Or: there are a lot of people who think that they're in on a scam, but in fact are lower down the pyramid than they are told. That explanation requires no faith, and can also explain participation of entirely rational actors.
Sadly, people have blind spots. I personally know someone who just like 40-50k, someone who was THE biggest advocate of Terra/Luna. Post crash? Reinvesting in Luna2.0
Fool me once, fool me twice... wow! It is this time when I think about all the people who cry about SEC regulations and argue that people are intelligent and need not be protected from scammers like this.
I know tons of people who made double digit millions in bitcoin. They put 10k to 50k early money in most projects they come across. Maybe 10% come out with a positive ROI of >1000%.
> If VC were like crypto, they’d only be funding startups whose objective would be to raise more money from other VCs
And this is not often the case? I mean for crypto it's basically only that, but there are quite a bunch of VC funded companies that just live on raise followed by raise. They won't say that out loud, but nor will crypto many crypto companies.
agreed, the difference being that those are bad apples in the VC basket, whereas they're the only apples in the crypto basket. which crypto unicorn has a product that it sells to non-investors? not a single one
It's easy, they know someone that knows someone that made a few hundred grand in crypto a while back, and they want a piece. The thinking doesn't go much beyond this.
> The Securities and Exchange Commission (SEC) has been investigating Kwon Do-Hyung for violating the Securities Act, claiming that the blockchain service that made it possible to buy US equities with Terra was a violation of the Securities Act.
FWIW this is the important part, not the fact that he was allegedly sending himself money.
like this? 6 days ago — Meta (NASDAQ: FB) chief operating officer (COO) Sheryl Sandberg, has sold more than 22 million Facebook shares worth $1.7 billion
Exactly, That's the brutal truth behind all the reactions and outrage in this thread.
Since the SEC is going after Do Kwon, it tells us that they are not letting him get away with his exit scam. That is the point. After this, I will expect more regulations [0] to come forward and will especially impact Tether. That would be interesting.
Not only that, this will wipe out the useless token projects with no use or utility but the compliant cryptocurrencies like the ones in ISO 20020 with continue to survive.
These cryptocurrencies are not all going to be as the critics keep saying; 'totally destoryed' 100% banned entirely and instead they will continue to co-exist with the current system rather than 'overthrow' it. It's here to stay I'm afraid.
It wasn't buying an equity, it was buying a token that was the same price as the equity. Buying the token had no effect on the upward price of the equity. I can see why the SEC is protective of that, for sure.
> It wasn't buying an equity, it was buying a token that was the same price as the equity. Buying the token had no effect on the upward price of the equity
Sounds like a derivative to me. That is also a type of security.
The mirror documentation [1] calls it a 'synthetic asset'. This mechanism is also how they also offered BTC and ETH on their network (as mBTC and mETH).
To be clear, I wasn't trying to debate the nature of if it is a security or not.
FWIW when I was doing some banking courses, as I was working in DeFi and wanted to know more about CeFi, they have synthetic assets too. Which are derivatives. In fact in the Big Short movie I'm 100% they call derivates synthetics!
These are a bit different. Derivatives is a complex product based on more fundamental products. Synthetic product is what it sounds like, stocks are a great example. You can create a synthetic stock with the same price as the real one and let people trade it.
I doubt it. HODL is a mantra used by crypto grifters to ensure they can liquidate into filthy dollars or euros without having bagholders panic and depress the price.
Can we leave these painfully overused sarcastic comments to reddit please? This adds nothing to the discussion. I've been seeing these types of comments more frequently on HN. What's happened to the moderation?
I agree it's not great. But imo it's an understandable and inevitable reaction to the constant pro-crypto fanboy comments. Both sides are mostly noise.
It reminds me of something I read about the debate over string theory in physics. One side says "by the standards of our discipline this has not, and never will accomplish anything" ("not even wrong"), the other side says "but this is so different and amazing none of the existing rules matter!"
Precisely. It is what you usually see pushed by critics like web3isgoinggreat, Stephen Diehl (CTO of blockchain startup Adjoint), and many more to hype up the uninformed for their ultimate goal of banning all of them, which isn't realistic; otherwise it would have happened along time ago.
While we have seen a scammer like Do Kwon getting reported to the authorities by his on employees to the SEC, it proves that the regulators are not going to sit around and let him get away with it. That is the whole point of why crypto regulations are coming, just like they did for regulating ICOs in 2018.
The same is true when one tries to 'hide' their funds using a blockchain with a transparent ledger or if they are trying to cash out stolen funds to exchanges which regulations have introduced KYC, AML checks on them if the hackers / scammers try to send the hacked funds to custodial wallets.
So in reality, it is getting harder for scammers and criminals to actually cash out the funds and anyone can still technically trace the transactions on these blockchains.
Oh no, web3 is almost purely greed. The entire point is to financialize everything possible and try to make money off of it. It's a truly horrific idea, one that enshrines "those with money make the rules" even moreseo than capitalism does.
I remember a story from The Unwomanly Face of War where a woman, so enthralled with Communism, sends her own young daughter to deliver a bomb to a house being used by German officers. She was happy to sacrifice her daughter for communism in this way.
When I read that, I couldn't believe it. The thought of believing something with so much conviction is completely foreign to me. I was jealous in a way. But for me, earthly pleasures are all I have to focus on.
This last statement is what concerns me a great deal about the MAGA / Q movement. Absolute belief and almost deification of a movement/individual that will replace thought and reason.
It's truly amazing how many people spend their entire lives pushing for higher salaries than they need and seeing the immense benefits of competing in the economy, but somehow fall back to the conclusion that greed (the only thing that has improved their life) is terrible.
The car you drive, the central AC you enjoy, the delivery food you'll eat this week? All of that is extreme luxury and unnecessary by someone else's standards.
I agree there's certainly a difference, but what you might consider grifting someone else might consider quite legitimate. e.g. I think essential oils and energy crystals are grifting, but many people find a lot of value in those things and I would never want to suggest I know better what they should spend their own money. They probably would see the money I spend on things like tech toys equally as stupid (and they might not be wrong LOL).
Someone using something unethically does not make the thing being used unethical. Encrypted communication is a great example of this...how many people circumvent local laws with encrypted communication in order to reveal crimes against humanity? There have always been unethical laws somewhere in the world as long as governed societies have existed.
That's not even what i said. I said the other direction.
Ponzis are unethical, and wrong, and it always should be regardless of who is doing it and whether someone is benefiting from it.
I find crypto useful and innovative. I find making money through ponzis disguised as innovation wrong, they happen to be using crypto. That's what Luna was.
I vouched for your comment, because GP's claim that "many in failing states are using it" has just as little evidence behind it as your claim that "the rich %1 in failing states are using it".
Thank you. IMO it's self-evident that only the rich in these "failing states" have access to both the tech and the education required to understand crypto enough to use it.
> Two days after the invasion began, the Ukrainian government posted addresses to its bitcoin, ethereum and tether wallets on social media. The Ministry of Digital Transformation of Ukraine now accepts donations in 14 cryptocurrencies. “Crypto really helped during the first few days because we were able to cover some immediate needs,” says Alex Bornyakov, one of Ukraine’s deputy ministers for digital transformation. The government has raised the equivalent of $100m so far. Non-government organisations are raising funds too. Come Back Alive, a Ukrainian NGO that since 2014 has collected money for military equipment and training, relies on crypto after it was kicked off Patreon, a fund-raising platform that accepts donations in fiat currency but does not allow them to be spent on military apparatus. UkraineDAO, a crypto collective, auctioned a non-fungible token (NFT) of a Ukrainian flag for $6.5m-worth of Ethereum. It is the tenth most expensive NFT ever sold according to Elliptic, an analytics firm. The proceeds will be spent on humanitarian aid.
If you'd prefer to donate using conventional currencies that is still quite available. I'm not sure if it really counts as a big positive when governments just incur additional overhead trying to process strange currencies instead of letting banks handle the exchange and just ending up with useful and liquid local currency.
And countries at war often use auctions of memorabilia or other objects to raise funds - selling an NFT is just a shift in medium.
Yeah, crypto isn't awesome in my view, but I've been trying to play devils advocate for myself to challenge my opinion. Thus far no dice until this. It's not much, but it atleast helps me confirm my view that crypto isn't living up to it's value prop.
I know many poor country citizens who have had their families lifted into middle class even by american standards because companies were able to pay them in bitcoin whereas USD wasn't possible.
You aren't alone, though. There are many in their first-world bubble that don't see the benefits of crypto because their fiat fulfills all their needs. The same way you've never gone hungry, that doesn't mean food scarcity doesn't exist.
Their local regulations, which is exactly the problem crypto aims to solve.
Some see illegal activity - I see consenting individuals being enabled to engage in free trade. Personally I would question anyone that would believe people shouldn't be able to trade their resources freely with consenting individuals. Humans shouldn't be slaves to the authoritarians they may have been born under.
The solution to stopping unethical activity should be to stop that unethical activity. It shouldn't be to limit and regulate all activity to simply make it less convenient to participate in unethical activity.
> You’re claiming that these countries prevent people from being paid money for work?
Yes, it's quite common even in the US you can't work without a visa. Other countries have much stricter rule depending on things like sanctions etc.
> Crypto is a luxury even for people in such countries, it’s not a feasible alternative to local fiat.
Except when it isn't - which is exactly the case I'm describing.
> Thanks for clearing that up! I wasn’t aware that the solution was so simple.
Really no need for snark. No one said it was simple. You know it would be much easier to presume guilt until proven innocence too, but that doesn't make it a better approach to creating a healthy society.
So the only use for crypto is that regulations haven’t caught up to it? Used to pay illegal immigrants and circumvent sanctions, which is still illegal whether or not crypto makes it possible.
I wouldn't say that's the only use, but it is a very legitimate use. Let's not forget legality is not morality. I consider it highly unethical to prevent someone from trade simply because you don't like where one of the individual lives.
So, slightly on a tangent, but I feel it is still applicable: several of the people I work with live in countries with restrictive currency controls, specifically, moving money out of the country above certain trivial sum requires gov permission which is granted for specific purposes only. Opening an account in another country is both illegal from their local perspective and is not straight forward generally for anyone else - I tried opening a US Bank account from the UK and that was not easy. Being paid in BC allows for a lot of flexibility for them.
I think the point about 1st world bubble is fair, in my opinion
The examples you state are not the primary reason that people want to be paid in crypto. It’s the potential for a speculative windfall and desire to avoid taxation that drives the need.
> The examples you state are not the primary reason that people want to be paid in crypto
This claim can be dismissed as easily as it was made. Quite literally everyone I know getting paid in crypto (which is only a dozen or so) would rather be paid in fiat but can't because of regulations.
To pick one:
- getting paid from abroad qualifies a journalist, or anyone for that matter, as foreign agent in Russia. This comes with obligations of monthly income/expenditure reporting, and unemployability for as long as you are on that register.
Disclaimer: For most of my career I've been paid in USD, but never in crypto. I'm not a fan of it, but I'm not too blind to see why my peers are using it.
> Why would they want to pay them in USD and not the local currency?
To be blunt, because the local currency is useless. You're presumably from somewhere in the Western world, so smack dab in the very first-world bubble being discussed here where "fiat" means stability and not simply a measure of an economy in free fall. Outside of the world's strongest economies there is very real incentive for individuals and businesses alike to hold currencies that don't lose significant amounts of their value from month to month. I started at my current role in April 2021 at which point the parallel market exchange rate was ?480 to $1; earlier this month I exchanged currencies at ?600 to $1. Less than a decade ago in 2014/15 the pm exchange rate was ?200 to $1. Why on earth, if I had a choice, would I take a salary pegged to the naira in such conditions?
People in the first world also vastly overestimate how useful holding [local] fiat is in the global market. Sure when your currency underpins the global economy you never have to think about foreign exchange, but for most developing countries pretty much no international marketplaces will take your local money. They may show localised prices but the actual transactions are settled in USD (or similar), which is often harshly controlled. For example naira-denominated Mastercards and Visa cards here have international spending limits - currently those limits are as low as $20 a month (not an exaggeration or typo) from major banks in the country. Middle-class people resort to using virtual dollar card services (which charge exorbitant rates, and which are often detected/blocked by platforms) to be able to pay for basic subscriptions. And for bigger expenses, getting large amounts of foreign currency ($1000+) from local currency involves either filing a Form A with the central bank (you get dollars at the official exchange rate, but the process takes a month or more, must be for an approved purpose, and again has spending limits - if you want to travel for tourism/business you can request a maximum of $4000, if you're attending a foreign university you can request a maximum of $15000 for tuition and $5000 for living expenses per semester, etc) or doing quasi-legal transactions at bureau de changes that are charged at the parallel market rate.
Whether or not you consider those limits too frugal, I personally am not interested in the government restricting me from spending literally my own money. So I simply receive and hold my salary in foreign currency and exchange a fraction of it to the naira for day-to-day living expenses. All my international transactions - new electronics, flight tickets, etc - I pay for directly. If I want to send money to friends or family outside the country I can do that without fuss. I'm able to receive USD directly because I have a foreign currency account and restrictions on the foreign exchange of the naira don't apply to it obviously. Not everyone can get one (e.g. most banks require you to present two references who themselves have FCAs to qualify), so they turn to alternatives like Payoneer and Wise. But those charge significant fees to make profit and will ban/block accounts especially of people from the developing world on a hair trigger (and also recent government controls mean that you can no longer withdraw from those accounts to a local naira account, so getting cash for local expenses is an issue), so recently people are increasingly turning to cryptocurrencies as well.
You need to understand that in a failing economy, crypto is just another foreign currency - one that is in some ways easier to obtain and hold safely (under a government that can and will freeze your bank account for dissident activity) than traditional foreign currencies. It's volatile, but averaged over time it's certainly held its value significantly better than the naira ever has. It's a gamble, but people don't have the luxury of caring as strongly about the risk as those who can comfortably rely on their own fiat. I consider myself lucky that I've been able to avoid using it; I don't judge those that have.
> What was preventing them from official employment?
You cannot officially employ people in a jurisdiction you do not operate in.
For all HN talks about remote work and hiring all over the world, how exactly do you imagine that works out legally? My employer certainly considers me a full-time employee in spirit (and so do I), but the paperwork is quite clear that I'm an independent contractor - same for all my non-American colleagues.
Thanks for that insight. I didn’t know about those restrictions of withdrawing your own money.
How did you open an USD account? Did you have to travel to the US?
If you had to do it today, would you use services like Wise. Being paid in crypto currencies seems unrealistic if you’re working for companies like Intel, not sure they would pay you in BTC.
My USD account is with a local bank - most countries AFAIK allow residents to open foreign currency accounts in USD, EUR or GBP at least. Here they are pretty tightly controlled because foreign currencies are not legal tender, but I can live with those restrictions (can't transfer money to FCAs in other banks, can't transfer more than a certain amount of money per month within the bank through electronic channels, can't have anyone apart from yourself deposit cash/checks in the account, etc) as long as I can make reasonable purchases off my card without worrying about the payment being blocked.
I've used Wise in the past (their borderless account) but had my account deactivated for no discernible reason, which was frustrating. I'd use their direct-to-account transfer service, but because of central bank regulations passed in 2020 they are no longer permitted to send/deposit naira in Nigerian bank accounts. This actually cut off quite a few people I know from receiving international payments - some scrambled to open foreign currency accounts, some got pushed to receiving crypto whether directly or through now-existing platforms like Sendcash. So now I just get my salary through regular old SWIFT transfers - my employer takes on the transfer fees, but I still get debited $20 for receiving them.
You're right that being paid in crypto is unrealistic for a company like Intel, because giant multinationals like that either have a local presence (Microsoft has an engineering office in my city) or have huge relocation budgets (Amazon, Google, etc usually move hires from here to offices in Europe). Some smaller companies and startups will offer to assist with relocation, but understandably will take local talent over someone that needs to sort out a visa and work permit the vast majority of the time.
I'm struggling to understand your connection at all. There's a difference between legality and ethics. Something can be illegal and it would be immoral for someone to obey that law. Similarly something can be illegal and it wouldn't be immoral for someone to ignore that law.
and who exactly is harmed when two people engage in free trade with resources they own? In your example the bank robber does not own the money, it was stolen and the robber has no claim, only possession.
you're using electricity just to comment on this thread - presumably you're okay with that, so what makes your electricity usage justified and not bitcoin owners? Both forms of electricity have been paid for (presumably) with resources you own and traded in good faith. It's not illegal to use electricity to mine crypto in the vast majority of places.
as for altcoins I really don't know what your point is
Could you provide a bit of detail? Like giving some examples of companies that pay their employees in bitcoin?
I'm somewhat sceptical as I know someone who works for a company in a role organising payment to employees in poorer and third-world countries. They've told me lots of interesting stories about navigating the bureaucracy, nepotism and avoiding extortion/corruption to ensure people were paid but never that bitcoin was involved.
then your friend knows all to well how difficult it is to get fiat to these people. Not every company has the resources to navigate corruption and red tape in other countries when they can simply pay them in bitcoin and be ensured the worker won't be subjected to extortion/corruption stealing their paycheck.
Sorry I can't provide more details, I don't really know if everything happening is totally legal? I assume it is for the US company, but I'm sure you can find more details if you look hard enough.
That’s not particularly convincing. If I can find the information by searching as you recommend, then the information is already out there so you wouldn’t be revealing secrets by providing the detail or a link to the relevant search results?
it doesn't seem easy to find details and I'm not particularly interested to keep digging, if you legitimately can't fathom that places exist where moving fiat across borders is practically impossible then I don't know what to tell you
I don’t get you? I’m not asking you to provide evidence that “places exist where moving fiat across borders is practically impossible“.
I’m interested in the many poor people you know who have been lifted into middle class through being paid in BTC by American employers. It’s a fairly bold claim from what I know of the way multinational companies operate globally so I’m genuinely curious about it.
sorry I misunderstood you. Possibly because I can't really comprehend what you're asking still. I won't give you these peoples names and location, if that's what you're asking for - I simply know that I'm aware of a group of contracted developers that I have spent a good deal of time talking to, that were paid in bitcoin because they claimed it was infeasible to get paid in USD due to their local regulations.
I'm not sure where the bold claim is - there are plenty of articles detailing companies who openly pay contractors in bitcoin, so I must still misunderstand you?
>> oligarchs can safely drain some third world country’s economy
> I know many poor country citizens who have had their families lifted into middle class even by american standards
Sounds like you're describing the same thing as the person you replied to - a small number of people evading or breaking their country's laws so that they can enrich themselves.
similar in action, but vastly different in the ethics and consequence - in the same way that stealing a loaf of bread from a wealthy person to save a starving child is considered by most to be ethical, ignoring overbearing laws to provide for your family I consider ethical. You're free to disagree, but that's vastly different than the rich evading paying back into a society that enabled them to being wealthy. Magnitude always matters.
> that's vastly different than the rich evading paying back into a society that enabled them to being wealthy.
Given that you're talking about people earning a middle-class-US money, likely putting them in at least the top percentile or two, I think it's actually exactly the same thing. Even millionaires will tell you they're not rich and point to people who are richer than them to justify why they feel that way, but you shouldn't believe them.
well that's definitely your opinion, but when the choices are being poor by a poor countries standards or taking a job that allows you to pay for your entire immediate families lifestyle - the choice for me is obvious
It's also obvious this choice is barely even in the same category as an oligarch that has to choose between being in the top 100 richest people on earth and the top 10,000 richest people on earth.
There's effectively nothing different about a top 10k and top 100 richest persons lifestyle options, they can do practically anything they want so long as it can be bought.
> It's also obvious this choice is barely even in the same category as an oligarch that has to choose between being in the top 100 richest people on earth and the top 10,000 richest people on earth.
If you're at the top 10,000 level you'll think there's no difference between the top 1 and top 100 but a huge difference between the top 100 and top 10,000. If you're at the top 1,000,000 level you'll think there's no difference between the top 100 and top 10,000 but a huge difference between the top 10,000 and top 1,000,000. And so on at every level.
Deflationary currencies are Ponzi scams because anyone with a brain knows that it will never function as a currency with that property and all that is left is a speculative bubble. Blame Michael Saylor and other crypto evangelists for preaching that it is property like gold that you hold onto forever and borrow against for access to currencies. He wants property that he can create derivatives with to leverage in finance.
> Deflationary currencies are Ponzi scams because anyone with a brain knows that it will never function as a currency with that property and all that is left is a speculative bubble
The gold standard was the basis for the international monetary system from the 1870s to 1971 with some brief interruptions. Before that, other commodities were used as the underpinnings of the monetary system for as long as humanity has utilized currency. These are all deflationary currencies. In fact, inflationary currencies are a relatively recent invention. The one notable feature it has is that depressions don't seem to exist (instead being converted to bad recessions). That being said, it has only 50 years of history behind it so who knows how stable it is in the longer term.
I'm a huge crypto skeptic because the cost/benefit isn't there for the amount of pollution it creates and the amount of crime it enables, not because it's a deflationary currency.
> The gold standard was the basis for the international monetary system from the 1870s to 1971 with some brief interruptions. Before that, other commodities were used as the underpinnings of the monetary system for as long as humanity has utilized currency. These are all deflationary currencies.
In what world is gold deflationary? The supply of available gold generally increases. The difference is that the expansion of the supply of gold is less flexible and harder to control.
Gold is also vunerable to supply shocks. For those weak on history, I suggest learning about the effects on global currencies due to the european pillaging of the Americas for precious metals.
Also, nothing prevents cryptocurrencies from having a mint rate that makes them inflationary. You don't really see that much because all "currency-like" projects with cryptocurrencies are still fundementally about inflating a speculative bubble to get early adopters rich.
As seen in the past, the production of gold could not keep up with the need for liquidity and was at least vastly less inflationary relative to modern currencies, which again isn't a useful property for the currency of a nation state.
Complete nonsense. A currency is an asset, and an asset is neither deflationary nor inflationary, since these terms refer to its price, which is determined by the market and is therefore not an intrinsic characteristic of the asset.
"...but I don't share the government's concerns about things like laundering."
I get that you, personally, aren't concerned about money laundering... But can you at least understand, in principle, why governments are concerned about money laundering?
He may be alluding to the fact that money laundering is easier to get away with using regular trace-less cash than through an immutable public ledger where your criminal activity is stored in perpetuity.
That would be a remarkable inversion of the standard Bitcoin argument: for years, the argument was that Bitcoin was more anonymous, and that the government simply had no business determining the legitimacy of transactions.
(The factuality of these claims is not being offered or challenged; only the observation that the justification seems to have completely flipped.)
That depends on the scale. At a small scale, cash works best for laundering, but it is hard to scale and doesn't work remotely.
Money laundering is a place where scale matters. Having the anonymity of cash creates privacy at the individual level but it's scaling issues are actually a feature that limit abuse.
That may be true, but I was also getting scammed in the old system where the people with the most money can just issue themselves more on a whim, devaluing my money.
I'm a crypto user, I'm a former Ethereum miner, I've read white papers, I've paid with things with crypto....and I'm disenchanted with it. Crypto seems to be great for three things: money laundering, tax evasion, and capital flight. Now, I'm not necessarily totally against those things as I think AML is excessive these days, I have a healthy distrust of government, and I value my privacy, but if you're not interested in doing those things then I struggle to see why crypto would be your go to solution for any problem. Can you name a problem which crypto has actually helped solve other than those? We've had billions of investment dollars and thousands of talented people enter this space and as far as I know basically nothing of real value has emerged as a result. I would love to be proven wrong though.
Crypto is vitally important in failed states. Corrupt governments like Canada can't just shut down your crypto wallet because they don't like you peacefully protesting against them.
If your account got frozen it's because while you were idling your truck in downtown Ottawa protesting mandates that have already been mostly lifted you were being funded by suspicious folks abroad.
> Corrupt governments like Canada can't just shut down your crypto wallet because they don't like you peacefully protesting against them.
Really?
> As of Sunday, the national police force said in a statement, 219 “financial products” had been frozen, 253 Bitcoin addresses related to protesters and organizers had been given to virtual currency exchange operators, and a bank had frozen 3.8 million Canadian dollars held by a payment processor.
[1]
> Corrupt governments like Canada
I'm also curious as to the definition of "corruption" you're choosing to use here, as it seems to be totally foreign to the one I understand the one I'm able to find definitions for online.
You're free to go to the ballot box to vote in a different set of politicians or petition for reforms to be passed. The emergency act powers are certainly controversial & we can have a debate about whether those powers are overbroad but I don't see how that's corruption (in which case the PATRIOT Act and the TSA are corruption but then that word loses all meaning). We can have debates about the ability for law enforcement to ruin your life without the legal system even getting involved. That's still not corruption by any definition I can find. To my knowledge, the balances of these accounts weren't transferred anywhere. The government did this to disperse the protests that were phenomenally more disruptive to the Canadian economy than the BLM protests were to the US economy in a drastically less violent response than what the BLM protestors saw from Washington DC (& all around the country).
Generally the definition of corruption I'm familiar with is members of the government making decisions that aren't in the best interest of the people they are governing but instead enrich themselves or their allies or otherwise wielding their power for self-interest goals, particularly through subterfuge and dishonesty. The goal of the government to be good stewards of the public good and for the public to have faith that they're doing that. Democracy depends on full information about the goings on of those in the government being available to voters. That's why subterfuge is generally a key component of corruption.
The bean counters at the SEC and various AG offices, while not being friends of mine, are nowhere close to "the worst people in the country." Nor are the main street investors who've been burnt and now see it for what it is.
Trump and Clinton have both been vocally opposed, for starters. Clinton even said something to the effect of it being an existential threat to their power.
I highly recommend this research article to understand the philosophy of cryptocurrency better, and why it is not a solution to anything, but offers great insight into the actual nature of the problem.
I understand and appreciate the philosophy behind crypto. Self-ownership and privacy are core values to me.
But I've spent two years in this space and I've come out thoroughly disillusioned. The vast majority don't even care about privacy or ownership or decentralization - they just want to know "wen pump?"
My comment was not in defense of cryptocurrency, in fact I am in a similar situation as you, spent 2 years in the space and have given up completely. DeFi is a disgrace. The shit happening there would be unfathomable in regular markets.
However I still recommend this article because it’s not necessarily on the topic of self-ownership and privacy (privacy running counter to the concept of cryptocurrency itself anyway)
I'm really curious about DeFi being your focus, it has seemed to be that pretty much everything other than core DeFi protocols are weird casinos but things like Aave and Curve are niche but highly functional infrastructure. Can you say more about your impressions?
Not very much, as I work in a high position in traditional finance now and would rather not go into detail, but your perspective seems to match mine very closely. It's not even casinos, that'd be 100x better still. I've seen extreme cases of market manipulation, money laundering, insider trading and fraud. As in, life-long federal prison extreme. And, to be honest, "I've seen" is a major understatement, because essentially it has become a reasonable, generalised expectation to apply to anything you see now.
A notable example here are the "pre-sale investment groups", which essentially consists of morally corrupt criminals buying tokens pre-release e.g. for 2 cents, which will then be listed on major exchanges for 50 cents initial price. You can probably imagine what happens to everyone buying the token for 50 cents on release. This has gone so far that these "investment" groups had to come up with "vesting schedules", which are essentially designed to keep them from dumping on *each other*, in addition to keeping them from selling too much too fast and dumping the price and "painting bad charts".
This is also not a niche venture that only happens with a few select tokens, it's become a completely normal procedure that happens with almost every single new token, and insanely enough even the people further down the food chain have accepted this procedure as a reasonable fact and don't even question it any more. "Of course bro, whales provide liquidity"
I totally agree that protocols like Aave, Curve and some others are extremely cool and useful technology, however, I've come to the preliminary conclusion that the degenerate disgrace that makes up 99% of the space now is permanently and irreversibly damaging reputation to a point where this technology might be ignored despite being useful and solid.
>I totally agree that protocols like Aave, Curve and some others are extremely cool and useful technology, however, I've come to the preliminary conclusion that the degenerate disgrace that makes up 99% of the space now is permanently and irreversibly damaging reputation to a point where this technology might be ignored despite being useful and solid.
It's interesting because I've come to the opposite conclusion from very similar experiences. I think the regulatory and legal enforcement haze allows the infinite scams to multiply but I found it refreshing/surprising to find there is a serious and useful core technology that all the scams are imitating in style (but not substance)
> It's interesting because I've come to the opposite conclusion from very similar experiences. I think the regulatory and legal enforcement haze allows the infinite scams to multiply but I found it refreshing/surprising to find there is a serious and useful core technology that all the scams are imitating in style (but not substance)
Well, why wouldn't there be? Cryptocurrency didn't start out the way it's being used now, and evangelists and nerds have been hard at work for over a decade in furthering the technology.
I can understand your perspective too, however, while we obviously appreciate and care for the underlying technology, almost no one else will. Most people have problems operating Metamask already, so there's no possible reality in which I can see cryptocurrency succeeding because of some awesome underlying technology that almost no one really understands. If cryptocurrency ever succeeds, it's because regulation has cracked down extremely hard, a lot of people are in jail, a lot of time has passed, the sentiment has recovered and real utility is commonplace.
The point at which APY rates for farming/staking are equal or almost equal to traditional treasury basis points, and the decision between investing in stocks or crypto is taken on the basis of fundamentals and utility, will be the time cryptocurrency has grown up and put on big boy pants.
I'm not trolling, but I really don't know what this real utility is. I've been extremely active in crypto for two years (as a user, not a trader) and I still don't know if there is any real utility, outside of gated access to communities and/or voting on DAO proposals. Whatever utility there is either very minor or refers to something in the future.
In two years, everything in crypto has largely been the same. Transactions on Metamask run the same way. Mobile experience is uniformly awful. Buying shitcoins is still using the same old crummy Uniswap interface. The only difference is that there are a bunch of new chains VCs can pump and dump on.
Most projects in crypto are deeply involved in navel gazing. All these bridge projects are a good example - they all hail it as "revolutionary" if you can transfer funds from Sol to ETH. Outside of crypto, people ask "but why?"
> Whatever utility there is either very minor or refers to something in the future.
That sums it up pretty nicely, at least for DeFi.
Layer 1 currencies do have utility as currency, albeit defined by adoption. I sometimes pay for my pizza in Bitcoin. Some banks use XRP as a SWIFT-style cross-border payment network.
Interestingly, AAVE, Curve, Maker, and Compound - all old school, plain vanilla DeFi projects - still have the highest value locked by a big margin.
Once you go beyond these functional but boring DeFi projects, you run into a ton of scams, wild "experiments for the sake of experiments", and projects that are just trying to extend the ponzis built on top of established protocols.
Take all the forks. One algostable becomes successful and suddenly there are hundreds of forks that collapse within days, sometimes hours (TOMB is an example).
Most of the promises of DeFi are absolutely nothing but pure ponzis that collapse once new money stops coming in. OHM chart is the best example. "Reserve currency" that dropped 99% because new money stopped coming in.
What it essentially boils down to is the simple question: what's the use of these projects besides making money? Don't get me wrong - speculation can be a use case. But I've never heard of speculators take the holier-than-thou, "we'll change the world" tone that crypto proponents seem to take.
It seems OK though to just ignore all the vaporware, other than maybe asking regulators to create a legal or regulatory framework to better distinguish between Aave (0.9% APY on USDC) and MonkeyBank (20,000% APY!)
The boring plain vanilla DeFi stuff seems great, especially for people who live in countries with unstable banking systems (e.g. Lebanon, Russia, &c)
People will believe anything if it helps them believe they'll get rich quick, whether it's that crypto is revolutionary, or that tulip prices can only go up.
1) I can send large payments effortlessly. I tried to move large sums using eTransfers last year and the friction is just unreal. I don't give a shit about my bank's arbitrary monthly limits
2) Fuck inflation. The fact that I can't park my money without it losing its value over time is asinine. I shouldn't have to be forced to play the market or spend if I don't want to. Just let people save their damn money.
> The fact that I can't park my money without it losing its value over time is asinine
Forcing people to invest or spend their money is the entire point of inflation. For good reason too, decreasing velocity of money is a major cause of recessions, and tightening of liquidity in the money market always leads to high unemployment.
> shouldn't have to be forced to play the market or spend if I don't want to. Just let people save their damn money.
You are always playing the market, and certainly are doing so when you park your wealth in whatever your cryptocurrency of choice is.
Having currency being optimized for use a liquid medium of exchange while other assets are better as a long term store of wealth is much better than having a currency that tries to compromise between competing purposes and ends up doing neither well.
Great comment, because it hits at something fundamental, and something I also think about a lot when considering the state of crypto today.
Point (2) is very axiomatic in its claims:
> The fact that I can't park my money without it losing its value over time is asinine.
Money will always have some relative value to what you can exchange it for. The reason bitcoin's value has kept up with inflation, is because today its price is determined mainly by speculative demand. Not because there's some cosmological guarantee that bitcoin is immune to inflation.
A few examples: one 1btc buys a small car today. Twenty years from now, when the novelty of crypto has worn off, what is providing the guarantee you'll be able to buy another car with 1btc? Or with 10btc you can buy a house today. Will 10btc buy you a house 20 years from now? If not, does it mean btc lost its value, or does it mean land got more valuable?
There's really no known way to park money and expect it to keep value, just because of its inherent properties. We've been trying for 5000 years.
> I shouldn't have to be forced to play the market or spend if I don't want to
Actually, yes, you do have to, at least if you like to preserve wealth, you preserve it by growing it. That's what investing (and it's degenerate cousin, "playing the market") really is.
Point (1) does hint at some intrinsic value of blockchain-technology. I think we'll know in 5-10 years or so, when we've gone through this correction, maybe some more war or something, whether the technologic properties of blockchain are enough to prop up current crypto prices. Consider as a counterpoint: noble metals are amazing technologies, which have provided value for millennia; from mediums of exchange, to stores of wealth, to their use in medical technologies, for mundane applications like for dishware, or spiritual applications in churches or art, for jewelry ... Really, it's absolutely completely mind boggling how long, how broadly, and how consistently gold and silver have provided value to humans. Yet, they've been poor hedges for inflation over the long term, both gold and silver being very speculative assets, worse than stocks or bonds. How is crypto-technology going to be even more fundamentally better? What is so amazing about blockchain that it's going to defy all other asset classes?
I think blockchain is an interesting technology that does have some unique qualities. It's cool that you can setup a system where the people running it don't have admin powers.
I also think that relatively few real-world problems are made easier by blockchain's strengths - and many of them are situations where you're seeking to avoid some kind of censorship. I think avoiding censorship is important and I'm glad we have a technology that is useful there - but by volume most human interactions do not have to worry about censorship.
An under-rated problem of blockchains, imo, is how the system shifts incentives for the stakeholders: if code really is law every system is one mistake away from giving away its entire value, if code isn't really law then we're just back to systems of social consensus and there's no need for all this blockchain nonsense. Very, very few people have the technical skill to implement a useful system which is fully automated. I'm extremely skeptical that we've been missing something that is going to make that dramatically easier in the future - and without several orders of magnitude decrease in programmer error smart contracts seem like a bad bet.
> I also think that relatively few real-world problems are made easier by blockchain's strengths - and many of them are situations where you're seeking to avoid some kind of censorship. I think avoiding censorship is important and I'm glad we have a technology that is useful there - but by volume most human interactions do not have to worry about censorship.
What's funny about that is China is adopting blockchain technologies specifically to bind together databases for tracking social credit scores across different provinces because they've previously been silo'ed and unable to communicate with each other in a straightforward way (for whatever reason).
China is banking on blockchain technologies precisely because it's can be such a powerful censorship tool.
Blockchain adds a level of certainty that history hasn’t been changed, and you can at least audit any undo-type actions; it’s the same reason certificate transparency logs and git are built on blockchain-esque technology.
When there are multiple actors incentivized to ignore any history-rebasing. Of course if you're running your own git repo, you know your githashes will change if you go back in history and change something, and it doesn't matter. When multiple people want to ensure that history hasn't changed, they can compare their hashes with yours, and have good evidence of who tampered with the history and ignore them / prosecute them.
`git push -f` can absolutely do the type of "history changing" that you claim it can't though. CT logs are also quite vulnerable to attacks where the root of the certificate chain gets compromised, for example because they are being threatened by their government. Even blockchains are only protected from history rewriting as long as no 51% attack takes place, and all but the largest blockchains are quite vulnerable to this.
Additionally a bit flip in a CT (cert transparency) log rendered it invalid and dead. This cannot happen in a peer to peer consensus protocol as the bad block would have been rejected by the working nodes. CT is good tech but it superficially is a private issued blockchain without most of the benefits of public peer to peer electronic cash and digital asset systems.
I question this idea of history writing and it being a huge problem.
How far down the chain could a 51% blockchain rewrite occur before consuming all of the computation power of the universe?
I have seen arguments in which the 51% steals all of the new coins but how long can that be maintained, the other 49% needs to pay their bills and audits would inevitably out the bad players. Eventually, the last bitcoin will be minted, making the whole issue mute.
51% attacks don't rewrite history, they rewrite accepted history (with accepted further narrowly defined to mean "accepted for transactional purposes"). It's not like the other 49% are under any sort of obligation to delete the alternative chain from their hard drives.
Anti-Corruption tech. If everyone's scores are just stored in a SQL databse, people can pay off officials to change their grade, Ferris Bueller-style. Blockchain prevents any province or official from having superuser power over the data.
That would make sense if:
- There weren't other methods to prevent tampering
- Governments didn't want anti-corruption methods without having admin powers to exclude themselves.
This doesn't really make sense. We have SQL databases with permissions to prevent tampering, and audit logs, and myriad other solutions.
In addition, I don't see what prevents an "official" from writing a social credit transaction (disclaimer that I have no idea how China's "social credit" system works or even what it is) to the blockchain. Nodes validate to solve disagreements where one node says a transaction happened that did not. This does not appear to be the same type of dishonesty being referred to here.
You'd be stupid to use, say, ETH to do it when you can simply have multiple parties sign and publish events in a distributed append-only log, which they keep syncronised. That doesn't need PoW or to be a currency.
Okay, maybe I should have posted the link to the Merkle tree page[0] instead.
The basic idea is, you have a chain of 'transactions' (like in bitcoin or think git commits) und you store the hash of the content + the hash of the member before as a checksum. This way, if you alter the log file, the hash for the modified entry is suddenly different, and the chain breaks, because the next member used your hash as input to calculate their checksum. So you can not only see that the file was tampered with, you can also say which entry was modified.
Edit: Merkle trees[0] generalize this concept into trees, which are e.g. used in ZFS (the file system), git and in the blockchain.
It seems to me that if you have a copy of the information locally and compare it to the remote, you can see whether they diverged with or without a hash - the hash certainly makes it faster, but it's not clear to me that a hash chain or a Merkle tree offers a guarantee that's as powerful as the blockchain's promise.
(Social factors and forks to change our minds on blockchains notwithstanding)
Erm the entire point of having multiple parties sign is you get the quorum which is how you avoid this issue.
Sure, you have a limited number of participants and some tweaking to do on the quorum (in some cases you might want all parties to sign).
But hey - the blockchain cool-aid gang tried to sell it as a solution for COVID contact tracing. Which is beyond laughable. The entire industry is a shillfest.
The only between-nodes trust blockchain relieves you of is trust in the history of a multiparty transaction log.
A blockchain doesn't prevent individual parties from lying about things only they would know about -- if that's what's on your chain, you still need trust.
There are many anti-fraud and enhanced supply chain tracking notions associated with blockchain tech. Of course, those are all enabled with this form of 'surveillance.'
this post makes absolutely no sense. blockchains are useful in situations where you need consensus between potentially adversarial parties. the benefits of trustless coordination have tradeoffs that make blockchains less efficient than traditional databases or computational systems. there is zero advantage and significant additional cost & complexity for a centralized body (the CCP), which has direct control over all subsidary participants, using a blockchain to collate disparate databases. this is a meaningless PR release.
> tracking social credit scores across different provinces because they've previously been silo'ed and unable to communicate with each other in a straightforward way (for whatever reason).
does this sentence mean something to you? what does a blockchain do in this situation?
China's provincial officials are potentially adversarial parties vs the central government. Officially they must do as they are told, but unofficially they have considerable independent power as long as they aren't caught.
Only a guess, but I suspect that Covid got as bad as it did partly because Wuhan officials didn't want the central government to know how bad things were (at least at first).
This is partially correct, China is not a monolithic entity that fully marches in lockstep with Beijing.
But the solution to the problem of uncooperative governors is the application of soft power (media, agitprop, appointments, rewards, threats, denunciations and disappearances, liquidation of problem people, their families, their friends, their pets, etc), not some over-engineered technological non-solution that still relies on the cooperation of all the parties in question to work.
A blockchain can't enforce that anyone actually enters data into it, or that the data that is entered isn't garbage. A snail-mail package containing data sent to Beijing has the exact same immutability property for the only party that cares about it - the national government.
Something like a blockchain is useful when peers don't trust eachother, but all care to build a shared consensus. When the peers don't care about consensus, and a central authority with the power of pit and gallows exists, none of those usecases hold.
The 21st century in the Western world has taught us that we don't need to physically erase inconvenient history, you just need to shout the new version of history loudly enough.
George Orwell was mistaken when he thought that anyone would care about facts, figures, and how much sugar was rationed every week. You just need to tell people that it's raining while you piss on them, and they'll believe you.
A block chain doesn't help with this situation though since only the central authority matters. If a adversarial party submits false data, blockchain doesn't do anything to address that.
The situation you describe can be handled via a write-only log with cryptographic signing of each change.
I’m unable to find a single article that actually details what “blockchain technology” they’re using, and why. Every English article seems to be a rehash of the same press release - Can anybody find something better in mandarin ?
Based on what you've described, they are using blockchain for their censorship tool, but that's different from the blockchain being a censorship tool in and of itself.
How would that even work? Nobody can force you to run a piece of code against your will.
EDIT: I guess you could rules-lawyer about the meaning of "majority" but like... you don't even need a majority of users to start a fork! Two people is enough to start a fork. There's nothing preventing me from starting a fork of Bitcoin today and mining/trading it among my friends. It's just that normally people feel compelled to go along with what the majority is doing
Probably not what you meant, but the US Credit Score is a very opaque system, but I would wager to say that the majority of people would like to see that code changed[1] (or more likely, abolished).
Though I suppose we're not "users" of such a system, but are rather "subjected to it"
No - but like...the key feature of blockchain is that you can design a system where you must do that to make a change. If you're running a 'centralized'* (let's say 'administered') system then you can just change the database with your admin credentials. You could swear up and down that you threw away your admin credentials, but you can't prove you destroyed data. Blockchain systems can be used to create systems where you can prove that no entity has admin powers. I am extremely skeptical of how useful that is - but it is unique.
* blockchains are centralized; just in a different way
I think checksums can be used to verify that particular messages are the same, but ultimately I think there just aren't that many protocols for ensuring that every provider has every message. Some messages could get dropped and the solution is that providers will just check again - there's no protocol level guard against it.
Absolute integrity is a lot less important in systems which assume that inexpensive manual overrides will be possible - because you save a ton by simply deciding to build a system that 'only' works 99.9% of the time and intervening in 0.1% of cases. Obviously blockchains don't work 100% of the time but that's the premise for their increased costs.
Newsgroups were run by a secret cabal for a long time. Beyond that the system just doesn't preserve integrity; a given provider can censor some messages and that's generally something you live with or switch to a better provider.
If there's very high interdependence and dependence on a scarce shared resource, they could be locked in. An non-code example is deciding which side of the road to drive on. If 99% of the population chose to change from left to right, the remaining 1% would prevent that from working. The 99% can't just build a parallel road network for themselves because of limited space.
If 99% of Bitcoin users/hash power switched over to a different set of rules, the 1% wouldn't matter, the 99% would ignore them. They could whinge and cry all they wanted.
I'm not sure the analogy even works, but in the case of driving, if 99% decided to switch how the roads were to be used, I assure you that literal resistance would not be tolerated. There might be some incidents, but there wouldn't be very many before the 1% were the ones getting pushed around.
I think it's typically true? The instances I know of where transactions were undone involved convincing all the node runners to fork their nodes - they were not done "within" the blockchain system. Instead they used social consensus to create a slightly altered blockchain system. How big of a difference this makes to you is up for debate.
>by volume most human interactions do not have to worry about censorship.
I suspect this will increase over time.
>if code isn't really law then we're just back to systems of social consensus and there's no need for all this blockchain nonsense.
Exactly, and the "code is law" thing is not going so well, given that many of the programmer error catastrophes thus far have been "solved" by the social consensus of a small clique of developers.
>>by volume most human interactions do not have to worry about censorship.
>I suspect this will increase over time.
Do we still have to qualify this with suspicion? In a lot of ways, it's already increasing.
> In the end, it turns out that you don't need admin powers to steal lots of money.
You just need to know the laws very well to steal a lot of money: this holds both in the "ordinary" world and for cryptocurrencies (there code is law).
> You just need to know the laws very well to steal a lot of money: this holds both in the "ordinary" world and for cryptocurrencies (there code is law).
With cryptocurrency, code is more like possession. The law is still law.
Reminds me a situation when all your databases are ransom-crypted, your PC is a part of a botnet, but more importantly the operating system is still safe and running.
As a programmer, I'm very impressed by the cleverness of blockchain and cryptocurrencies as a tech demo, much the same way I'm impressed by 64k intros from the demo scene. And at the same time I'm as horrified by the notion that people have seriously invested billions in turning the former into the basis of a new real-world economy, as I would be if the same were done with the latter. It just blows my mind that so many highly intelligent people can so thoroughly believe in something so misguided.
I think the same of intelligent people in the blockchain space the same that I think of intelligent people that have joined cults. Either they're in on the scam or a victim of their own naïveté and/or ignorance.
There were and are a surprising number of people such as Sir Arthur Conan Doyle who studied and practiced an actual thing called ‘Magick’. I have yet to see any honest-to-God evidence of such a thing.
Just because whom you believe may be credible people might back something up doesn’t give it value. It’s value does.
Intelligent, pro-blockchain people should be relatively easily able to explain the value and utility provided by it though. It shouldn't be necessary to say "I'm intelligent and I think this is good".
Even I can name a few: uncensorable payments (especially important as I'm from an extremely corrupted country where we can't use PayPal), also super quick payments (donated to Ukrania during war ar Sunday night < 30 secs), moving the ownership of items to a decentralized system (e.g. NFTs as trading cards), smart contracts (lock your tokens and you're guaranteed, by code, that something happens like being paid an interest at some time/logic trigger). While some of those can also be implemented non-blockchain too, decentralization and having everything public and distributed is the key here. I can have my trading cards on a privately owned server too, for sure, then I'm bound to them not banning me, not crashing and losing my data, not going bankrupt, not changing the rules of the game etc. And as a bonus everyone can come and say "hey if you have this card you can play this other game I made" which empowers creative freedom.
Eventhough I consider myself above average, I'm sure there are smarter and more creative people that can come up with more use cases by time.
Just like the Internet evolved to what it is over decades, crypto space also will. We're in the "animated gifs, visitor counts, and unskippable huge flash intros" era of the crypto space.
With your last sentence, I think you're conflating the utility of blockchains as implemented today with the potential of the technology that has yet to be realized. I'm not asking for someone to point me to an incredible crypto project that exists today, but rather to explain why they think a decentralized, low-trust consensus protocol will change the world as we know it. Like, what are the killer use cases. If what you're saying is (like the early internet) we don't know what they are yet but expect it will be transformational in the long term, that's fine, but that's not really what people are saying.
Regarding your use cases.
> uncensorable payments
would your corrupt country not eventually catch up by regulating the ability to convert your BTC into fiat to buy things, or do you anticipate doing all your payments on the blockchain and never converting to fiat?
> also super quick payments (donated to Ukrania during war ar Sunday night < 30 secs)
a global payment system does seem very useful, assuming the currency is stable; not justified to the current hype though
> moving the ownership of items to a decentralized system (e.g. NFTs as trading cards)
I have failed to understand this one. If you own NFT 1 on Blockchain X, how do you enforce your ownership rights in the real world if someone else chooses not to acknowledge the authority of this decentralized system? If it's a real world asset, and I steal it from you, who do you appeal to? If it's a digital asset, and I copy and use it, who do you appeal to? Or is the utility here people who all buy into and respect the authority of this chain's ownership ledger being able to trade these things within that ecosystem?
> smart contracts (lock your tokens and you're guaranteed, by code, that something happens like being paid an interest at some time/logic trigger)
I haven't found this one that compelling, but maybe I'm missing something. Code isn't immutable, so what's to stop my "smart contract" from changing? I may be unaware of some guarantees that the blockchain provides that the code itself is also immutable.
While it's true that you can't really censor the blockchain transfer, how much that allows someone to 'take' a payment depends a great deal on the legal circumstances where they live. I don't mean that the core transfer mechanism isn't cool - but there's a pretty big gap between a digital currency and acquiring physical goods where authorities can step in.
> super quick payments
Blockchain technology is, on average, pretty much the slowest possible way to make a payment. The slowness of other techniques are not because of any underlying technical reason - they're based on laws and policies. It's true that it can be faster than other methods in certain circumstances - but that has more to do with gaps in regulation than the technology.
I fully agree that distributed ownership is cool, but I wanted to note something about this:
> I can have my trading cards on a privately owned server too, for sure, then I'm bound to them not banning me, not crashing and losing my data, not going bankrupt, not changing the rules of the game etc
You are still bound by them not crashing, losing your data, going bankrupt or changing the rules. Many blockchains have gone down, lost history, shut down entirely, or changed the rules. There are ways that these problems are more easily addressed in a blockchain ecosystem, but it's not straightforwardly "better." If your usecase suffers from a bug, and a majority of the nodes benefit from that bug, you will likely never be able to get that bug fixed on the main chain.
I also think that copyright is the elephant in the room. Imagine two versions of...a world of warcraft sword. One is the texture & model that are included with the game - the other is, additionally, an NFT. The material reality of adding that sword to another game are identical in both cases: you can just put the sword in another game if you have the assets. That has never been a technical challenge. The challenge is legal and NFTs do not help with the legal problems.
If I sign a contract with you saying you can use the sword in another game the contract is the thing that matters. It does not matter if the contract is in an NFT or references an NFT. If anything, creating a system to manage & mint NFTs is an additional technical lift in creating multi-game assets.
I'm hard pressed think of how NFTs would be better than a centralized server that publishes daily signed database dumps of all owned assets. The cryptographic guarantees are the same and in either case the service continuing to sell assets depends on their willingness to assign copyright.
I worked for a blockchain startup and let me tell you, it was a ride. It was small operation not doing cryptocurrency (it had tried, failed, and pivoted). There was still a financial angle to it and the pitch enamored me enough to join them.
It turned out that the only value proposition they had was that they "used blockchain" but literally only in the sense that at some point a blockchain would have some data on it.
They were true believers too, but simultaneously didn't care that it was fakery. I have lingering PTSD from that gig.
The crazy thing (for me) is that I remain enamored with the special qualities of blockchains and would like to put them to use in a non-financial manner.
> I remain enamored with the special qualities of blockchains and would like to put them to use in a non-financial manner.
Can you think of any practical uses of a blockchain? I also think they're a fascinating concept, but I cannot think of a killer application for them.
I remember one of the original ideas was a trustless logistics system for things like shipping, but even then all the blockchain proves is that someone said they'd shipped you a box, you could still open it and find it full of rocks. And the smart contract stuff is very clever, but seems to be essentially techno-escrow except that you just have to trust your smart contract broker and the authors of the blockchain rather than your escrow agent, and also if everything goes sideways there's no legal system to interpret the contract "sensibly".
I had an opportunity to get something going on Amazon once they started hosting Hyperledger Fabric (the stack that I used). I could not come up with a commercially viable service to launch on there.
I've got some fuzzy notions on identity management and other non monetary things but it still needs thinking through.
Only if you redefine what is usually meant when people say "blockchain" to mean "some kind of linked data structure with checksums", then yes, git is a fantastic use of a linked data structure with checksums.
> Can you think of any practical uses of a blockchain? I also think they're a fascinating concept, but I cannot think of a killer application for them.
Identity / authenticity. As we head into a world of digital (deep) fakes, being able to authenticate the source of information/media will be very important. Block chain seems well positioned for this?
I think NFTs will settle down eventually and they'll be useful (after these short term stupids).
I'm not a fan of blockchain currencies mostly due to the preponderance of bad actors. Maybe some day, but it's a bit of a shit show atm, and not nearly as practical as originally hoped for.
> being able to authenticate the source of information/media will be very important
What would stop an actor with enough resources (Russia, China, USA) to put deepfakes onto the chain?
What would stop them from blackmailing service providers who act as gatekeepers / market platforms to put deepfakes into the chain?
Why would they even accept any single "Blockchain X" as the source of truth? Why wouldn't they just say "Oh that's the evil state Y, of course they're pretending that their fakes on their state-governed propaganda blockchain are authentical, whereas OUR blockchain tells the TRUTH!"
How would you correct honest mistakes on the chain? By a correction update? Then what would stop an evil actor (Taliban) who overturns the government, or takes over a giant corporation, from "correcting" an unpleasant truth, and rewriting history?
Once again, a social problem is attempted to be solved with technology. This never works.
> I think NFTs will settle down eventually and they'll be useful
What would be different, given some time, from now? What needs to change for NFTs to become useful?
NFTs are nothing but a scam and provide no intrinsic value (other than cover for money laundering).
I think that the way would be to use a permission-based, id-linked, reputation-maintaining mechanism. No PoW or PoS -- proof of self. It would have to be designed from the start to account for hostile manipulation. Easier said than done, of course.
> What would be different, given some time, from now? What needs to change for NFTs to become useful?
I think being able to identify and authenticate original works is a good idea that has practical uses. Practical in the same way as identifying originals in meatspace. I believe there's a ton of hype and bad actors (as usual in a new market), but suspect that'll eventually settle down. I don't see any issue with the idea of purchasing the Nyan cat original if we (society?) all agree that it as an original, same as a material painting.
Maybe NFTs are a misstep on the way to that, I don't know, and I don't care to be honest (I'm not invested in anything crypto related). There's at least a useful idea there.
> I think being able to identify and authenticate original works is a good idea that has practical uses
I agree. I don't agree that blockchain, or NFTs, can ever deliver on their promises to contribute to that matter, because of their nature.
How do you think would the blockchain, or NFTs, help to identify and authenticate original works?
> I believe there's a ton of hype and bad actors (as usual in a new market)
Can you name an example of another market where this was the case - i.e. bad actors were the majority of actors, and then something (what?) happened that made the market unviable for scams?
> the idea of purchasing the Nyan cat original
What does the "original" .gif of the Nyan Cat do for you that my copy of it doesn't?
> same as a material painting
I see 2 purposes of the "original" in a material world: 1. speculation, 2. paying the original artist.
Since 2. isn't possible for e.g. the Mona Lisa, what remains is that it's a pure speculation object.
You could argue that experts could distinguish the orginal Mona Lisa from any copy, but that wouldn't work in the digital world, where my copy of the Nyan Cap .gif would gif just as your original would.
What is the problem statement here, and how would NFTs, or blockchain, contribute to a solution here?
What does it practically solve that a normal cryptographic signature does not?
Even distributed trust doesn't need a blockchain; web of trust is an example of that.
This is all fairly irrelevant anyway as people do not do not check things before sharing them anyway, and/or trust authenticated information from untrustworthy sources (if Fox News put their reporting on a blockchain, it doesn't suddenly become truth).
> if Fox News put their reporting on a blockchain, it doesn't suddenly become truth
There's two problems / truths here; 1) the source (E.g. Fox), which is what I think we'll need to verify, and 2) the truth of the content, which is an age old problem with no technical solution I'm aware of (or would even believe if presented with one).
> The crazy thing (for me) is that I remain enamored with the special qualities of blockchains and would like to put them to use in a non-financial manner.
Which special qualities are you enamored with? And to what use would you like to put them?
IPFS seems like the most interesting non-financial blockchain project to me. Could be a decent way to make a decentralized backup of the internet in case the current centralized web starts falling into disrepair.
>And whilst it is still widely used today and has practical use cases e.g. data distribution it wasn't transformative.
This comment reminds me of the scene in The Social Network where Eduardo Saverin taunts Sean Parker about Napster losing to the record companies, and Parker says "you wanna buy a Tower Records, Eduardo?"
By which I mean: just because peer-to-peer didn't win as a technology, does not mean it wasn't transformative. We live in a world where the iPod could launch and we have access to $10/mo unlimited (centralized) streaming. This world exists because the mere existence of p2p technology places limits on the way that the content industry can operate.
"Few"? More like none. No blockchain is fully automated. The idea that Bitcoin or anything else just works by itself despite the persistent changes to the system by faceless developers is ridiculous. Crypto marketing presents this false narrative where we're meant to accept that crypto operates above social influence despite the evidence that clearly contradicts that (see the miner vs developer drama during the SegWit soft fork for instance).
> I think blockchain is an interesting technology that does have some unique qualities
Blockchain has unique attributes, I don't think it has any unique quality.
Most of its "qualities" are things that you do not want under any circumstance in your systems even independently, so adding them all together turns it into a worthless technology.
Immutability? Harmful in 99% of the use cases. Trustless? Harmful in 99% of the use cases. Decentralized? A waste in 99% of the use cases. Now put all 3 together, add more "qualities" akin to those, and you've got blockchain.
I think blockchain is an interesting technology that does have some unique qualities. It's cool that you can setup a system where the people running it don't have admin powers.
It’s a Merkel tree, with a distributed clock. I still don’t know where it would be useful outside of cryotocurrencies. And for currency, it’s still extremely questionable.*
> if code isn't really law then we're just back to systems of social consensus
This is one reason why I'm still cold on blockchain tech in general. When push came to shove and Ethereum was hacked, the solution was an informal social consensus to fork the chain. Which proved that as far as the flow of value is concerned, the buck stops not at the tech but at the social consensus. So all this mental effort going into fancy byzantine algorithms is effectively just smoke and mirrors and the rest is a Merkle tree.
> This is one reason why I'm still cold on blockchain tech in general. When push came to shove and Ethereum was hacked, the solution was an informal social consensus to fork the chain.
Worse than this. Code is law, but some insiders are above the law.
You realized Bitcoin was rolled back early in its history as well right (someone figured out a way to mint billions of BTC)?
It doesn't make sense to take an example of what happened in the infancy of a technological innovation like Ethereum and think that that's what still defines it.
A rollback like the one the one that happened in 2016 is almost impossible right now as the tech and the community/ecosystem has matured and grown.
Seriously, both the finance industry and politics needs to return to a time when it was boring a.f., just ordinary people getting on with their day-to-day jobs. The artists are the ones that should be entertaining us, not the NASDAQ, and not the latest political (bowel) movement.
I’m not sure what to say. Some of us have been saying this at every single NFT release, every influencer-backed shitcoin release, before every rugpull. They all predictably collapse, the community swoons in astonishment and immediately move on.
There’s maybe a utility in crypto, but every one of these dumb scams erodes trust in it and lessens the likelihood of widespread adoption
There is but it isn't pretty and the utility was found years ago. It is amazing for online black markets and monetizing organization's weak security through ransomware. Cryptocurrencies are extremely well made for moving value online without limit opportunities for government intervention. People have been trying to jam that square peg in endless number of more socially acceptable round holes and, unsurprisingly, it doesn't work out well.
> It was a blessing because the animal was sacred and a sign of the monarch's favour, and a curse because the recipient now had an expensive-to-maintain animal he could not give away and could not put to much practical use.
Crypto is a blessing because it allows people to move value freely, but a curse in that it forces us to really come to terms with the fact that selective oppression (i.e. you can't use a credit card to pay for a hitman) actually helps us live higher quality lives.
I feel that part of that is attributable to the idea that, people know very well that it is a scam, but they're hoping that they can get in on the next iteration early enough to be the ones pulling the rug.
It's because crypto has never been anything more than an investment vehicle. Bitcoin was briefly used as a real currency until people realized that it was inflationary in nature and then the mantra became "HODL".
Allow me to make the case for cryptocurrency as a payment system.
There are still systems like Monero, Firo, and others which are heavily used as payment networks on the DN due to their ability to obfuscate the source/destination/amount of transactions.
Even then, many micro-transactions have little need for anonymity/security and might happily make a tradeoff for lower anonymity and/or higher centralization in exchange for lower fees. There are systems like Nano and GNU Taler which try to address this.
There's a lot of BS surrounding "web3", but the dream is really this: Imagine you could have a spam-prevention system that requires a small fee for users to access a scarce and easily DoS-able service or resource - all without the vendor lock-in, tracking, insecurity, fraud, proprietary software or fees associated with middlemen like PayPal.
I might pay to read a news article for 0.2 cents if I didn't have to give them my credit card. I might pay youtube a cent for every video I watch without ads, in fact I might even pay a cent for a third-party service to strip youtube of ads even if they didn't offer that service. Such a hyper-competitive system would discourage easily-bypassed advertisements and tracking in favor of an online economy that makes it easy to securely spend or donate a minuscule amount of money.
I think the largest reason why we don't see bitcoin taking this role as a payment processor goes back to the 2017 XT dispute wherein bitcoin users decided not to increase the block size limit and the users who wanted to decrease payment fees forked off into "bitcoin cash", which happened to coincide with the 2017 bull market. In this sense, bitcoin is a bad example of a cryptocurrency because of its disproportionately high fees and it's use of extra measures like LN. An example of a more "normal" cryptocurrency would be something like litecoin or bitcoin cash.
I'll bite! Why does it have to be crypto currency? Why couldn't I load ten dollars credit into YouTube, in exchange for 1000 credits - one of which I'd use for every video I watch? Google has my card on file already, I'd trust them to deduct one credit per video properly.
I'm pretty sure some startups have already attempted a micropayment content gate. You pay them 5 bucks, they portion out the money to the content creators every month based on the articles you choose to read.
Other than an immediate payment (in the case where you're not running it yourself), why does it need cryptocurrency?
>I'll bite! Why does it have to be crypto currency?
It doesn't. It could just be some secure, open cryptographic payment system like Digicash or GNU Taler, but financial institutions refuse to implement those types of systems because they benefit from the vendor-lock-in, surveilance, insecurity, and ambiguity of the existing system.
>Why couldn't I load ten dollars credit into YouTube, in exchange for 1000 credits - one of which I'd use for every video I watch? Google has my card on file already
Because that requires you to set up a pre-existing buisness relationship with every service you interact with. "Works great" for big companies like youtube, netflix, not so much for news websites, blogs, forums, etc. that rely on surveilance and easily blockable ads. The friction associated with that is what makes the current system uncompetitive. You couldn't just do a microtransaction with a random self-hosted website- there's too much risk on both sides: they could steal your identity, you could hit them with chargebacks, etc.
>I'm pretty sure some startups have already attempted a micropayment content gate. You pay them 5 bucks, they portion out the money to the content creators every month based on the articles you choose to read.
I would congratulate them on reinventing paypal. Watch as they re-invent vendor lock-in and hike up the fees once they gain signifigant market share. The purpose of cryptocurrency is to eliminate these middlemen so users can exchange peer to peer using FOSS, and we are not beholden to the whims of a single company like Patreon.
>Other than an immediate payment (in the case where you're not running it yourself), why does it need cryptocurrency?
It doesn't need to be cryptocurrency. It needs to be secure, private, cheap, reliable and competitive. All things which the current payment systems are not, and will never be so long as they are run by rent-seeking intermediaries like SWIFT, PayPal, Apple, Google, etc.
The internet is already monetized (services have real costs, and someone has to pay for them at the end of the day)- you can pay for services directly, or you can accept the consequences of intrusive advertising, surveilance and manipulation on the "free" internet.
I'd do more research before making generalizations. Helium, Livepeer, Arweave, The Graph, LinksDAO, and many, many, many more examples counter your cluelessness. But apparently, it's "nothing but pollution, speculation, theft, and crime" that's an ignorant statement.
They're companies, just like any other tech startup with a name. Google can be of assistance to you. I'm not performing due diligence for anyone. You'll see.
Scams aren't limited to cryptocurrency. There are actual businesses that are providing the real-world utility with the assistance of cryptocurrency. Take, for example, Helium Network. Helium has scaled the most ubiquitous IoT network on Earth with a revolutionary business model that incentivizes users to set up IoT hotspots and soon other wireless protocols like 5G, Wi-Fi 6, VPN, and more, with cryptocurrency incentivization and a Proof-of-Coverage mechanism. This new business model to scale infrastructure is here to stay.
Here are some excellent resources if you want to learn more about the network, its future goals, and its economic model. The white paper is also a good read.
Ultimately, will Helium succeed? I don't know. But what I do know is that it is positioned for longevity. And like any ultra fast-growing startup, it is working through the kinks of scaling right now. In my opinion, Helium is as sure of a bet within the blockchain/crypto/decentralized wireless space as there is and will benefit all stakeholders, users, and enterprises alike. I don't work for Helium. However, I have been involved with the project for almost three years. It's been gratifying to me monetarily (on paper) and through a lens of my providing service and value to others, while building out the largest contiguous wireless network on Earth.
Helium website has nice design. Unfortunately, it forced me to scroll up, down, and all around to piece together the clues and figure out what it even is. I am still trying to work out why I would want one, or what I would do with all that earned $HNT.
"Since the start of 2021, more than 46,000 people have reported losing over $1 billion in crypto to scams – that’s about one out of every four dollars reported lost, more than any other payment method."
Not to mention
"Because of federal law & issuer card network terms and policies, consumers are shielded from the cost of unauthorized purchases made with their cards."
Millions of people in third world countries have escaped hyperinflation by storing their wealth in bitcoin. The revolution has already happened. You see it as crime though, because revolutions are always criminal while they're happening.
A technology doesn't need to revolutionize the world in order to be good. The bitcoin white paper itself says that fiat electronic payments work well enough for most transactions.
In my case crypto helps me receive money internationally, in a country where it's a huge pain in the ass otherwise. Just because you don't have a use case does not mean something has no use cases.
Are the exchanges local, or is he doing an international money transfer from the exchange anyway? Trying to find where the value offered by the crypto is, but every way I can see for this to work still involves an international transfer.
To me the most obvious example of the failure of crypto is that nobody in Russia, at a reasonable scale, is using it to evade sanctions. I haven't even heard crypto-advocates explain why this isn't happening.
I hear all these anecdotes about people sending money back to countries in South America, but these clearly are happening at a small scale and with whatever crypto currency being seen as a slightly more complicated version of other money sending apps.
If crypto had a value prop to justify the absurd prices it would be that it would one day replace, or at least compete with, USD as a global currency. The fact that we aren't seeing articles about Russian oligarchs making massive financial transactions using crypto tells me that this will never happen. If ruthless billionaires don't see crypto as a viable means of evading sanctions right now, I can't imagine what conditions would actually make cryptocurrencies succeed.
Of course this brings up the obvious problem with crypto: do you really want to live in that world? For all the positive messaging around decentralized exchange, and anti-government rhetoric involving crypto, the reality isn't that it will be used by radical lovers of freedom to evade oppressive governments, but rather that things like sanctions will be impossible.
Either way, if crypto was going to become a serious player in facilitating financial transactions we would absolutely be seeing it right now. Since we're not, I'm not sure what arguments are left as far as the "you just wait and see!" crypto camp.
I think you misunderstand the Russian situation a little bit. Russia has not blocked the movement of cash - you can transfer out up to $50k per month to self or relative. Secondly, the cut off from SWIFT has meant that it takes longer to transfer rather than inability to transfer. Oligarchs don't need to transfer anything - frozen accounts are still accessible for personal expenditure so it's not like they are starving. Moving to crypto for business deals is obviously a non starter.
>So far, it’s been nothing but pollution, speculation, theft, and crime.
I agree with the sentiment, but I don't believe they ever claimed to solve these things. All the same problems exist with other forms of money. As far as I can tell, crypto is just money with more steps.
Nothing? How about the ability to self-regulate, and other acts of personal sovereignty? Learn and adapt, network gets stronger for all. Do Kwan is a circus act with elephants - he got implicitly deplatformed if not explicitly.
Simply, not depending on a centralized authority for self-regulation. For instance, whatever value any gov offers regarding trading regulation can be codified into the network.
Here's the most obvious example right now: what is the argument for centrally regulating BTC at this point given its design? People will HODL no matter what happens. The set of all attributes of personal sovereignty includes self-regulation.
Well you do have an example of this in BTC. For physical property, it might be backed by a smart contract, then whoever takes your land, does so at the risk of being deplatformed. IOW, take my land, then the world around you becomes off-limits. Then you would have to be Alexander the Great to expand your world. Then antagonist is back into an energy expenditure issue. It's just not worth the energy cost to steal your land, so I don't.
BTC doesn't enforce property rights. If someone steals your keys, they control your coins. The BTC network doesn't care that the keys are stolen.
The other claim is even more bizarre. Let's say that your car is "backed" by a smart contract. How does a smart contract stop a thief from stealing your car? Does it involve magic?
For me its easier to send crypto overseas then dollars (I use the one with lowest fees)... And the person even have blank checks pre-signed (there's high fees and delays)
> So far, it’s been nothing but pollution, speculation, theft, and crime.
One of the interesting things about crypto to me, is that the projects that don't involve pollution, speculation, theft and crime don't get noticed because of the lack of controversy or speculation.
People are like "but what if there wasn't artificial scarcity", well those projects exist, they just fail to coordinate humans to care. What you see is survivorship bias. There are many onchain-only versions of other onchain projects without any token at all! Annnnd thats exactly why nobody knows about them. (some are pretty active though, they just don't bubble up and out to a broader community)
Theft and crime? I mean if that's the headlines you see, (or even if its your actual experience), thats still not nearly everything.
Pollution? Proof of work still taking up all the headlines when only like 2 out of like a thousand blockchains are heavy on that, with one of those 2 trying as hard as it can to go off of that.
(I'm not opining about the "revolutionize" part, that one is so subjective that its not worth bothering.)
One of Sila Money's applications was that they were able to convince banks to do faster domestic ACH transactions by putting the transfer messages on a public blockchain, instead of bothering with some kind of shared database or permissioned consortium blockchain. (You can add arbitrary data to most cryptocurrency transactions).
Another one that comes to mind is pNetwork. That is a big bridge, was the subject of a large and amateurish hack. There are now many bridge technologies. I had found it interesting that it was so popular but had no token, seemed like it was popular in Asia which contributed to me missing it before the headlines. Nowadays most bridges don't have a token associated with them though.
Sometimes what I do to find projects that don't surface from seeing a big token price movement or don't surface from hearing people talk about it, is to search for certain code signatures for a constructor or a popular function that programmers might re-implement.
disclaimer: i'm a bit of a lateral thinker so you might not like some of my metaphors, but fwiw they're backed by a biochem degree and a not-insignificant number of years working at intersection of tech/society/democracy.
I'm not a crypto fan, but am mostly understanding it as a financial churn mechanism. Wealth and power tend to pool and become self-stabilizing -- power is inherently conservative imho. Assets moving between hands is part of renewal cycles -- generally a chance for change or something different. It allows new possibilities to be stumbled into. Even just assuming we're doing a random walk of the possibility space, churn is better than stasis, no?
If there's any value in crypto, it's imho mostly about moving money between hands. Crypto has funded a ton of garbage and fads, but also a ton of research and advocacy. So yea, new garbage, but also new and different research and advocacy, different than we'd have had otherwise. I could certainly judge and express opinions on which hands it's moving between (and that's a site of action for justice work) but it can still be a net positive even when that's flawed.
re: moving X between hands. The value here is comparable to how some believe the main value of democracy is that it's a stable system for moving power between hands, and nothing more.[1] We wrap it in a nice story, but some smart people genuinely believe it's nothing more, and that most things we tell us about how and why democracy works, it's pretty suspect. (I've worked in democratic reform movements for almost a decade, so that's not an unconsidered perspective.)
Again, speaking of "churn" and keeping power circulating. The value of churn is kinda like the value of tidal action or diurnal rhythms generally -- it doesn't have a goal on which to judge whether it's "succeeding", but from the churn and flow of resources, it supports ecologies that find new niches. So maybe crypto has no purpose. But even if pointless, it can still have a role in the environment we live in.
Tides, democracy, american dreams, crypto or any goldrush past -- it's maybe stuff with mystique because each is a churn that creates some sort of renewal, like turning the earth with a shovel and mixing it up. I'm glad for most any churn, especially in a society lacking it in certain spaces, even if it leaves things to be desired. imho the alternative is to allow power to entrench more and more, which isn't the team i want to be on while wishing crypto away * shrug *
It 's been instrumental in illegal purchases online (drugs, weapons, counterfeit currency, etc), tax evasion, sanctions avoidance, and money laundering.
Some of these things, in some contexts, are both ethical and critically useful. Obviously there are also many (if not most) unethical use-cases.
...but you cannot claim it has no practical value.
Its not revolutionizing the world, but it is allowing people to shop online without having their transactions spied on by credit card companies or the government.
Cryptocurrencies are the only viable mechanism for online financial privacy that comes even remotely close to widespread adoption and use.
Which is why the main value is and will always be illegal transactions. That's the problem it solves, it's not 100% a bad thing cause it prevents the gov't from possibly abusing power in controlling of financial transactions, but the main impact of crypto is to allow organized crime to operate.
There are plenty of legal purchases that people would want to keep to themselves. If there were an anonymous non-cash way to purchase legal medications, many people would take that option rather than reveal health details to data brokers.
Maybe my answer is entirely UK based, but I'm pretty sure if I asked in my circle of non tech friends, I don't think any of them would have a concern about buying anything legal on a credit or debit card. You might not want your friends to know, but I don't think they care in the slightest about the bank or CC company knowing. And even if they did, that can be obfuscated a little more by buying it with a non-high street bank (like Revolut) they never have to go into/use for their mortgage or whatever.
> So far, it’s been nothing but pollution, speculation, theft, and crime.
I see, nothing right?
So Stripe [0], Stellar, and MoneyGram [1] are polluting the world? Where is Stripe, and MoneyGram scamming then?
Of course, we like to complain about the scammers in crypto (and there are outright scams on there but not all of them are scams) just as we keep complaining about the non-free software and spyware that is plagued by the same companies from Google, Microsoft and Apple.
Some are still waiting for all non-free software to be wiped off the face of the software industry and after 37 years, that hasn't happened and it has gotten to the point that we have the same Big tech companies keeping privacy activist companies like Mozilla on life support.
The outcome is the same and it is co-existence. Many of these coins and tokens will collapse, but the useful and compliant ones with ISO 20020 will still be around as soon as regulations come in, which will disappoint both crypto-maximalists and the skeptics.
I wish I could access amazon.com circa 2040 (or equivalent site) and buy the definite book about the history of the cryptocurrency world. I bet it'll have some real doozies in it.
When a new technology comes along, a lot of people want to invest in it. That’s a big opportunity for scammers. People who are unable to discern scam from not scam get scammed.
there's no widely adopted index fund in the crypto world. to get exposure to a variety of ideas, one inevitably buys some that don't work and yes, some where the project runners commit fraud.
The problem being discussed is not the difficulty of asset diversification. Lest you forget:
> People who are unable to discern scam from not scam get scammed.
This is a common refrain, along with Do Your Own Research (DYOR). As if scams are that obvious.
However, my additional point was that I have successful crypto friends, that actively and knowingly invest in shitcoins and justify it as “money they can afford to lose”.
Also, just to be clear - are cryptocoins an investment, a store of value, a currency, or equity-equivalent in a company? Because the goal always seems to be buying enough of every coin to maximise speculative windfalls. That is /strictly/ not the goal of a traditional index fund.
different tokens have different purposes, but you could describe vc investing as maximizing speculative windfalls, and that's how many traders view their tokens.
i can't speak to your friends' behavior, but you can buy tokens and do well without putting money behind the do kwons of the world.
>That’s a big opportunity for scammers. People who are unable to discern scam from not scam get scammed.
Queue ESG in the current time.
I own a startup in that space, we are not scammers (source: trust me, bro) but the amount of charlatans I see everyday is staggering! Btw, Adam Neumann just jumped into this as well, just so you know ¯\_(?)_/¯.
If you spend your brainpower on crypto, cheer up! You're likely one of the contributors to the allocation of brainpower on advertising in-app purchases of crypto as well!
if the iPhone was released in 2007 but in 2022, you couldn't use it to make calls, browse the web, and chat with friends. Instead, it could only run a bunch of Candy Crush clones, but with real money.
And given how bad Android is with its plurality or majority market share, how much worse would it be without iPhone competition? I wonder how few years Android devices would be supported if iPhones didn't set the bar so high.
Bitcoin is 13 years old. The "crypto" that you're most likely referring to is Smart contracts based dApps, 7 years old.
The Internet in early 1990s was still over a decade old but had it disappeared overnight then, absolutely nothing about anyone's life would've changed back then.
Crypto usage is entirely tied to the market. If the market is doing well, dApp usage collapses.
Google search volume doesn't collapse if the stock market isn't doing well. You still send emails even in a recession.
No one uses crypto outside of speculation. Even the dApp with the most "mainstream" use case, OpenSea, has collapses in usage as soon as the market turns bearish. Why? Because no one wants to buy "digital art" when there is no bigger fool to sell it to.
I haven't even logged into my Metamask for weeks now.
My point above is still relevant to your response as well - the Internet in the 1990s was in a similar state. No one was buying things online and it was too slow to replace TV shows.
> No one uses crypto outside of speculation.
Same old argument while closing your eyes to actual use cases. You have this technology where - leaving aside free cross-border trustless payments to anyone, you can have an immutable record of data to store, unhackable, solves spam and you actually still think this is all about speculation? You're on Hacker News, really recommend putting on your hacker hat and re-evaluating it.
---
On a slightly different note, Opensea is not a true dApp and it's a little centralized in places. But yes of course NFTs right now are extremely speculative. Look elsewhere, ENS domains usage is at an all time high and rapidly growing (even after the recent price correction), Uniswap recently crossed a trillion $ in total transaction volume in its lifetime.
Blockchain tech is an extremely powerful tool, it's a shame most hackers on HN are hostile to it which makes them miss real use-cases happening under the surface.
Man, I've been in the crypto hole for two years straight. There's not a protocol that I haven't tried yet. And there's not a protocol that I now use outside of speculation.
Even ENS domain usage has been going up because of the speculative frenzy around valuable domain names (look up the race to register all 3-letter ENS names).
You can start off by naming three projects that you actually use regularly outside of speculative investments. Because for the life of me, I can't.
1) I'm hosting a blog on my ENS domain - this cannot be censored and this exact version will always be available for anyone to access (as long as someone's pinned it on IPFS). So it solves a real problem that DNS does not. For example, you can checkout Vitalik's blog at https://vitalik.eth.limo/
2) I was in Budapest and had lost my debit card and was in need for Euros - I literally looked up the closest Bitcoin ATM, which was 10 mins walk from my hotel and instantly had access to cash (global borders, international payments can be a nightmare). On a similar note - I often make payments in crypto to international contractors.
3) I regularly use Poap (https://poap.xyz/) as proof of participation in various events like hackathons / workshops, etc and this has in turn helped me in the space.
All three of these are not speculative investments.
And as I keep repeating, this is literally the start. We're builders, we can see where the space is heading and where it will be in 5 years.
I'm open to proposals for an ethical basis for technological work that's better than "well it's not nearly as societally destructive as what I was building before!"
No, but imagine a world in which brain power was distributed by consensus via a decentralized ledger, rather than a bio-authoritarian central party! The crowdsourced, democratic nature of DeBi(o) would sense this problem early and avoid it in the first place. There are other solutions as well, but they all have one thing in common...you guessed it, blockchain technology!
It is not about brain power but the computing power. The biggest fallacy with crypto is that combined computing power owned by general public is more than few powerful entities. This has never hold true in the history of humanity. The 1% of people owns 80% of the computing resources. So there is no "decetralized" or "distributed" authority. For instance, US or Chises government can put togather more GPUs than the rest of the public combined any day perform 51% attack on any crypto. The reason for this lies in tax arrangement in physical world. No matter what people earn, government is taking away a big chunk from them and thus always can have majority resources than rest of the public combined.
I can legit imagine this being used to describe a gig-knowledge-worker DAO, where via "decentralized consensus" the "best minds" were directed at "humanity's most important problems".
But in reality it would be a bunch of people paid in gamified company bucks to write spammy blogs and comments to promote shitcoins that a small number of the DAO members would trade on while the rest debated if they should buy some half-assed NFT because it would support a community of creators.
Even the most execrable world-torching view of Facebook, TikTok, &c. does not entail the kind of global waste and fraud that transpires in decentralized finance.
Couple months back a seemingly talented promising colleague quit for croinspace.
He had some arguments like "I don't want to pay taxes so gov blocked my accounts, it's an unfair system" and "it's a scammy field now, but we can solve that by simply automating scam assessment".
When I talked to his superior turned out he shown himself not nearly as good a dev as my impression was, they were strapped for resources yet not sad to see him go. Makes me think it's not usually the best brain power that goes there.
Let's be honest, the vast majority of things we spend money on is a complete waste, focused solely on producing short-term feel-good chemicals in our brain.
Tasty food? Waste.
Fine wine? Waste.
Any car that costs more than $20k? Waste.
Blockbuster hollywood movies? Waste.
Housing that goes beyond our basic need for shelter? Waste.
The resources we've spent on crypto are, at the very least, pushing technological frontiers. And experimenting with new systems of finance that could improve on the foundations of our entire economy. Compared to all the other crap we spend money on, this is far less wasteful.
If you peel back the feverish financialization, there are a few different areas of actual research which might be usable outside crypto, such as consensus methods for distributed computation. The one I have started following is the development of ZK proofs from a theoretical construct into a programming substrate. Traditional complexity texts focus on interactive ZK protocols, but non-interactive ZK proofs have been developed significantly in the crypto world. They have recently become usable for general purpose computing with interesting privacy guarantees: you can prove f(x) = y for a known f and y but without revealing x. This feels very powerful and related to other research fields like differential privacy.
I object to the car point. Any Prius with a lithium ion battery (a significant improvement over the old NiMH models) and less than 50,000 miles costs more than $20k.
It’s objectively the most practical car in terms of balancing mileage, longevity, cost-to-own, environmental impact, and convenience.
Although, I will admit Priuses being far north of $20k is due to temporary market conditions.
I think you are slightly biased. Let me offer a similar argument that hopefully will serve as a counterpoint:
“The money we spend on crack pushes humanity’s chemical frontiers. Experimenting with new methods of producing crack could result in improvements in our public health system!”
> In US law, money laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money.
Secretly transferring money out of your company to locations where you may at an opportune time be able to personally withdraw it seems to match the description very well. To put another way, even if you own 100% of your company, your company's money is not your personal money. Trying to make it so while concealing it and avoiding taxes etc is a crime.
I agree the base crime here appears to be embezzlement. However the actions taken to conceal the embezzlement may be considered laundering. Most embezzlements do involve hiding the money movements, so I would only expect it to be laundering if he mixed the funds with legitimate funds in order to conceal their source. I don't see that in the article.
He is being accused of nothing, because no charges have been filed.
They will formally charge him with something like money laundering because it is the easiest to prove (you don't need intent, just concealment) and more charges will be added later.
You know the ledger doesn't track transactions at centralized exchanges (where the overwhelming majority of transactions actually happen), right? It also doesn't track offline transactions where you transfer the wallet keys instead of the coins on chain.
This is where projects should be more strict about operating (in some sense) as a DAO, with transparent voting and resourec/fund allocation based on proposals. Even if its a "centralized" single organization like Terra Labs or the Luna Foundation.
Seems silly to advocate for the future of finance and the trustless verifiable web, when the projects building on it still use traditional corporate mechanics and the veil to go along with it.
I've yet to see _anything_ valuable come out of crypto.
Nothing but scams and rich pricks scamming dumb retail investors. What a shame, I really through it would change the world. Show me one thing positive crypto has done, please.
The only thing to learn here is that on HN is that they like predictable outrage on their own bias. Post a crypto exit scam in the multi-millions and just watch the reactions go wild.
Post anything about Stripe, Moneygram, Checkout.com, Shopify Namecheap, Porkbun, etc and other companies using cryptocurrencies, then you will get zero reactions or it never reaches the top of HN.
The absolutist arguments that both the critics and maximalists make its quite cheap really and I'm only looking at the carnage from a distance and I'm looking at it with closer inspection but not sweeping the industry as a whole with a hasty generalisation.
Otherwise, the whole thing would have been totally banned and collapsed shorter than expected. Co-existence is what is going to happen really.
That’s an enormous amount of money! I’ve really gotta figure out where I can make friends with these crypto whales so I can be like “Hey would you mind hooking me up with a fraction of a percent of what you pay yourself in one month?”
Yeah - sorry, it won’t work if you say it like that.
They want returns! So you gotta offer them. “Invest in my coin and you will get 24% interest per month forever!”
Apparently they are smart enough to accumulate masses of money, but not smart enough to understand that you can’t (mathematically) take returns like that indefinitely.
No, I would not want a crypto job. I mean literally just asking for free stuff. People can be surprisingly generous and the only way to find out is by asking.
My rules for Asking For Shit are threefold:
1. Ask nicely — don’t be presumptive or manipulative.
2. Don’t be grumpy about a “No” — Don’t be a dick.
3. Maintain a habit of generosity such that other people feel comfortable Asking You For Shit — Be nice.
Little kids playing football look up to Tom Brady, those playing basketball look up to LeBron - as someone who aspires to be part of the American elite, I look up to guys like this :) <3
I've never wanted to see someone get the book thrown at them so badly. This guy was so egregious. And the tweets just calling everyone who was calling this months in advance, "poor".
I genuinely don't get how people are so surprised at what seems to me like yet another DeFi exit scam. What's different about this one other than the scale?
It’s all unraveling including how shitcoins fed into BTC/ETH and meme stocks for two long years.
But the SEC is hellbent on scapegoating Robinhood. I truly don’t know why we even have the SEC. They consistently fail to address egregious market flaws.
tangential but related. It’s a grifters economy. I am worried that nothing would come of this and a few years later a16z would be funding his Series A on his next thing like they did with Adam Neuman and the Goddess Nature Token.
The biggest benefit touted of Blockchain based currencies is the ease and low cost of transaction. Both are anything but. Take cost for example. India's UPI supports 5B transactions per month which are _free_ to users at the cost of perhaps $10-20 million to the govt which subsidizes it. Compare that to the US restaurants (and gas pumps) which give you 3-5% discount if you use Cash. At some point a national payment rail makes sense though it offends my capitalistic sensibilities though currency violates that too.
The Federal reserve charges $1.28 (one dollar and twenty eight cents) to move about $100 million dollars[1]. That is before volume discounts. Cost of money movement is extremely small because you are just sending a packet. Cross border was hard but was due to interchange between different currency systems but has gotten much cheaper too. I can send payment for less than 1% to most countries near instantaneously and this will only drop.
> At some point a national payment rail makes sense though it offends my capitalistic sensibilities though currency violates that too.
It’s not at all clear to me why anyone thinks that it’s “anti-capitalistic” for a tax-collecting democratic government to provide a digital API to transact with their sovereign fiat currency. Why should that be a rent-seeking competitive business left to the private sector?
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