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On Cryptocurrencies (2018)
- magma17 6y agoSo, you're not a big fan. Today this "rounding error" (bitcoin) has the same market value as Bank of America.
- sebmellen 6y agoIs there a reason for the fervent crypto bashing on HN? Posting an article from 2018 with many rehashed arguments is fine, I guess, but there are many interesting (if not useful) things coming out of the cryptocurrency space. Of these, the standardization and development of cryptographic standards and libraries is perhaps the most applicable for the rest of the computing world.
- smabie 6y agoWho even cares, institutional investors are buying crypto, huge market making firms are trading crypto, etc. I think a lot a people would be surprised about how much volume and demand there is from "traditional" investors in crypto. Billions of dollars of volume and new exchanges popping up like wild fire. Hell, you might have exposure to crypto through a pension fund, or fund of fund, or whatever. It's here to stay.
- lalaland1125 6y agoWhat actually useful things are coming out of the cryptocurrency space? All I see is illegal security offerings, ransomware, child pornography, assassination markets, illegal drug trade and ponzi schemes.
- capnorange 6y agoYou are looking at a part of crypto, it's not crypto if it doesn't enable illegal activities. Whether this double-edged sword is net positive is the real question!
- hirako2000 6y agoIt's an inevitable side effect. The day before the knife was discovered to slice animal flesh, someone had already killed their enemies with it.
- hirako2000 6y agoI buy a few totally legal things from sellers on the other side of the world who can't (be bothered to) get to transact with visa/mastercard. A lot of people can't get into a traditional bank, a lot of people are fed up with how complicated it had become to simply receive money in a timely manner, and reliably. That's whats coming out of the crypto space: a borderless payment system. It's often criminals, porn businesses, then gamer, then teens, and then the rest who adopt new good tech. It's okay,it takes some time, those who don't see the value in crypto will eventually pass away.
- alfiedotwtf 6y agoHow much do you actually know about cryptocurrencies without parroting Fox News? ... because by your account, we should probably ban cash too
- tromp 6y agoSome cryptocurrencies can only send funds to a receiver by interacting with the receiver wallet. Those at least are somewhat ransom-resistant.
- cryptica 6y agoThe real projects are being built in the background. You cannot find them right now but they will rise to the surface eventually and they will help to drive Bitcoin's value as a reserve cryptocurrency.
- sebmellen 6y agoDIDs are probably the most relevant. See https://www.w3.org/TR/did-core/ https://www.w3.org/TR/did-core/.
- fidelramos 6y agoLook at people being fed in Venezuela and South Sudan: https://eatbch.org/ https://eatbch.org/ Also in Venezuela there are people surviving thanks to cryptocurrencies protecting them from hyperinflation and capital controls.
- eitland 6y ago> Is there a reason for the fervent crypto bashing on HN? To prevent more ordinary people from getting scammed either by ICOs or otherwise?
- alfiedotwtf 6y agoWhen most people think Bitcoin, they think of a) the scary dark web, and b) the energy used to mine bitcoin is 3 countries put together which is killing us through global warming. Cryptocurrencies have moved on from 2009
- tromp 6y agoWell, if you're free to pick countries with low energy demands, then I'm sure it's many more than 3 countries put together.
- alfiedotwtf 6y agoYep, exactly. Wow... the Tromp. I’m blushing
- isoprophlex 6y agoFor me, the crypto scene is almost irreparably damaged by its vibe of greed, the rampant scams, the ridiculous inefficiency and complexity of doing transactions, and the environmental disaster that is "proof of work". Not uniquely useful, not very interesting, full of hot air: primo bashing material.
- p2detar 6y agoExactly. I still find the „proof of work“ a total waste of computational energy. I mean I believe I understand why it’s required, but it just seems like such a waste. Someone please correct me if I talk jiberish.
- sunshinerag 6y ago"... I mean I believe I understand why it’s required". if you do understand why it is required, then you must understand the game theory incentives underpinning modern economics and the disaster in wasted productivity, wasted savings, livelihoods bought on by centralised monetary systems. You can think proof of work as the cost paid to eliminate all that and save money. If you think you can solve that problem (Decentralised trust) non-trivially without proof-of-work you are welcome to try.
- p2detar 6y agoThe only thing I learned from your comment is that wishful thinking justifies wasteful technologies. Not cool.
- somjeed 6y agoit is more than wishful, it is pragmatic, as all attempts before it were shut down by very powerful forces. The purpose of PoW is to create anti-fragile, unstoppable signals using opportunity costs. How society decides to dictate those costs is up to them. Very cool.
- 6y ago
- detaro 6y agoWhat cryptographic standards have come from cryptocurrencies? Also, instead of complaining that you don't like what's being submitted, submit good articles about what you see as positive things? Good non-marketing-fluff submissions are dearly needed.
- scottlocklin 6y ago>What cryptographic standards have come from cryptocurrencies? Zk-STARKS, which are fairly revolutionary and completely unknown outside magic internet money dudes. Non-trusted setup ceremonies and the newer Zk-SNARKs are also pretty much crypto-only. Bulletproofs arguably as well. Maybe verifiable delay functions; not sure of the history there. Most cryptocurrency engineering is evolutionary, and it's the combination of things (Mimble-wimble etc) that makes it worth something. On the non crypto side, there are novel consensus algorithms, interesting data structures and contributions to distributed computation in general. There's lots of social problems with blockchains, including carnival barker types overhyping things they don't understand. You could have said the same things about the internet in the 90s. The technology is pretty interesting, and making the things do useful work is one of the few actually innovative areas in software engineering right now. There's lots of obvious places for this sort of distributed, trustless database that aren't just magic internet money. DNS is an obvious one. Identity is another one. Provenance of food/wine/art is another. Pretty much any place where database disintermediation is desirable, which is almost everywhere.
- nmlnn 6y agoHere's the final paragraph for those who want to know if this is worth reading: > The real solution, as I have argued elsewhere (and as many people have argued, back to Keynes at least) is for central banks to intervene at many more points in financial system. They have to set prices of many assets, not just one overnight interest rate, and they have to direct credit to specific classes of borrowers. They have to accept their role as central planner. It is the need for much more conscious planning of finance, and not crypto currencies, that, I think, is the great challenge and opportunity for central banks today.
- hirako2000 6y agotl-dr: let's get back to communism.
- kabaka 6y agoDoesn't this make central banks partly take on the mantle of Legislature in its budgeting and allocation roles?
- dn2k 6y agoWhen it comes to Bitcoin or cryptocurrencies HN community seems to become the church of central bankers, where the same old (debunked millions of times) BSs are repeated over and over as a mantra. You may not agree with a sound money economy, and you may like the idea of a central bank that manipulate the market to encourage spending and discourage savings. But thankfully nobody is forcing you to use Bitcoin, and that's alone one of the main interesting point of it, it's completely and absolutely an open and voluntary economy.
- heckerhut 6y agoYes, spot on. HN mostly hates crypto but for all the wrong reasons. I learned a lot about the community here when I first realized that.
- mdoms 6y agoI've never seen someone here make the claim that they're being forced to use Bitcoin, but here you are arguing against that claim anyway.
- dn2k 6y ago> but here you are arguing against that claim anyway. where exactly?
- pmachinery 6y ago"nobody is forcing you to use Bitcoin"
- madmaniak 6y agoThis article is promoted by HN itself.
- kaio 6y ago> You may not agree with a sound money economy, and you may like the idea of a central bank that manipulate the market to encourage spending and discourage savings. For me its actually the opposite: I feel like crypto markets are much easier to manipulate- so its done more often. I would also expext that a currency is used in daily life and not saved as form of high risk investment So while I don't think that Banks operate for the benefit of mankind, I don't see where Cryptocurrencies would help, either. And to be fair the most real-world contact I had with Bitcoin are All of criminal nature - So there is definitely a certain negative bias
- capnorange 6y agoleaving the ponzis, illegal markets aside I think there is some interesting stuff happening in crypto right now. Publicly traded companies[1] are starting to consider BTC as a reserve asset. MSTR converted 85% of cash reserves to Bitcoin(38,250 BTC). AMMs[2], a novel idea in market making is growing popular. [1] https://bitcointreasuries.org/ https://bitcointreasuries.org/ [2] https://medium.com/dragonfly-research/what-explains-the-rise-of-amms-7d008af1c399 https://medium.com/dragonfly-research/what-explains-the-rise...
- ganafagol 6y agoCould everybody commenting on this article please first read it and then provide some actual arguments? The noise level with pure ideology, "crypto" promotion or just pure rambling is shockingly high. The article presented a well-structured argument. You may not agree, but then please at least try to respond properly. You are better than that.
- dpc_pw 6y ago> They have to accept their role as central planner. That's the whole argument. Since everything that central bankers were doing is not working and falling apart, we need to take the dial to 11, and introduce a full central planing. A proper enlightened communism, for the people, by our omniscient leaders, who by precise control of asset prices and such will make sure everybody has exactly as much money as they should, according to their position in The Party, and prices of everything are "fair".
- ganafagol 6y agoSorry, that's just incorrect. Neither is that the whole argument nor is this about communism. As long as people scream "communism" when they see anything related to planning and ignore the rest of the argument, you're never going to have a balanced or even nuanced debate and instead just dumb black-and-white rambling. Like your post.
- dpc_pw 6y agoYou can call it whatever you want. It doesn't change the fact that it calls for these intelectuals-yet-idiots who are unaccountable, unelected, who couldn't tell a bubble even after it already hit them, and can't even admit what ridiculous mess they made out of the financial system and economy, to have more power and more or less directly tell everyone what to do, how can they can or can not accumulate and store their wealth, invest and pretty much live their lives. No, thank you. You can keep it if you like. It's not Bitcoin people forcing their shit on anyone.
- bouncycastle 6y agoThe chairman of the CFTC, Heath P. Tarbert, praised Ethereum this week, saying: "Let me just say how impressed I am with Ethereum...If Bitcoin is email ––a one-trick pony, so to speak, but obviously revolutionary–– Ethereum goes far beyond that; it's more like the internet."
- cryptica 6y agoIt's not a bubble because bubbles need a reason to pop. People who bought Bitcoin or other cryptocurrencies have no misconceptions about what they bought. It's a scarcity-driven store of value just like gold or silver. Crypto feeds on opportunity asymmetries and financial asymmetries in society. There are people in our society who can earn millions of dollars without lifting a finger, while others have to struggle the extreme just to make ends meet. Is a dollar worth the same to both of these people? No. A dollar is worth much more to someone who has to struggle to earn it. If you get a passive fiat income for free, then your dollar is worth hardly anything because it didn't cost you anything to get it... If there was once a struggle, then it is likely far behind you. If a human gets a lot of anything for free and they can't figure out a good use for it, then it's basically trash to them. They may as well put it into crypto, gold, silver or other scarce assets which are known to soak up other people's surplus fiat currency. The fact that crypto is a store of surplus currency is what makes it much more valuable and resilient than stocks.
- alFReD-NSH 6y agoThis was true in 2018, but the cryptocurrency world has moved beyond bitcoin being an easy way to make transactions. That was just the beginning and Bitcoin doesn't do a good job compared to the newer Blockchains. Right now you can buy Bitcoin via bank transfers which the fee for it can be easily low as you as 5 USD depending on the provider, I buy with fee of 0.1% normally. So the transaction fee in the article is not true anymore. You can also use bitcoin as a collateral for a loan. If you have bitcoin savings and suddenly you need to cash out temporary you can already do that. And if you look into news you can see banks and trust funds holding bitcoin as an asset. The cryptocurrency and decentralised market has to grow, it has a lot of problems, but there's a crazy amount of investments on it so problems are being solved and new things come out every week.
- etaioinshrdlu 6y agoHas anyone done an economic analysis on how much electricity may ultimately be used by crypto mining? What are the factors that lead to and limit crypto mining? (Before anyone chimes in to say that traditional finance is also wasteful, let's hypothetically imagine crypto took up 70% of the earth's energy production. It is at least a somewhat plausible problem.) Why, or why not, can this happen? It would be nice to put together a strong argument with numbers behind it.