12 ms·

Bitcoin didn’t regress, what actually happened is that its fundamental flaws ended up eventually dominating whatever early enthusiasm allowed them to be ignored

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.
      - Sargos 5y ago
        ENS has largely replaced DNS in crypto. Most dapps integrate ENS to display human readable names for addresses and it supports arbitrary TXT records so some apps are using it as a shared profile of yourself that you own.
  - rkagerer 5y ago
    You don't need centralization to do chargebacks and conflict mediation. What is lacking is a decentralized version of a justice system.
  - govcoin 5y ago
    Please dont mix Austrian economics into the picture. The few "austrians" that took the bait for BTC are either stupid or scammers at heart. I consider myself the student of Austrian economics, i work as a gold dealer, and both me and hundreds of my clients (whom many likewise are "austrians" or libertarians) believe BTC and cryptos are a scam.
- 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
        [deleted]
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.

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.
    - Sargos 5y ago
      ENS has largely replaced DNS in crypto. Most dapps integrate ENS to display human readable names for addresses and it supports arbitrary TXT records so some apps are using it as a shared profile of yourself that you own.
- rkagerer 5y ago
  You don't need centralization to do chargebacks and conflict mediation. What is lacking is a decentralized version of a justice system.
- govcoin 5y ago
  Please dont mix Austrian economics into the picture. The few "austrians" that took the bait for BTC are either stupid or scammers at heart. I consider myself the student of Austrian economics, i work as a gold dealer, and both me and hundreds of my clients (whom many likewise are "austrians" or libertarians) believe BTC and cryptos are a scam.
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
      [deleted]

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.