It's a cliche at this point.
Your strategy is to say "you're wrong, prove me right". No, I won't be writing book-length comments here to convince some internet stranger whom is categorically against it.
I have no burden of proof. I'm not even a proponent or opponent. All I said is that it's complicated and two-sided, to keep an open mind.
I'm not here to explain you crypto.
When you come out and say, things are too complex to make an argument, it can read like FUD and whataboutism. As if you are attacking an idea that an argument _can_ be made.
I'm sure you didn't set out to muddy the waters, but after having muddied them in the middle of a lively debate, I think this is the sort of response you should expect to receive.
Coherent arguments against cryptocurrencies are readily available. The case for cryptocurrencies is shifting, contradictory, and often nonsensical. This means something. It matters.
But I'm pointing out that this is ALWAYS the argument pro-cryptocurrency. It's not this instance, but a pattern.
Cryptocurrency people refute entire books and deep analysis (from actual experts) with "everything you just said is wrong, but I have to go now so can't say why".
It's not this in isolation, but the fact that it's a cliche that's the thing.
It's comical. I'm not sure, but it sounds like you're laying the ground work for waving your hand and saying "book? By the time it's published the technology has moved on, so it's not relevant, so let's just ignore the whole thing" when the main arguments against cryptocurrencies/smart contracts are not about the details of the tech.
The arguments are mainly about the premises and the goals. What technical means get invented then becomes irrelevant.
I'm not a crypto bro, so I don't need to defend the case for crypto. 6 months ago I was in exactly the same spot as most people here dismissing the industry as a whole.
Admittedly, largely based on hear-say and the mainstream narrative. Not by actually knowing anything about it. After taking a deep dive I've changed my mind on some aspects, but not all. I would not agree with my past self, I was ignorant.
Even if you do study it deeply and still conclude it's all garbage, it's an intellectually fascinating journey. You get to learn a lot about history, human psychology, our financial system, politics, trading...basically how the world works.
Interesting stuff to debate, but this is not the place. Fine.
Well, almost. Probably cryptocurrencies have more of a chance of actually succeeding in providing realistic microtransactions. Not BTC (PoW and way WAY too few tps, too slow, too high fees, etc...), but it's something traditional finance has failed to provide.
(cryptocurrencies have, for a decade now, also failed though. So I'm not getting my hopes up)
Of the remaining ones that should at least get the benefit of the doubt, here's my rough opinion...
Bitcoin is king and proven in its function as "digital gold". Based on its enormous market cap, network effect (100m users and growing exponentially) and one-of-a-kind performance of 200% per year on average, for 12 years straight.
Which is no guarantee for the future, but nothing is. Bitcoin is the invention of an entirely new asset class with unique properties, good ones and bad ones.
Ether and adjacent helpers (such as link) are also a winner, if you take the long term perspective. Almost anything application-wise is built on top of it (DeFi, NFT) touching potentially almost any industry one can think of.
It is true that most things built on Ether are crap and likely to fail, but that doesn't have to be true forever. The point is that even if 1% becomes successful, it's likely Ether-based. Even failed development on Ether grows usage of Ether, and the network effect quickly gets beyond the point of no return.
Compare it to the world settling on Git/Github for software development. This doesn't guarantee good or useful software, yet when such software is produced, it's from that infrastructure.
Besides Bitcoin and Ether, there's a few semi-serious outliers like Cardano and XRP. I expect them to fail fully.
So that sums up my opinion of the space:
- Bitcoin as asset class, long term. - Bitcoin's Lighting Network for payments, yet needs to become more user friendly and get wide support (give it 3 years). - Ether and helpers for a wide range of uses.
Bitcoin and Ether are not only here to stay, they will grow exponentially. Pretty much anything else is safe to ignore. For now.
It's consuming more electricity now than Sweden. It can't really grow exponentially. The world just does not have enough electricity for more growth at that rate. Unless you just mean "exponential in price", in which case that's just speculation, and completely disconnected from, as they say, the fundamentals.
For its current purpose (store of value, so not an every day payment currency), Bitcoin does scale. Should for some reason miners be unable to gain access to more energy in the physical world, the protocol automatically adjusts the difficulty.
Scaling transactions has no relation to energy usage, only mining does.
As for its energy usage, that is a wildly complex topic, and it's moving very fast.
Energy consumption in itself is not a problem, it is only considered a problem when:
1. The energy source is not renewable 2. The consumption directly competes with purposes deemed more useful by society (perceived or real).
As for renewables, I believe the score to be somewhere between 30-50%, which is greener than almost any other industry. Furthermore, this score is going to rapidly improve as coal-based mining in China is in major decline whilst North America gains in mining. The NA mining companies have formed a council to report on energy usage and stimulate not just the use of renewables, specifically to go for stranded energy sources. These are types of energy that are locally available, yet too remote or costly to transport to civilization.
To sum it up, it's not as bad as the headlines say, and rapidly improving for the better.
Energy usage, not even it being dirty or green, isn't the heart of the debate though. Keeping devices powered on/plugged in costs more energy and serves no purpose, yet zero headlines about that.
Rather, the debate is that a lot of energy is consumed for what skeptics consider to be no purpose.
And now we do get to a hard divide. Believers and non-believers.
A true believer thinks of Bitcoin as the hardest money ever created, absolute scarcity as a one time human invention. This classic article is one of many making the case for it:
https://vijayboyapati.medium.com/the-bullish-case-for-bitcoi...
Read it with an open, but skeptical mind. If you're disgusted by it, your personal outcome is clear. If it does tickle some interest, this Twitter thread links to a few of such articles:
https://twitter.com/anilsaidso/status/1290758632238276609?s=...
As for Bitcoin being speculative, yes and no. With a long term perspective, it is predictable to a degree. A dutch stock expert came up with a valuation model called "stock to flow":
https://stats.buybitcoinworldwide.com/stock-to-flow/
Actual price action versus predicted price is so accurate that it's creepy. And there's a reason for it. Bitcoin's supply is entirely predictable and mining rewards are cut in half every 4 years, triggering the next bull run, followed by a bear market. Like clockwork.
Even the financial establishment agrees that Bitcoin is the most asymmetrical bet there is. The risk/reward ratio is one of its kind.
To translate that to any ordinary citizen: you pick a portion of your wealth you can afford to lose entirely. 10-25% of savings are often heard numbers.
There's a really small chance that this money, which you could afford to lose anyway, will be lost. A so-called "Black Swan event". More likely, the money would be halved and never recover.
Against that limited risk (due to your limited exposure), is a much higher chance of it multiplying by 10, 20, more...depending on how long you hold the asset. As in, almost guaranteed. For Bitcoin, not for the shitcoins.
This sounds like a sales pitch for buying Bitcoin, which is not my goal. I don't care if you do or don't. My point is to highlight the uniqueness of this asymmetrical bet. It has no comparison. There's no asset in the world with a risk/reward ratio this favorable.
Or, you can call it funny internet money that heads to zero. Either conclusion is fine, if its an informed one.
My main point on that was that the exponential function grows quickly. If it's all of Sweden today, then it's just a couple of doublings before it's literally everything. If you graph the current use this is not the far away future.
I don't have absolute proof, but you cannot hide the kind of electricity use without driving up demand noticeably, so actually people are already today paying more for electricity in order for someone to profiteer from hashing. We're all paying for this.
> 1. The energy source is not renewable
Or it displaces otherwise-renewable use into non-renewable. Which (at this scale) of course it has.
> To sum it up, it's not as bad as the headlines say, and rapidly improving for the better.
I disagree on both points. The waste graph (and that's just electricity. Where do you think non-economical mining rigs go?) is growing exponentially.
Have you seen this guy talk about our inability to understand the exponential function? https://www.youtube.com/watch?v=kZA9Hnp3aV4
> Keeping devices powered on/plugged in costs more energy and serves no purpose,
It's a problem, yes. But it's not true that it serves no function. "It's easier to keep it plugged in than not" is convenience.
I'm not justifying it, but yes actually it does have a purpose. Just like idling a diesel car outside my window while I'm trying to sleep does have a purpose.
> Bitcoin's supply is entirely predictable
Not really since an unknown amount is lost forever every year due to crashed hard drives and lost passwords.
For your medium link, it can be summarized as "an intro to bitcoin". And I'm surprised it was written in 2018, as it seems to have the naivety of a small child, with regards to both bitcoin and economics.
E.g. it doesn't motivate why we need to (effectively) get back on the gold standard. The "work" that was "proof of work" for my FDIC-insured bank balance is a combination of the value I added to my employer, and the value the market gave me for helping correctly price goods. I don't need my bits to be scarce.
> "However, because bitcoins are traceable on the blockchain, a particular bitcoin may become tainted by its use in illicit trade and merchants or exchanges may be compelled not to accept such tainted bitcoins."
Like I said. Naive. And this was written 4 years after Mt Gox, where 4% of all bitcoins that will ever exist, were stolen.
In a legal money laundering sense I would guess that maybe the majority of bitcoin out there is tainted, since tumblers actually cause 100% of their output to legally be tainted. And with it being circulated, the only "clean" bitcoin is from HODLers who have never moved it after mining.
> "Without improvements to the privacy and anonymity of Bitcoin’s network protocol, bitcoins cannot be considered as fungible as gold."
And in this very next sentence he's essentially saying "yeah but let's help the criminals hide it, and not do that tainted thing I just said".
He calls it "improvements".
> "Nation-states have shown a persistent proclivity to inflate their money supply to solve short-term political problems. The inflationary tendencies of governments across the world leave the owner of a fiat currency with the likelihood that their savings will diminish in value over time."
This is more naivety. E.g. in order to have our best future, we as a society actually don't want resting savings. I've been lectured by a friend because I have a coin jar, and that is money that isn't in motion. I wouldn't go that far, but there's some truth to the fact that money (in any form) at rest does nothing. Whereas money in motion does.
GDP is not a perfect model, but like many models it can be useful. And GDP measures the velocity of money.
So why "punish" people for hoarding cash (in any form) and not moving it? Because it's in society's best interest, or so goes the argument. This naive writeup seems to merely say (like other pro-coin ones) that taxation is theft, inflation is theft, etc...
Anyway, I think I've read this before (or it's just the same coiner dogma repeated ad nauseum so that it's indistinguishable from something I've read before).
I'm not disgusted by it. I don't get disgusted by uninformed naivety.
> As for Bitcoin being speculative, yes and no. With a long term perspective, it is predictable to a degree.
What I mean is that approximately nobody is buying bitcoin in order to actually use it. Unless they are using it to send money to ISIS, or something. No, they buy it in the hopes that someone else will pay more for it, later. That is neither payment, nor store of value.
Maybe one day it'll be more stable, and thus a better store of value. But I hope it dies way before that.
I don't disagree that these coins can be a good investment for the individual. But that's where the disgust comes in. It's profit over morals, with a spread never before seen. It's doing something evil (environmental impact), in order to profiteer from organized crime (anonymous currency). Even if you yourself commit no crime, it's you profiting from destruction[1], to fund organized crime.
You're essentially making the argument for a lottery that has (unfortunately) reasonable odds. That doesn't make it right, or good, or nondestructive.
I'm not sure why you think those bitcoin 101 links would be new to me.
[1] And I don't mean "destroying the old to create the new", no I mean literally destroying productivity and base resources. As if you could mine bitcoin by proving that you've burned medication. That is resources society had, that could be used, that you burned at the expense of others for your profit.
It seems we disagree overall on crypto, and that is fine. I'm going to selectively respond given the large amount of points you address.
As for the energy part, the technicals (energy mix, stranded energy, emissions) are a discussion on their own and reality on the ground is fast moving. I do not consider the issue resolved, I consider it smaller than projected.
In particular, your claim that the convenience and laziness of leaving electronics plugged in justifies wasting energy whilst using this same energy for sound money to be problematic, shows privilege.
Bitcoin is incredibly popular in Venezuela, Turkey, authoritarian nations with a rapidly inflating currency. One of very few ways for underprivileged citizens in said countries to protect/grow some of their wealth. In Africa, nodes are growing the most currently, as several projects aim to implement the same basic life raft.
Back home (developed nations), the youngest generations struggle to build up wealth. Never before in history have the young owned such small piece of the pie and never before were their debts so high. Middle class seems entirely out of reach for them. That's why it's not surprising that specifically they jump on crypto.
And lastly, even for those already in middle class not necessarily requiring crypto as a life raft, there's nothing wrong with them trying to build wealth, unless you also oppose to people investing in stock, real estate, etc.
You probably have the opinion that Bitcoin is not a solution for these people, but I want you to acknowledge that the problem it tries to solve and the macro backdrop that has led to its creation, is very much real. Bitcoin aims to be hard money, and hard money has humanitarian value infinitely larger than leaving your phone plugged in.
As for privacy, you're again being quite selective in your outrage. We know that almost anything able to connect humans can be used for good and bad. WhatsApp is end to end encrypted and proven to be used in terrorist attacks in Europe. Yet nobody has called for the ban of WhatsApp. You intentionally take the bad faith angle for privacy as if this feature was specifically designed to do unlawful things.
No, it is designed as part of the separation of state and money. A good faith goal, a humanitarian goal. Just like WhatsApp basically is designed for good, to allow billions of people to connect with each other.
Bitcoin is a store of value, yet a volatile one. That's because it's still early. It's likely to reach a 10T market cap. A maximalist would project 100T, but I'm not sold on that idea.
The more realistic projection, 10T, would not make it an existential threat to the existing financial system. It would just be digital gold. Bonds and derivatives are a few hundred times larger.
I'll end with a philosophical note. One you would wildly disagree with, but that's the point of a debate.
Our current system depends on perpetual growth. Maximize work, productivity, consumption, even population growth. Only endless growth keeps the system alive, and even barely so. It rapes the planet and cruelly still leads to enormous inequality.
As such, I don't consider it very much of a threat when money has no inflation or is deflationary. We should work less, consume less, and return to a more sane standard. This is going to happen anyway due to further automation.
The current system treats people like economic cannon fodder. If the current system has no regard for people, don't be surprised that people turn their back on it and seek a life raft or early exit.
Anyway, thanks for the debate, this was my last reply.
Nothing is. That's kind of the point.
> As soon as it hits real world caps
Do you think that will be before or after every single use of electricity becomes metered? We already lost most free tier trials of any sort of compute (CI, VMs, etc). I'm expecting that hotels will start metering electricity for guests at some point, because some asshole is going to rent rooms for mining rigs.
Someone's going to put a mining rig in the public bathroom. In the curtesy outlets in airports.
There is no "cap", it's a constant escalation of theft. All there is is a place of diminishing returns for the thieves.
> your claim that the convenience and laziness of leaving electronics plugged in justifies wasting energy
What the actual fuck. This is literally the opposite of what I said. Literally the exact words "I'm not justifying it" is what I said.
> Back home (developed nations), the youngest generations struggle to build up wealth. Never before in history have the young owned such small piece of the pie and never before were their debts so high. Middle class seems entirely out of reach for them. That's why it's not surprising that specifically they jump on crypto.
So you agree that it is speculation, not currency?
> there's nothing wrong with them trying to build wealth,
On that level, no. If you rob a bank to do it, yes.
> One you would wildly disagree with, but that's the point of a debate.
Ironically, no it's not. You think the point of debate is to increase disagreement?
But no, I do not disagree with anything you said after that. That's almost the only thing you said that was reasonable.
You didn't justify leaving electronics plugged in, you said it provided value: convenience. If you'd calm down and read between the lines, see the overall point that "value" is subjective. Surely we can point out several energy consumers offering questionable or no value. The popular narrative is that Bitcoin offers no value at all, which I tried to counter. Clearly it has value. Maybe not to you, but it does to 100m+ users and exponentially growing. And the value it offers ranges from a humanitarian life raft to pure greed, yet value it is.
True, I do not consider Bitcoin a currency as in a payment currency. Its currently useless for that in a technical sense, but also in a financial sense. You do not want to spend a deflationary asset.
I consider it an asset, banks literally call it a new asset class. Is it speculative? Yes and no. Short term it is, day to day its clearly volatile and actively manipulated by traders (doing longs, shorts, leverage). So as a "store of value" on the short term, it's a failure. With a bank account, if I put in 10K today, I can take out 10K the day after. With Bitcoin, that 10K might be 9K or 12K, who knows?
Longer term, it's less speculative. It's deflationary, aiming to at least counter fiat inflation, yet in reality far surpass it in growth, doing 5-10x price actions every halving, and about 200% per year on average. That's the track record. I can't predict the future.
I think the point of a debate is to discuss opposing views. They don't have to grow further apart, but they might. I also don't mind a hot debate, nor am I frustrated or upset with you. My point isn't too "win".
Still, nice to agree on one point in the end. Have a great day.
It's not. What would you say to someone who went from store to store, and emptied the "take a penny leave a penny" tray into their pocket, so that nobody could have that anymore?
Even when it's not literally theft (e.g. credit card fraud or cloud services), it's abuse that destroys a resource, to the point where nobody can offer such a service.
> If you'd calm down and read between the lines,
I don't appreciate you lying about what I said.
> Surely we can point out several energy consumers offering questionable or no value.
So this is plain whataboutism?
1.3M people die every year in traffic, too. That doesn't justify setting a price floor on energy, or fast-turnaround ewaste.
> You do not want to spend a deflationary asset.
And if it doesn't die, it always will be deflationary. Supply is limited and people die, or lose passwords or hard drives.
Yes, Bitcoin will always be deflationary. I personally am not convinced it will eat up all wealth in the world in the way a maximalist believes it will. As said earlier, I'm thinking 10T max.
Should it grow to contain much more value, Bitcoin is more likely to be expressed as sats by default, and owning a full coin would be rare. Many want to do this right now due to unit bias. Newbies tend to prefer a 0.3$ shitcoin like Dogecoin over a coin as expensive as a luxury car.
Layer 2 solutions can work with a fraction of a sat, yet they can't settle this fraction on the core BTC network, nor would this make sense in terms of transaction costs. So I think they use some kind of buffering mechanism for that.
That's not how I use it, at least. I use it as "stop changing the subject", and "two wrongs doesn't make a right".
What am I supposed to say to this distraction, if you're triggered by the word whataboutism?
> It's hypocritical to aggressively combat one energy waster whilst allowing or even demanding 200 others.
If that were the only thing about blockchain, then maybe. But it's not.
But also no, I don't think it's hypocritical in that abstraction level. There are doctors out there who want to help people, yet are not working on malaria. That doesn't make them hypocrits on malaria.
Yes, there is arguably hypocracy. Just like how you would save a drowning child if you walk past them, but you won't give $2 to feed a starving child on another continent, or $10 for a malaria net.
Maybe you actually do. But even then I'm saying you'll ruin your nice shoes to save the drowning child, but then you'll buy new shoes instead of using that money to save another life.
And then we have descended into a completely different point from the value of bitcoin. It's a distraction. You've effectively changed the subject to not have to discuss that you're making the world worse by pumping bitcoin.
In a world where children starve and die from malaria we don't have to discuss any issue at all. How convenient.
> shitcoin like Dogecoin
What makes Dogecoin shit and bitcoin not?
The way I see it, nobody really cares about emissions, energy use, pollution, the environment...at all. Most people commenting on Bitcoin are likely to enjoy a US middle class existence, or even upper middle class.
They have ACs running all day, 50 electric appliances in their home, move themselves with 2 tons of steel, indulge in purchasing clothes made from slavery in Bangladesh, consumables stiff from palm oil (destroying rain forests), likely regularly eat meat, take airline flights, and produce tons of plastic trash.
The above lifestyle, if it were to be deployed globally, would require 6-8 planet earths, by estimation. Yet there's no concerted outrage, call for regulation, outright bans on any single aspect of it. Obviously because that would mean giving up comforts you enjoy yourself. As it comes to principles, people have none as soon they are tested.
Therefore, it's much easier to attack something you don't use or understand, as there's no personal cost to it. I reject your environmental abuse yet will defend mine.
Still, its a fair and valid point that in a world of environmental collapse, adding to the pile doesn't help. I'm with you on that. I'm optimistic that it will be resolved, and rather quickly. Mining will pretty rapidly become renewable, CO2 neutral, focus on stranded energy, etc. A headline may be forthcoming this week even.
Dogecoin is shit because the creator says it's shit. When interviewed about its purpose, inflation scheme, energy usage, he openly admitted he considered nothing at all. It was a joke. Dogecoin has no functionality nor scarcity. It doesn't even have a development team.
Still, the joke is widespread enough for it to sustain for quite a while. If only enough people hold it, a full crash to zero becomes less likely.
The main differences with Bitcoin would be scarcity, the network effect, institutional adaption, L2 solutions, exchange support, ETF funds, etc.
The difference between a "serious" coin and a shitcoin is easy to see in price movement. When BTC dumps, say 30%, a shitcoin dumps 80%. A shitcoin is speculation only, whilst a serious coin is speculation combined with long term value, or the belief in long term value.
I'd say the reason is that many people have already made their mind up and no amount of "actual arguments" will convince them otherwise, but sure, here are some examples of things enabled by smart contracts.
https://www.gemini.com/cryptopedia/amm-what-are-automated-ma...
https://www.investopedia.com/terms/a/atomic-swaps.asp
https://www.ibm.com/blogs/blockchain/2020/11/blockchain-for-...
Arguing with someone who is bearish on cryptocurrency is pissing in the wind, which is why people would rather leave for "unrelated reasons".
1. Inconsequential. Ok, you built a fancy crypto system.. so what?
2. Misattribution (the IBM article). Ok, you improved a traditional finance system, why is crypto necessary for that (other than marketing purposes?)
Regarding your second point, I understand what you're saying. I guess the benefit of doing that specifically in a blockchain/smart contract system instead if <insert your bespoke system + database of choice here> is you can take contracts that have been verified by others and deploy them on your blockchain and tweak the numbers and be confident on the output. Instead of blockchain, you could use any sort of "industry standard ledger/schema", but no industry standard ledger/schema exists and blockchains do exist.
ImmuDB was posted here the other day, it's pretty young but could be promising for businesses who want the benefits of blockchain without needing to use a blockchain.
Yet the cost is distributed externalities like burning nonrenewables or wasting greener energy sources on inefficient or pointless calculations.
Are there any smart contracts or DeFi without the externalities problem?
And even if there are then is it wise to put money into things one doesn't understand? The DAO exploit makes me wonder if the juice is really worth the squeeze.
But even if that happens (and it would be great), there's still everything else: https://news.ycombinator.com/item?id=27345786
Harmony One, Polygon, Fantom to name a few (Polkadot/Substrate is growing quickly, too). ETH2 is obviously going to be the big one, though.
Cryptocurrency people refute entire books and deep analysis (from actual experts) with "everything you just said is wrong, but I have to go now so can't say why".
It's not this in isolation, but the fact that it's a cliche that's the thing.
https://www.amazon.com/Attack-50-Foot-Blockchain-Contracts-e...
I should have a cut-and-paste answer to this question. I actually do already, but under my real name and I don't want to dox myself.
Search for my username here for some: https://news.ycombinator.com/item?id=27210604 (some comments are "below the fold" (e.g. this comment: https://news.ycombinator.com/item?id=27219137).
And here: https://news.ycombinator.com/item?id=26944659
But I'll try to summarize:
The core things that blockchain stuff tries to solve are not actually the hard problems. The hard part of online commerce is not that customers can reverse credit card transactions. The hard part of contract law is not automatic payments. The hard part about property law is not atomic transactions of money and deed transfers.
So just off the bat, almost everything that is presented as a "solution" is not actually solving anything meaningful.
But it doesn't stop there. It's actually making the actual hard problems worse.
For cryptocurrencies, it makes courts all but impotent. A court can't compel you to pay child support, or return the money you stole. You can just say "no".
It's not trivial to track money, but the stated goals of cryptocurrencies is to make it hard or impossible to trace, and to compel.
It's not easy to find money laundering, or just criminal money being moved around. AML & KYC laws exist. They're not perfect. They can inconvenience legit people, and they can be gotten around. But they do help greatly.
The explicit goals of cryptocurrencies is to get around AML & KYC laws. This is what Pintrest was talking about.
So that's for "anonymous". We don't actually want someone to trivially move $1B anonymously.
We as a society, as a people, don't even want people to be able to send money any way they want. E.g. we don't want people to be able to send money to ISIS. There's a "baby and bathwater" argument that can be made here, but since cryptocurrency people don't even WANT to prevent this use case, it's not what they're making, or selling.
Like airline security, it's not effective because it's perfect, but because there's too much risk that one of the layers will catch you.
And the cryptocurrency dream is to remove all those layers.
Reversibility: People don't want this. One of the main reasons to use a credit card AT ALL is that people want reversibility. If that's all you wanted then you can probably just accept debit cards.
And as for smart contracts: All smart contract systems need a way for a court to interpret the contract. The contract may not be legal, it may have been signed under duress, etc.. So all smart contract systems need this escape hatch.
So how is it adding any value?
And the hard part of contracts was never what's being solved here. The hard part is codifying your intention into legalese, and conflict resolution. The codifying is still there, but now it's computer code instead of legalese. But conflict resolution is removed? Why?
The most ridiculous one is "land ownership registry". You know who ultimately decides who own a piece of land? The government of the country it's in.
Do you think France will bow down to "math" if a French court orders a house to be sold, but the would-be seller is some anonymous "wallet" that refuses?
France would just "fork the blockchain", and the authoritative fork is the one backed by police who will come remove anyone who claims ownership of something they don't own.
In an extreme example, if the ownership of Mona Lisa was "on the blockchain", and a rogue employee sold it, do you think France would hand it over? Of course not. So it means nothing.
I realize this comment is all over the place, and not diving deep into any one argument. It's more like a survey (though not complete) of various arguments, that can then be explored in more detail. This comment is long enough already.
And note that all this is in addition to technical problems like PoW/PoS, electricity use, scalability, transaction speed, 51% attacks, etc... Even assuming all those are solved, the problem is the the very GOAL is a dystopia.
ISIS has figured out how to get funded long before crypto was a thing. Banks already launder billions and that's harder to trace than Bitcoin transactions. And now, like it or not, crypto already exists and is here to stay, so perhaps it's better to start building legitimate use-cases around it than to just mumble about ISIS from afar.
All of your examples seem very contrived for how crypto won't work. I can make up examples of areas where crypto won't help, too. It's not supposed to be the end-all use case for everything.
The lack of conflict resolution in crypto is a side effect of decentralization. When you're talking global interoperability and value exchange, conflict resolution is off the table anyway. What court am I supposed to go to if I wire money to a guy in Nigeria and he doesn't fulfill his end of the bargain?
Ownership of the Mona Lisa might not be one, but there are many use-cases where removing a centralized mediator has a ton of potential benefits. One example might be Basic Attention Token, where advertisers and users can get a better experience because there's no need to satisfy the Google Ads middleman. What's the use for a conflict resolution mechanism in online advertising? Same with device connectivity with helium network, or decentralized lending that can provide better interest rates because there's not a huge meatspace banking infrastructure to support.
I'm not saying crypto won't work. I'm saying every single idea that's been proposed won't work.
And the base problem is that the whole point of these coins is disguising "I want to create a world problem" as "I want to solve a problem".
"It's hard to get around [AML, KYC, tax, etc.] laws" is not a "problem" that needs to be solved. Yet again and again, this is what coiners propose as a potential "killer app".
> When you're talking global interoperability and value exchange, conflict resolution is off the table anyway.
Huh?
> What court am I supposed to go to if I wire money to a guy in Nigeria and he doesn't fulfill his end of the bargain?
Your bank makes it hard to do this, to make sure you're not being scammed.
And what problem exactly are you trying to solve? If you send BTC to Nigeria and the guy doesn't fulfill his end of the bargain then BTC by design doesn't allow any recourse.
Our current system may or may not be able to help you, but BTC goes out of its way to say "fuck you, you should just never have made a mistake".
But also, if someone moves $10B to Nigeria, you can bet your ass they'll find a way.
C.f. when one of the Pirate Bay founders, while living in Cambodia which doesn't have an extradition treaty, hacked some banks. VERY quickly that whole "doesn't have an extradition treaty" did not matter at all, and he got arrested and put in prison.
He should have bought bitcoin/monero. Noob. :-)
It's actually telling that he had full access to the bank's mainframe, yet still only managed to steal like a couple of thousand USD. The rest of the transfers were blocked or reversed.
So the system worked as intended. And as we've seen time and time again (cough, Mt Gox), bitcoin just doesn't work even as intended.
> One example might be
For many years now we've heard hypotheticals, but no actual solutions. The time for brainstorming should have been over, considering the HUGE environmental and crime impact.
At this point it all sounds like "it's not worked so far, but can we just continue setting fire to children? I think it'll do something good one of these days".
> decentralized lending that can provide better interest rates because there's not a huge meatspace banking infrastructure to support.
But can we have an actual solution, not just handwaving, here?
How are you going to solve the intersection between lending contract and laws? What about bankrupsy? What about court ordered child support? What about inheritance, death, etc?
These blockchain things are trying to solve what is actually the EASY problems, not the hard problems.
Like, what do you think will happen if you say "can I get a better interest rate, if I agree to be excluded from chapter 11 and chapter 7 laws?". Likely no, no you cannot. Your "math" doesn't magically make the government, judicial system, and police just "go away". And for good reason.
Most exchanges also blacklist addresses to help keep you from getting scammed. People still get scammed, though.
> Mt Gox
A sketchy exchange hacked 7 years ago and many of the BTC was recovered. Good luck hacking Coinbase.
> hypotheticals, but no actual solutions
Basic Attention Token is literally a functional system working today, right now. So is Helium Network, The Graph, Unlock Protocol, Storj, Golem, Livepeer, and dozens of other projects that are actually making awesome innovations today.
> The time for brainstorming should have been over, considering the HUGE environmental and crime impact
So if we stop all crypto brainstorming and innovation, then mining and crime will suddenly disappear? What if I told you crypto innovation is making these things better, not worse - Proof-of-Stake is about to reduce Ethereum's energy use by 99.9%, only made possible by continued innovation in crypto.
> But can we have an actual solution, not just handwaving, here?
Yes, Compound and Aave are decentralized lending platforms that give you better interest rates than banks. Your points about bankruptcy don't apply here, because DeFi lending is designed so that you can't go into debt. Bankruptcy only happens when you're loaned some money that you can't pay back.
In meatspace, avoiding debt collectors and child support is still illegal, whether you're hoarding BTC or just putting cash under your mattress.
Even so, can we agree that if I'm paying for a newsletter subscription online, that the multi-trillion dollar meatspace infrastructure of banks, credit cards, bankruptcy laws, FDIC, and court settlements is basically wasted? Shouldn't I just be able to sign up to a website, instantly pay a fraction of an ETH, and be on my way, no banks involved? That's the core of what crypto promises: web-native money.
Which is why nonreversibility is a bug.
> A sketchy exchange hacked 7 years ago and many of the BTC was recovered.
4 years before that article.
> Good luck hacking Coinbase.
That's a matter of when, not if. Like I just said even actual real banks get hacked.
But it doesn't even have to be that clean. It's enough that one Coinbase employee has the opportunity for even one minute. I don't know how much they manage, but someone left alone (or conspiring, for a two-key system), and you can have all the money disappear.
And the thing is, they'll likely get caught in that case. But so what?
The average sentence for robbery is apparently 111 months. Now, I didn't do more research on that than a simple googling, but 10 years prison, and when you get out you're a billionaire?
And keeping in mind that during that whole prison time, your family is stinking rich.
> Proof-of-Stake is about to reduce Ethereum's energy use by 99.9%
Again, I'm not holding my breath. Especially since bitcoin HODLers will never give up, and bitcoin factories have financial incentive to continue the scam.
> So if we stop all crypto brainstorming and innovation
No. You should show some results after a decade of crime and waste.
> What if I told you crypto innovation is making these things better, not worse
I read this as "reducing the problems they created", not "making the preexisting problems less of a problem".
Great. Let me know when coiners consume less power than Denmark for 7tx/sec.
> DeFi lending is designed so that you can't go into debt.
How does that work? Let's say I have a DeFi loan, and then I get drunk and smash a priceless vase, now owing $100M to some art gallery?
So my assets and liabilites are now that loan, and my debt to the art gallery. I go bankrupt, and my assets and liabilities are renegotiated / forgiven.
And the solution can't be "the law of the land, and courts, do not have jurisdiction over DeFi debt". Because obviously they do.
> In meatspace, avoiding debt collectors and child support is still illegal, whether you're hoarding BTC or just putting cash under your mattress.
Yes, but like I said: judgement proof.
Today it sucks to be judgement proof (i.e. you pretty much have to be a bum). In a coin future it doesn't really affect you at all.
> Even so, can we agree that if I'm paying for a newsletter subscription online, that the multi-trillion dollar meatspace infrastructure of banks, credit cards, bankruptcy laws, FDIC, and court settlements is basically wasted?
Not sure what you mean, here. The multi-trillion dollar industry does more than allow you to pay for things online. It's the engine of the whole economy. A better comparison is to compare it to only paypal.
And paypal does have overhead, to be sure. And yes for any happy transaction between you and the newsletter that overhead is waste. But you're paying for when it's not a happy transaction. E.g. when the company goes bust, just plain doesn't give you the product or service, or when your card gets stolen (c.f. someone hacked your computer), and other mishaps.
And also for when actually the newslesser is a front, and "you" are actually just laundering money for them. Compare this to how in the 90s some people set up companios selling ringtones, and then went and bought SIM cards with cash, and used it all on their own ringtones.
You don't have to make it impossible, just too risky or expensive to be worth it. At least with real money. With coins making it risky doesn't help, because the money can't be clawed back, so you can just wait out your prison sentence.
You saying the whole industry is wasted is like me saying police, fire departments, and ambulance are a complete waste, because I have never neither either of them. Hell, I've never even needed my home or car insurance, or my life insurance.
Do you have the source study? I don't want to give my personal data to a blockchain company, and they rejected both mailinator and gmail for registration.
> The core things that blockchain stuff tries to solve are not actually the hard problems.
What are the hard problems though? Depending on where you stand you might see different things, but to me the hard problems are that banks throughout the world have a hard time trusting and interoperating, things are slow (payments have to go through banks correspondences and central banks and the BIS and that route takes a long time even if some of the stages are RTGSs), errors are way too common (basically audits happen all the time, are manual, and consequences of errors are real issues that people have to deal with).
> The hard part of online commerce is not that customers can reverse credit card transactions. The hard part of contract law is not automatic payments. The hard part about property law is not atomic transactions of money and deed transfers.
What are the hard parts from your point of view? Is your point of view that the system is perfect and doesn't need the technical improvements proposed by blockchain? I'm not sure I follow.
> It's not trivial to track money, but the stated goals of cryptocurrencies is to make it hard or impossible to trace, and to compel.
I feel like that's too much of a strong statement considering that some cryptocurrencies, which I've worked on, were built specifically to follow regulations and make fraud hard.
> The explicit goals of cryptocurrencies is to get around AML & KYC laws. This is what Pintrest was talking about.
Again, there are many cryptocurrencies with very different goals and this statement can't apply to all. The statement is at least very wrong for some well-known cryptocurrencies.
> We as a society, as a people, don't even want people to be able to send money any way they want. E.g. we don't want people to be able to send money to ISIS. There's a "baby and bathwater" argument that can be made here, but since cryptocurrency people don't even WANT to prevent this use case, it's not what they're making, or selling.
So, ignoring what I said previously that different cryptocurrencies have different goal, and so that statement doesn't apply to the field in general, there's still something to be said about that. How much privacy do we deserve? Where is the line where privacy is too strong that it is damaging to society? There's a very similar argument with end-to-end encryption in messaging applications and governments trying to fight it. For example: https://www.gov.uk/government/publications/international-sta...
> Like airline security, it's not effective because it's perfect, but because there's too much risk that one of the layers will catch you.
BTW I don't think airline security is a good example. Adam ruins everything has a good episode on that: https://www.youtube.com/watch?v=-LDzOi1dyAA (tl;dw: it's security theater)
> Reversibility: People don't want this. One of the main reasons to use a credit card AT ALL is that people want reversibility. If that's all you wanted then you can probably just accept debit cards.
Credit cards are mostly a US thing btw, I never knew about them before moving here, and even in the US reversibility is not always a thing. For example, you can't reverse transactions done on venmo or zelle. But even then, cryptocurrencies don't preclude reversing transactions, there's nothing in the technology that would prevent that, especially if it used as a settlement layer for virtual assert service providers (exchanges, banks, etc.)
> And as for smart contracts: All smart contract systems need a way for a court to interpret the contract. The contract may not be legal, it may have been signed under duress, etc.. So all smart contract systems need this escape hatch.
I'm not sure I understand your point. A smart contract has its code published in clear so by using it you already choose to trust and obey the code.
> The most ridiculous one is "land ownership registry". You know who ultimately decides who own a piece of land? The government of the country it's in.
Agree, linking real objects to the blockchain is hard, and projects that tout that usecase are often scams.
> And note that all this is in addition to technical problems like PoW/PoS, electricity use, scalability, transaction speed, 51% attacks, etc... Even assuming all those are solved, the problem is the the very GOAL is a dystopia.
PoW/electricity use are things of the past for the technology. No new cryptocurrency rely on these. Scalability and transaction speed are things that are being solved (I believe Algorand is aiming for 20k transaction/s for the end of the year). There are other consensusless protocols that pretty much scale linearly based on the number of machines you throw on the problem (see fastpay or At2).
BTW if you have any question, happy to continue this conversation or clarify anything.
I mentioned this. E.g. "The hard part is codifying your intention into legalese, and conflict resolution".
But again, I would invite you to talk to some contract lawyers and see what the hard problems are in their space. And carefully listen to how they solve them, and if your cryptosolution maybe not only doesn't solve the problem, but actually makes it worse.
Especially internationally, where you maybe hire a service, but then one of the countries involved has export restrictions, or immigration requirements, or whatever else.
These blockchain things are explicitly made to "go around" all government regulations (that's why they can say it'll be cheaper and more efficient). But the companies still have to obey the law, or they'll go to jail. So no that's not the problem.
> Is your point of view that the system is perfect and doesn't need the technical improvements proposed by blockchain?
I have not seen a solution based on blockchain that solves a hard problem. Nor have I seen one that doesn't make a hard problem even harder.
E.g. when I bought a house I had to prove to the bank and various involved parties where the money came from. And then when transferring I had two people from the bank walk me through it, to make sure this 6 digit cash transfer was legit.
It was annoying, yes. But I understand why it's there. To say "oh if this had been bitcoin you could just have transferred and it would be there in an hour". Or "had this been a smart contract it would have triggered deed transfer". Ok, sure. But what if there were some legal dispute and the seller was about to lose the house? That I would essentially be buying stolen goods?
What if the house had known deficiencies that the seller provably knew about but lied about during selling? If this had been Bitcoin they could simply decline to pay me. They'd launder it in Monero, and sucks to be me.
It's easy to set yourself up to be judgement proof if your assets cannot be seized.
> Credit cards are mostly a US thing btw, I never knew about them before moving here, and even in the US reversibility is not always a thing
I've lived in two countries, neither of which are the US, and credit card extra protection is certainly not US-only.
But that was still not my point. I'm saying reversibility is a feature. That mainstream finance can deliver. And it's good, so cryptocurrencies should too. They mostly do the opposite on purpose, which shows that they are not actually making what people actually want in a currency.
> Again, there are many cryptocurrencies with very different goals and this statement can't apply to all. The statement is at least very wrong for some well-known cryptocurrencies.
zcash, I believe, makes lip service to AML/KYC, but to me as a non-ML-investigator it smells a bit loophole-y, and one that may close.
> BTW I don't think airline security is a good example.
Adam ruins everything (and I've seen it) is entertaining and informative and all, but while yes there are aspects that are security theatre, turns out many of them do add up. The hijackings of the 70s largely went away. But also, Adam's not even saying airline security is security theatre! He even enumerates four added security features that DO stop terrorists. He's talking about the TSA. And then Bruce Schneier says more relevant things.
So the sum of airline security is: good old fashioned police work, infiltration of organizations, wiretaps, anomaly detection, behavior checking (Israel does a lot of this, and the have a good track record despite the obvious targeting), TSA, passengers, air marshals, reinforced cockpit doors, etc..
So if you want to be successful, then you have to get past ALL that.
And while the TSA doesn't do much, any suicidal idiot could just get on a plane with a fullauto in his carryon. At least now he has to weigh the risk of being embarrassedly found in the security check.
So maybe he probably switches to a handgun instead of the AK47. So he's less dangerous.
> cryptocurrencies don't preclude reversing transactions, there's nothing in the technology that would prevent that
Sure. But every time someone tries to sell the benefits of cryptocurrencies they will list this as a feature. And again this is my core point: All of the features they list, are actually bugs. And if you invent a cryptocurrency without the bugs, then it doesn't actually solve anything for anyone.
> I'm not sure I understand your point. A smart contract has its code published in clear so by using it you already choose to trust and obey the code.
It's not your choice to obey an illegal contract. And it shouldn't be. That's the point of contract legality.
And the hard part of writing a contract is not the enforcement, but codifying your inner intent into a bugfree contract, signed in a legal manner.
If you hold a gun to my head and force me to sign a smart contract, and I can prove it, how can a court invalidate the contract if you refuse to sign the invalidation block?
> PoW/electricity use are things of the past for the technology
And the present. I won't celebrate prematurely.