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> Cryptocurrencies make us question why money has value, what makes an asset, and all sorts of interesting philosophical and economic questions. Honestly these

> Cryptocurrencies make us question why money has value, what makes an asset, and all sorts of interesting philosophical and economic questions. Honestly these questions have all been considered before, answered, and codified into law, and the crypto communities are full of people who have no idea what is going on around them. The banking systems we have are the result of us considering these questions, deciding politically we want something very different, and then building the technical systems that match that design. The classic example is investor accreditation laws, and why, as far as I can tell, there isn't a single ICO that doesn't violate them. It's not that no one considered whether or not you should be able to raise money from many different people, and it's not been logistically complicated to do that for at least three decades. The reason is that the political will does not exist.

teknopurge 8y ago
> Honestly these questions have all been considered before, answered, and codified into law, and the crypto communities are full of people who have no idea what is going on around them. The banking systems we have are the result of us considering these questions, deciding politically we want something very different, and then building the technical systems that match that design. Crypto is saying that because of the evolution of institutions surrounding banking and politics there are many inefficiencies(and malevolent actors) that have become ingrained in the poli-fi complex. Many of these projects(the 20% that are legit) aim to solve various issues that have been identified in the "free market" - whether it's reducing settlement time of cross-border payments or efficiently pricing what a unit of cloud compute and storage can be, blockchain is a novel excuse to revisit many problems with lazy answers.
- wdewind 8y ago
  The technology is part of the institutions, which are both derivative of the politics, which is where these systems are really designed. I'm not saying the banking system is perfect, but the ideas coming out of crypto aren't new from an economic perspective, and frankly aren't really even interesting.
  - seibelj 8y ago
    I think you are being extraordinarily flippant in your descriptions of cryptocurrency. They are fascinating and have captured the popular imagination, at least in terms of awareness of bitcoin and how frequently it’s mentioned. You have clearly made up your mind and I won’t attempt to change it. But for anyone reading, an asset, created out of nowhere, that has no control from any authority and cannot have any control, is worth $100 billion in a decade. This is an amazing feat, and is indeed very interesting.
    - wdewind 8y ago
      I don't think I am. I've spent a ton of time in the community, I've owned a bunch of different currencies, and I've spent a lot of time thinking about the implications of the technology. The ideas are fun, but they aren't new, and we can reason about why they still wont work. One reason cryptocurrency "wont work" (admittedly vague term, but I'm happy to shoot down any definition of "work" you have because I think they are truly useless outside of a tiny portion of people with very specific needs) is simple specialization of labor: people do not want to be engaged in the process of running a currency or a government, which is why, among many other reasons, banks and representative governments exist. And you see this pattern already repeated with crypto where any meaningfully large currency has extremely concentrated ownership. This is just swapping one set of large, monolithic bankers for another one. Another reason cryptocurrency "wont work" is that everything it depends on is completely derivative of political and technical systems that are designed to prevent decentralized control. The internet exists on networks owned by companies like Verizon, on computers owned by Amazon, and is regulated by the US government. If cryptocurrency was going to be truly revolutionary in anyway the US federal government (and others) already have multiple built in kill switches for it. Sure you can cold store your hashes (even though we all know most people just have Coinbase wallets), but the utility of the network is trivial to compromise or destroy for a state level actor. And as an aside: most crypto is actually regressive from a privacy/personal liberty standpoint when compared with cash, or even the current banking system in many ways. One more reason crypto "wont work" is that I just haven't heard a single use case for it. The classic "remittances" use case makes no sense because you still have to change the crypto for real currency, which is where the cost is, (yes, only until the currency is meaningfully bootstrapped, let me know when that happens). You don't pay Western Union 15% to flip bits in their servers, you pay them 15% because they put a guy with a gun next to the actual money in the relatively less safe country you are sending money to. I will remind you that Lehman Brothers was worth about $70B at its peak, in a highly regulated market. $100B is big but far stranger things have happened than an unregulated public market being wrong about things this size. The incentives to pump something like this up are massive, and the market is irrational in the short and medium term. There are a LOT of really rich people out there who feel like if they hadn't missed "the internet" they could be even richer, and we managed to convince them crypto might be the next internet. To your point: that in and of itself, from a sociological perspective, is fascinating. I do have strong opinions, but they are held loosely and they are ones I hope to be wrong about, so I'm open to discussion.
- ElBarto 8y ago
  They could at least offer free tulip bulbs with every coin.
seibelj 8y ago
Investor accreditation laws are USA specific. There is no such concept in other countries in most situations. They are such a bad law they congress finally reformed them with the JOBS act and now allow investment of startups companies by anyone. ICOs in the USA only take accredited US investors now. That has been standard practice for a year now. Finally, I would not agree that the political system has perfect solutions to everything and therefore cryptocurrencies are irrelevant. The financial crisis alone is proof that things can go terribly wrong.
- wdewind 8y ago
  > Investor accreditation laws are USA specific. There is no such concept in other countries in most situations. They are such a bad law they congress finally reformed them with the JOBS act and now allow investment of startups companies by anyone. Almost all countries that have public markets have a similar form of regulation. > ICOs in the USA only take accredited US investors now. That has been standard practice for a year now. Right, which makes them not significantly politically different from regular securities. > Finally, I would not agree that the political system has perfect solutions to everything and therefore cryptocurrencies are irrelevant. The financial crisis alone is proof that things can go terribly wrong. I'm not here to defend the law, I'm saying the decisions weren't made because crypto currency markets simply weren't possible then, the decisions were made because no one wants this, really. If you want to change the financial system you need to do it from the regulation side, this is not a "build it and they will come" situation. These aren't new ideas, people just forgot we already decided we don't want them. Maybe that's changed, but it's not clear why or how.

teknopurge 8y ago

> Honestly these questions have all been considered before, answered, and codified into law, and the crypto communities are full of people who have no idea what is going on around them. The banking systems we have are the result of us considering these questions, deciding politically we want something very different, and then building the technical systems that match that design. Crypto is saying that because of the evolution of institutions surrounding banking and politics there are many inefficiencies(and malevolent actors) that have become ingrained in the poli-fi complex. Many of these projects(the 20% that are legit) aim to solve various issues that have been identified in the "free market" - whether it's reducing settlement time of cross-border payments or efficiently pricing what a unit of cloud compute and storage can be, blockchain is a novel excuse to revisit many problems with lazy answers.

wdewind 8y ago
The technology is part of the institutions, which are both derivative of the politics, which is where these systems are really designed. I'm not saying the banking system is perfect, but the ideas coming out of crypto aren't new from an economic perspective, and frankly aren't really even interesting.
- seibelj 8y ago
  I think you are being extraordinarily flippant in your descriptions of cryptocurrency. They are fascinating and have captured the popular imagination, at least in terms of awareness of bitcoin and how frequently it’s mentioned. You have clearly made up your mind and I won’t attempt to change it. But for anyone reading, an asset, created out of nowhere, that has no control from any authority and cannot have any control, is worth $100 billion in a decade. This is an amazing feat, and is indeed very interesting.
  - wdewind 8y ago
    I don't think I am. I've spent a ton of time in the community, I've owned a bunch of different currencies, and I've spent a lot of time thinking about the implications of the technology. The ideas are fun, but they aren't new, and we can reason about why they still wont work. One reason cryptocurrency "wont work" (admittedly vague term, but I'm happy to shoot down any definition of "work" you have because I think they are truly useless outside of a tiny portion of people with very specific needs) is simple specialization of labor: people do not want to be engaged in the process of running a currency or a government, which is why, among many other reasons, banks and representative governments exist. And you see this pattern already repeated with crypto where any meaningfully large currency has extremely concentrated ownership. This is just swapping one set of large, monolithic bankers for another one. Another reason cryptocurrency "wont work" is that everything it depends on is completely derivative of political and technical systems that are designed to prevent decentralized control. The internet exists on networks owned by companies like Verizon, on computers owned by Amazon, and is regulated by the US government. If cryptocurrency was going to be truly revolutionary in anyway the US federal government (and others) already have multiple built in kill switches for it. Sure you can cold store your hashes (even though we all know most people just have Coinbase wallets), but the utility of the network is trivial to compromise or destroy for a state level actor. And as an aside: most crypto is actually regressive from a privacy/personal liberty standpoint when compared with cash, or even the current banking system in many ways. One more reason crypto "wont work" is that I just haven't heard a single use case for it. The classic "remittances" use case makes no sense because you still have to change the crypto for real currency, which is where the cost is, (yes, only until the currency is meaningfully bootstrapped, let me know when that happens). You don't pay Western Union 15% to flip bits in their servers, you pay them 15% because they put a guy with a gun next to the actual money in the relatively less safe country you are sending money to. I will remind you that Lehman Brothers was worth about $70B at its peak, in a highly regulated market. $100B is big but far stranger things have happened than an unregulated public market being wrong about things this size. The incentives to pump something like this up are massive, and the market is irrational in the short and medium term. There are a LOT of really rich people out there who feel like if they hadn't missed "the internet" they could be even richer, and we managed to convince them crypto might be the next internet. To your point: that in and of itself, from a sociological perspective, is fascinating. I do have strong opinions, but they are held loosely and they are ones I hope to be wrong about, so I'm open to discussion.
ElBarto 8y ago
They could at least offer free tulip bulbs with every coin.

seibelj 8y ago

Investor accreditation laws are USA specific. There is no such concept in other countries in most situations. They are such a bad law they congress finally reformed them with the JOBS act and now allow investment of startups companies by anyone. ICOs in the USA only take accredited US investors now. That has been standard practice for a year now. Finally, I would not agree that the political system has perfect solutions to everything and therefore cryptocurrencies are irrelevant. The financial crisis alone is proof that things can go terribly wrong.

wdewind 8y ago
> Investor accreditation laws are USA specific. There is no such concept in other countries in most situations. They are such a bad law they congress finally reformed them with the JOBS act and now allow investment of startups companies by anyone. Almost all countries that have public markets have a similar form of regulation. > ICOs in the USA only take accredited US investors now. That has been standard practice for a year now. Right, which makes them not significantly politically different from regular securities. > Finally, I would not agree that the political system has perfect solutions to everything and therefore cryptocurrencies are irrelevant. The financial crisis alone is proof that things can go terribly wrong. I'm not here to defend the law, I'm saying the decisions weren't made because crypto currency markets simply weren't possible then, the decisions were made because no one wants this, really. If you want to change the financial system you need to do it from the regulation side, this is not a "build it and they will come" situation. These aren't new ideas, people just forgot we already decided we don't want them. Maybe that's changed, but it's not clear why or how.