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This utopian streak running through the crypto community is what convinces me most that it’s going to be a heartbreaker. > But Hayek used the notion of distrib

This utopian streak running through the crypto community is what convinces me most that it’s going to be a heartbreaker. > But Hayek used the notion of distributed knowledge. Well, it looks like we do not even need that thing called knowledge for things to work well. Nor do we need individual rationality. All we need is structure. Irrational exuberance is a good thing! And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt...

matthewbauer 9y ago
Yes definitely. If you replace "Bitcoin" in this essay with "blockchain based assets", Taleb would have a fairly good point. But "Bitcoin" has been manipulated so much that I think most people recognize that a crash is inevitable. There is nothing special about Bitcoin-anyone can start their own blockchain. Bitcoin is just an overpriced version of the infinite possible blockchains.
- soneca 9y ago
  But he indeed is mostly talking about the idea/concept behind Bitcoin (that could be translated as "blockchain based assets") rather than necessarily Bitcoin itself. He doesn't discard Bitcoin as not having these qualities, but he also doesn't state that only Bitcoin is capable of it.
- jebeng 9y ago
  I think you have it backwards here for the most part. What problems do you see infinite blockchains solving? No comment on whether or not a crash is inevitable, who knows where the price is going. That's not really too important to me. But the fact that Bitcoin is for now the most secure and technologically sound blockchain is what makes it interesting. And actually having those unique characteristics is what makes it special. I definitely don't see much special with 'blockchain the data structure' on its own.
  - matthewbauer 9y ago
    Yes there’s definitely value in Bitcoins hash power and underlying technology. But the code is open source and easy to copy. There’s a team behind it that is definitely worth something for Bitcoin but they could certainly work on any blockchain (especially if it’s a Bitcoin fork). I think forks are definitely the biggest concern for Bitcoin. I think most longterm holders arent realizing how big of a threat it is. Bitcoin Cash is still around and can probably stay around for a long time reusing Cores work. Other forks will be less friendly and won’t preserve Bitcoins transaction history.
paulgb 9y ago
For what it's worth, I think Hayek's vision of competitive money is often misrepresented by crypto folks. I wrote about it here: https://paulbutler.org/archives/stop-dragging-hayek-into-bitcoin/ https://paulbutler.org/archives/stop-dragging-hayek-into-bit...
brndnmtthws 9y ago
I hope the price goes close to 0 so I can buy it all up.
jgh 9y ago
I honestly hope the utopian dream is smashed in the cryptocurrency community. It's not the kind of "utopia" I want to be a part of. I like the technical ideas behind cryptocurrency, but the terrible political views are off-putting.
- tenaciousDaniel 9y ago
  I'm legitimately interested in cryptocurrency; I think it's a really cool idea. So what I'm hoping for is that everything goes as horribly wrong as possible, the price tanks, everyone's dreams are smashed, and all the bullshit takes disappear. At that point, the people who are interested in building something worthwhile will be the only ones who remain, and we can work in peace.
  - jgh 9y ago
    I'm sure that there will be some kind of reckoning at some point. Who knows though, maybe prices will just stabilize to the point that it becomes another boring equity.
  - adwhit 9y ago
    Is there an altcoin which is indefinitely and exponentionally inflationary? Such a coin would not have the gold-rush/ponzi characteristics which bitcoin has, and there wouldn't be a such huge incentive to mine new coins so hopefully it would avoid the incredibly wasteful mining arms race. But no one would get rich quick, so it would probably never take off in the first place.
    - pjkundert 9y ago
      I think the concept you're looking for is "value stable". Right now we're seeing the tip of the iceberg of potential cryptocurrencies. Pretty much only token-based (ie. non-ledger) based currencies, where we need global BFT consensus to track the current position of every single coin. This is crazy. And, as it turns out, unnecessary (see: Holochain). When the iceberg capsizes (as Git capsized the CASE industry), globally consistent ledger-based value-stable currencies based on peer-to-peer co-signed personal blockchains will supplant these unnecessary globally consistent token based ... things. (Do I really care that you just slid a nickel across the table to someone? Nope). Same with crazy Turing-complete globally consistent VMs implementing Smart Contract languages. Not necessary. You are correct -- value-stable currencies won't have anyone getting rich quick. But, when every sub-saharan goat herder and neighbourhood kid with a collection of trading cards can independently monetize his/her wealth into a value-stable currency, we'll see the face ripped off of the global Fiat monetary systems...
dqpb 9y ago
I feel like you could say the exact same thing about democracy
- vec 9y ago
  You can! Also relevant, there are no functioning democracies in the world today. There are a bunch of republics and parliaments and representative democracies and such, but without exception they empower some relatively small central institution to make broad, sweeping decisions on behalf of the nation.
jm__87 9y ago
There is a distinct difference between some pump and dump strategy and a central bank printing a ton of currency. One has a temporary effect on supply and demand for the instrument in question, the other has a permanent effect.
- tinokid 9y ago
  >the other has a permanent effect This is not really accurate. There are of course many ways both fiscal and monetary for policymakers to "tighten the screws", as it were. They just haven't chosen to do so in recent years.
  - jm__87 9y ago
    * Permanent until the central bank chooses to contract their balance sheet at some point in the future. Perhaps a better way to describe it is that a pump and dump strategy has a transient effect on the value of the asset in question, whereas a central bank increasing the money supply has a persistent effect on the value of the currency in question.
agorabinary 9y ago
If there is a fatal flaw in Bitcoin somewhere, there are hundreds of other attempts to improve upon this idea by forking the code. We will surely see dramatic changes in valuation amongst these different coins as the crypto community develops, but to think that ALL the coins will fail in their game-changer level ambition.. this does not logically follow. In all possible worlds, individuals will fork Bitcoin and the competition for economically and technically sound digital monies will only increase. And in all possible worlds, individuals will manipulate markets with very low volume, ie. Bitcoin for most/all of its existence. This is all deterministic. It could not be otherwise.
- sethrin 9y ago
  >but to think that ALL the coins will fail in their game-changer level ambition.. this does not logically follow. Good thing no one suggested that.
ShabbosGoy 9y ago
> And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt... What baffles me is the obsession over price. Nobody obsesses over USD/JPY, unless you’re a forex trader. Rather than focusing on price, the focus should be on building new ideas with blockchain technology. Dapps are easier than ever to deploy with Truffle/web3.js[0] for example. You can come up with cool alternative governance models like Dash[1] has. I’ve been following Bitcoin since 2010. It’s never been about price for me. It’s been about what cool things you can build with the technology. [0] http://truffleframework.com http://truffleframework.com [1] https://dashvotetracker.com https://dashvotetracker.com
- rmah 9y ago
  How is this baffling? 99% of people who buy bitcoin and other cryptocurrencies don't care about freedom, disrupting the financial system or any of that other ideological issues. They simply want to make money (USD, EUR, JPY, what have you).
vec 9y ago
> And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt... Thank you for putting words to an idea I've had for a while. I agree that central banks are imperfect and that they sometimes abuse or just misuse their power. When they abuse the trust we place in them it creates real, specific problems. Cryptocurrencies have no trust, but they have even worse versions of the same specific problems. This shouldn't be surprising. The entire reason we created central banks in the first place was precisely to attempt to manage these specific problems. The implicit argument is that centrally managing a currency isn't just imperfect and corrupt, but that it's so incredibly imperfect and corrupt as to be worse than nothing.
deleted 9y ago
[deleted]
arisAlexis 9y ago
you can manipulate any market when it's small. that doesn't mean anything actually

matthewbauer 9y ago

Yes definitely. If you replace "Bitcoin" in this essay with "blockchain based assets", Taleb would have a fairly good point. But "Bitcoin" has been manipulated so much that I think most people recognize that a crash is inevitable. There is nothing special about Bitcoin-anyone can start their own blockchain. Bitcoin is just an overpriced version of the infinite possible blockchains.

soneca 9y ago
But he indeed is mostly talking about the idea/concept behind Bitcoin (that could be translated as "blockchain based assets") rather than necessarily Bitcoin itself. He doesn't discard Bitcoin as not having these qualities, but he also doesn't state that only Bitcoin is capable of it.
jebeng 9y ago
I think you have it backwards here for the most part. What problems do you see infinite blockchains solving? No comment on whether or not a crash is inevitable, who knows where the price is going. That's not really too important to me. But the fact that Bitcoin is for now the most secure and technologically sound blockchain is what makes it interesting. And actually having those unique characteristics is what makes it special. I definitely don't see much special with 'blockchain the data structure' on its own.
- matthewbauer 9y ago
  Yes there’s definitely value in Bitcoins hash power and underlying technology. But the code is open source and easy to copy. There’s a team behind it that is definitely worth something for Bitcoin but they could certainly work on any blockchain (especially if it’s a Bitcoin fork). I think forks are definitely the biggest concern for Bitcoin. I think most longterm holders arent realizing how big of a threat it is. Bitcoin Cash is still around and can probably stay around for a long time reusing Cores work. Other forks will be less friendly and won’t preserve Bitcoins transaction history.

paulgb 9y ago

For what it's worth, I think Hayek's vision of competitive money is often misrepresented by crypto folks. I wrote about it here: https://paulbutler.org/archives/stop-dragging-hayek-into-bitcoin/ https://paulbutler.org/archives/stop-dragging-hayek-into-bit...

brndnmtthws 9y ago

I hope the price goes close to 0 so I can buy it all up.

jgh 9y ago

I honestly hope the utopian dream is smashed in the cryptocurrency community. It's not the kind of "utopia" I want to be a part of. I like the technical ideas behind cryptocurrency, but the terrible political views are off-putting.

tenaciousDaniel 9y ago
I'm legitimately interested in cryptocurrency; I think it's a really cool idea. So what I'm hoping for is that everything goes as horribly wrong as possible, the price tanks, everyone's dreams are smashed, and all the bullshit takes disappear. At that point, the people who are interested in building something worthwhile will be the only ones who remain, and we can work in peace.
- jgh 9y ago
  I'm sure that there will be some kind of reckoning at some point. Who knows though, maybe prices will just stabilize to the point that it becomes another boring equity.
- adwhit 9y ago
  Is there an altcoin which is indefinitely and exponentionally inflationary? Such a coin would not have the gold-rush/ponzi characteristics which bitcoin has, and there wouldn't be a such huge incentive to mine new coins so hopefully it would avoid the incredibly wasteful mining arms race. But no one would get rich quick, so it would probably never take off in the first place.
  - pjkundert 9y ago
    I think the concept you're looking for is "value stable". Right now we're seeing the tip of the iceberg of potential cryptocurrencies. Pretty much only token-based (ie. non-ledger) based currencies, where we need global BFT consensus to track the current position of every single coin. This is crazy. And, as it turns out, unnecessary (see: Holochain). When the iceberg capsizes (as Git capsized the CASE industry), globally consistent ledger-based value-stable currencies based on peer-to-peer co-signed personal blockchains will supplant these unnecessary globally consistent token based ... things. (Do I really care that you just slid a nickel across the table to someone? Nope). Same with crazy Turing-complete globally consistent VMs implementing Smart Contract languages. Not necessary. You are correct -- value-stable currencies won't have anyone getting rich quick. But, when every sub-saharan goat herder and neighbourhood kid with a collection of trading cards can independently monetize his/her wealth into a value-stable currency, we'll see the face ripped off of the global Fiat monetary systems...

dqpb 9y ago

I feel like you could say the exact same thing about democracy

vec 9y ago
You can! Also relevant, there are no functioning democracies in the world today. There are a bunch of republics and parliaments and representative democracies and such, but without exception they empower some relatively small central institution to make broad, sweeping decisions on behalf of the nation.

jm__87 9y ago

There is a distinct difference between some pump and dump strategy and a central bank printing a ton of currency. One has a temporary effect on supply and demand for the instrument in question, the other has a permanent effect.

tinokid 9y ago
>the other has a permanent effect This is not really accurate. There are of course many ways both fiscal and monetary for policymakers to "tighten the screws", as it were. They just haven't chosen to do so in recent years.
- jm__87 9y ago
  * Permanent until the central bank chooses to contract their balance sheet at some point in the future. Perhaps a better way to describe it is that a pump and dump strategy has a transient effect on the value of the asset in question, whereas a central bank increasing the money supply has a persistent effect on the value of the currency in question.

agorabinary 9y ago

If there is a fatal flaw in Bitcoin somewhere, there are hundreds of other attempts to improve upon this idea by forking the code. We will surely see dramatic changes in valuation amongst these different coins as the crypto community develops, but to think that ALL the coins will fail in their game-changer level ambition.. this does not logically follow. In all possible worlds, individuals will fork Bitcoin and the competition for economically and technically sound digital monies will only increase. And in all possible worlds, individuals will manipulate markets with very low volume, ie. Bitcoin for most/all of its existence. This is all deterministic. It could not be otherwise.

sethrin 9y ago
>but to think that ALL the coins will fail in their game-changer level ambition.. this does not logically follow. Good thing no one suggested that.

ShabbosGoy 9y ago

> And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt... What baffles me is the obsession over price. Nobody obsesses over USD/JPY, unless you’re a forex trader. Rather than focusing on price, the focus should be on building new ideas with blockchain technology. Dapps are easier than ever to deploy with Truffle/web3.js[0] for example. You can come up with cool alternative governance models like Dash[1] has. I’ve been following Bitcoin since 2010. It’s never been about price for me. It’s been about what cool things you can build with the technology. [0] http://truffleframework.com http://truffleframework.com [1] https://dashvotetracker.com https://dashvotetracker.com

rmah 9y ago
How is this baffling? 99% of people who buy bitcoin and other cryptocurrencies don't care about freedom, disrupting the financial system or any of that other ideological issues. They simply want to make money (USD, EUR, JPY, what have you).

vec 9y ago

> And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt... Thank you for putting words to an idea I've had for a while. I agree that central banks are imperfect and that they sometimes abuse or just misuse their power. When they abuse the trust we place in them it creates real, specific problems. Cryptocurrencies have no trust, but they have even worse versions of the same specific problems. This shouldn't be surprising. The entire reason we created central banks in the first place was precisely to attempt to manage these specific problems. The implicit argument is that centrally managing a currency isn't just imperfect and corrupt, but that it's so incredibly imperfect and corrupt as to be worse than nothing.

deleted 9y ago

[deleted]

arisAlexis 9y ago

you can manipulate any market when it's small. that doesn't mean anything actually