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- The space is littered with fraud. - Wallets have bugs that lose hundreds of millions of dollars - Energy consumption forecasted to hit 0.5% of the world’s e

by hudon 8y ago

- The space is littered with fraud. - Wallets have bugs that lose hundreds of millions of dollars - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 - Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized - No legal use case found to date Blockchain is a parasite on society.

mtaksrud 8y ago
It sounds like the future to me... as currencies, not as investment objects... the similarities with our current national currencies is eerie.
- roywiggins 8y ago
  when was the last time someone pitched an "initial dollar offering"?
  - repomies6999 8y ago
    When you have violence monopoly backing up your business, it is easy to limit competition.
    - roywiggins 8y ago
      we tried wildcat banknotes and it didn't exactly revolutionize anything https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking
      - CryptoPunk 8y ago
        The share of our attention captured by isolated bank failures is disproportionate to their effect relative to the systemic banking failures created by centralized banking systems. I would argue that the negativity toward such things as the wildcat banking era is a result of cognitive biases like this that manifest when dealing with complex social systems. More on the wildcat banking era: https://www.alt-m.org/2015/07/23/real-pseudo-free-banking/ https://www.alt-m.org/2015/07/23/real-pseudo-free-banking/ >>Indeed, the all-around record of U.S.-style free banking improved significantly as the Civil War approached. Even banknote discounts — another consequence of unit banking that has been wrongly treated as a necessary consequence of having multiple banks of issue — had become almost trivial by the early 1860s. According to my own research, someone who, in October 1863, was foolish enough to purchase every non-Confederate banknote in the country for its full face value, in order to sell the notes to a broker in either Chicago or New York, would have suffered a loss on that transaction of less than one percent of his or her investment.[9] That's less than the cost merchants incur today when they accept credit cards, or what people typically pay to withdraw cash from an ATM that doesn't belong to their own bank.
econochoice 8y ago
Despite all of this, I don't think we've hit peak blockchain fetishism yet. There's still a lot of room to make solved problems worse with a blockchain.
- Ygg2 8y ago
  Webscale IOT Blockchain!!!
  - aiCeivi9 8y ago
    So IOTA? Blockchain world has already integrated all possible buzzwords.
- yks 8y ago
  There is a lot of social capital to acquire by making solved problems worse (e.g. "reddit redesign") so blockchain will probably see much wider adoption soon. On the bright side, there will be a lot of social capital to acquire by "fixing blockchain" with revolutionary "centralised databases" afterwards :)
  - mrgordon 8y ago
    Yes I think some of the coins caught onto this with DPOS. Have a couple dozen block producers who will run fast servers and can be voted out. Then don’t worry about total decentralization and your performance is 100x the competition.
mythrwy 8y ago
The -'s are no doubt true in many (most?) cases but they don't lead the final conclusion. That's just your personal distaste.
ryanlol 8y ago
>No legal use case found to date How do you expect anyone to take you seriously?
- Viker 8y ago
  He does have a point. Adoption of crypto is falling while more and more coins are sprouting...
  - tenaciousDaniel 8y ago
    I think adoption is falling in the right places. I think it's wildly premature for a crypto-currency to be used in everyday transactions. So if, say, Amazon decided to accept bitcoin but is now moving away from it, I think that's a good thing. Cryptocurrencies need to solve several issues such as energy consumption, price stability, and scaling before we see anything useful.
  - deleted 8y ago
    [deleted]
- lotyrin 8y ago
  Do you have counter examples? Anything using the currencies as stores of wealth or mediums of exchange seem to be better suited by traditional finance which are less volatile and capable of higher volume. Anything using the ledger as a distributed datastore seems like it would be better suited by a datastore that wasn't wrapped up in a currency ledger and uses a consensus algorithm less costly than proof-of-work.
  - ryanlol 8y ago
    We receive up to six figures in cryptocurrency payments every week for multiple perfectly legal products. If that’s not a “legal use case”, I don’t know what is. Are we going to argue next that credit cards have no use case because other forms of payment exist? Another example: I just bought a watch off of a guy on a forum using bitcoin, bank transfers or WU would have been a far bigger pain in the ass.
miscreanity 8y ago
This happens in any field during growth. Blockchain is a tool which you can blame all you want, but will not change the outcome. Blockchain or Distributed Ledger Technology or whatever the name is of late has shown the possibility of standardizing identity, time-stamping and other forms of data with almost no trust involved. These systems are herding cats successfully, the only question is which will be settled upon as global infrastructure, much like IPX/SPX vs TCP/IP. The greater danger than fraud is when governments and other institutions get involved to use these systems as control and tracking tools. Snowden's revelations showed laughable secrets compared to what will be done with blockchain as infrastructure. People looking to blockchain as salvation are simply misguided. The reality is much more complex than such hopes, and sadly more destructive as well.
- jaredklewis 8y ago
  > The greater danger than fraud is when governments and other institutions get involved to use these systems as control and tracking tools. Snowden's revelations showed laughable secrets compared to what will be done with blockchain as infrastructure. This makes no sense. Why would a surveillance state possibly need or want a blockchain?
  - lostmsu 8y ago
    He is saying, that fraud on blockchain platforms caused much less damage, than state wide survelliance for instance. But there's no cry to dismantle all government structures because of it. Not agreeing, just trying to explain that point. IMHO, this is sort of whataboutism. But I don't agree with the criticism either, for blockchains/Bitcoin so far does not deal measurable damage. Energy consumption is not a danger on it's own.
  - miscreanity 8y ago
    As @lostmsu points out, government surveillance is a greater issue. The paper currency you may have in your pocket has serial numbers on it but it is impractical to associate those numbers with an individual, much less the sequence of travel it takes among varied transactions. Blockchain-style crypto systems make it exceedingly simple for a government to track every transaction anyone engages in, from paying for gas to buying stock to selling a house. We are certainly not there yet for most of the currently-imagined purposes. However, there are services like Chainalsys[1] that are already being used to track users. It is not a stretch to imagine the impact of full government monitoring. Take that a few steps further with regulatory control of development, mining operations, validating nodes, etc; then the control aspect kicks in and makes asset freezes of today seem quaint. Combined with international information-sharing efforts, you will either have to agree with the ruling elite or be excluded from the broader economy. Dissidents will be tracked far more easily as well, leaving nowhere to run but increasingly remote locations. This is why I say that blockchain/crypto will become far worse than the hope for what they could do for people around the world. At the same time, numerous advances in many sectors will make things seem magical - from construction and manufacturing and medicine and robotics. With jobs shifting away from labor-intensive toward creative endeavors in all fields, control will no longer be over people directly but the systems that support us - and who will have control of those systems? [1] https://www.chainalysis.com/ https://www.chainalysis.com/
codegeek 8y ago
Not to mention that it has become more of a speculative tool than an actual currency for general and everyday use.
kbody 8y ago
- You could say that for cash and internet as well, but I hate it too that currently the majority of the space is overrun by scammers & useless ICOs. - As for wallet bugs: if you're talking about Ethereum or low-quality software projects yes, but for Bitcoin it's been a long time since that was an issue - Regarding power: setting aside all those sensationalistic headlines. Crypto-miners are a way that enable renewables to be optimized when there are imbalances on the demand/supply on the powergrid. Contracts with renewables enable further development of that infrastructure. Of the top of my head BitFury, one of the big crypto-mining firms are in majority if not completely powered by renewables. - Also compare that to the multiples of power used today by gold mining, or infrastructure that Bitcoin aims to replace. - In the end, it's like any other power usage, the market will decide if it's viable, govs could probably tax power usage on cryptocurrencies, but it won't matter since the market will adapt. - There are decentralized exchanges trying to break through along with various different type of projects, albeit the space is crowded by scammers/ICOs like any new space it's the unfortunate nature of the people. - Although it's illegal in Venezuela, Venezuelans protecting their wealth from the dictatorship is quite a use case. Also, what's the legal use case for owning gold? I do commerce legally just fine with Bitcoin although the tech is still evolving on that front. Judging on a tech based on its current state is being blinded to the evolution of tech and I'm surprised to see it from an HN user. I personally don't care about Blockchain or the ICOs, scams etc. unfortunately pop everyone, but I see value on Bitcoin, using your money completely permissionlessly with other people is a great feeling in our days. I also see great applications in the future where we can have more native money on games/apps. Like internet, people will abuse, scam and it can be dangerous but thing how it would have been if there was no free internet to browser any website you want, but only a regional app store.
- hockeybias 8y ago
  Puh-lease...
- teraflop 8y ago
  > Also compare that to the multiples of power used today by gold mining, or infrastructure that Bitcoin aims to replace. Based on DoE estimates of energy cost per ton of gold mined [1] and the current annual production of roughly 3000 tons/year, it looks like gold mining consumes an average of roughly 7 GW (assuming there have been no efficiency improvements since 1975). That's roughly equal to the power consumption of all Bitcoin mining. But of course Bitcoin can't replace gold, because the majority of gold mined is used for non-monetary applications. [1]: https://www.energy.gov/sites/prod/files/2013/11/f4/gold-silver.pdf https://www.energy.gov/sites/prod/files/2013/11/f4/gold-silv...
mikec3010 8y ago
>No legal use case found to date Thanks to regulatory capture and governmental privacy erosion that eschews anonymous transfers such as cash.
CryptoPunk 8y ago
First of all, no one is forcing you to use cryptocurrency. Second, your post is incredibly one-sided and misleading. >>The space is littered with fraud. And also unprecedented accessibility. In no previous era in history were so many teams of capable developers living outside of wealthy countries able to raise enough capital to pursue ambitious technology projects. Also unprecendented innovation and market evolution: we're seeing: * rapid emergence and growing popularity of websites for vetting and rating token sales, and identifying scams * an investor class that is becoming wiser to scams, and more discerning in general, every day. No longer can a whitepaper alone raise tens of millions of dollars worth of ETH. In just the space of 18 months, we've seen investor behaviour undergo a massive transformation towards sophistication. >>Wallets have bugs that lose hundreds of millions of dollars Wallet bugs and scams are largely a thing of the past in Bitcoin. Ethereum's ecosystem is much younger, and so we see it going through the same trials. Once the industry matures, these kinds of problems will be much less common. >>Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 That's because energy is one of the largest, if not the largest input to the production of cryptocurrencies and maintenance of blockchains. Blockchains require very little resources other than integrated circuits and energy, which makes them very different from other product categories, where labour costs are much higher relative to direct energy costs. So the flip side here is much lower costs in other types of resources relative to the cost of the good/service being generated. Also, proof of stake is coming. >>Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized Development is highly decentralized, with people defecting through hard forks when they disagree with some coalition of developers (see Bitcoin Cash versus Bitcoin Core). In Ethereum at least there are also multiple independent implementations of a full node. All changes to development occur through consensus, with a straightforward exit path, via hard forks, for those who do not agree with that consensus. As for exchanges: several decentralized exchanges have been released over the last year. Once blockchain scalability gets better, and peer-to-peer usage increases, exchanges will also be much less necessary. >>No legal use case found to date Absolutely ridiculous claim. How about avoiding rent-seeking by monopolistic platform providers, by encoding the rules of use and fee levels in an immutable smart contract? Anyway, providing people with the ability to circumvent regulated industries that impose financial censorship can have social value. Unless you think Wikileaks bypassing the financial blockade was not a net benefit to the world, or that repressive governments never impose tyrannical laws.
whataretensors 8y ago
OP is proof that intelligent people aren't always creative or future looking.
- justherefortart 8y ago
  You can be open to things but also be skeptical. I got a degree in finance in college (in addition to MIS/Economics) because of all the scandals of my youth. I wanted to see if I could avoid those issues. Being a software engineer it's actually pretty easy, being a business owner you're certainly riding the tides that are our joke of a financial regulatory system (up to the highest bidder to make the laws/regulations).
  - whataretensors 8y ago
    Yes skepticism is healthy, and I'm wrong to assume ops abilities. It seems obvious that dapps can decentralize supplier/consumer relationships, removing the 30% that perhaps ops job relies on.
- abalone 8y ago
  OP is an ex-Coinbase engineer, so no. That's just a lazy dismissal.
  - mythrwy 8y ago
    Being an ex-Coinbase engineer doesn't make that "no". As ex-Coinbase engineer could still lack imagination and foresight, being hired at Coinbase says nothing about possessing these. (not saying OP does lack these, but original post is pretty poor for an "authority" on the subject). But agreed on lazy dismissal and I'll throw in assumption.
jMyles 8y ago
> No legal use case found to date Even if this were true, and it's obviously not, what about the illegal use cases? Aren't they important? Bitcoin has helped people gain access to a wide variety of medicines that the state has improperly and violently prohibited. That's not nothing. And if it can do that - if, in the face of such overwhelming opposition, this technology has aided people in need, then doesn't it stand to reason that it can help other groups of people also?
- solean 8y ago
  People default to the idea that illegal == wrong.
  - jMyles 8y ago
    I don't think that's a particularly normal mindset, at least on HN. Or am I wrong?
- wz1000 8y ago
  > Aren't they important? They might be, but does enabling you to buy LSD over the internet really justify a $300 billion market cap?
  - jMyles 8y ago
    To be perfectly honest, I'm inclined to say "yes." And I don't think it's even close. LSD is one of the most important inventions in the history of humanity. The state has chosen to ban it, which to me seems a little childish. But I mean, I get it. Sure, go ahead, ban it for now. In the face of such a small-minded prohibition, I might look around for tooling which seems imbued by its nature with a desire to circumvent such a ban. And even if it is scaffolded on hundreds of billions of dollars, it has the hallmark of a sacred origin if it's successful at doing that. Or maybe not. I don't really know. But I do feel confident that, in light of such circumvention, it's not quite correct to write it off as "nothing at all," which blockchain skeptics seem wont to do.
zby 8y ago
Store of value is a legitimate use case. How bitcoin is useful for that is debatable, but cryptocurrencies do have some advantages over precious metals. There should be a niche for 'internet gold' (https://medium.com/@zby/proof-of-work-8d8265def194 https://medium.com/@zby/proof-of-work-8d8265def194). The energy wastefulness is proportional to the block rewards and fees, the rewards will be exponentially declining to zero and fees should be proportional to the usefulness of the system. Also most probably some other more efficient cryptocurrency - possiblly PoS or DPoS based (https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-proof-of-work-da14223a965 https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-p...) - will replace bitcoin. Having said that - yeah - there is just too much scam in all of this crypto-world, this will end up badly.
decentralised 8y ago
- The space is littered with fraud. >> Fraud is everywhere, you are just filtering this topic in particular. - Wallets have bugs that lose hundreds of millions of dollars >> Software has bugs that cost lives. Losses in the millions are terrible events but they raise awareness to information security and that's priceless. - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 >> PoW uses electric power to secure billions of euros in assets. Bitcoin miners were paid ~3.5B USD last year and paid an estimated 1.5B in utilities not to mention the thousands of jobs it creates. In any case right now Bitcoin's PoW spends as much as 3k US households so I don't think it's quite 0.5% of the world's total consumption... - Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized >> It's quite evident that realistically it's near impossible to start decentralised, but many teams and projects are adopting loose structures and contemplating moving their governance to a DAO. - No legal use case found to date >> Among those who disagree with you are all the G-7 governments, almost all major exchanges, many of the major banks, law firms, etc. I'm not saying you're wrong, but you are not even wrong. Blockchain is a parasite on society. >> FU. This is my job you are talking about.
lend000 8y ago
- Signed, someone who wishes they didn't dismiss Bitcoin the first time they heard about it. Blockchain is a brilliant and revolutionary technology. Is cryptocurrency the killer app? Maybe, but in any case it's financing the development of decentralized projects which may solve difficult problems in the realm of self organizing machines, artificial intelligence, mesh networks, trustless systems, transparency, etc. It gets old seeing educated people on HN trying to frame anything-cryptocurrency in the most negative light possible without productive discussion, most often out of jealousy and bitterness about not partaking in the profits enjoyed by those who saw potential earlier and bought some.
- hudon 8y ago
  > - Signed, someone who wishes they didn't dismiss Bitcoin the first time they heard about it. Ugh, that is so presumptuous. I've been in Bitcoin since the "Bitcoin 0.3" announcement on Slashdot. I was an engineer at Coinbase. I'm on 2 Bitcoin-related patents. I was reading about Ethereum when people were still learning about Bitcoin. I've tried really hard to see what can be done with cryptocurrencies and I've arrived at different conclusions than you have. I think you may need to ask yourself harder questions.
  - lend000 8y ago
    I then find it difficult to believe that you cannot think of productive applications of cryptocurrencies. As someone who researches self organizing systems, especially in the network space, I have seen numerous applications of mesh network organization based on a blockchain-like decentralized ledger that adds a new dimension after well over a decade long plateau in development. Semi-centralized blockchains utilizing proof-of-stake and other methods seem to be valuable ways to add transparency to certain government functions (such as voting), publishing trade records, and clearing transactions over an ACH-like network (which is currently monitored manually by the Fed and is a growing vulnerability in the global financial network). To dismiss the whole space is to lack vision, or perhaps to be dejected about not being in the financial position you could have been in given the early opportunity.
    - deleted 8y ago
paulpauper 8y ago
"- Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018" One can make the same argument about anything. "Look at all the fabric wasted on beanie babies that could be used for clothes" one could have argued in 1998. if Bitcoin is just a fad ,energy use will plunge due to difficulty decreasing. The energy consumed on mining represents a an input cost based on an expected return on investment, like energy spent on car manufacturing, for example. if the return falls, so will input costs because no one operates at a loss for long.
- paulmd 8y ago
  > The energy consumed on mining represents a an input cost based on an expected return on investment, like energy spent on car manufacturing, for example. if the return falls, so will input costs because no one operates at a loss for long. A significant number of operators in places like China are stealing electricity, either by tapping into wires or by making deals with corrupt local officials for reduced/free electricity. Articles such as these occur quite regularly. http://www.scmp.com/news/china/society/article/2143758/chinese-household-caught-stealing-electricity-power-its-home http://www.scmp.com/news/china/society/article/2143758/chine... https://www.ccn.com/chinese-police-seize-600-bitcoin-mining-computers-over-electricity-theft/ https://www.ccn.com/chinese-police-seize-600-bitcoin-mining-... http://www.scmp.com/news/china/society/article/2108486/four-accused-stealing-power-chinese-oil-company-generate-bitcoins http://www.scmp.com/news/china/society/article/2108486/four-... https://kyc360.com/article/bitcoin-causes-electricity-crisis-parts-china-fresh-crackdown-looms/ https://kyc360.com/article/bitcoin-causes-electricity-crisis... As such, there really isn't a "price floor" to crypto mining. Stolen electricity is free, they will keep mining no matter what.
pshin45 8y ago
Re: Bitcoin's electricity consumption, I wasn't satisfied with how one-sided or incomplete a lot of the articles written about this topic are, so I tried writing my own* that (hopefully) more fully and objectively encapsulates the data and facts of the matter. TL;DR – We all need to stop ignoring Bitcoin's rapidly-growing electricity consumption and making flawed "What about _____?"† arguments. The Bitcoin community (myself included) needs to start facing reality and be able to demonstrate four things: 1) Bitcoin’s energy usage is actually reasonable, when viewed in proper context 2) All that electricity is actually serving a useful purpose 3) Bitcoin’s growing energy needs can be brought under control 4) Over time, the electricity for Bitcoin will increasingly come from renewable sources I personally believe that #1 and #4 are already true and will continue to trend in the right direction over time. As for #2 and #3, those can become true in the near future, but right now it's all hypothetical and Bitcoin needs to start delivering on its (unfulfilled) potential soon. * https://medium.com/@petershin45/bitcoin-is-killing-the-planet-fact-or-fiction-2df23a933f34 https://medium.com/@petershin45/bitcoin-is-killing-the-plane... † https://en.wikipedia.org/wiki/Whataboutism https://en.wikipedia.org/wiki/Whataboutism
clarkmoody 8y ago
Global sound money, however, could have unimaginable long-run benefits for humanity. 99.5% of the other stuff is a scam.
deepnotderp 8y ago
- The space is littered with fraud. - Websites have bugs that lose hundreds of millions of dollars - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 1998 - Promoters yelling “digitalize everything” while services, development teams and internet companies are all highly centralized - No legal use case found to date Internet is a parasite on society. (Clearly satire....)
- deleted 8y ago
  [deleted]
granaldo 8y ago
No denying the wild speculative ride https://www.coingecko.com/en/coins/ath https://www.coingecko.com/en/coins/ath
- headsoup 8y ago
  Lol at the ad for Peer Mountain at the top Relevant.
branchless 8y ago
As is finance. Create wealth, do not appropriate it.
thisisit 8y ago
Blockchain's only use seems to be in money: https://medium.com/@jimmysong/why-blockchain-is-hard-60416ea4c5c https://medium.com/@jimmysong/why-blockchain-is-hard-60416ea... In a sense, current conceptions of blockchain are trying to do the impossible. They want the security of a decentralized system with the control of a centralized one. The desire is the best of both worlds, but what they end up getting is the worst of both worlds. You get the costs and difficulty of a decentralized system with the failure modes of a centralized one.

by hudon 8y ago

mtaksrud 8y ago

It sounds like the future to me... as currencies, not as investment objects... the similarities with our current national currencies is eerie.

roywiggins 8y ago
when was the last time someone pitched an "initial dollar offering"?
- repomies6999 8y ago
  When you have violence monopoly backing up your business, it is easy to limit competition.
  - roywiggins 8y ago
    we tried wildcat banknotes and it didn't exactly revolutionize anything https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking
    - CryptoPunk 8y ago
      The share of our attention captured by isolated bank failures is disproportionate to their effect relative to the systemic banking failures created by centralized banking systems. I would argue that the negativity toward such things as the wildcat banking era is a result of cognitive biases like this that manifest when dealing with complex social systems. More on the wildcat banking era: https://www.alt-m.org/2015/07/23/real-pseudo-free-banking/ https://www.alt-m.org/2015/07/23/real-pseudo-free-banking/ >>Indeed, the all-around record of U.S.-style free banking improved significantly as the Civil War approached. Even banknote discounts — another consequence of unit banking that has been wrongly treated as a necessary consequence of having multiple banks of issue — had become almost trivial by the early 1860s. According to my own research, someone who, in October 1863, was foolish enough to purchase every non-Confederate banknote in the country for its full face value, in order to sell the notes to a broker in either Chicago or New York, would have suffered a loss on that transaction of less than one percent of his or her investment.[9] That's less than the cost merchants incur today when they accept credit cards, or what people typically pay to withdraw cash from an ATM that doesn't belong to their own bank.

econochoice 8y ago

Despite all of this, I don't think we've hit peak blockchain fetishism yet. There's still a lot of room to make solved problems worse with a blockchain.

Ygg2 8y ago
Webscale IOT Blockchain!!!
- aiCeivi9 8y ago
  So IOTA? Blockchain world has already integrated all possible buzzwords.
yks 8y ago
There is a lot of social capital to acquire by making solved problems worse (e.g. "reddit redesign") so blockchain will probably see much wider adoption soon. On the bright side, there will be a lot of social capital to acquire by "fixing blockchain" with revolutionary "centralised databases" afterwards :)
- mrgordon 8y ago
  Yes I think some of the coins caught onto this with DPOS. Have a couple dozen block producers who will run fast servers and can be voted out. Then don’t worry about total decentralization and your performance is 100x the competition.

mythrwy 8y ago

The -'s are no doubt true in many (most?) cases but they don't lead the final conclusion. That's just your personal distaste.

ryanlol 8y ago

>No legal use case found to date How do you expect anyone to take you seriously?

Viker 8y ago
He does have a point. Adoption of crypto is falling while more and more coins are sprouting...
- tenaciousDaniel 8y ago
  I think adoption is falling in the right places. I think it's wildly premature for a crypto-currency to be used in everyday transactions. So if, say, Amazon decided to accept bitcoin but is now moving away from it, I think that's a good thing. Cryptocurrencies need to solve several issues such as energy consumption, price stability, and scaling before we see anything useful.
- deleted 8y ago
  [deleted]
lotyrin 8y ago
Do you have counter examples? Anything using the currencies as stores of wealth or mediums of exchange seem to be better suited by traditional finance which are less volatile and capable of higher volume. Anything using the ledger as a distributed datastore seems like it would be better suited by a datastore that wasn't wrapped up in a currency ledger and uses a consensus algorithm less costly than proof-of-work.
- ryanlol 8y ago
  We receive up to six figures in cryptocurrency payments every week for multiple perfectly legal products. If that’s not a “legal use case”, I don’t know what is. Are we going to argue next that credit cards have no use case because other forms of payment exist? Another example: I just bought a watch off of a guy on a forum using bitcoin, bank transfers or WU would have been a far bigger pain in the ass.

miscreanity 8y ago

This happens in any field during growth. Blockchain is a tool which you can blame all you want, but will not change the outcome. Blockchain or Distributed Ledger Technology or whatever the name is of late has shown the possibility of standardizing identity, time-stamping and other forms of data with almost no trust involved. These systems are herding cats successfully, the only question is which will be settled upon as global infrastructure, much like IPX/SPX vs TCP/IP. The greater danger than fraud is when governments and other institutions get involved to use these systems as control and tracking tools. Snowden's revelations showed laughable secrets compared to what will be done with blockchain as infrastructure. People looking to blockchain as salvation are simply misguided. The reality is much more complex than such hopes, and sadly more destructive as well.

jaredklewis 8y ago
> The greater danger than fraud is when governments and other institutions get involved to use these systems as control and tracking tools. Snowden's revelations showed laughable secrets compared to what will be done with blockchain as infrastructure. This makes no sense. Why would a surveillance state possibly need or want a blockchain?
- lostmsu 8y ago
  He is saying, that fraud on blockchain platforms caused much less damage, than state wide survelliance for instance. But there's no cry to dismantle all government structures because of it. Not agreeing, just trying to explain that point. IMHO, this is sort of whataboutism. But I don't agree with the criticism either, for blockchains/Bitcoin so far does not deal measurable damage. Energy consumption is not a danger on it's own.
- miscreanity 8y ago
  As @lostmsu points out, government surveillance is a greater issue. The paper currency you may have in your pocket has serial numbers on it but it is impractical to associate those numbers with an individual, much less the sequence of travel it takes among varied transactions. Blockchain-style crypto systems make it exceedingly simple for a government to track every transaction anyone engages in, from paying for gas to buying stock to selling a house. We are certainly not there yet for most of the currently-imagined purposes. However, there are services like Chainalsys[1] that are already being used to track users. It is not a stretch to imagine the impact of full government monitoring. Take that a few steps further with regulatory control of development, mining operations, validating nodes, etc; then the control aspect kicks in and makes asset freezes of today seem quaint. Combined with international information-sharing efforts, you will either have to agree with the ruling elite or be excluded from the broader economy. Dissidents will be tracked far more easily as well, leaving nowhere to run but increasingly remote locations. This is why I say that blockchain/crypto will become far worse than the hope for what they could do for people around the world. At the same time, numerous advances in many sectors will make things seem magical - from construction and manufacturing and medicine and robotics. With jobs shifting away from labor-intensive toward creative endeavors in all fields, control will no longer be over people directly but the systems that support us - and who will have control of those systems? [1] https://www.chainalysis.com/ https://www.chainalysis.com/

codegeek 8y ago

Not to mention that it has become more of a speculative tool than an actual currency for general and everyday use.

kbody 8y ago

- You could say that for cash and internet as well, but I hate it too that currently the majority of the space is overrun by scammers & useless ICOs. - As for wallet bugs: if you're talking about Ethereum or low-quality software projects yes, but for Bitcoin it's been a long time since that was an issue - Regarding power: setting aside all those sensationalistic headlines. Crypto-miners are a way that enable renewables to be optimized when there are imbalances on the demand/supply on the powergrid. Contracts with renewables enable further development of that infrastructure. Of the top of my head BitFury, one of the big crypto-mining firms are in majority if not completely powered by renewables. - Also compare that to the multiples of power used today by gold mining, or infrastructure that Bitcoin aims to replace. - In the end, it's like any other power usage, the market will decide if it's viable, govs could probably tax power usage on cryptocurrencies, but it won't matter since the market will adapt. - There are decentralized exchanges trying to break through along with various different type of projects, albeit the space is crowded by scammers/ICOs like any new space it's the unfortunate nature of the people. - Although it's illegal in Venezuela, Venezuelans protecting their wealth from the dictatorship is quite a use case. Also, what's the legal use case for owning gold? I do commerce legally just fine with Bitcoin although the tech is still evolving on that front. Judging on a tech based on its current state is being blinded to the evolution of tech and I'm surprised to see it from an HN user. I personally don't care about Blockchain or the ICOs, scams etc. unfortunately pop everyone, but I see value on Bitcoin, using your money completely permissionlessly with other people is a great feeling in our days. I also see great applications in the future where we can have more native money on games/apps. Like internet, people will abuse, scam and it can be dangerous but thing how it would have been if there was no free internet to browser any website you want, but only a regional app store.

hockeybias 8y ago
Puh-lease...
teraflop 8y ago
> Also compare that to the multiples of power used today by gold mining, or infrastructure that Bitcoin aims to replace. Based on DoE estimates of energy cost per ton of gold mined [1] and the current annual production of roughly 3000 tons/year, it looks like gold mining consumes an average of roughly 7 GW (assuming there have been no efficiency improvements since 1975). That's roughly equal to the power consumption of all Bitcoin mining. But of course Bitcoin can't replace gold, because the majority of gold mined is used for non-monetary applications. [1]: https://www.energy.gov/sites/prod/files/2013/11/f4/gold-silver.pdf https://www.energy.gov/sites/prod/files/2013/11/f4/gold-silv...

mikec3010 8y ago

>No legal use case found to date Thanks to regulatory capture and governmental privacy erosion that eschews anonymous transfers such as cash.

CryptoPunk 8y ago

First of all, no one is forcing you to use cryptocurrency. Second, your post is incredibly one-sided and misleading. >>The space is littered with fraud. And also unprecedented accessibility. In no previous era in history were so many teams of capable developers living outside of wealthy countries able to raise enough capital to pursue ambitious technology projects. Also unprecendented innovation and market evolution: we're seeing: * rapid emergence and growing popularity of websites for vetting and rating token sales, and identifying scams * an investor class that is becoming wiser to scams, and more discerning in general, every day. No longer can a whitepaper alone raise tens of millions of dollars worth of ETH. In just the space of 18 months, we've seen investor behaviour undergo a massive transformation towards sophistication. >>Wallets have bugs that lose hundreds of millions of dollars Wallet bugs and scams are largely a thing of the past in Bitcoin. Ethereum's ecosystem is much younger, and so we see it going through the same trials. Once the industry matures, these kinds of problems will be much less common. >>Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 That's because energy is one of the largest, if not the largest input to the production of cryptocurrencies and maintenance of blockchains. Blockchains require very little resources other than integrated circuits and energy, which makes them very different from other product categories, where labour costs are much higher relative to direct energy costs. So the flip side here is much lower costs in other types of resources relative to the cost of the good/service being generated. Also, proof of stake is coming. >>Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized Development is highly decentralized, with people defecting through hard forks when they disagree with some coalition of developers (see Bitcoin Cash versus Bitcoin Core). In Ethereum at least there are also multiple independent implementations of a full node. All changes to development occur through consensus, with a straightforward exit path, via hard forks, for those who do not agree with that consensus. As for exchanges: several decentralized exchanges have been released over the last year. Once blockchain scalability gets better, and peer-to-peer usage increases, exchanges will also be much less necessary. >>No legal use case found to date Absolutely ridiculous claim. How about avoiding rent-seeking by monopolistic platform providers, by encoding the rules of use and fee levels in an immutable smart contract? Anyway, providing people with the ability to circumvent regulated industries that impose financial censorship can have social value. Unless you think Wikileaks bypassing the financial blockade was not a net benefit to the world, or that repressive governments never impose tyrannical laws.

whataretensors 8y ago

OP is proof that intelligent people aren't always creative or future looking.

justherefortart 8y ago
You can be open to things but also be skeptical. I got a degree in finance in college (in addition to MIS/Economics) because of all the scandals of my youth. I wanted to see if I could avoid those issues. Being a software engineer it's actually pretty easy, being a business owner you're certainly riding the tides that are our joke of a financial regulatory system (up to the highest bidder to make the laws/regulations).
- whataretensors 8y ago
  Yes skepticism is healthy, and I'm wrong to assume ops abilities. It seems obvious that dapps can decentralize supplier/consumer relationships, removing the 30% that perhaps ops job relies on.
abalone 8y ago
OP is an ex-Coinbase engineer, so no. That's just a lazy dismissal.
- mythrwy 8y ago
  Being an ex-Coinbase engineer doesn't make that "no". As ex-Coinbase engineer could still lack imagination and foresight, being hired at Coinbase says nothing about possessing these. (not saying OP does lack these, but original post is pretty poor for an "authority" on the subject). But agreed on lazy dismissal and I'll throw in assumption.

jMyles 8y ago

> No legal use case found to date Even if this were true, and it's obviously not, what about the illegal use cases? Aren't they important? Bitcoin has helped people gain access to a wide variety of medicines that the state has improperly and violently prohibited. That's not nothing. And if it can do that - if, in the face of such overwhelming opposition, this technology has aided people in need, then doesn't it stand to reason that it can help other groups of people also?

solean 8y ago
People default to the idea that illegal == wrong.
- jMyles 8y ago
  I don't think that's a particularly normal mindset, at least on HN. Or am I wrong?
wz1000 8y ago
> Aren't they important? They might be, but does enabling you to buy LSD over the internet really justify a $300 billion market cap?
- jMyles 8y ago
  To be perfectly honest, I'm inclined to say "yes." And I don't think it's even close. LSD is one of the most important inventions in the history of humanity. The state has chosen to ban it, which to me seems a little childish. But I mean, I get it. Sure, go ahead, ban it for now. In the face of such a small-minded prohibition, I might look around for tooling which seems imbued by its nature with a desire to circumvent such a ban. And even if it is scaffolded on hundreds of billions of dollars, it has the hallmark of a sacred origin if it's successful at doing that. Or maybe not. I don't really know. But I do feel confident that, in light of such circumvention, it's not quite correct to write it off as "nothing at all," which blockchain skeptics seem wont to do.

zby 8y ago

Store of value is a legitimate use case. How bitcoin is useful for that is debatable, but cryptocurrencies do have some advantages over precious metals. There should be a niche for 'internet gold' (https://medium.com/@zby/proof-of-work-8d8265def194 https://medium.com/@zby/proof-of-work-8d8265def194). The energy wastefulness is proportional to the block rewards and fees, the rewards will be exponentially declining to zero and fees should be proportional to the usefulness of the system. Also most probably some other more efficient cryptocurrency - possiblly PoS or DPoS based (https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-proof-of-work-da14223a965 https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-p...) - will replace bitcoin. Having said that - yeah - there is just too much scam in all of this crypto-world, this will end up badly.

decentralised 8y ago

- The space is littered with fraud. >> Fraud is everywhere, you are just filtering this topic in particular. - Wallets have bugs that lose hundreds of millions of dollars >> Software has bugs that cost lives. Losses in the millions are terrible events but they raise awareness to information security and that's priceless. - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 >> PoW uses electric power to secure billions of euros in assets. Bitcoin miners were paid ~3.5B USD last year and paid an estimated 1.5B in utilities not to mention the thousands of jobs it creates. In any case right now Bitcoin's PoW spends as much as 3k US households so I don't think it's quite 0.5% of the world's total consumption... - Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized >> It's quite evident that realistically it's near impossible to start decentralised, but many teams and projects are adopting loose structures and contemplating moving their governance to a DAO. - No legal use case found to date >> Among those who disagree with you are all the G-7 governments, almost all major exchanges, many of the major banks, law firms, etc. I'm not saying you're wrong, but you are not even wrong. Blockchain is a parasite on society. >> FU. This is my job you are talking about.

lend000 8y ago

- Signed, someone who wishes they didn't dismiss Bitcoin the first time they heard about it. Blockchain is a brilliant and revolutionary technology. Is cryptocurrency the killer app? Maybe, but in any case it's financing the development of decentralized projects which may solve difficult problems in the realm of self organizing machines, artificial intelligence, mesh networks, trustless systems, transparency, etc. It gets old seeing educated people on HN trying to frame anything-cryptocurrency in the most negative light possible without productive discussion, most often out of jealousy and bitterness about not partaking in the profits enjoyed by those who saw potential earlier and bought some.

hudon 8y ago
> - Signed, someone who wishes they didn't dismiss Bitcoin the first time they heard about it. Ugh, that is so presumptuous. I've been in Bitcoin since the "Bitcoin 0.3" announcement on Slashdot. I was an engineer at Coinbase. I'm on 2 Bitcoin-related patents. I was reading about Ethereum when people were still learning about Bitcoin. I've tried really hard to see what can be done with cryptocurrencies and I've arrived at different conclusions than you have. I think you may need to ask yourself harder questions.
- lend000 8y ago
  I then find it difficult to believe that you cannot think of productive applications of cryptocurrencies. As someone who researches self organizing systems, especially in the network space, I have seen numerous applications of mesh network organization based on a blockchain-like decentralized ledger that adds a new dimension after well over a decade long plateau in development. Semi-centralized blockchains utilizing proof-of-stake and other methods seem to be valuable ways to add transparency to certain government functions (such as voting), publishing trade records, and clearing transactions over an ACH-like network (which is currently monitored manually by the Fed and is a growing vulnerability in the global financial network). To dismiss the whole space is to lack vision, or perhaps to be dejected about not being in the financial position you could have been in given the early opportunity.
  - deleted 8y ago

paulpauper 8y ago

"- Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018" One can make the same argument about anything. "Look at all the fabric wasted on beanie babies that could be used for clothes" one could have argued in 1998. if Bitcoin is just a fad ,energy use will plunge due to difficulty decreasing. The energy consumed on mining represents a an input cost based on an expected return on investment, like energy spent on car manufacturing, for example. if the return falls, so will input costs because no one operates at a loss for long.

paulmd 8y ago
> The energy consumed on mining represents a an input cost based on an expected return on investment, like energy spent on car manufacturing, for example. if the return falls, so will input costs because no one operates at a loss for long. A significant number of operators in places like China are stealing electricity, either by tapping into wires or by making deals with corrupt local officials for reduced/free electricity. Articles such as these occur quite regularly. http://www.scmp.com/news/china/society/article/2143758/chinese-household-caught-stealing-electricity-power-its-home http://www.scmp.com/news/china/society/article/2143758/chine... https://www.ccn.com/chinese-police-seize-600-bitcoin-mining-computers-over-electricity-theft/ https://www.ccn.com/chinese-police-seize-600-bitcoin-mining-... http://www.scmp.com/news/china/society/article/2108486/four-accused-stealing-power-chinese-oil-company-generate-bitcoins http://www.scmp.com/news/china/society/article/2108486/four-... https://kyc360.com/article/bitcoin-causes-electricity-crisis-parts-china-fresh-crackdown-looms/ https://kyc360.com/article/bitcoin-causes-electricity-crisis... As such, there really isn't a "price floor" to crypto mining. Stolen electricity is free, they will keep mining no matter what.

pshin45 8y ago

Re: Bitcoin's electricity consumption, I wasn't satisfied with how one-sided or incomplete a lot of the articles written about this topic are, so I tried writing my own* that (hopefully) more fully and objectively encapsulates the data and facts of the matter. TL;DR – We all need to stop ignoring Bitcoin's rapidly-growing electricity consumption and making flawed "What about _____?"† arguments. The Bitcoin community (myself included) needs to start facing reality and be able to demonstrate four things: 1) Bitcoin’s energy usage is actually reasonable, when viewed in proper context 2) All that electricity is actually serving a useful purpose 3) Bitcoin’s growing energy needs can be brought under control 4) Over time, the electricity for Bitcoin will increasingly come from renewable sources I personally believe that #1 and #4 are already true and will continue to trend in the right direction over time. As for #2 and #3, those can become true in the near future, but right now it's all hypothetical and Bitcoin needs to start delivering on its (unfulfilled) potential soon. * https://medium.com/@petershin45/bitcoin-is-killing-the-planet-fact-or-fiction-2df23a933f34 https://medium.com/@petershin45/bitcoin-is-killing-the-plane... † https://en.wikipedia.org/wiki/Whataboutism https://en.wikipedia.org/wiki/Whataboutism

clarkmoody 8y ago

Global sound money, however, could have unimaginable long-run benefits for humanity. 99.5% of the other stuff is a scam.

deepnotderp 8y ago

- The space is littered with fraud. - Websites have bugs that lose hundreds of millions of dollars - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 1998 - Promoters yelling “digitalize everything” while services, development teams and internet companies are all highly centralized - No legal use case found to date Internet is a parasite on society. (Clearly satire....)

deleted 8y ago
[deleted]

granaldo 8y ago

No denying the wild speculative ride https://www.coingecko.com/en/coins/ath https://www.coingecko.com/en/coins/ath

headsoup 8y ago
Lol at the ad for Peer Mountain at the top Relevant.

branchless 8y ago

As is finance. Create wealth, do not appropriate it.

thisisit 8y ago

Blockchain's only use seems to be in money: https://medium.com/@jimmysong/why-blockchain-is-hard-60416ea4c5c https://medium.com/@jimmysong/why-blockchain-is-hard-60416ea... In a sense, current conceptions of blockchain are trying to do the impossible. They want the security of a decentralized system with the control of a centralized one. The desire is the best of both worlds, but what they end up getting is the worst of both worlds. You get the costs and difficulty of a decentralized system with the failure modes of a centralized one.