw used to steal crypto can kill an entire company. They're largely powerless to stop it once the transaction has gone through.
With crypto, a xss attack or a misplaced password can cost me all of my coins.
With crypto, I have to triple check the address I'm sending coins to because I can't undo it.
With crypto, I have to spend what's sometimes a significant amount of money just to complete a transaction, and transactions can take minutes or hours to complete.
I think there's a future in crypto but we're in the dotcom boom days of it where most of the value is in speculation (and I suppose illegal purchases on the darknet). I'll wait for crypto 2.0.
I’ve written this elsewhere when this topic routinely comes up and crypto is dismissed, but the capability of self-custody is the thing to pay attention to.
Nothing else has this capability to the same extent.
Today we store most of our wealth in assets (market index funds, stocks, real estate, etc.) and some (typically very little, and rarely outside of a bank account) in cash.
Most of this is not actually controlled by you.
With BTC (and cryptocurrency more generally) you have the capability of having your private key in a hardware wallet under your control and retain the capability to transact independently of other institutions.
If you keep some percentage of your wealth here you retain certain advantages that you can't get elsewhere. The closest alternative would be having cash (in cash form), but it's hard to have that much, hard to travel with it (you can memorize your wallet seed words and recreate your wallet on the other side of a border), and cash is vulnerable to government stupidity (see: Russia).
I'm not sympathetic to the Canadian truck protests, but whether or not you care about what they're protesting - it's the capability wielded by the Canadian government over their private finances that's alarming.
All this is to say the focus on what crypto is worse at is kind of missing the forest for the trees.
The capability of a global self-custody capable store of value that can be trivially moved anywhere is a big deal and puts power back in the hands of individuals.
I don't pretend there are no risks with cryptocurrency. The security requirements are obviously harder, the UX is bad and even technical users fuck it up.
Some of this will be improved by tooling, some of it is just what's required for self-custody.
Still, the capability it provides is new and gives individuals more power even with these tradeoffs. That capability is valuable and shouldn't be dismissed imo. It's a lever against authoritarian control and increasing centralization of power.
Governments can trivially prevent this if they wanted to. Bringing your wallet along will be of no use if nobody dares to transact with you because they themselves will then need to explain the source of their newfound wealth.
The current ability of crypto to (sometimes) escape government oversight is temporary and only exists because it's currently a rounding error in the grand scheme of things, but I can guarantee you it will be cracked down on.
The specific case I read about was someone escaping the Russian occupied areas of Ukraine this way: https://www.forbes.com/sites/tatianakoffman/2020/06/13/why-b...
It’s also more common in countries with bad currencies and limited access to USD (Venezuela).
You’re right it’s not perfect, but it gives more power to individuals than the alternatives. It’s also possible something like Zcash could allow individuals to transact despite an all seeing panopticon, but I don’t know how that works well enough to have a strong opinion.
Indeed. By regulating the transparent cryptocurrencies and banning privacy coins from exchanges like Monero and MobileCoin which is how the criminals and scammers cash out their ransomware money into fiat currencies.
Notice that although many points are raised, it doesn’t address the direct objections of the previous post.
Obfuscate, misdirect, and confuse the marks.
But even given those cons we see benefits in things mentioned above. E.g. my colleague can send bitcoin to his brother in russia. Tell me what other options to transfer value there are at the moment between west and russia. Very similar for ukraine.
If you could buy stuff with it and it wasn't an absolute headache (install app, pay transaction fees) and it was easier, it would be more popular.
That would also remove the "it's a speculative asset bubble" problem.
For the interim, using it as a private bank, assuming you can cache it out at an exchange for local legal tender, is the next best thing.
The only true way to make it a currency is for it to have its own country - bunch of people somewhere decide to use it for all their stuff, trade goods and services. Problem with that OFC is a lack of free land and energy.
So maybe when we live in space, and need a long term store of value, but don't really want to carry around bars of gold or platinum, it can have some serious uses. Until them it is exactly like buying oil - technically asset trading but really hard to realize the value in any meaningful way.
You can choose to ignore the nuance, but it exists anyway.
I've been doing blockchain on and off since 2008. Recently I lost a few thousand dollars by sending crypto to a L1 address when I was on a L2.
I work on self-soverign identity in my day job. I've written smart contracts. I'm a careful person. Basically I think if I'm dumb enough to do this what chance do most people have of getting this right?
Sorry mate. Not high scores for that.
I’d your going to claim to be OG sign a message with the keys…
They will if you didn't initiate the wire. If you typed the wrong account number then you are SOL, but that's true of BTC too.
There are also courts etc to get involved, if someone sends you a million dollar wire and you keep it (for no services rendered), courts generally don't let you just have it (cross border caveats etc).
Frankly banks also rarely help people scammed via other means (Venmo, Apple Pay, Zelle, etc.)
I think this will forever be the sticking point for crypto for a lot of potential users. It boils down to trust. And the relevant question is: for an average person, do they trust FDIC insurance more than they trust their own ability to understand the crypto infrastructure and protect themselves from rogue or compromised transaction facilitators (because for Bitcoin at least, it's fundamentally impractical to transact for most things without a facilitator; the time it takes for the transaction to get buried into the chain alone is enough to take most day-to-day uses off the table).
And personally, I think for most people the risk model is that trusting FDIC insurance is a superior option.
For the record, The Current Thing at the moment is to recommend citizens hurting from their government's stupidity to overthrow said government (and if you are averse to dying, then it's only fair that you suffer).
I'm being facetious, but there's a grain of truth in that notion.
If your government robs you with its economic policies you could, of course, invest in croins or other hard to sanction assets -- or you could instead take action to make your government better, more transparent and reliable.
It’s harder to control your transactions when you have self-custody. It requires a higher level of coordination.
The difference is that while allowing a (properly set up) crypto bank to transfer funds you may also at any point and for any reason take full custody over your coins. The private key which enables that should not be used for anything other than emergency (minimize attack surface) and keeping such a key secure is not all that difficult. With this combination you get all the benefits of a normal bank yet they are powerless without express authorization to do anything with your funds. You can withdraw at any point for any reason.
Services and practices securing your private key will need to be widespread before adoption seriously takes off. Storing a seed phrase in your sock drawer is not acceptable: Vitalik Buterin secured his billions via two physical pieces of paper which summed to his private key; surely a step in the right direction. An n of m scheme with each n being held by parties unlikely to collaborate is another solution.
This is all not even mentioning massive private banking and its relationship to the economy and bias towards the wealthy. Crypto is FOSS finance, it works for the people as stated and expected. As I said, you are correct - using your layer 1 sovereign access for everyday use is a security blunder - you now know where progress points.
A laughable statement in the face of crypto’s negative externalities. We’ll wreck the planet we all share, but at least we’ll have FOSS finance!
there are two way to do this currently- multisig wallets and shamir's secret sharing algorithm.
multisig wallet is more widely supported. Gnosis Safe is a popular implementation, but requires multiple transactions per final action.
shamir's secret sharing allows splitting the secret off-chain, which means you only pay gas once. it's hard to find a safe implementation and be confident that it works correctly.
I believe this is viewed as a feature in the blockchain / cryptocurrency world.
The rest of us probably actually want an anonymous, "like cash" crypto currency that is resilient against theft (which basically implies some sort of non-repudiation and compensating transactions).
But, such a currency probably wouldn't be great for speculation or black market transactions, which are the killer use cases for bitcoin.
You can transfer money to an escrow smart contract that reverts the transaction if a third party confirms malicious activity.
> They can block transactions if they think it's stolen, and if I report it as stolen I can claw back money from fraudulent purchases.
Certain DLTs allow you to secure your account with SSI/DPKI methods. You can create complex multi signature authorization and revocation schemes.
> With crypto, I have to triple check the address I'm sending coins to because I can't undo it.
With time the UX of wallets and wallet integrations will improve. Many wallets already offer address books, where you give addresses names. Also, decentralized name service is being worked on (but still an unsolved problem).
> With crypto, I have to spend what's sometimes a significant amount of money just to complete a transaction, and transactions can take minutes or hours to complete.
Crypto isn't Bitcoin or Ethereum, crypto is much larger. The field is constantly evolving, and things like txn costs are non-issues for sophisticated architectures.
> I think there's a future in crypto but we're in the dotcom boom days of it where most of the value is in speculation. I'll wait for crypto 2.0.
100% agree. This field is full of speculation. The version 2.0 however will absolutely find impact.
>> With crypto, a software flaw used to steal crypto can kill an entire company. They're largely powerless to stop it once the transaction has gone through.
>> With crypto, a xss attack or a misplaced password can cost me all of my coins.
>> With crypto, I have to triple check the address I'm sending coins to because I can't undo it.
>> With crypto, I have to spend what's sometimes a significant amount of money just to complete a transaction, and transactions can take minutes or hours to complete.
> You can transfer money to an escrow smart contract that reverts the transaction if a third party confirms malicious activity.
In practice, who would you trust with such significant transactions as a company though? If you want to get anywhere close to the level of protection that you'd get in the "old" system, you'd need to thoroughly vet both the smart contract and the third party to be sure that there are no additional bugs in the contract (after all, it's just software like anything else, so there can be exploitable bugs) and that the third party won't screw you over. Some sort of neutral third party that both the buyer and seller can trust due to being known for such trusted transactions...like a bank. How is this any different than what we have, just with extra steps?
It's declarative. There's no vagueness about the state of the transaction, and settlement can be cryptographically proven. This creates transparency and accountability. It's also sovereign. Not every transaction NEEDS this level of customer protection. Paying in person at a restaurant or supermarket can be done with a simple transaction.
Also, some transactions like subscriptions (which are very common) need a cancel functionality that follows strict rules: perfect for a smart contract.
And finally, even your bank won't be able to protect you in many cases.
There's also other things that even make it attractive for governments and financial institutions. E.g. you can use transaction fees as a form of consumption tax (especially valuable if you're the world's reserve currency or that of a major area). Through a country cryptocurrency you could set a federal consumption tax (providing a new and difficult to avoid revenue stream), give everyone free access to banking (wallets), make buying treasury bonds trivial, and other modern things that most of us take for granted but not everyone has access to (5.4% of Americans are unbanked). This would have the potential to simplify taxes but could equally complicate them. Hell, the Fed Reserve could pre-mine coins (for fast transactions and low environmental impact) and even offer interest on wallets through POS. These things could be beneficial.
Also one thing that makes it attractive to governments is that you have the ability to track every transaction, making it a data rich environment. This is an extreme authoritarian route although could make for simple return free filing and "stop terrorists and criminals" (I'm not bullish on that). Though personally I hope it doesn't go this route and we have ZKP transactions (i.e. anonymous like cash). Personally I don't think the gov should see that grandma gave me lunch money. Most cryptocurrencies aren't anonymous/private (not what the crypto stands for), despite what is common belief. I, unfortunately, think that this is a big reason large financial institutions and governments are interested.
But definitely agree on this being full of speculation and uncertainty. There are also plenty of people creating scams and abusing the systems. But just because a big part of the ecosystem is corrupt doesn't mean the underlying technology is useless. To determine that we'll have to wait and see, but there has been shown at least the potential for utility. I'm not trying to say that cryptocurrencies are going to be the future. I'm just also saying that there's reasons that smart people are attracted to the idea other than scams. But that also doesn't mean the ideas will work out.
Did you even look at why they are unbanked?
--- start quote [1] [2] ---
According to the Federal Reserve data, 14% of households making less than $40,000 are unbanked, compared to only 3% of households making more than that amount.
...
“Don’t have enough money to meet minimum balance requirements” was cited by 29.0 percent of unbanked households as the main reason for not having an account—the most cited main reason
--- end quote ---
But sure. Do tell me how magical crypto that expects you to pay wildly fluctuating fees for every single transaction is going to save the unbanked.
Cue in "not all cryptocurrencies in 3... 2... 1..."
[1] https://www.forbes.com/advisor/banking/costs-of-being-unbank...
A related thing that's bonkers to me is how much progress there has been in ZK cryptography.
But people just dismiss the field, saying "ZK existed since the 80s it's a fad", and post yet another Bruce Schneier article.
For example, in the smart contract introduce some authorities that are allowed to block and revoke transactions for some time (if the block chain has no support for certified timestamps, use "number of new blocks mined and appended to the blockchain" as substitute).
Let the market decide what kind of protection stakeholders prefer.
Exactly the same can be said about the legal system. People are just a lot more used to the many existing "glitches" of the legal system in comparison to "bugs" in smart contracts.
People keep losing money making coding mistakes that even "gcc -Wall -Werror" would refuse to compile. Examples: type errors like L1 vs L2 (whatever that even means, not a crypto person), wrong number of function parameters causing some sort of currying, allowing that massive ETH heist a few weeks back.
I'm sure there are hundreds of other similar horror stories.
"-Wextra -pedantic" would protect against even more bugs.
(I'm not saying C is a reasonable choice, just that JavaScript was a laughably bad choice.)
It's a piece of code written in an esoteric programming language that even people who are experts in have trouble understanding and spotting errors in.
Compared to actual contracts which are human readable.
The credit card company can also unilaterally decide to block your purchases if it thinks you have become a bad credit risk or if you donate to a frowned upon political cause or any other reason they arbitrarily decide.
Bitcoin is simply digital property. And like real world property, you can mess up and lose it irrevocably.
If you give your gold to the wrong person or drop it to the bottom of the sea, you're probably not getting it back.
If you under fund your military, and someone else comes in and takes control of your land, you're probably not getting it back.
If you send your bitcoin to the wrong address, or mismanage your private keys such that they are stolen, you're probably not getting it back.
I'm not saying that it's an impossible problem to solve, but our society and legal system aren't structured in a way that makes it easy.
Your base assumption of knowing or finding them is not strong
Crypto means you will always know who has your money and where it goes.
We can build systems around repercussions for crypto too.
Yes that is a major double-edged sword but it is ultimately a feature of blockchains (at least the base layer), not a bug. Everyone who has ever been a victim of fraudulent chargebacks can vouch for that. If you want reversibility you are free to create a smart contract which allows that using its own token. Frankly I wouldn't want to use a blockchain where someone can acquire my personal info and then social engineer their way into stealing my money, as commonly happens within the traditional financial system.
Can we, just for a moment, think critically about whether or not this is a good* thing?
As a consumer / client of the credit card company it seems great at first glance. I get scammed? No problem, I'll get my money back. But where does that money come from? Certainly not from the thief. My hypothesis (I'm not an expert in this field) is that it actually comes from you, the consumer, albeit very indirectly and in two main ways:
1) Credit cards companies charge businesses that allow consumers to use them a fee. Business often pass this fee on to the consumer, sometimes even explicitly. For example gas stations usually publish separate prices for gas w/ or w/o credit card. That fee is the main revenue source for the credit card company, and fraud reimbursement is one of their expenses. Expenses go up? Fees go up. In this way businesses (and less directly you) are paying an insurance premium on top of the credit card company's operating costs and profit margin.
2) Credit card companies most likely write fraud reimbursement off when filing taxes. So taxes that they would otherwise pay vanish. If the taxing entity wants a minimum tax revenue, that means increased rates elsewhere (and quite possibly for individuals).
So what's an alternative? Putting more effort in to the prevention of theft/fraud in the first place.
* "Good thing" meaning net benefit to society.
With bitcoin you have both: high fees and no fraud protection.
> Credit card companies most likely write fraud reimbursement off when filing taxes. So taxes that they would otherwise pay vanish. If the taxing entity wants a minimum tax revenue, that means increased rates elsewhere (and quite possibly for individuals).
So what you saying this is better, because when fraud happens you (an individual) can't deduct it from your taxes?
I think the arguments are very weak, much stronger would be that government can't supposedly stop you from paying or receiving payments, but they still can do it in other ways (like prevent converting the money or physically get you).
I think though that (at least for me) ability to reverse charge to stop fraud is more valuable than the above.
People make mistakes. Our society should not be an unforgiving one that heavily punishes mistakes or can’t handle basic situations like fraudulent transactions. Prevention of fraud is a cat and mouse game.
Even for people who don't care about the credit card incentive programs, the feeling that the credit card company will take your side in a dispute is itself an incentive to do business with companies you don't know very well.
Consider a traveller shopping in a foreign city, or someone buying things from unknown third parties via Amazon, or buying an app from an unknown vendor in an app store. The customer gets certain reassurances from the credit card / Amazon / app store vendor that certain scams are less likely, though not eliminated. And if you do get a counterfeit you might be able to get a refund just because you say you deserve one.
Yes, ultimately the money comes from consumers, but the same is true of advertising and every other business expense. As a consumer you can often get a discount if you shop places with low overhead and pay with cash, but with perhaps somewhat less assurance that you're not getting ripped off.
Fraud prevention isn't free. The police do some of it, but maybe you want more protection than that?
The benefit to society is that it lowers the risk of making transactions, so people actually spend their money. The inherent risk in crypto transactions has a (very slight) chilling effect on people's willingness to buy things with it. Why would you pay for something with BTC when you can use a safer payment method?
Also, let's not ignore the fact that crypto has fees too, and few people are paying taxes on the money they make from them, so there's little difference on that side of things except the benefit to the consumer is missing.
As for net benefit to society, it's not the first thing I'm thinking of when I've had my credit card skimmed. What I'm thinking is, thank goodness there's some modicum of protection for me and I haven't been wiped out with no recourse, which could be the case with crypto.
Is it good for the consumer to have these protections? I think people would much rather have the safety net of the financial institution and maybe need to pay a passed on fee at a merchant than not pay a fee and risk being completely drained of funds.
Is it good for banks? Not really, I think? Regardless of whether they're writing it off on taxes, it's still money that's leaving their hands. That does leave the point about them being able to dodge taxes, but, if there's one thing corporations are good at, it's dodging taxes.
--
Forgive typos, on my phone.
You sound like Gov. Abbott. Don't worry about abortion in the case of rape, we'll just get rid of rape.
Why didn't we just think of that before? Just get rid of crime, and there won't be any problems!
But yeah, I do think clawbacks are a good thing.
Snark aside, my 70yo dad fell into a very stupid fraud where someone called him and convinced him to send money from his bank account to some other (this is using Mexican Gov digital money transfer network SPEI). After he did and realized it was a scam, he called his bank and they basically told him that they couldn't reverse it, nor do anything.
So, bank transactions are not as revocable as they want you to think, for the lay person at least.
Santander [0] agrees with you.
It is all but impossible to block a crypto wallet from receiving funds.
There are pros and cons everywhere.
For example: https://www.msn.com/en-us/money/companies/feds-seize-dollar3...
This not much of an issue in pure Mimblewimble based blockchains, where sender and receiver interact to construct a transaction, and the receiver essentially has to prove the ability to spend received funds before the transaction can happen.
This is mainly with Smart Contracts or Hot Wallet Storage specifically. A bug in a Smart Contract can be detrimental considering that it's code is immutable. A Hot Wallet could be misconfigured or exploited by a remote attacker. This is why it's important to use cold storage methods for larger amounts of funds, typically using a paper wallet, or even memorizing the seed phrase as a last resort. If you're an institution, then you should be employing institutional level security (though, I don't really see this happening as often as it should). You can even employ segregated witness to divy the funds amongst contract holders.
> They're largely powerless to stop it once the transaction has gone through
That's pretty much the entire point. This isn't a bug. It's a feature. It's up to the end user to determine the execution of the transfer of value from one to another on the ledger. The ledger can only ever be written to; making it immutable.
> With crypto, a xss attack or a misplaced password can cost me all of my coins.
I mean, this can happen anyways, even with the current system. If you get phished, click on a redirect, execute a payload locally, or whatever. Not really sure how this is even considered a cryptocurrency specific issue; It's a fairly universal issue as it is already. Also, you're more likely to see something like this with anything utilizing a Smart Contract.
> With crypto, I have to triple check the address I'm sending coins to because I can't undo it.
Well, not if you're using QR Codes. Remember those? They've been around for awhile. I would do this with my Account and Routing numbers if I'm wiring money or setting up a direct deposit regardless. I find my self checking the numbers to make sure I get paid. Even though the bank can reverse it, it would still be a pain. Knowing I can't reverse a crypto tx makes me a bit on edge, yes. It's, again, a feature... not a bug. If you have that much doubt with a transaction, then you should be using QR Codes instead. I personally find them to be convenient. Otherwise, I'm putting the public address in my clipboard and pasting it and then checking the first 6 and last 6 hex symbols. If they match, I'm happy.
> With crypto, I have to spend what's sometimes a significant amount of money just to complete a transaction, and transactions can take minutes or hours to complete.
The more congested the base layer of the network becomes, the more likely the fees are to be driven up. Bitcoin has a side-chain called the Lightening Network to mitigate this while focusing on processing micro-transactions. You can basically send 10 Sats for the cost of 1 sat. Some tx are basically free because of how the network is setup. With Ethereum, the base layer can process upto about 15 tx/s. Bitcoin is about 7 tx/s. Lightening can process up to 100k+ tx/s. That's 4 times the speed of either Visa or Mastercard. If you're executing a smart contract on the Eth network, then things can get expensive because you're using gwei as gas to execute the smart contract which is used to deter bad actors from abusing the EVM. Solana can process a 50 tx in about 500 ms which is impressive to be honest.
> I think there's a future in crypto but we're in the dotcom boom days of it where most of the value is in speculation (and I suppose illegal purchases on the darknet). I'll wait for crypto 2.0.
Less than 2% of crpyto is used for criminal activity and that's mainly because you can get caught using it. A lot of people believe that it's completely anonymous when it's not. You're usually KYC'd somewhere and the only way to avoid this is to do direct p2p transaction without having it linking back to something that's tracable. Bitcoin is a criminals worst nightmare simply because it's a public ledger which anyone can audit.
> their usage as currency will be limited unless the inefficiency problem is solved.
This is common point that's brought up as well and was in the article. In PoW, this inefficiency is not a problem. It's Bitcoins network security to maintain it's own decentralization. It's the base layer and you can build on top of it to address the transaction speed as well as the network congestion; Lightning Network being a prime example of this as a potential Layer 1 solution to Bitcoins Layer 0 solution.
I feel like alot of people are missing the forest for the trees. I've done my research. Have you?
There is no crypto 2.0
This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected.
However, day-to-day, if you're making transactions that the government approves of, it's better and more convenient to rely on said government to protect you and end up using a much more efficient (in terms of transactions per second, fees & energy usage) and convenient system such as credit cards.
Crypto is like a tank - useful if you need to go into battle and defend yourself, and while it can be used to go buy groceries at the mall, it's not the most convenient. When you're not in battle, you're better off just using a normal car and relying on local laws and subsequent enforcement to deter anyone from harming you, which, at least in civilized countries, works the majority of the time.
Unless crypto becomes actually useful for real world transactions, it has to be converted to fiat currency for use, and all the exchanges or technologies that do that conversion are subject to the will of governments.
There was literally a post on HN today in which a government proposed to curtail crypto transactions for entities it considers hostile: https://www.coindesk.com/policy/2022/03/17/senator-elizabeth...
Recently another government seized crypto assets from those it considered adversaries: https://www.coindesk.com/policy/2022/02/16/canada-sanctions-...
And those are just actions taken by relatively benign governments that use regulation to accomplish their goals instead of force. It's tough to think that government-level actors couldn't just disrupt the crypto networks directly if they so desired, either through cyber attacks (ie denial of service or exploiting vulnerabilities that almost certainly exist in the crypto networks). Or in extreme cases even just taking control of network infrastructure directly. Or shutting off the internet. And no, Starlink will not save crypto users against adversaries who can jam EM communications.
Governments are powerful and to think that crypto or anything in the internet space is resistant to that power in the most extreme situations is not wise.
>Unless crypto becomes actually useful for real world transactions, it has to be converted to fiat currency for use, and all the exchanges or technologies that do that conversion are subject to the will of governments.
This is true, except that in some places governments are too inefficient to even control those things. The IT people works for them for pennies, and got there because they are the cousin of some politician. They are also not very capable, otherwise they would work for someone who paid them better and on time. I'm using my country as an example, where people trade them for money in fintech wallets and not banks, since they are more difficult to control despite also having a KYC process.
>Governments are powerful and to think that crypto or anything in the internet space is resistant to that power in the most extreme situations is not wise.
Other decentralized technologies simpler than cryptocurrencies prove this to be wrong. And I'm talking about torrents and some other kinds of P2P networks.
Those things are used mostly for piratery, they make companies lose money, so there's an incentive for governments to take them down, yet they fail to do so. On the other hand, crypto is seen as an investment by people who actually own a lot of money. Investors from big banks sometimes have at least a very, very small portion of their portfolios on it because it would be dumb to not take that risk for just a small amount of money they can afford to lose. So a government might not be that much focused into taking it down since a lot of "important" folks of the business industry are on it too
The only thing I think the US government might be truly worried about are the so-called stablecoins. Having an alternative to the USD is risky for their monetary control, since the supply can be artificially expanded with cryptos like UST which is a decentralized stablecoin, instead of centralized and backed by real dollars
You don't have to find either of these use cases acceptable to understand the risk at play when the financial system can be used as a mechanism of control used to try to snuff out things the establishment upper class doesn't like without going through proper legal channels and kept in check by our elected representatives.
What you’re asking for is a way to make these disproportionately illegal transactions on demand at scale. This isn’t a position on technology, it’s a position on government.
As it stands, I remain pretty unconvinced that cryptocurrencies writ large solve this kind of (at least, what I call) "borderless" free speech problem today. They simply don't do enough to frustrate the state or the incumbent banking institutions, mostly because they aren't actually peer to peer enough where it counts. Notably, I can't transact with other people on the network with only my smartphone or a small computer communicating 1000's of kilometers over the radio using digital modes without also relying on, e.g., an exchange to act as an intermediary.
How do these systems handle large-scale network partitions where an entire geographic region stops announcing its prefixes to the wider Internet but continues to process transactions and append to the blockchain within its borders? Does the blockchain fork? How is that fork resolved? (Is it ever resolved? The existence of Ethereum Classic implies to me that it isn't, or at least isn't required to be, and I find that prospect frankly frightening.)
The tank analogy is quite apropos, I find. Without a convoy of trucks bringing in fuel, the tanks stop. An adversary powerful enough to sever your connection to the outside world (whether in terms of electricity to keep things going or network connectivity) for the purposes of transacting seems like quite the Achilles' heel.
[0]: Modulo other rulings. Modulo the impartiality of SCOTUS.
https://www.openssh.com/releasenotes.html
* ssh(1), sshd(8): add the sntrup761x25519-sha512@openssh.com hybrid
ECDH/x25519 + Streamlined NTRU Prime post-quantum KEX to the
default KEXAlgorithms list (after the ECDH methods but before the
prime-group DH ones). The next release of OpenSSH is likely to
make this key exchange the default method.
This might not require a full application of Shor's algorithm, as studies continue with statistics from quantum annealers.
https://www.forbes.com/sites/arthurherman/2021/06/07/q-day-i...
If this happens, cryptocurrency as currently designed collapses.
To wit: it may be very difficult for me to ensure that the smart contract does not contain a malicious payload. Even if we pinky swear to there being no malicious payloads. Perhaps even if I read the code in an effort to personally confirm that there's no funny business going on.
This very problem is a big part of why smart contracts are becoming a popular tool for confidence artists. There seem to be a lot of people who are very (one might even say unreasonably) confident that the fact that smart contracts can't be altered after the fact makes them inherently trustworthy.
Yes. In the early days, people were thinking retail sales of illegal drugs. That turned out to be a petty cash application. What really powered Bitcoin usage was getting money out of China despite exchange controls. There have been disclosures in recent years which established that the money laundering sector was much larger than previously thought.[1][2][3] Just a fraction of that moving through the cryptocurrency system may account for most of the growth in Bitcoin.
[1] https://www.icij.org/investigations/panama-papers/
You'd be lucky to have working computers, power sources and internet connections in a hostile environment. Cash and physical assets are king in that domain.
Governments can order exchanges to halt trading and liquidation, or demand haircuts, and 99% of people who hold cryptocurrency won't be able to do anything about it.
It is completely reasonable to have some assets that the government cannot take away from you without actually going through the court process, putting the screws to someone and arguing to a judge that a crime took place. And that inflates in a predictable, controlled manner.
The last 3 years has convinced me that I will own crypto by the time I die. Not bitcoin - indeed, I don't know what protocol it will be yet. But something.
This doesn't mean anything. Lots of things "need to be there" and aren't. If it doesn't work, it won't work, even if you think it should work.
I would not personally be quite so confident that a state actor (or a well-capitalized non-state adversary such as a criminal organization) would not have the ability to severely curtail, if not outright eliminate, some other party's ability to execute cryptocurrency transactions. Most of us have no idea what unexploited vulnerabilities these sorts of organizations have found, and they didn't get to be as powerful as they are by habitually playing an ace up the sleeve when a three will do.
Compare with the proverbial suitcase full of cash. From a security perspective, it has the interesting property that transactions involving one don't have to be publicly recorded and processed on a public, global, openly accessible peer-to-peer network in order to complete.
Indeed, but it also has drawbacks. You need to find someone with capability to use that much cash without suspicion.
Also, I think most of the money laundering is made across borders, from people willing to enjoy their wealth in a country different than the one they earned it. Think money earned to US to be used in Mexico, or nationals of a heavy currency export regulated country (rmb, ruble). Customs are very efficient at looking for cash moving through these borders.
Hence why governments around the world are pushing towards cash free societies.
Physical cash is where most illegal (whether you think it's the good illegal or the bad illegal) transactions happen.
I believe the possibility of breaking the law is a necessary escape hatch against authoritarianism. Back in the day this was achieved by physical limits (omnipresent surveillance & control just wasn't physically possible - the tech just wasn't there), nowadays this is becoming more and more difficult - which is great if your government is sane but recent events suggest that even relatively stable governments can quickly turn sour.
Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities.
Proof of work burns a lot of electricity, though this is complicated because it drives up demand for renewables.
I also wish I had bought BTC when it was like a basis point, and if I had I’d be a booster instead of a skeptic, like everyone else.
Can we go back to arguing about Rust vs C? This horse has been flogged into quarks at this point.
HackerNews Crypto Thread Discovers Unconfined Equine Quarks (theregister.com)
Forum Boffins Observe Physics Beyond Large Hadron Collider: New Use For Blockchain in Repeatedly Smashing Dumb Ideas Together
Stocks represent ownership so just by that virtue, it has intrinsic value.
Stock represents specific rights (which may differ across classes) typically including a claim on assets at dissolution.
Tech companies return money to their investors via buybacks. Most investors prefer this as they get to choose when they get taxed.
FTX burns FTT when they have a good quarter, with roughly the same zero accountability to do so as a FAANG with a God Emperor CEO running a dual-class share structure.
Neither of these things are backed by guys with guns who come to your house if you fail to pay taxes in them.
A piece of paper has no intrinsic value, pays no dividend, and gets diluted over time.
And they should be. Software has become much bigger than it was "half a century" ago. We need to scale up on C.
> "unsafe" code is really not that bad.
Wow,... I only hope I never need to maintain your code.
It reminds me of the early days of the personal computer. Early PC's were useless to most people. But they were the greatest tool/toy to some. They couldn't get enough of it. Now it's crypto. It's mainly useless to most but some people can' t get enough of it. Add greed to that and there's no way people won't find a way to reduce its drawbacks and create useful tools.
Crypto's blockchain brought about the technology that lets complete strangers collaborate on a problem and be sure with high certainty that it's trustworthy. People just don't get how mind blowingly important that is.
It's slow in its development but it will have a great impact in our future. Give it time.
Electronic money, sure. But from a blockchain?
But it’s not. Bitcoin is 13 years old. At that age, Windows was on >90% of the world’s computers. Java at age 13 had taken over enterprise software and was about to conquer mobile via Android. Cryptos are used by maybe 0.1% of computer users (if we’re very generous about what exactly constitutes usage). Considering the amount of investment they are an expensive failure by any normal metrics like monthly active users.
It’s not the early days. Rather these are the last days for VCs to sell you this tired old thing before the novelty wears off, and that’s why they are so frantic about pushing it via Hollywood celebrities and whoever else they can muster with money.
Twitter hocking NFTs to everyone for their profile pics is like a Costa Concordia-level move, which pretty much serves as a huge sign that the ship is sinking...
It's a car accident in process to be honest, and only the people who read alt-news sources get the right dose of pessimism. On the flip side, I'm still confused but pleased that my email inbox is still only flooded with bank transfer scheme emails rather than crypto/NFT news and scams... Ahh... The quiet life... :P
Decentralized systems by nature suffer for slow adoption (just look at decentralized networks like Mastodon which are objectively better than alternatives yet lag behind in adoption). Finally, bitcoin is a financial product, I really don't know any other financial systems that we're adopted quickly other than maybe payment processors. We still struggle to adopt centralized systems that come pre-enabled on our phones!
Crypto is just too big to be adopted quickly and one might argue that's actually a good thing.
If even the European Union moves faster than your cutting-edge decentralized system, maybe you have a problem.
I don't see why that's self-evident. Decentralized applications get fast and wide adoption all the time, e.g. Napster.
Social media is the last thing left in pushing this lottery brigade... Social platforms have already demonstrated that most frankly can't succeed in their large oceans of popularity and in competing with wealthy influencers, the same holds true for crypto. It is far too easily influenced by tweets, wealthy influence, and popularity to make everyone socially climb the ladder, and far too volatile for people who can't afford to risk money to play with...
Just like regular money.
No, we couldn't be. i mean, every time in these crypto threads cyptobros compare crypto to the Internet, and to cars, and to the wheel, and to..., and it's fine.
But when we compare it to something, it's apples to oranges? You don't say.
> Crypto is just too big to be adopted quickly
It's not big.
It was pretty damn big after it was 13 years old.
It took more than 20 years for a website to exist on the internet.
WeChat pay
What about Git, or Napster, or filesharing in general, or Tor?
The first operating system for real work is arguably in 1956 [1]. 13 years later we still didn't have the personal computer.
The internet was born in 1983. 13 years later it was around 36M users (1% global population) [2]
With "general purpose" crypto/decentralized apps really only getting going in 2015 w/ ethereum, it does seem like early days. The UX and infrastructure/tooling are still a ways away from being consumer ready.
[1] https://en.wikipedia.org/wiki/History_of_operating_systems [2] https://www.internetworldstats.com/emarketing.htm
It sounds like the author is describing crypto as a ponzi (rather than a bubble) and I'd agree too if crypto never ends up on delivering real value. But it already has in terms in efficiencies (e.g. money transfer and cutting out middlemen is a 10x improvement) and I definitely think we're starting to see more.
I think that crypto hasn't quite integrated with society yet (yet is the key word). Once it does, crypto will be operating less within its own sandbox and will have more impact on society. It needs to marry into our legal system and deal more with oracles bridging the real world into the crypto world.
When you say Bitcoin is 13 years old you're only looking at it from a technology standpoint. It's made a few strides in this time period, but I think we could also consider Bitcoin as a monetary good. From that lens, as something to think about, how long did it take for gold to be accepted as currency?
The rest of crypto is much less than 13 years old and I think we'll start seeing more of their impact in the next 5 years.
https://csrc.nist.gov/Projects/post-quantum-cryptography/rou...
"Formal complaint regarding 8 June 2021 incident - 2021.06.15, Daniel J. Bernstein
"Executive summary. A week ago Dr. Daniel Apon from NIST publicly accused me of professional misconduct. Specifically, he accused me of initiating private contact with NIST so as to provide false information to NIST regarding the timing of an upcoming announcement relevant to NIST’s ongoing decisions..."
I mean, I can even see that in reputable payment services like Stripe, BitPay and Coinbase Commerce in the future.
ENS/wallets give users a lot of utility on Skiff - it makes logging in to privacy-first platforms easier (manage on secret key/seed phrase), sharing easier (ENS vs. an address), and decentralized storage can be nice if you don't want your data hosted on big tech.
First sentence of the Bitcoin whitepaper: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."
Actual cash moves quite easily.
I'd stay away from making statements like this without backing them up.
In the more distant future, if bitcoin survives, its utility will just be one thing, it will be regarded as a unit of measuring transaction value independent of any government. It will not be a replacement for any sovereign currency. Just this extra tool out there in the ether of finance. Notions of store of value, blockchain, proof of work etc. will be regarded as implementation details of achieving a global unit of account. Think of it like the SI unit of value, kilogram, meter, bitcoin. It's still far too illiquid to serve that purpose now; but, once it has at least an order of magnitude larger market cap it may.
Crypto is inherently less stable which amplifies minor corrections, but that’s not what crypto’s bubble bursting looks like. When prices drop 99% that’s when the bubbles burst.
As of 99% dropping, at this point so many minds has been set to see growth or "know" the "minimum" value of main cryptocoins, that masses would not allow for it to drop 99%. There will be enough people along the line to be picking it up at all sort of discounts and Fibonacci supports and arcs to hold the support lines and change trends. I am also very glad to see crypto finally got "locked" on the stock exchange.. and moves with it up or down (logical, since lots of Wall St. guys finally joined the party). I think long-term this will help stabilize BTC, ETC etc, since they will be mimicking serious market (U.S. stock market) moves.
just my 2c (investing in stocks since 1992, and crypto early adopter 2009)
Why do you believe that? Are you talking about pure speculation?
lol. Ether dropped 93% in 2018 and is doing just fine today. I think you have to adjust your "bubbles burst" definition for crypto.
What does this mean? I would bet that there'll always be Bitcoin miners, so the network will never completely "die". If you're talking about BTC/USD rate, it's hard to meaningfully interpret given how unregulated (and possibly manipulated, see Tether) the market is.
As a technology, it's probably more interesting to look at, say, the number of people who did a cryptocurrency transaction in the past month or week.
Modern monetary policies whatever they are exist for reason, things would likely be worse without them. And the big cryptos have no monetary tools...
Dai
If you think art can be appreciated without being an NFT, then why pay any amount of money for any physical art when a super high resolution PNG does the same thing?
This seems to be an object/reference mistake: NFTs (as we've been repeatedly told) are tokenizations of an asset, not the asset itself. You can tokenize anything, so of course there exist things represented by NFTs that are themselves are.
But NFTs themselves? They're not art, at least not until the Andy Warhol of SHA256 shows up.
That said, people are willing to pay irrationally large amounts of money for art for pretty similar reasons to why they pay money for NFTs.
NFTs as tokens not really. The art used in conjunction maybe. But the token is not art.
The NFT itself isn't - it's in fact just a .. wait for it now .....financial tool to monetize said art.
got 'em
The same coins now like litecoin are unchanged even as far back as 2017. So either it's a weak bubble or a deflated one. Compared to stocks, Crypto is dead..nothing goes up for more than a day..tons of wash trading. tons of scams.
3x tech etfs are way better than bitcoin anyway. I would rather own TECL and TQQQ instead of bitcoin. TECL and TQQQ were up over 100% in 2021 compared to 60% returns for bitcoin.
Also, buying very large quantities of fringe alt coins at millionths of a dollar each can pay off if the coin ends up rising in popularity and price. I do a few moon shots each year and cash out in November when crypto rallies. I’ll put $500 in 10 coins and usually one or two of them 100x at some point. I have my notifier send me a text message when it’s time to sell.
Not saying this stuff is useful, because it totally isn’t at this point. Well, except perhaps to make some random people a lot of money from nothing.
The implied promise is that it’s still the early days, and you too can become a millionaire
Was the housing bubble a lousy one just because home prices didn't go up 100% per year?
> Some guy on reddit's wallstreetbets recently turned $17k into $600k with amazon call options.
This is just gambling. If you are open to extreme risk, you can make plays like this on anything. It doesn't mean there is or isn't a bubble.
I would replace "non-monetery" with "non-financial". I think it's a perfectly reasonable (albeit, imperfect) solution as a ledger and exchange mechanism for new financial assets.
1961 IC invented
1974 personal computer
1983 internet
1998 g
2004 f
On average 20.6 years between the innovations I listed. Consider that since the inception of BTC (and ETH) there might not have been any actual innovations that would fit this rubric.
Maybe one example is space travel. My parents generation was apparently convinced that we'd have hotels on the moon by 1990. Probably most 20 year olds don't think we'll have hotels on the moon in their lifetime now.
Fiat is going to ZERO. All fiat currencies. I’d you fail to see the utility now at year 13, I hope you will not let another 13y pass.
Tell me you don't know what a bubble is without telling me you don't know what a bubble is.
No.
Gold is a commodity with genuine industrial uses, and ingrained appeal to humans through thousands of years of being adorned and traded as jewelry. Sure, it's been diminished, we have so many materials now that can be used industrially and fashioned in to shiny trinkets, but comparing it to a completely synthetic, abstract instrument like Bitcoin is a bit disingenuous.
I definitely think there's room in the world for a completely decentralised peer to peer digital cash equivalent, but I think it remains to be seen how valuable everyday people in this world consider this utility.
Every investment we are talking about is only rare because the community that participates in it has decided they are rare. Otherwise there is nothing stopping me from taking a picture of a piece of art or trading card and reproducing it a million times.
Bitcoin is fungible, unlike collectibles. There is no value to holding one bitcoin vs another, if "different bitcoins" even makes sense as a concept.
It can also be subdivided, so it is more accurate to say that there are 21 trillion units that will be out there.
The easiest way for the regular Joe to use crypto it's with an exchange... that it's basically, just a centralized institution making changes in a private database for when transactions are made inside the exchange.
Only if the user wants to send money to a wallet the transaction enters into the blockchain, outside of that it's like a bank... without the regulation benefits.
I think the state of Crypto right now it's in similar to what HTML journals were at the start of the internet. The reason why social media won over everyone having their blog in a distributed network, was in big part to the easy-to-use experience.
I find it a little bit hard to believe that crypto will not be centralized at the end to some extent. This motto of "crypto it's a fight of the common folks against the big guy" feels like marketing made by people who control crypto now and who want to be the "big guy" this time, rather than the democratization of the banking system.
Look, I like concepts of the tech behind it and I hope to be wrong, crypto has proven useful in some scenarios like Venezuela. But seem naive to expect that, if they don't take into account the limitations of the tech itself, everyone it's going to use wallets and private keys with all the good security practices requires and never make a mistake.
We're almost forced to get Google Workspace / Microsoft equivalente Service for your own email.
Ironically that means that excessive amounts of money are being thrown at them in order to obtain any kind of small angular velocity towards funders that believe they can capture the next generation of the market -- or simply to prevent it from happening, for those with existing moats.
Simply wait. Give it another five years to a decade or so and the tide will recede and the valuable technology will remain above the silt.
They know the "limitations" of the existing model (the ways in which it is not centralized) -- as do many others -- but they want to lay a claim to some of the solution.
To do so requires twisting reality in ways that involve huge sums of money to create distortion fields.
First off, it is factually incorrect to say that transaction costs are higher than traditional banking. In fact, costs on some blockchains are negligible when compared to traditional banking fees -- literally fractions of a cent for moving large sums of money.
Moreover, it is very liberating to be free of banks, with all of their absurd controls, endless gouging, and inconvenience. Admittedly, in the beginning, it is somewhat scary to trust blockchains, but one gets over that fear very quickly and apps and services keep improving to make it easier and safer. It's not ready for grandma yet, but grandma may have a hard time with her normal bank app right now anyways.
Furthermore, blockchain based Web 3.0 technology with a wallet that automatically recognizes your account without having to ever enter a password or username actually solves a big problem and greatly improves the experience on most websites.
We can debate the philosophical merits of decentralization versus centralization of financial systems until the cows come home, but for me, the benefits of decentralization outweigh the costs.
Without getting into too much detail, the main ones for me are: Freedom over my money. Protection from inflation (since some coins limit supply). Transparency of markets (all transactions are public on the blockchain).
Also, I believe that for most governments there are real benefits to using crypto. After all, the transparency of public transactions facilitates taxation and the implementation of policy. In the long term, it should actually help to curb money laundering, rather than facilitate it. It is very easy to corrupt a banker. It is near impossible to corrupt the blockchain data. Also, in our complex financial system, blockchains and smart contracts can also unlock a lot of value that is currently trapped in our legal, administrative, and bureaucratic systems. Just solving the problem of custody of financial instruments, would unlock incredible value in the economy.
With regards to centralization, I suspect that the real argument that this author is trying to make -- and it really shows his bias -- is that the US should not/won't allow crypto to really gain mass adoption because it threatens its hegemony (the petro-dollar, World bank, dollar as the world's store of value, etc.).
The author ignores that for a lot of the world, solving inflation is a much bigger problem than maintaining central bank control. He assumes that US influence/control over world economics/affairs is a good thing. I'm American, but I don't buy that argument at all. It is manifestly unfair and illigical to ask the world to use the dollar as a store if value and then print trillions of dollars whenever banks or other bad economic actors crash the US economy. Think also of the damage that the petro-dollar has caused the environment, delaying the onset of renewable energy while even facing global catastrophe.
These are just some thoughts off the top of my head.
Lastly, I want to add that for me the most exciting thing about blockchain technology is the disruption and innovation that it will cause in many industries. NFTs are a great example, but just one. Defi is another. There is massive innovation going on right now in defi. New models for lending, raising capital, etc etc. Models that could probably never work with centralized control and current transaction technology. Granted it's something of a totalky deregulated Wild West right now, but there will be winners who may become (in size, hopefully not in spirit) the Amazons and Bank of Americas of tomorrow.
Is there a market to short crypto?
- a technology that solves coordination among untrusted parties can be useful
- the early usecases for blockchains are mostly profiteering and rent-seeking
Sure, data would need to be verified by a trusted party when it's first entered. A blockchain still protects against forgery after this though.
People have been making similar claims about Bitcoin for over a decade now, and meanwhile it is still alive and kicking and shows no signs of slowing down. It is especially useful in places in the world that don’t have easy access to banking and countries where their currencies are being debased. I encourage you to watch this video if you have any interest in challenging your beliefs:
You shrug crypto off as not being “genuinely innovative” which I think shows a big lack of understanding. Personally, I think the invention of Bitcoin is perhaps the greatest innovation since the internet itself. It cannot be understated how powerful it is to create money whose supply cannot be controlled by a central institution or power. This is the kind of invention that could literally change the world (and likely will).
Your second point in claim 3 is the exact talking point used by the Federal Reserve and other central banks. I think this represents an extremely narrow view of the world. Look at the US dollar which is dangerously on the verge of falling into an inflationary spiral. If you feel safe keeping your money in dollars then godspeed. I personally feel very unsafe given the current political climate. The dollar has lost over 99% of its purchasing power since the creation of the Federal Reserve and the current strategy of printing more money to solve every problem has been much more of a “detriment to people’s lives and livelihoods” than the gold standard ever was. You should research The Cantillon effect which seems to be more and more relevant in today’s economy.
An alternative to the boom and bust narrative is that the banking elites of that time period created the boom and bust cycles themselves through control of the gold supply in order to lobby and justify the creation of a central banking system that would benefit them and ensure that if they ever got into a pinch they could bail themselves out by having easy access to the money spigot. Remember history is told by the victors.
I agree with you that governments are unlikely to let go of control over monetary policy and won’t do it willingly or eagerly, but I think it is already too late for them to kill Bitcoin. They can cut off exchange access to buy and sell for dollars, but by forcing people to use dollars and cutting off access to crypto, I think it will actually expedite people’s willingness and acceptance of crypto. People and businesses will start accepting crypto directly for payments. It will take a long time for this to actually materialize in the real world because there are so many people like you who have such a narrow-minded view of crypto, but when you are faced with accepting a currency that is losing 10-20% of its purchasing power every year, or accepting Bitcoin, eventually people will understand that Bitcoin is the better money.
I expect to receive an onslaught of downvotes for this reply and going against the grain, but so be it.
> when you are faced with accepting a currency that is losing 10-20% of its purchasing power every year, or accepting Bitcoin, eventually people will understand that Bitcoin is the better money.
How can this be a better money with such a volatility? Over the last three months, it looks like the minimum rate was 35kUSD/BTC and the maximum 50kUSD/BTC[0]. If you buy at the wrong time you can easily lose way more than 20% in way less than a year. Looking for articles about BTC volatility, it also doesn't seem to be going down.
Very practically speaking, in most countries, I'd see people buying real estate before they buy BTC to protect themselves against inflation.
This was really off topic. My apologies for that, but I feel like I had to get that off my chest :-)
> Claim 1: Crypto is a Bubble (Confidence: High)
Are stablecoins not crypto? The DeFi built on top of stablecoins and other assets is basically what the market/banks had been doing for a long time (except that everything is transparent, fraud is easier to detect, etc.)
> Claim 2: Blockchain technology has no non-monetary applications (Confidence: High)
This one is easy to refute. A few ways:
1. The point of cryptocurrencies, is that we found that we could use monetary incentives to build and run services that have nothing to do with money. Sure bitcoin was only for transfers, but other projects have explored how to build services on top: smart contracts, identity registry, archiving of the web, file storage as a service, a tor-like mixnetworks, and I'm sure others can point out all sorts of projects.
2. The core of blockchain technology (although not all of it, see next point) is about protocols for distributed systems when faults can be malicious. Distributed systems are used EVERYWHERE, think distributed databases. As threat models are different for every products, why claim that we don't need distributed databases resistant to malicious faults? Banks are the first target of such products, so it's no wonder that cryptocurrencies were invented. Another example is the web PKI, which currently uses protocols like Certificate Transparency which are good are letting you audit your domain names and detect if any attacks have happened after the fact. I bet you that in the next 10-20 years the web PKI will run on a BFT consensus protocol, or an unknown breakthrough solving a similar problem, to prevent attacks from happening, period. And if nobody builds it I will.
3. What is blockchain tech exactly? Because I can tell you that many fields in cryptography have seen INSANE advances SOLELY because of cryptocurrencies: general-purpose zero knowledge proofs, multi-party computation (and threshold cryptography), broadcast protocols, etc.
> Claim 3: Future monetary use of blockchain technology will be minor (Confidence: Medium)
That really depends on regulations, and if they want to kill the beast (and replace it with a non-fault tolerant CBDC). But we're already seeing countries adopting cryptocurrencies (albeit the wrong ones) so I guess it depends on where you'll be in the world. The dream of crypto is really, no matter bitcoin maximalists will tell you, to make payments as easy as sending an email. And without an open standard that everyone can trust, how will this ever happen?
Lightning is an engineering marvel.
It may or not end up looking exactly like traditional money, but it'll look like something.
I believe some of these things are in direct contradiction to each other and there just isn't exactly a wide amount of academic discussion going on about it that I've been exposed to.
And what's interesting to me is that if you did effectively create such a system, how would it manifest in usage? If there isn't a digital gold rush, or a speculative aspect to its consumption, well ran monetary systems from established governments give you few reasons to utilize it.
*Claim 3: Future monetary use of blockchain technology will be minor (Confidence: Medium) There are many forms of crypto, and many are not immutable. Many have systems of governance that allow for changes in monetary policy, just like in a fiat currency.
as far as web3, i suspect that will be a few things. a move away from centralized platform economics and/or a rise in applied cryptography made accessible to ordinary business software developers.
so maybe a disruption of the venture capital buying out industries and replacing them big singleton companies with web/mobile interfaces business model and hopefully bigger advances in things like end to end encryption for all areas where modern technology has revamped how we conduct business. if we're lucky, we'll see actually secure operating systems as well.
to play my own devil's advocate: it could end up replacing a lot of finance, if only for the reason that it seems to attract a lot of the brightest minds in that space, and sometimes that's all you need.
I accept down arrow fate.
crypto is good for the following:
1. when you're living in armageddon and/or under an authoritative regime and/or need an exit from fiat for wte reason. not saying it's easy to exit into it, but it's there
2. to create a recursive never-ending loop of collateralized lending. to trade tokens in order to create tokens that can then be traded for other tokens used to collateralize lending for a different set of tokens
for anything else, there are better and more efficient solutions.
- Refilled my sim card in a foreign country for 0.0004 Lightning BTC
- Bought a VPN account for my friend in a country with heavy censorship for 0.0015 Lightning BTC
- Sent 100 and 150 USDT to my friends in a sanctioned country
- Donated 0.026 to EFF
- Donated 0.29 BTC to Ukrainian defense
- Donated 0.22 ETH to Navalny team
- Took my savings out of a country that forbids outwards money transfers
So it's been pretty productive for me. In addition, I protected my savings from inflation.
Currently FX trades between banks are settled by a bank-owned coop type system, CLS bank.
"""
“The four most expensive words in investing are: ‘This time it’s different.'”
"""
And then proceeds to talk about cryptocurrency as a bubble.
The same rhetoric was used for email, webcams, web browsers, and internet companies (dot-com bubbles, VCs etc).
This time is much the same. There's a lot of hype and a lot of hate. Behind the hype is real technology that is in the process of being deployed.
This has to win a prize for the most redundantly true headline ever
Claim 2: Google 'Bitcoin Spacechains'
Claim 3: On a long enough time scale all discoveries are minor, this is what it means to always be optimistically solving problems at the beginning of infinity.
Even beyond this: there don't seem to be that many non-speculative monetary applications of cryptocurrencies and distributed ledgers. The few that do exist seem to exist primarily in conjunction with the demand for liquidity in speculative applications.
who cares?
- to exchange crypto you need an internet-connected computer, you can't exchange anything from a human to another human being, many might state that's not different than bank transfer on X.25 but it's different from cash, and that's just the appetizer that simply mean: to participate to the economy you need to be connected, and you can choose between few big ISPs for that and you need a computer chosen between the very few manufacturers we have around the world, typically a computer filled of proprietary FWs like moderns ones;
- cryptos are based on a "blockchain" concept, witch means on a giant append-only file, that's means sooner or later home computer will have not enough storage nor bogomips nor bandwidth to operate cryptos "freely", exchanges will be mandatory by technical needs, not by laws, since only big server farms will be able to process transactions at a viable speed. At this point the "free" and "open" part is gone. At this time cryptos are like today's banks, BUT without State laws and protection, an exchange can be in an exotic place, can disappear and start over with another name etc it's costumers are and will be totally powerless;
- not only: since we pay "on-the-go" naturally with cryptos wildly adopted that means de facto mandatory smartphone always with any humans, like the wallet in your pocket, and smartphones not only means already mandatory exchange on a hyper-surveilled platform but also means depend on them for anything, being unable to even buy food without and integrate social scoring it's natural.
Take the above and observe what WEF want in terms of digital identities and payments systems https://www.weforum.org/agenda/2021/01/davos-agenda-digital-... perhaps together with https://www.protocol.com/entertainment/upland-augmented-real... and you close the circle: cryptos so far are not there, but have created a narrative that digital currencies are good and needed. Most people do no even know the difference between cryptos and CBDC, in the end for most means just numbers inside a mobile (cr)app or website. I expect in a decade a final success of the cash-less push, with the sole payment system remained a smart-phone based one, connected and surveilled, of course linked to a digital ID, of course linked to social score: wellcome to the "western version" of modern China, evolved to surveil even more.
Oh beware a thing: if you want to wait and see because seems too extreme to be true... Once inside such systems, once our IDs, payment systems, social scores are implemented only an improbable civil war can overthrown them, and in a hyper-surveilled and hyper-centralized society where from ovens to toothbrushes to cars anything is connected a civil war means a thing: any Citizen can only let itself die hoping that's enough to crash dictatorship dominance, because it's impossible to fight if you can't eat, you can't travel because all the means to do so are connected and centralized in few hands. Take then a look as software these days: we tell for decades that we need FLOSS etc, what happen in the meantime? Emails are still there, only for 99% are webmails, so nothing practically different than a proprietary service like WA or Telegram. Dependence on few giants is far bigger then ever, anything desktop-centric and P2P-centric is disappeared, even tech communities are now on Reddit, HN etc, witch means on proprietary third parties platforms instead on open Usenet no one really own. Most people, devs included, live on APIs and cloud. Did you really think we are so far from the society depicted above? In the IT we already almost owning nothing "and being happy", actually IT is the core of our society functioning. Companies, especially from the finance sector have internal social score since decades, people think a society like a company, witch means a hierarchy not a Democracy etc...
That's about as productive of a thing as I can imagine. I suppose physically producing a thing might be a step above that depending on whether it's a useful thing.
Satoshi's words come to mind on this. If you don't get it (or it's not useful for you), that's fine.
Really it's just amusing 14 years in that you don't realise you're the old man ranting in the pub.
Bitcoin is a tool for freedom.
What's funny is watching the crypto world relearn all the lessons that went into making the current financial system the way it is. Example: printing money aka managing the money supply. This is a feature not a bug. At least for a currency. Side note: let's stop calling these cryptocurrencies. They're crypt-assets.
It makes me wonder if th Great Filter responsible for the Fermi Paradox is civilizations boiling their planets alive mining crypto before they ever establish a presence in space.
No. Gold standard has none of the properties you told. Fiat currency is a disaster and evil. Besides, it's also likely the only reason why cryptocurrency is drawing attention to anyone.