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I can't agree with your point hard enough. Really useful nascent technologies all have this pattern—they grow incrementally more interesting and constantly gain

I can't agree with your point hard enough. Really useful nascent technologies all have this pattern—they grow incrementally more interesting and constantly gain applications. Bitcoin followed this pattern for a while. But then at some point it started to regress on that axis. You could no longer buy a pizza with it, you could no longer mine it, and it got too flooded by scammers to use safely. There's nothing to really DO with blockchain unless you buy into the subculture. That's very different from early internet, early web, early radio, you name it.

ashtonkem 5y ago
Bitcoin didn’t regress, what actually happened is that its fundamental flaws ended up eventually dominating whatever early enthusiasm allowed them to be ignored. It was never going to work, for a variety of reasons that were incredibly apparent at the time. “Why did it regress” is much less interesting than “why did anyone ever fall for this?”
- idlewords 5y ago
  Sure, but a lot of early technologies move laterally in some unexpected direction, and it was reasonable to expect blockchain stuff to do the same. Maybe the original idea could never fly (even in 2008 you didn't have to be a genius to see that evading financial controls would be the chief use of a working cryptocurrency). But likely someone would find a really neat twist on it and find the blockchain equivalent of VisiCalc, and that would happen again and so on. What's interesting to me is that the original idea was clearly brilliant, but never found any of those lateral steps. It's kind of a string theory for programmers now.
  - ashtonkem 5y ago
    There was no reason to believe it would move laterally, for both technical and social reasons. First, the underpinnings of Bitcoin are ideological, namely in Austrian economics. This means that any change that caused any inflation would be socially resisted. Second, most of the issues with Bitcoin stem from the lack of a central authority to do things like chargebacks and handle conflict resolution. It is not possible to solve many of the issues of Bitcoin without a central authority, and that was not going to happen for obvious reasons.
    - idlewords 5y ago
      Yeah, but when you took away the money part and just looked at the technical idea of a distributed chained ledger with no central point of trust, that was cool. At least, it was cool to me. It seemed like it might go in some interesting other direction.
      - davidgerard 5y ago
        Bitcoin was a fascinating technical trick, but it's also been a worked example of the difference between "interesting", versus "feasible" or even "a good idea". As soon as it claimed to be money, then it was all about the money. If you look at early BitcoinTalk, you'll see a pile of scams that are extremely similar to the jargon still used in crypto to this day - the scammers got in very early indeed.
      - FourthProtocol 5y ago
        I never quite understood how that might happen. I kept hearing how it was distributed when it isn't. How the blockchain was going to change the world, when not a single example beyond Bitcoin itself could be given. Healthcare was mentioned, but no application... It's right up there with all the other crazy ideas of the last decade or two (Mongo, agile, Google Glass...)
        Clewza313 5y ago
        Augmented reality has plenty of potential commercial applications, and Glass is still quietly trying to exploit them. The problem is that delivering AR with enough fidelity to fool the eye is capital-H Hard. Michael Abrash had a good series of blog posts on this.
        imtringued 5y ago
        It's the big problem with Bitcoin. The USD dollar exists for the US. Bitcoin only exists for itself.
      - jacquesm 5y ago
        There's one application that I always wondered why it didn't take off as a blockchain based element, a DNS replacement. It's one of the cornerstones of the internet and the web (which to many people is the internet) and the centralized control over it is definitely a drawback and a shortcoming.
  - Rerarom 5y ago
    > string theory for programmers This is gold, I'm gonna steal it
    - jjulius 5y ago
      We could get really meta with it and have @idlewords sell that phrase/post to you as an NFT.
  - api 5y ago
    String theory for programmers is close to my take. I always think of the STTNG episode where the Federation comes up with a weapon to kill the Borg by giving them an impossible but deeply fascinating problem to ponder forever. Cryptocurrency seems like that for endless numbers of tech nerds. It’s even worse than the impossible shape they were going to use on the Borg since it plugs right into humanity’s biggest cognitive vulnerability: gambling. Maybe it’s a weapon sent by aliens to make halt our technological progress. 25 years from now cryptocurrency will have soaked up all surplus capital and locked it into a Ponzi and all our best minds will be churning out increasingly Byzantine coin hacks. Then the hypervelocity impactors start arriving…
- webgoat 5y ago
  Fees high, world too stable, heavy speculation. Cryptos forced to trade on centralized exchanges to avoid fees, making it a much crappier version of something like PayPal. Doesn't help that there's an unending supply of people more than willing to participate in ponzi schemes creating massive volatility and turning the "currency" into the commodity.
  - ahallock 5y ago
    Dotcom bubble was the same way. We're in the early stages.
    - UncleMeat 5y ago
      By the time the dotcom bubble burst, email had completely changed the workplace, search engines had completely changed the way people found information, chat rooms had produced an entire online culture, and more. Just think about all of the people on HN who claim that the internet was the best it ever was in the 90s.
  - noxer 5y ago
    Trading on a DEX is free trading on an exchange costs you fees. People are just lazy and use exchanges because they provide easy to use apps and stuff and cash out to fiat etc. but this changes because exchanges are horrible at staying up when the market moves fast and everyone wants to trade. Sologenic DEX [1] is an modern UI for a DEX to trade. Cutting out the middlemen was once a key point of p2p and decentral systems. It was kinda lost with all the non tech savvy people storming the crypto space. [1] https://www.sologenic.com/ecosystem/sologenic-decentralized-exchange https://www.sologenic.com/ecosystem/sologenic-decentralized-... (The DEX runs on the XRPL, Manticore Securities AS(the company behind sologenic) has no control over it)
    - arcticbull 5y ago
      Weren't DEX trade fees in the thousands of dollars during the big part of the crash a few weeks ago?
- Graffur 5y ago
  What are the fundamental flaws you're talking about? (I assume throughput but I'll wait for your reply). What do you mean by saying people fell for "this"? I assume you mean it's a scam but I will wait for your reply.
  - lottin 5y ago
    > What are the fundamental flaws you're talking about? For a payments system, the fact that all transactions are final is pretty bad. I'd say this, by itself, makes the system unusable in the real world.
    - danboarder 5y ago
      Except that transactions are not final, your scenario is exactly what crypto is great at, there are many ways you can set up an escrow for any transaction to protect multiple parties, for example by using a multisig wallet (1). (1) https://en.m.wikipedia.org/wiki/Multisignature https://en.m.wikipedia.org/wiki/Multisignature
    - deleted 5y ago
      [deleted]
    - doomroot 5y ago
      You can build a system of reversible transactions on bitcoin or any other currency (people already have). It’s impossible to do the inverse in a non reversible system.
      - acjohnson55 5y ago
        We have non reversible payments already. It's called wiring money. People generally avoid using it unless absolutely necessary, because it's expensive (much like bitcoin) and most of the time, it's not what you want.
        deleted 5y ago
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- eli 5y ago
  The extremely messed up incentives make it impossible to even have an honest conversation about it’s merits or issues. If there are any legitimate uses for blockchain (and that’s an if) they’re lost in the noise of 10,000 get rich quick schemes, outright frauds, and bad actors.
  - acjohnson55 5y ago
    100% this. It's the world's greatest machine for generating motivated reasoning. People buy in during the pump and get incredibly motivated to join the immune system for their chosen coin.
    - eli 5y ago
      I spent a long time giving NFTs the benefit of the doubt because I didn’t really get it and I couldn’t get anyone to explain it to me who wasn’t also VERY invested in their outcome and unable to concede the possibility of any downsides.
      - deebosong 5y ago
        What are your thoughts on NFT's after giving it the benefit of the doubt? I, too, wanted to give the NFT space a chance because admittedly I wanted to cash in while the gettin was good. But after digging into things before I dipped my toes, the whole thing smelled foul, even if people I know and respect are making good money in that space. It's just off to me, the motivations, moreso than the tech & function & problems it purports to address/ solve. A big ole hype machine that doesn't seem like it has real depth, integrity or soul, to use a bit more flowery language. Curious what you landed on, though.
        eli 5y ago
        Well, if your question is just can you make a buck off them, I'd guess you probably could. But I don't like gambling and I'm more interested in whether there's anything of lasting value here. Tl;dr I don't own any NFTs and have no plans to buy any. The NFTs that just point to a painting or a youtube video, I don't think so. They don't do anything and I don't think owning them will be valuable. The NFTs of, like, NBA clips I can sort of understand as digital trading cards. Being purely digital I think they're inferior to the baseball cards I collected as a kid, but I can kinda see it. But 1) they don't need a blockchain; a public database would probably work better for everyone and 2) I don't think sports trading cards are generally a good investment. There's something maybe interesting in the "creator economy" angle where like a new podcaster auctions off NFTs of the episodes to early fans, who then become invested in its success. If the show takes off, newly minted NFTs will go for more and more money benefitting the creator and the secondary market will appreciate for early supporters. To be clear, I don't think this is actually a good idea for a lot of reasons... but it's interesting. All the games and pets and racehorses seem like junk.
kragen 5y ago
I've been using Bitcoin to get paid for a couple of years at this point (programming work for overseas clients), and I haven't gotten scammed yet. I'm not engaged in money laundering, vaporware, fraud, ransomware, or gambling, and only the usual amount of delusion. And I don't even buy illegal drugs! And, yeah, 13 years after the internet's invention was 01982; not only couldn't you get so much as a weather report online, much less IRC, but many of the early interesting experiments like NLS at SRI had shut down, and more and more places were disabling guest access to their hosts — you couldn't run so much as a game of ADVENT without getting a username. And a password. Things were seriously regressing. The only people you could talk to on the internet were other people who really bought into the subculture, of which there were a few tens of thousands. So why does Bitcoin have tens of millions of users 13 years after its inception, instead of only tens of thousands like the internet? If you live in a country with a highly functional banking system and no kleptocracy, Bitcoin is probably a bit puzzling unless you have family in Cuba. But it’s not puzzling at all for those of us who live somewhere in the middle of the broad spectrum between Switzerland and Somalia, because most places have a little kleptocracy. Argentina is a stable democracy, far from being “a failed state,”† but if you want to send US$500 abroad via non-Bitcoin means it’s basically impossible, and the only broadly available savings vehicle is real estate (“ahorrar en ladrillos”), which of course grossly inflates real-estate prices, with a substantial part of the capital city occupied by empty apartments someone bought “as an investment”. Historically, Argentines have saved by buying dollars, but that’s limited to US$200 a month now, and then only if you have a non-under-the-table job (about a third of total employment is under the table): https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-cambiario-se-cumple-un-ano-la-restriccion-impuesta-macri-n5129832 https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-... You can see that in September 02019 when this measure was imposed the price of a dollar was AR$63.50; now it’s AR$155. So whatever savings you had in pesos in 02019 have lost 59% of their value to peso devaluation. In 02001 a lot of Argentines had saved dollars in their dollar-denominated bank accounts. This did not preserve their savings through the financial crisis that year; the cash-strapped government limited withdrawals to a trickle, then converted dollar deposits to pesos at a one-to-one rate, then released the exchange-rate peg, at which point peso went overnight from being worth US$1 to being worth US$0.25 before settling at about US$0.31 for the next few years. The US did something similar in 01933. Some might suggest using “alternatives to banks like credit unions where customers—as owners—hold more power,” but Credicoop depositors suffered the same two-thirds confiscation of savings as depositors in for-profit banks. And they pay the same 3% tax on bank transactions including checks. That’s more than a fast Bitcoin transaction fee of US$15 for transactions over US$500. But we’re not a failed state. There are no gangs of bandits roving the streets in Argentine cities (though there are some pretty bad slums where you’ll get robbed if you wander in without knowing anybody). Courts, free public hospitals, and roads continue to function, though there are more potholes than a year ago. Argentine infant mortality is 10 per 1000 live births, down from almost 20 in the late 01990s and the same as the late 01980s in the US; life expectancy at birth is 77 years, worse than Switzerland’s 84, but the same as China and Hungary, and better than Saudi or Mexico. (Somalia is 54.) Most of the world is worse off than Argentina, although not necessarily in such a statistically transparent fashion. About one fourth of the people in the world are unbanked, 51% here in Argentina; even advanced countries like Russia, Hungary, and Uruguay have roughly a quarter of the population unbanked: https://www.gfmag.com/global-data/economic-data/worlds-most-unbanked-countries https://www.gfmag.com/global-data/economic-data/worlds-most-... And if your family lives in a country like Iran or Venezuela subject to US sanctions, and you live in the US? Good luck sending them an ACH, instant or otherwise!‡ It’s well known that Bitcoin is very popular in Venezuela, which kind of is a failed state, so one of the Venezuelan governments is trying to tax Bitcoin remittances at 15%. https://archive.fo/ZRXzS https://archive.fo/ZRXzS Bitcoin handles a few billion dollars per year in such remittances. This might seem like a trivial amount of money to someone in a rich country, but in poor countries, it’s enough to keep several million people alive. Even in the US, it’s common for the police to confiscate large amounts of paper currency just because they can (“civil forfeiture”); US bank accounts are probably fine for US$100K but probably somewhat risky for US$10M if the bank thinks you don’t seem like the kind of person who ought to have it. US$10M in US$100 bills fits in a box you can wheel around on a dolly, but Bitcoin is a lot more practical. (And of course US$10M in dollar bills loses about US$200k per year to inflation.) Transaction fees are usually high enough that you wouldn’t want to use Bitcoin to pay for a can of Red Bull or even a restaurant dinner. But it’s extremely practical as an alternative to Western Union or US$100 bills or gold, even with the current very high transaction fees. At the moment, the Bitcoin transaction fee is very low—the median Bitcoin transaction fee in the last block was 0.00678 millibitcoins, which is US$0.25: https://btc.com/0000000000000000000778ef382c1697706e34634696ece8d3243eb061e896d9?page=59&order_by=fee&asc=1 https://btc.com/0000000000000000000778ef382c1697706e34634696... Three months ago it was at what I think of as a more normal rate of 0.31 millibitcoins, US$11, which is lower than the 3.4% spread you’d pay to a jeweler or black-market money changer for transactions over US$350: https://btc.com/00000000000000000000476ab57eea9be8ada36e26803130287eb75c7e99797d?page=72&order_by=fee&asc=1 https://btc.com/00000000000000000000476ab57eea9be8ada36e2680... So, Bitcoin doesn’t have to be a cypherpunk utopia to be a big improvement on the status quo ante. For those of you living in stable countries where your worries are things like “instant and extremely low-fee ACHs” and “decentralized utopia”, this may be very confusing, but try to remember that most of the world lives in places with much more pressing concerns, concerns that Bitcoin helps a lot with. And you may live there too, soon—the loyal subjects of Kaiser Wilhelm in 01913 certainly didn’t expect that in 15 years they’d be in the middle of a hyperinflation episode that remains legendary a century later. I think that, by providing workarounds to the people who need them, cryptocurrencies probably not only ameliorate the most immediate and pressing concerns of poor parts of the population like Venezuelan immigrants, but probably also adjust the power balance in a more liberal and democratic direction. This will improve the chance of those concerns being ameliorated by public policy over the next decades as well. But it's hard to tell what will really happen. The potential disaster scenario is that, by making most taxation impossible, cryptocurrencies destroy the modern welfare state without providing anything to replace it. So the public hospitals close, the enormous police force starts to support itself by extracting tribute, and the infrastructure decays. Pretty similar to what's happened in the US over the last 50 years, in fact, only more so. However, at this point I think the modern welfare state is already doing a good enough job of destroying itself without any significant help from cryptocurrencies—as evidence, I can point to Maduro, Macri, Bolsonaro, Trump, and Brexit, and metonymically to the social changes they betoken. So at this point I'm more worried about cushioning the collapse than preventing it. (I posted an earlier version of this a couple of months ago at https://news.ycombinator.com/item?id=26654767 https://news.ycombinator.com/item?id=26654767.) ____ † We’ve remained democratic since 01983, electing presidents from three different political parties (UCR, PJ, and PRO), and there’s no serious insurgency. It’s the economy and government policy that are ruinously unstable, to a point that seems satirical to anyone accustomed to the US, but is lamentably common worldwide. Rich people sometimes say they don't know of legitimate uses of Bitcoin outside of “failed states”. ‡ Family remittances are specifically exempted from the US sanctions on Iran, but good luck finding a US bank that’s willing and able to take that risk: https://www.wiggin.com/wp-content/uploads/2019/09/26580_advisory-family-remittances-from-us-to-iran-not-prohibited-by-iranian-transactions-regulations-martini-glasser-november-2011.pdf https://www.wiggin.com/wp-content/uploads/2019/09/26580_advi...
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daniel-cussen 5y ago
It's become gold. Preferred by criminals, untraceable (gold is a single stable isotope, basically untraceable). A store of wealth. And you can't buy a pizza with gold, either, and there are tons of scammers who love gold (I remember, about Thailand, the scammers would conspire to get people's gold, a few would talk loudly about how jewels were going up, then someone else in your trip would just happen to mention, despite not wanting to mention it, that there was a great new jewelry offering discounted jewels, whatever, the point was they wanted the tourist to go to buy gold, then trade that gold for fake jewels, because then he couldn't get a refund).
- Taniwha 5y ago
  Gold also has a fatal flaw, there's only so much of it, building a currency based on gold (ie the US dollar on the gold standard) limits the size of the economy, it can't grow if you can't pay for stuff - it's why we left the gold standard. Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.
  - mixmastamyk 5y ago
    Are you saying economies grow by inflating their currency?
    - Taniwha 5y ago
      No, economies based on gold or bitcoin can ONLY grow by inflating their currency .... At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
    - barrkel 5y ago
      Growth of the economy without growth of the money supply leads to deflation, which harms consumption and investment, because hanging on to your money becomes competitive with actively doing something with it. A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.
throwaway384028 5y ago
You can still buy drugs with bitcoin :-)
DennisP 5y ago
"Bitcoin" is a subset of "blockchain." Some blockchains have a lot of stuff to do, even if Bitcoin doesn't.
- acjohnson55 5y ago
  Which ones?
  - TheSmiddy 5y ago
    There's heaps. Hypothetical blockchains, imaginary blockchains, future blockchains, theoretical blockchains, unconfirmed blockchains, academic blockchains; the list is endless!
    - SubiculumCode 5y ago
      The ignorance is astounding and the trolling low brow.
  - baby 5y ago
    Avalanche, cosmos/tendermint, ethereum, mina, celo, dfinity, axelar, etc.
    - acjohnson55 5y ago
      I've studied some of these, in varying depth. But it honestly seems like we've built a tremendous amount of impressive technology that currently has very little impact outside of its own ecosystem, in terms of enabling new industries or consumer services.
      - baby 5y ago
        I’m not sure how you’re qualifying impact. A lot of people seem to have unrealistic expectations for these currencies to take over right away. It’s just not possible without massive adoption, stability, etc. It takes time to get there, technology-wise, and ecosystem-wise. If I wanted to be more optimistic I would look at the level of adoption today as insane compared to 5y ago.
earnesti 5y ago
> You could no longer buy a pizza with it I have bought a lot of pizzas with BTC (and other cryptocurrencies), as the local food ordering platform accepts it. Worked grear, but at some point the crypto payment processor started requiring KYC. I'm not gonna upload my passport to pay for pizza. I dont know if this problem is because of crypto or excessive regulation.
- barrkel 5y ago
  It's because of money laundering, which Bitcoin makes easier - and the more people buying pizza, the better for laundering.
- lhl 5y ago
  Use of cryptocurrencies for transactions is also limited due to tax treatment - in the US and many other countries you are expected to calculate and report capital gains for every transaction. Of course this sort of treatment won’t be done for CBDCs (algorithmic stablecoins with governance tokens is the answer here. I’m still waiting for someone to combine this with a reasonable mobile UX, feeless transfer, and transactional privacy. All these properties exist independently (Frax, Nano, Nano, Monero, for example) but not in a single product. Yet.)
baby 5y ago
Every time I read a comment like that, I feel like there’s a fundamental gap in understanding the field. Bitcoin hasn’t regressed, the tech has just evolved a lot since then but most people just know about bitcoin.
derefr 5y ago
Why are you measuring a specific cryptocurrency vs. the whole Internet? The correct comparison for the Internet would be "all cryptocurrencies." Bitcoin "regressed" (really, specialized) because it got so big that it became speculators' favorite, which made it too expensive for anyone but speculators to interact with. Then, other cryptocurrencies that aren't so expensive to move around were created, and people who wanted to use cryptocurrency as a medium of exchange moved to using those instead. So now the ecosystem supports two applications (investment, exchange) using different tools specialized to those purposes, each better at that thing than a single cryptocurrency trying to "do it all" would be. Which is, y'know, also the story of the Internet.
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lhl 5y ago
The problem is you’re looking at a technological dead end (Bitcoin). There’s no innovation there, financial or otherwise, just momentum. However all you have to do is to turn your eye adjacent to the dapp space and see where developer and user adoption is definitely happening. There’s no shortage of “stuff to do” in DeFi and over the past few months the pattern is that it maxes out the transactional capacity every single network it touches. There are currently multiple networks in production (BSC, Polygon, Solana) that have billions in TVL and handling hundreds of transactions/second right now and no shortage of contenders/alternatives and a huge amount of innovation at every layer. Complaining about nothing to do on Bitcoin feels like complaining how empty the gopher server are after everyone’s moved onto the web.
- ikt 5y ago
  i'm glad at least one other person here has insight, i honestly don't understand why people here are so uninformed
- arcticbull 5y ago
  Crypto only solves problems crypto itself created. DeFi is a perfect example of that. The reason is that blockchain can only offer its trustless, decentralized and permissionless guarantees to things that are wholly representable on-chain. As soon as you try and sync it with the real world, the real world is the source of truth and the chain representation is meaningless. Further, by boat anchoring solutions to the fundamental inefficiencies of blockchain, you leave your chain solutions at a material disadvantage to centralized, permissioned solutions anyways. This creates huge adverse selection bias, leaving only the criminals and scammers using it. Concrete example: Sia has 800TB of storage - total! - in spite of an $800M market cap and millions spent on R&D. You could achieve the same result with a half of a 1U rack of hard drives and $40,000 - or a few bucks on AWS. Why? Because why on earth would anyone use it? On the other hand, Chia has 1.5 exabytes of wasted hard drive capacity loaded up with bingo cards lol. This is crypto. DeFi is particularly fun, it's basically just decentralized 2008, a way to extend way too much leverage to people who simply should not have it, in exchange for fanciful 3-digit percentage APR to lenders. It's all a damn mess.
  - 5y ago
tim333 5y ago
Re fun stuff to do, you can speculate. In 2017 I put a modest amount in some ICO and it went up 100x. That was actually more fun for me than trying to make Compuserve work back in the 90s. One of the most interesting aspects of crypto to me is it's like printing money - having held some bitcoin and having it in an account is rather like the government printing it and giving it to you as a grant. It doesn't directly create goods or services but it does have an effect for better or worse.
api 5y ago
The nascent cryptocurrency economy experienced a deflationary crash due to the hyperdeflation baked into the protocol. The currency became useless as such and was mostly abandoned, and then the shell of it was picked up by scammers who are now using it to run a Ponzi scheme. I’d put that deflationary crash right at the point you mention. I remember it. Bitcoin ran up to crazy levels in 2017 while it was simultaneously abandoned, which is what a deflationary currency collapse looks like. Bitcoin’s designer(s) were brilliant cryptographers but crank economists. There’s a reason nobody takes that kind of superficial pop Austrianism seriously. It would be possible to design a viable cryptocurrency but it won’t happen until the current crop of cranks and scammers goes away. Right now anything actually workable in the space is tainted by the nonsense.

ashtonkem 5y ago

Bitcoin didn’t regress, what actually happened is that its fundamental flaws ended up eventually dominating whatever early enthusiasm allowed them to be ignored. It was never going to work, for a variety of reasons that were incredibly apparent at the time. “Why did it regress” is much less interesting than “why did anyone ever fall for this?”

idlewords 5y ago
Sure, but a lot of early technologies move laterally in some unexpected direction, and it was reasonable to expect blockchain stuff to do the same. Maybe the original idea could never fly (even in 2008 you didn't have to be a genius to see that evading financial controls would be the chief use of a working cryptocurrency). But likely someone would find a really neat twist on it and find the blockchain equivalent of VisiCalc, and that would happen again and so on. What's interesting to me is that the original idea was clearly brilliant, but never found any of those lateral steps. It's kind of a string theory for programmers now.
- ashtonkem 5y ago
  There was no reason to believe it would move laterally, for both technical and social reasons. First, the underpinnings of Bitcoin are ideological, namely in Austrian economics. This means that any change that caused any inflation would be socially resisted. Second, most of the issues with Bitcoin stem from the lack of a central authority to do things like chargebacks and handle conflict resolution. It is not possible to solve many of the issues of Bitcoin without a central authority, and that was not going to happen for obvious reasons.
  - idlewords 5y ago
    Yeah, but when you took away the money part and just looked at the technical idea of a distributed chained ledger with no central point of trust, that was cool. At least, it was cool to me. It seemed like it might go in some interesting other direction.
    - davidgerard 5y ago
      Bitcoin was a fascinating technical trick, but it's also been a worked example of the difference between "interesting", versus "feasible" or even "a good idea". As soon as it claimed to be money, then it was all about the money. If you look at early BitcoinTalk, you'll see a pile of scams that are extremely similar to the jargon still used in crypto to this day - the scammers got in very early indeed.
    - FourthProtocol 5y ago
      I never quite understood how that might happen. I kept hearing how it was distributed when it isn't. How the blockchain was going to change the world, when not a single example beyond Bitcoin itself could be given. Healthcare was mentioned, but no application... It's right up there with all the other crazy ideas of the last decade or two (Mongo, agile, Google Glass...)
      - Clewza313 5y ago
        Augmented reality has plenty of potential commercial applications, and Glass is still quietly trying to exploit them. The problem is that delivering AR with enough fidelity to fool the eye is capital-H Hard. Michael Abrash had a good series of blog posts on this.
      - imtringued 5y ago
        It's the big problem with Bitcoin. The USD dollar exists for the US. Bitcoin only exists for itself.
    - jacquesm 5y ago
      There's one application that I always wondered why it didn't take off as a blockchain based element, a DNS replacement. It's one of the cornerstones of the internet and the web (which to many people is the internet) and the centralized control over it is definitely a drawback and a shortcoming.
- Rerarom 5y ago
  > string theory for programmers This is gold, I'm gonna steal it
  - jjulius 5y ago
    We could get really meta with it and have @idlewords sell that phrase/post to you as an NFT.
- api 5y ago
  String theory for programmers is close to my take. I always think of the STTNG episode where the Federation comes up with a weapon to kill the Borg by giving them an impossible but deeply fascinating problem to ponder forever. Cryptocurrency seems like that for endless numbers of tech nerds. It’s even worse than the impossible shape they were going to use on the Borg since it plugs right into humanity’s biggest cognitive vulnerability: gambling. Maybe it’s a weapon sent by aliens to make halt our technological progress. 25 years from now cryptocurrency will have soaked up all surplus capital and locked it into a Ponzi and all our best minds will be churning out increasingly Byzantine coin hacks. Then the hypervelocity impactors start arriving…
webgoat 5y ago
Fees high, world too stable, heavy speculation. Cryptos forced to trade on centralized exchanges to avoid fees, making it a much crappier version of something like PayPal. Doesn't help that there's an unending supply of people more than willing to participate in ponzi schemes creating massive volatility and turning the "currency" into the commodity.
- ahallock 5y ago
  Dotcom bubble was the same way. We're in the early stages.
  - UncleMeat 5y ago
    By the time the dotcom bubble burst, email had completely changed the workplace, search engines had completely changed the way people found information, chat rooms had produced an entire online culture, and more. Just think about all of the people on HN who claim that the internet was the best it ever was in the 90s.
- noxer 5y ago
  Trading on a DEX is free trading on an exchange costs you fees. People are just lazy and use exchanges because they provide easy to use apps and stuff and cash out to fiat etc. but this changes because exchanges are horrible at staying up when the market moves fast and everyone wants to trade. Sologenic DEX [1] is an modern UI for a DEX to trade. Cutting out the middlemen was once a key point of p2p and decentral systems. It was kinda lost with all the non tech savvy people storming the crypto space. [1] https://www.sologenic.com/ecosystem/sologenic-decentralized-exchange https://www.sologenic.com/ecosystem/sologenic-decentralized-... (The DEX runs on the XRPL, Manticore Securities AS(the company behind sologenic) has no control over it)
  - arcticbull 5y ago
    Weren't DEX trade fees in the thousands of dollars during the big part of the crash a few weeks ago?
Graffur 5y ago
What are the fundamental flaws you're talking about? (I assume throughput but I'll wait for your reply). What do you mean by saying people fell for "this"? I assume you mean it's a scam but I will wait for your reply.
- lottin 5y ago
  > What are the fundamental flaws you're talking about? For a payments system, the fact that all transactions are final is pretty bad. I'd say this, by itself, makes the system unusable in the real world.
  - danboarder 5y ago
    Except that transactions are not final, your scenario is exactly what crypto is great at, there are many ways you can set up an escrow for any transaction to protect multiple parties, for example by using a multisig wallet (1). (1) https://en.m.wikipedia.org/wiki/Multisignature https://en.m.wikipedia.org/wiki/Multisignature
  - deleted 5y ago
    [deleted]
  - doomroot 5y ago
    You can build a system of reversible transactions on bitcoin or any other currency (people already have). It’s impossible to do the inverse in a non reversible system.
    - acjohnson55 5y ago
      We have non reversible payments already. It's called wiring money. People generally avoid using it unless absolutely necessary, because it's expensive (much like bitcoin) and most of the time, it's not what you want.
      - deleted 5y ago
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eli 5y ago
The extremely messed up incentives make it impossible to even have an honest conversation about it’s merits or issues. If there are any legitimate uses for blockchain (and that’s an if) they’re lost in the noise of 10,000 get rich quick schemes, outright frauds, and bad actors.
- acjohnson55 5y ago
  100% this. It's the world's greatest machine for generating motivated reasoning. People buy in during the pump and get incredibly motivated to join the immune system for their chosen coin.
  - eli 5y ago
    I spent a long time giving NFTs the benefit of the doubt because I didn’t really get it and I couldn’t get anyone to explain it to me who wasn’t also VERY invested in their outcome and unable to concede the possibility of any downsides.
    - deebosong 5y ago
      What are your thoughts on NFT's after giving it the benefit of the doubt? I, too, wanted to give the NFT space a chance because admittedly I wanted to cash in while the gettin was good. But after digging into things before I dipped my toes, the whole thing smelled foul, even if people I know and respect are making good money in that space. It's just off to me, the motivations, moreso than the tech & function & problems it purports to address/ solve. A big ole hype machine that doesn't seem like it has real depth, integrity or soul, to use a bit more flowery language. Curious what you landed on, though.
      - eli 5y ago
        Well, if your question is just can you make a buck off them, I'd guess you probably could. But I don't like gambling and I'm more interested in whether there's anything of lasting value here. Tl;dr I don't own any NFTs and have no plans to buy any. The NFTs that just point to a painting or a youtube video, I don't think so. They don't do anything and I don't think owning them will be valuable. The NFTs of, like, NBA clips I can sort of understand as digital trading cards. Being purely digital I think they're inferior to the baseball cards I collected as a kid, but I can kinda see it. But 1) they don't need a blockchain; a public database would probably work better for everyone and 2) I don't think sports trading cards are generally a good investment. There's something maybe interesting in the "creator economy" angle where like a new podcaster auctions off NFTs of the episodes to early fans, who then become invested in its success. If the show takes off, newly minted NFTs will go for more and more money benefitting the creator and the secondary market will appreciate for early supporters. To be clear, I don't think this is actually a good idea for a lot of reasons... but it's interesting. All the games and pets and racehorses seem like junk.

kragen 5y ago

I've been using Bitcoin to get paid for a couple of years at this point (programming work for overseas clients), and I haven't gotten scammed yet. I'm not engaged in money laundering, vaporware, fraud, ransomware, or gambling, and only the usual amount of delusion. And I don't even buy illegal drugs! And, yeah, 13 years after the internet's invention was 01982; not only couldn't you get so much as a weather report online, much less IRC, but many of the early interesting experiments like NLS at SRI had shut down, and more and more places were disabling guest access to their hosts — you couldn't run so much as a game of ADVENT without getting a username. And a password. Things were seriously regressing. The only people you could talk to on the internet were other people who really bought into the subculture, of which there were a few tens of thousands. So why does Bitcoin have tens of millions of users 13 years after its inception, instead of only tens of thousands like the internet? If you live in a country with a highly functional banking system and no kleptocracy, Bitcoin is probably a bit puzzling unless you have family in Cuba. But it’s not puzzling at all for those of us who live somewhere in the middle of the broad spectrum between Switzerland and Somalia, because most places have a little kleptocracy. Argentina is a stable democracy, far from being “a failed state,”† but if you want to send US$500 abroad via non-Bitcoin means it’s basically impossible, and the only broadly available savings vehicle is real estate (“ahorrar en ladrillos”), which of course grossly inflates real-estate prices, with a substantial part of the capital city occupied by empty apartments someone bought “as an investment”. Historically, Argentines have saved by buying dollars, but that’s limited to US$200 a month now, and then only if you have a non-under-the-table job (about a third of total employment is under the table): https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-cambiario-se-cumple-un-ano-la-restriccion-impuesta-macri-n5129832 https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-... You can see that in September 02019 when this measure was imposed the price of a dollar was AR$63.50; now it’s AR$155. So whatever savings you had in pesos in 02019 have lost 59% of their value to peso devaluation. In 02001 a lot of Argentines had saved dollars in their dollar-denominated bank accounts. This did not preserve their savings through the financial crisis that year; the cash-strapped government limited withdrawals to a trickle, then converted dollar deposits to pesos at a one-to-one rate, then released the exchange-rate peg, at which point peso went overnight from being worth US$1 to being worth US$0.25 before settling at about US$0.31 for the next few years. The US did something similar in 01933. Some might suggest using “alternatives to banks like credit unions where customers—as owners—hold more power,” but Credicoop depositors suffered the same two-thirds confiscation of savings as depositors in for-profit banks. And they pay the same 3% tax on bank transactions including checks. That’s more than a fast Bitcoin transaction fee of US$15 for transactions over US$500. But we’re not a failed state. There are no gangs of bandits roving the streets in Argentine cities (though there are some pretty bad slums where you’ll get robbed if you wander in without knowing anybody). Courts, free public hospitals, and roads continue to function, though there are more potholes than a year ago. Argentine infant mortality is 10 per 1000 live births, down from almost 20 in the late 01990s and the same as the late 01980s in the US; life expectancy at birth is 77 years, worse than Switzerland’s 84, but the same as China and Hungary, and better than Saudi or Mexico. (Somalia is 54.) Most of the world is worse off than Argentina, although not necessarily in such a statistically transparent fashion. About one fourth of the people in the world are unbanked, 51% here in Argentina; even advanced countries like Russia, Hungary, and Uruguay have roughly a quarter of the population unbanked: https://www.gfmag.com/global-data/economic-data/worlds-most-unbanked-countries https://www.gfmag.com/global-data/economic-data/worlds-most-... And if your family lives in a country like Iran or Venezuela subject to US sanctions, and you live in the US? Good luck sending them an ACH, instant or otherwise!‡ It’s well known that Bitcoin is very popular in Venezuela, which kind of is a failed state, so one of the Venezuelan governments is trying to tax Bitcoin remittances at 15%. https://archive.fo/ZRXzS https://archive.fo/ZRXzS Bitcoin handles a few billion dollars per year in such remittances. This might seem like a trivial amount of money to someone in a rich country, but in poor countries, it’s enough to keep several million people alive. Even in the US, it’s common for the police to confiscate large amounts of paper currency just because they can (“civil forfeiture”); US bank accounts are probably fine for US$100K but probably somewhat risky for US$10M if the bank thinks you don’t seem like the kind of person who ought to have it. US$10M in US$100 bills fits in a box you can wheel around on a dolly, but Bitcoin is a lot more practical. (And of course US$10M in dollar bills loses about US$200k per year to inflation.) Transaction fees are usually high enough that you wouldn’t want to use Bitcoin to pay for a can of Red Bull or even a restaurant dinner. But it’s extremely practical as an alternative to Western Union or US$100 bills or gold, even with the current very high transaction fees. At the moment, the Bitcoin transaction fee is very low—the median Bitcoin transaction fee in the last block was 0.00678 millibitcoins, which is US$0.25: https://btc.com/0000000000000000000778ef382c1697706e34634696ece8d3243eb061e896d9?page=59&order_by=fee&asc=1 https://btc.com/0000000000000000000778ef382c1697706e34634696... Three months ago it was at what I think of as a more normal rate of 0.31 millibitcoins, US$11, which is lower than the 3.4% spread you’d pay to a jeweler or black-market money changer for transactions over US$350: https://btc.com/00000000000000000000476ab57eea9be8ada36e26803130287eb75c7e99797d?page=72&order_by=fee&asc=1 https://btc.com/00000000000000000000476ab57eea9be8ada36e2680... So, Bitcoin doesn’t have to be a cypherpunk utopia to be a big improvement on the status quo ante. For those of you living in stable countries where your worries are things like “instant and extremely low-fee ACHs” and “decentralized utopia”, this may be very confusing, but try to remember that most of the world lives in places with much more pressing concerns, concerns that Bitcoin helps a lot with. And you may live there too, soon—the loyal subjects of Kaiser Wilhelm in 01913 certainly didn’t expect that in 15 years they’d be in the middle of a hyperinflation episode that remains legendary a century later. I think that, by providing workarounds to the people who need them, cryptocurrencies probably not only ameliorate the most immediate and pressing concerns of poor parts of the population like Venezuelan immigrants, but probably also adjust the power balance in a more liberal and democratic direction. This will improve the chance of those concerns being ameliorated by public policy over the next decades as well. But it's hard to tell what will really happen. The potential disaster scenario is that, by making most taxation impossible, cryptocurrencies destroy the modern welfare state without providing anything to replace it. So the public hospitals close, the enormous police force starts to support itself by extracting tribute, and the infrastructure decays. Pretty similar to what's happened in the US over the last 50 years, in fact, only more so. However, at this point I think the modern welfare state is already doing a good enough job of destroying itself without any significant help from cryptocurrencies—as evidence, I can point to Maduro, Macri, Bolsonaro, Trump, and Brexit, and metonymically to the social changes they betoken. So at this point I'm more worried about cushioning the collapse than preventing it. (I posted an earlier version of this a couple of months ago at https://news.ycombinator.com/item?id=26654767 https://news.ycombinator.com/item?id=26654767.) ____ † We’ve remained democratic since 01983, electing presidents from three different political parties (UCR, PJ, and PRO), and there’s no serious insurgency. It’s the economy and government policy that are ruinously unstable, to a point that seems satirical to anyone accustomed to the US, but is lamentably common worldwide. Rich people sometimes say they don't know of legitimate uses of Bitcoin outside of “failed states”. ‡ Family remittances are specifically exempted from the US sanctions on Iran, but good luck finding a US bank that’s willing and able to take that risk: https://www.wiggin.com/wp-content/uploads/2019/09/26580_advisory-family-remittances-from-us-to-iran-not-prohibited-by-iranian-transactions-regulations-martini-glasser-november-2011.pdf https://www.wiggin.com/wp-content/uploads/2019/09/26580_advi...

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daniel-cussen 5y ago

It's become gold. Preferred by criminals, untraceable (gold is a single stable isotope, basically untraceable). A store of wealth. And you can't buy a pizza with gold, either, and there are tons of scammers who love gold (I remember, about Thailand, the scammers would conspire to get people's gold, a few would talk loudly about how jewels were going up, then someone else in your trip would just happen to mention, despite not wanting to mention it, that there was a great new jewelry offering discounted jewels, whatever, the point was they wanted the tourist to go to buy gold, then trade that gold for fake jewels, because then he couldn't get a refund).

Taniwha 5y ago
Gold also has a fatal flaw, there's only so much of it, building a currency based on gold (ie the US dollar on the gold standard) limits the size of the economy, it can't grow if you can't pay for stuff - it's why we left the gold standard. Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.
- mixmastamyk 5y ago
  Are you saying economies grow by inflating their currency?
  - Taniwha 5y ago
    No, economies based on gold or bitcoin can ONLY grow by inflating their currency .... At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
  - barrkel 5y ago
    Growth of the economy without growth of the money supply leads to deflation, which harms consumption and investment, because hanging on to your money becomes competitive with actively doing something with it. A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.

throwaway384028 5y ago

You can still buy drugs with bitcoin :-)

DennisP 5y ago

"Bitcoin" is a subset of "blockchain." Some blockchains have a lot of stuff to do, even if Bitcoin doesn't.

acjohnson55 5y ago
Which ones?
- TheSmiddy 5y ago
  There's heaps. Hypothetical blockchains, imaginary blockchains, future blockchains, theoretical blockchains, unconfirmed blockchains, academic blockchains; the list is endless!
  - SubiculumCode 5y ago
    The ignorance is astounding and the trolling low brow.
- baby 5y ago
  Avalanche, cosmos/tendermint, ethereum, mina, celo, dfinity, axelar, etc.
  - acjohnson55 5y ago
    I've studied some of these, in varying depth. But it honestly seems like we've built a tremendous amount of impressive technology that currently has very little impact outside of its own ecosystem, in terms of enabling new industries or consumer services.
    - baby 5y ago
      I’m not sure how you’re qualifying impact. A lot of people seem to have unrealistic expectations for these currencies to take over right away. It’s just not possible without massive adoption, stability, etc. It takes time to get there, technology-wise, and ecosystem-wise. If I wanted to be more optimistic I would look at the level of adoption today as insane compared to 5y ago.

earnesti 5y ago

> You could no longer buy a pizza with it I have bought a lot of pizzas with BTC (and other cryptocurrencies), as the local food ordering platform accepts it. Worked grear, but at some point the crypto payment processor started requiring KYC. I'm not gonna upload my passport to pay for pizza. I dont know if this problem is because of crypto or excessive regulation.

barrkel 5y ago
It's because of money laundering, which Bitcoin makes easier - and the more people buying pizza, the better for laundering.
lhl 5y ago
Use of cryptocurrencies for transactions is also limited due to tax treatment - in the US and many other countries you are expected to calculate and report capital gains for every transaction. Of course this sort of treatment won’t be done for CBDCs (algorithmic stablecoins with governance tokens is the answer here. I’m still waiting for someone to combine this with a reasonable mobile UX, feeless transfer, and transactional privacy. All these properties exist independently (Frax, Nano, Nano, Monero, for example) but not in a single product. Yet.)

baby 5y ago

Every time I read a comment like that, I feel like there’s a fundamental gap in understanding the field. Bitcoin hasn’t regressed, the tech has just evolved a lot since then but most people just know about bitcoin.

derefr 5y ago

Why are you measuring a specific cryptocurrency vs. the whole Internet? The correct comparison for the Internet would be "all cryptocurrencies." Bitcoin "regressed" (really, specialized) because it got so big that it became speculators' favorite, which made it too expensive for anyone but speculators to interact with. Then, other cryptocurrencies that aren't so expensive to move around were created, and people who wanted to use cryptocurrency as a medium of exchange moved to using those instead. So now the ecosystem supports two applications (investment, exchange) using different tools specialized to those purposes, each better at that thing than a single cryptocurrency trying to "do it all" would be. Which is, y'know, also the story of the Internet.

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lhl 5y ago

The problem is you’re looking at a technological dead end (Bitcoin). There’s no innovation there, financial or otherwise, just momentum. However all you have to do is to turn your eye adjacent to the dapp space and see where developer and user adoption is definitely happening. There’s no shortage of “stuff to do” in DeFi and over the past few months the pattern is that it maxes out the transactional capacity every single network it touches. There are currently multiple networks in production (BSC, Polygon, Solana) that have billions in TVL and handling hundreds of transactions/second right now and no shortage of contenders/alternatives and a huge amount of innovation at every layer. Complaining about nothing to do on Bitcoin feels like complaining how empty the gopher server are after everyone’s moved onto the web.

ikt 5y ago
i'm glad at least one other person here has insight, i honestly don't understand why people here are so uninformed
arcticbull 5y ago
Crypto only solves problems crypto itself created. DeFi is a perfect example of that. The reason is that blockchain can only offer its trustless, decentralized and permissionless guarantees to things that are wholly representable on-chain. As soon as you try and sync it with the real world, the real world is the source of truth and the chain representation is meaningless. Further, by boat anchoring solutions to the fundamental inefficiencies of blockchain, you leave your chain solutions at a material disadvantage to centralized, permissioned solutions anyways. This creates huge adverse selection bias, leaving only the criminals and scammers using it. Concrete example: Sia has 800TB of storage - total! - in spite of an $800M market cap and millions spent on R&D. You could achieve the same result with a half of a 1U rack of hard drives and $40,000 - or a few bucks on AWS. Why? Because why on earth would anyone use it? On the other hand, Chia has 1.5 exabytes of wasted hard drive capacity loaded up with bingo cards lol. This is crypto. DeFi is particularly fun, it's basically just decentralized 2008, a way to extend way too much leverage to people who simply should not have it, in exchange for fanciful 3-digit percentage APR to lenders. It's all a damn mess.
- 5y ago

tim333 5y ago

Re fun stuff to do, you can speculate. In 2017 I put a modest amount in some ICO and it went up 100x. That was actually more fun for me than trying to make Compuserve work back in the 90s. One of the most interesting aspects of crypto to me is it's like printing money - having held some bitcoin and having it in an account is rather like the government printing it and giving it to you as a grant. It doesn't directly create goods or services but it does have an effect for better or worse.

api 5y ago

The nascent cryptocurrency economy experienced a deflationary crash due to the hyperdeflation baked into the protocol. The currency became useless as such and was mostly abandoned, and then the shell of it was picked up by scammers who are now using it to run a Ponzi scheme. I’d put that deflationary crash right at the point you mention. I remember it. Bitcoin ran up to crazy levels in 2017 while it was simultaneously abandoned, which is what a deflationary currency collapse looks like. Bitcoin’s designer(s) were brilliant cryptographers but crank economists. There’s a reason nobody takes that kind of superficial pop Austrianism seriously. It would be possible to design a viable cryptocurrency but it won’t happen until the current crop of cranks and scammers goes away. Right now anything actually workable in the space is tainted by the nonsense.