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> I had hoped PG would write an essay on crypto/NFTs, as he seems enthused by them and is good at explaining things. What is there to explain? People who are i

> I had hoped PG would write an essay on crypto/NFTs, as he seems enthused by them and is good at explaining things. What is there to explain? People who are invested in cryptocurrencies are hyping the equivalent of digital trading cards because it has the downstream effect of increasing the hype on cryptocurrency.

graeme 5y ago
I don’t know what there is to explain, but I’m always open to the possibility that I’ve missed something. Ethereum, in particular, is at least capable of interesting things. That doesn’t mean it will change the world. But I’m always interested in hearing from intelligent people who differ on why they think it will.
- bob33212 5y ago
  I appreciate this as I'm also trying to keep an open mind and understand what this means for the future. So far there are only two arguments that I understand: 1. Libertarianism: The world will be better if we remove the government and other 3rd parties from interfering in transactions between individuals. 2. Decentralization of Money (Crypto), like the decentralization of information (The internet) will unlock technologies and opportunities that we cannot appreciate now. Those are logical arguments, but I'm still missing the "so what" answer. How does the lack of government oversight change my life? My next bank account may be decentralized, so what? Does that mean I get better service? Lower Fees? I understand that plenty of people were unimpressed with the internet when it first came out, but I was not one of those people. I got it and was online in 1995, I bought GOOG in 2005, and TSLA in 2014. So I'm not your typical technological naysayer. Maybe Bitcoin isn't just an accidental Ponzi scheme, but as far as I can tell that is what it will be when we look back in 10 years.
  - 52-6F-62 5y ago
    Some degree of it has to just be the grown resentment of established banking. So this is a view of a certain cohort of sentiment, not necessarily exclusive to cryptocurrencies and all that. These days a bank account will cost you money. Any savings account available to most people offers interest rates at or below inflation, if they're not 0% and charge fees (making those ones functionally offering negative interest). Even more glaring is being charged fees for not having a high enough balance in your account. When you're young and poor and you look to a bank to help you grow out of that state, and you're offered the above, you can understand why it would appear the game is just plain broken. And that's just talking private bank accounts, not the larger economic sphere. To me, it's no wonder that people are trying out different things, even if they don't work. It's better than just accepting the thing that's already not working for you.
    - parksy 5y ago
      Well put, and another aspect beyond currency is a move against centralised control of enterprise. Centralised legal systems governing contracts, centralised ownership and rewards, centralised risk, etc. Some people looked at how the world is run and thought they could make a more efficient and secure way of doing things with more freedom for anyone that can swing an IDE to create fairer reward systems. At least one of the implications of systems like ethereum is that they enable autonomous contracts that are decentralised and at least in theory don't require any separate and typically centralised governing body to execute and enforce, which could in turn lead to a range of new models of business and human interaction. It remains to be seen what will happen, the technology is still young (the Web took about a decade to start catching on in the mainstream as perhaps being something more than a flash in the pan) and lofty ideas are being thrown at the wall as the new concepts are explored in both good and bad ways. Having seen the ups and downs of the online revolution I have a hunch at least some of it will stick, and whether this moment goes down as some great proletarian revolution or becomes just another tool in the billionaires belt seems up in the air to me, but at the very least it is disruptive and we may be seeing the birth of the next generation of crypto barons. Or anything could happen, like by some unlikely turn of events we solve prime factorisation and the whole thing fizzles into history as a big oops moment, or jackbooted forces raid homes and data centres to destroy all crypto-related hardware and knowledge. I feel the outcome will be somewhere between the two extremes of utopia and dystopia, it just seems to be how things turn out, but as you say at least people are trying things. Disrupting the status quo is how society moves forward, humanity never seems too comfortable sitting on its haunches (for better or worse).
  - yourabstraction 5y ago
    I think the problem is you're looking at cryptocurrency with the wrong perspective, so you're missing the fundamental ways it can rewrite the entire world of finance. I imagine you're looking at this from a consumer perspective, and you trust your bank, have a stable government fiat currency to use, and a credit card to make easy transactions with, so you have little use for cryptocurrency. Yet with the internet you likely saw the immediate ways you could make use of it, or how Google or Tesla would change the world with better search or better cars. Cryptocurrency at the core is about solving trust issues and human coordination issues. Just because you don't have these issues in your life doesn't mean they aren't extremely important for the world. Part of the problem is that at times crypto has been sold as a consumer technology, remember before Bitcoin was digital gold it was going to be the microtransaction currency of the internet, which excited a lot of people looking through the consumer lens. But in the bigger picture of how revolutionary the technology is, microtransaction are the least interesting thing it could do. This is a brand new technology that can solve trust problems and allow global business and trade to work more efficiently. It can allow humans to organize more efficiently and create brand new kinds of institutions (DAOs). Take Uniswap as an example. It's a decentralized exchange running on the Ethereum blockchain that has at times done as much daily trading volume as Coinbase. Now here's the kicker, they have two orders of magnitude less employees than coinbase (15 vs 1500). So not only are they vastly more efficient than legacy exchange technology, they also solve the trust problem because there is no third party taking custody of your funds, it's all done on the blockchain. Another interesting example I've been pondering lately is automated insurance policies that run on the Ethereum blockchain and payout based on decentralized oracle data feeds from Chainlink. Imagine a farmer in Africa who doesn't have access to crop insurance, but needs to smooth out his year to year risk so that he doesn't go bust during a drought year if his crop fails. You can now write a smart contract that takes data from a decentralized oracle network providing rainfall data. A user can then pay into this contract and he will automatically be paid out if the rainfall during the growing season is below a certain threshold. So the farmer gets a slightly lower but much more predictable income stream. Someone else (who's better capitalized) can take the other side of the bet to collateralize the insurance policy, and earn a higher but more volatile payout. This kind of efficiency per employee was never possible prior to blockchain. It's like how software and the internet allowed greater human coordination and orders of magnitude efficiency gains over legacy business organization, just applied to the world of finance. In the same way those massive gains in efficiency are allowing software to eat the world, crypto will eat the world of finance. This is a deep back end technology, and it's likely that by the time you're using it you won't even be aware of it as centralized institutions will adopt it on the backend while still providing you with a familiar user experience.

graeme 5y ago

I don’t know what there is to explain, but I’m always open to the possibility that I’ve missed something. Ethereum, in particular, is at least capable of interesting things. That doesn’t mean it will change the world. But I’m always interested in hearing from intelligent people who differ on why they think it will.

bob33212 5y ago
I appreciate this as I'm also trying to keep an open mind and understand what this means for the future. So far there are only two arguments that I understand: 1. Libertarianism: The world will be better if we remove the government and other 3rd parties from interfering in transactions between individuals. 2. Decentralization of Money (Crypto), like the decentralization of information (The internet) will unlock technologies and opportunities that we cannot appreciate now. Those are logical arguments, but I'm still missing the "so what" answer. How does the lack of government oversight change my life? My next bank account may be decentralized, so what? Does that mean I get better service? Lower Fees? I understand that plenty of people were unimpressed with the internet when it first came out, but I was not one of those people. I got it and was online in 1995, I bought GOOG in 2005, and TSLA in 2014. So I'm not your typical technological naysayer. Maybe Bitcoin isn't just an accidental Ponzi scheme, but as far as I can tell that is what it will be when we look back in 10 years.
- 52-6F-62 5y ago
  Some degree of it has to just be the grown resentment of established banking. So this is a view of a certain cohort of sentiment, not necessarily exclusive to cryptocurrencies and all that. These days a bank account will cost you money. Any savings account available to most people offers interest rates at or below inflation, if they're not 0% and charge fees (making those ones functionally offering negative interest). Even more glaring is being charged fees for not having a high enough balance in your account. When you're young and poor and you look to a bank to help you grow out of that state, and you're offered the above, you can understand why it would appear the game is just plain broken. And that's just talking private bank accounts, not the larger economic sphere. To me, it's no wonder that people are trying out different things, even if they don't work. It's better than just accepting the thing that's already not working for you.
  - parksy 5y ago
    Well put, and another aspect beyond currency is a move against centralised control of enterprise. Centralised legal systems governing contracts, centralised ownership and rewards, centralised risk, etc. Some people looked at how the world is run and thought they could make a more efficient and secure way of doing things with more freedom for anyone that can swing an IDE to create fairer reward systems. At least one of the implications of systems like ethereum is that they enable autonomous contracts that are decentralised and at least in theory don't require any separate and typically centralised governing body to execute and enforce, which could in turn lead to a range of new models of business and human interaction. It remains to be seen what will happen, the technology is still young (the Web took about a decade to start catching on in the mainstream as perhaps being something more than a flash in the pan) and lofty ideas are being thrown at the wall as the new concepts are explored in both good and bad ways. Having seen the ups and downs of the online revolution I have a hunch at least some of it will stick, and whether this moment goes down as some great proletarian revolution or becomes just another tool in the billionaires belt seems up in the air to me, but at the very least it is disruptive and we may be seeing the birth of the next generation of crypto barons. Or anything could happen, like by some unlikely turn of events we solve prime factorisation and the whole thing fizzles into history as a big oops moment, or jackbooted forces raid homes and data centres to destroy all crypto-related hardware and knowledge. I feel the outcome will be somewhere between the two extremes of utopia and dystopia, it just seems to be how things turn out, but as you say at least people are trying things. Disrupting the status quo is how society moves forward, humanity never seems too comfortable sitting on its haunches (for better or worse).
- yourabstraction 5y ago
  I think the problem is you're looking at cryptocurrency with the wrong perspective, so you're missing the fundamental ways it can rewrite the entire world of finance. I imagine you're looking at this from a consumer perspective, and you trust your bank, have a stable government fiat currency to use, and a credit card to make easy transactions with, so you have little use for cryptocurrency. Yet with the internet you likely saw the immediate ways you could make use of it, or how Google or Tesla would change the world with better search or better cars. Cryptocurrency at the core is about solving trust issues and human coordination issues. Just because you don't have these issues in your life doesn't mean they aren't extremely important for the world. Part of the problem is that at times crypto has been sold as a consumer technology, remember before Bitcoin was digital gold it was going to be the microtransaction currency of the internet, which excited a lot of people looking through the consumer lens. But in the bigger picture of how revolutionary the technology is, microtransaction are the least interesting thing it could do. This is a brand new technology that can solve trust problems and allow global business and trade to work more efficiently. It can allow humans to organize more efficiently and create brand new kinds of institutions (DAOs). Take Uniswap as an example. It's a decentralized exchange running on the Ethereum blockchain that has at times done as much daily trading volume as Coinbase. Now here's the kicker, they have two orders of magnitude less employees than coinbase (15 vs 1500). So not only are they vastly more efficient than legacy exchange technology, they also solve the trust problem because there is no third party taking custody of your funds, it's all done on the blockchain. Another interesting example I've been pondering lately is automated insurance policies that run on the Ethereum blockchain and payout based on decentralized oracle data feeds from Chainlink. Imagine a farmer in Africa who doesn't have access to crop insurance, but needs to smooth out his year to year risk so that he doesn't go bust during a drought year if his crop fails. You can now write a smart contract that takes data from a decentralized oracle network providing rainfall data. A user can then pay into this contract and he will automatically be paid out if the rainfall during the growing season is below a certain threshold. So the farmer gets a slightly lower but much more predictable income stream. Someone else (who's better capitalized) can take the other side of the bet to collateralize the insurance policy, and earn a higher but more volatile payout. This kind of efficiency per employee was never possible prior to blockchain. It's like how software and the internet allowed greater human coordination and orders of magnitude efficiency gains over legacy business organization, just applied to the world of finance. In the same way those massive gains in efficiency are allowing software to eat the world, crypto will eat the world of finance. This is a deep back end technology, and it's likely that by the time you're using it you won't even be aware of it as centralized institutions will adopt it on the backend while still providing you with a familiar user experience.