16 ms·

The crypto alternative

89 points by tdurden 8y ago

blattimwind 8y ago
"Suppose, just for a moment, just for argument’s sake, that (some) cryptocurrencies are not a giant scam, and what’s more, they’re not just another kind of financial asset. Come on. Don’t look at me like that. Work with me here. Imagine, just for a moment, that there exist plausible futures in which they matter." I'm afraid my suspension of disbelief has its limits.
justinsaccount 8y ago
Title should be "The cryptocurrency alternative"
bobbygoodlatte 8y ago
The author fails to mention a likely outcome: the co-mingling of centralized solutions and decentralized ones. Decentralized solutions would be at global scale (not at 2% usage) and they'd complement centralized solutions, not replace. For example, digital property rights might be best preserved via decentralized tech. But perhaps you might take your digital property and use it to interact with centralized services. Imagine a video game where the player truly owns the in-game items they use as crypto tokens, but the game itself runs on centralized servers. The same might be said of Facebook-like applications. Rather than imagining a future where a decentralized Facebook exists, perhaps it becomes more of a hybrid decentralized-centralized platform.
- paulgb 8y ago
  > Imagine a video game where the player truly owns the in-game items they use as crypto tokens, but the game itself runs on centralized servers. This is a neat thought experiment, but beyond the novelty what value does it give you to own an item in a decentralized way if a centralized entity can take it away from you if they want to (even if it means patching the game instead of knowing your private key?) Truly decentralized, Sybil-resistant networks are necessarily expensive to maintain, so it has to provide more than just novelty value.
  - Vadoff 8y ago
    The value of the decentralized token would be determined by the free market. If the centralized entity ever had a history of patching the game to block tokens, then the value of that token would go down a lot.
    - theamk 8y ago
      But if the value is determined by a single centralized entity, what is the value that crypto tokens bring? For example, if WOW currency were to become decentralized overnight -- what would practically change? Either way Blizzard can take them away. Either way value of token will drop if Blizzard does this a lot.
      - woah 8y ago
        A game accepting the token would be able to get an instant potential audience of people who had built up a lot of value in it already
        vertex-four 8y ago
        So this sounds like a good reason for game developers not to use decentralised currencies, since it makes it easier for competitors to steal players away.
        miscreanity 8y ago
        While not participating means no "real world" money involved and an uphill battle for adoption. The game would have to be an outstanding gem, and even then markets will form. Would it be worthwhile for a game developer to spend time on an economic system, or the game? Unless the game is an economic system...
        vertex-four 8y ago
        Generally speaking, game developers need to create and maintain "fixed" economic systems to make the game fun. Games regularly suffer from ridiculous economic effects because it's too easy to get money and not enough sinks, or vice versa. Making the tokens tradeable outside the game doesn't fix this, and in fact creates even more problems - the presence of gold farmers and those who pay them can unbalance the game for others playing the game with them. People spend their lives struggling under capitalism and use games to escape - and then you want to create a capitalist class system there too?
avmich 8y ago
> Likelihood: essentially nil, for many, many reasons, such as: The overwhelming majority of people don’t want to maintain their own private keys, and if you don’t maintain your own private keys, cryptocurrencies are essentially no different from fiat money held in banks, except for the many ways (such as the irrevocability of transactions) in which they are wildly inferior. Looks like an complete failure of imagination. Is it really that hard to assume there could be solutions to problems like that?
- blattimwind 8y ago
  I'd say the onus is on the cryptocurrency people to show that "the many ways [...] in which they are wildly inferior" are fixable.
  - sgeisler 8y ago
    For example "irrevocability of transactions" is fixable by introducing arbitrators. This has the huge benefit of making the trade off explicit and still allowing for irrevocable transactions. With 2-of-3 multi-sig escrow services can be implemented in a decentralized and trust less way (if both parties agree no escrow agent has to be involved). Handling private keys has also become much simpler in the past years due to hardware wallets and hierarchical deterministic keys. But I can see why someone could not want to be responsible for the safekeeping of their savings.
    - root_axis 8y ago
      "Arbiter" aka a centralized authority. At that point you're better off with a bank.
    - psychedelic 8y ago
      I think we still have a long way to come in regards to handling private keys. In my efforts to get my family/friends informed on cryptocurrency it amazes me how difficult these things are. I think that is why Coinbase has been so successful. If my mom wants to hold some bitcoin, I'm sending her to coinbase. She can't be trusted with her own private keys. I'm interested to read more on the multi-sig escrow services you mentioned though. Do you have any recommended reading material on the matter? Thanks.
Theodores 8y ago
I am a keen watcher of crypto although I have zero skin in the game, just friends that did get bitten by the bitcoin fever. I use bitcoin as a generic term for all the alt coins and any business that talks of 'blockchain' or 'ICO' - it is all the same snake-oil to me. A mere six months ago everyone and his dog was advising me to get into one coin or another as if they were trying to get me into their pyramid scheme. This chat is now absent from the watercooler. So I pressed my bitcoin mad neighbour on 'how are the coins going?' earlier today. I got an answer that they weren't doing it at the moment which sounded like the answer you would get if you asked a drug addict if they are still on crack knowing that their dealer had been busted. I asked some more and the response I got was that bitcoin was seasonal and that right now is just not the season for it. I asked some more but there was no more other than 'seasonal'. I also no longer get notifications of bitcoin things on YouTube and Twitter. For instance the guy 'bitfinex'd' was writing daily about the scam that was going on with that coin that was pegged to the dollar, he has not written in weeks. So my analysis is that the coin thing has gone the way of 'cold fusion'. It sounded like the next big thing but it is not. There is a lot of momentum with these things, I am sure that bitcoin is worth many thousands of dollars and I am sure that there are people putting together new coin scams, however, the word on the street and by the watercooler is that bitcoin is passe. People have moved on.
- jeremyt 8y ago
  On the contrary, we are about to start the second wave of things. The next wave will be an order of magnitude larger than the last, and this will continue until Bitcoin and blockchain has disrupted the vast majority of current industries. You sound like an Internet hater after it failed to find a killer app besides email for most of the mid-90s. Then, in 2000, as Pets.com was imploding, no doubt you would've dusted off this consistent criticism: "I am sure that internet stocks are worth many thousands of dollars and I am sure that there are people putting together new scams, however, the word on the street and by the watercooler is that internet stocks are passe. People have moved on." Ten years later, the stock market is dominated by tech stocks. If your criticism was based on actual knowledge, I'd give you credit, but it sounds like you have no idea what you're talking about, and you're using derision as an excuse not to educate yourself. Indeed, I think $8500 per Bitcoin is a bargain. Come check with me in a year.
spraak 8y ago
The different scenarios don't seem to follow the same time line. The first example seems to be far in the future while the others closer to now, making the comparisons flawed
deleted 8y ago
[deleted]
PopePompous 8y ago
The article does not address what I think is the Achille's Heel of crypto currencies: Controlling the money supply is one of the most powerful rights that a government has. Why do you think the governments in the EU have not unified their fiscal policies? Why do you think EU countries cheat on their budget deficits? Governments want to be able to make money plentiful during economic downturns, and tighten it up when the economy starts overheating. They set nonzero target inflation rates to encourage people to consume and invest. The idea that governments will allow some technology to remove that power from them is silly. If a crypto currency ever becomes a significant medium of exchange, it will be outlawed (following predictable reports about Drug Kingpins, Terrorists and Child Pornography).
- tim333 8y ago
  That's only a problem if you expect cryptos to replace fiat in everyday things like paying wages and taxes. If it's a parallel currency like at present it doesn't really effect the money supply stuff.
- slededit 8y ago
  Most cryptocurrencies are spec'd to stop creating new coins after a period of time. But that doesn't mean one couldn't design a coin where inflation is controlled by an entity with the right key. Even without that consideration policy changes can be enforced by Software updates. In the case of bitcoin gridlock has stalled this process but other coins have managed fine. The government has a strong compelling argument to force upgrades - you can't pay your taxes if you don't and then you will go to jail.
ilaksh 8y ago
How can he be so good at understanding the possibilities but so bad at judging the likelihood of significant change?
arisAlexis 8y ago
some good points there but saying "uh, nah" as a valid argument for dismissing probable outcomes doesn't awe me
arisAlexis 8y ago
the subsidization of real world real estate, art and other things that solve numerous problems did not enter this article.

89 points by tdurden 8y ago

"Suppose, just for a moment, just for argument’s sake, that (some) cryptocurrencies are not a giant scam, and what’s more, they’re not just another kind of financial asset. Come on. Don’t look at me like that. Work with me here. Imagine, just for a moment, that there exist plausible futures in which they matter." I'm afraid my suspension of disbelief has its limits.

justinsaccount 8y ago

Title should be "The cryptocurrency alternative"

bobbygoodlatte 8y ago

The author fails to mention a likely outcome: the co-mingling of centralized solutions and decentralized ones. Decentralized solutions would be at global scale (not at 2% usage) and they'd complement centralized solutions, not replace. For example, digital property rights might be best preserved via decentralized tech. But perhaps you might take your digital property and use it to interact with centralized services. Imagine a video game where the player truly owns the in-game items they use as crypto tokens, but the game itself runs on centralized servers. The same might be said of Facebook-like applications. Rather than imagining a future where a decentralized Facebook exists, perhaps it becomes more of a hybrid decentralized-centralized platform.

paulgb 8y ago
> Imagine a video game where the player truly owns the in-game items they use as crypto tokens, but the game itself runs on centralized servers. This is a neat thought experiment, but beyond the novelty what value does it give you to own an item in a decentralized way if a centralized entity can take it away from you if they want to (even if it means patching the game instead of knowing your private key?) Truly decentralized, Sybil-resistant networks are necessarily expensive to maintain, so it has to provide more than just novelty value.
- Vadoff 8y ago
  The value of the decentralized token would be determined by the free market. If the centralized entity ever had a history of patching the game to block tokens, then the value of that token would go down a lot.
  - theamk 8y ago
    But if the value is determined by a single centralized entity, what is the value that crypto tokens bring? For example, if WOW currency were to become decentralized overnight -- what would practically change? Either way Blizzard can take them away. Either way value of token will drop if Blizzard does this a lot.
    - woah 8y ago
      A game accepting the token would be able to get an instant potential audience of people who had built up a lot of value in it already
      - vertex-four 8y ago
        So this sounds like a good reason for game developers not to use decentralised currencies, since it makes it easier for competitors to steal players away.
        miscreanity 8y ago
        While not participating means no "real world" money involved and an uphill battle for adoption. The game would have to be an outstanding gem, and even then markets will form. Would it be worthwhile for a game developer to spend time on an economic system, or the game? Unless the game is an economic system...
        vertex-four 8y ago
        Generally speaking, game developers need to create and maintain "fixed" economic systems to make the game fun. Games regularly suffer from ridiculous economic effects because it's too easy to get money and not enough sinks, or vice versa. Making the tokens tradeable outside the game doesn't fix this, and in fact creates even more problems - the presence of gold farmers and those who pay them can unbalance the game for others playing the game with them. People spend their lives struggling under capitalism and use games to escape - and then you want to create a capitalist class system there too?

avmich 8y ago

> Likelihood: essentially nil, for many, many reasons, such as: The overwhelming majority of people don’t want to maintain their own private keys, and if you don’t maintain your own private keys, cryptocurrencies are essentially no different from fiat money held in banks, except for the many ways (such as the irrevocability of transactions) in which they are wildly inferior. Looks like an complete failure of imagination. Is it really that hard to assume there could be solutions to problems like that?

blattimwind 8y ago
I'd say the onus is on the cryptocurrency people to show that "the many ways [...] in which they are wildly inferior" are fixable.
- sgeisler 8y ago
  For example "irrevocability of transactions" is fixable by introducing arbitrators. This has the huge benefit of making the trade off explicit and still allowing for irrevocable transactions. With 2-of-3 multi-sig escrow services can be implemented in a decentralized and trust less way (if both parties agree no escrow agent has to be involved). Handling private keys has also become much simpler in the past years due to hardware wallets and hierarchical deterministic keys. But I can see why someone could not want to be responsible for the safekeeping of their savings.
  - root_axis 8y ago
    "Arbiter" aka a centralized authority. At that point you're better off with a bank.
  - psychedelic 8y ago
    I think we still have a long way to come in regards to handling private keys. In my efforts to get my family/friends informed on cryptocurrency it amazes me how difficult these things are. I think that is why Coinbase has been so successful. If my mom wants to hold some bitcoin, I'm sending her to coinbase. She can't be trusted with her own private keys. I'm interested to read more on the multi-sig escrow services you mentioned though. Do you have any recommended reading material on the matter? Thanks.

Theodores 8y ago

I am a keen watcher of crypto although I have zero skin in the game, just friends that did get bitten by the bitcoin fever. I use bitcoin as a generic term for all the alt coins and any business that talks of 'blockchain' or 'ICO' - it is all the same snake-oil to me. A mere six months ago everyone and his dog was advising me to get into one coin or another as if they were trying to get me into their pyramid scheme. This chat is now absent from the watercooler. So I pressed my bitcoin mad neighbour on 'how are the coins going?' earlier today. I got an answer that they weren't doing it at the moment which sounded like the answer you would get if you asked a drug addict if they are still on crack knowing that their dealer had been busted. I asked some more and the response I got was that bitcoin was seasonal and that right now is just not the season for it. I asked some more but there was no more other than 'seasonal'. I also no longer get notifications of bitcoin things on YouTube and Twitter. For instance the guy 'bitfinex'd' was writing daily about the scam that was going on with that coin that was pegged to the dollar, he has not written in weeks. So my analysis is that the coin thing has gone the way of 'cold fusion'. It sounded like the next big thing but it is not. There is a lot of momentum with these things, I am sure that bitcoin is worth many thousands of dollars and I am sure that there are people putting together new coin scams, however, the word on the street and by the watercooler is that bitcoin is passe. People have moved on.

jeremyt 8y ago
On the contrary, we are about to start the second wave of things. The next wave will be an order of magnitude larger than the last, and this will continue until Bitcoin and blockchain has disrupted the vast majority of current industries. You sound like an Internet hater after it failed to find a killer app besides email for most of the mid-90s. Then, in 2000, as Pets.com was imploding, no doubt you would've dusted off this consistent criticism: "I am sure that internet stocks are worth many thousands of dollars and I am sure that there are people putting together new scams, however, the word on the street and by the watercooler is that internet stocks are passe. People have moved on." Ten years later, the stock market is dominated by tech stocks. If your criticism was based on actual knowledge, I'd give you credit, but it sounds like you have no idea what you're talking about, and you're using derision as an excuse not to educate yourself. Indeed, I think $8500 per Bitcoin is a bargain. Come check with me in a year.

spraak 8y ago

The different scenarios don't seem to follow the same time line. The first example seems to be far in the future while the others closer to now, making the comparisons flawed

deleted 8y ago

[deleted]

PopePompous 8y ago

The article does not address what I think is the Achille's Heel of crypto currencies: Controlling the money supply is one of the most powerful rights that a government has. Why do you think the governments in the EU have not unified their fiscal policies? Why do you think EU countries cheat on their budget deficits? Governments want to be able to make money plentiful during economic downturns, and tighten it up when the economy starts overheating. They set nonzero target inflation rates to encourage people to consume and invest. The idea that governments will allow some technology to remove that power from them is silly. If a crypto currency ever becomes a significant medium of exchange, it will be outlawed (following predictable reports about Drug Kingpins, Terrorists and Child Pornography).

tim333 8y ago
That's only a problem if you expect cryptos to replace fiat in everyday things like paying wages and taxes. If it's a parallel currency like at present it doesn't really effect the money supply stuff.
slededit 8y ago
Most cryptocurrencies are spec'd to stop creating new coins after a period of time. But that doesn't mean one couldn't design a coin where inflation is controlled by an entity with the right key. Even without that consideration policy changes can be enforced by Software updates. In the case of bitcoin gridlock has stalled this process but other coins have managed fine. The government has a strong compelling argument to force upgrades - you can't pay your taxes if you don't and then you will go to jail.

ilaksh 8y ago

How can he be so good at understanding the possibilities but so bad at judging the likelihood of significant change?

arisAlexis 8y ago

some good points there but saying "uh, nah" as a valid argument for dismissing probable outcomes doesn't awe me

arisAlexis 8y ago

the subsidization of real world real estate, art and other things that solve numerous problems did not enter this article.