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I really don't understand the mindless bashing of cryptocurrency by Hacker News. Normally discussion here is quite rational and level headed, but there is somet

I really don't understand the mindless bashing of cryptocurrency by Hacker News. Normally discussion here is quite rational and level headed, but there is something regarding crypto that makes people get very polarized. First of all, I am not a Bitcoin maximalist, nor I am "brainwashed by a multi-level marketing sale pitch". Bitcoin is just a prototype for a P2P consensus algorithm that has stood the test of time. It has MANY flaws, and it failed its original goal of becoming electronic cash, and instead it became kind of a digital store of value. Is it worth more than it should? Sure, but you could argue the same of a lot of tech companies. The problem is most people think they understand blockchain, but they don't. They just think its for creating a meme currency that is a speculative bubble. What blockchain enables us to do, is to create a trustless P2P state machine, on top of which you can build any Turing complete project you can dream of. Instead of focusing on Bitcoin and Dogecoin go and check out Ethereum and projects like Aave and Compound. Blockchain will completely change the way we do finance, from how stock are traded, to how we transfer money. I am sure that it will happen in our lifetimes.

acjohnson55 5y ago
I'm not at all sure blockchain tech will change how we do finance. Literally every finance or finance-adjacent company has been trying to figure this out for the better part of the decade, and it just doesn't add up. Ethereum is very cool. Aave and Compound are very cool. But today, the whole ecosystem is super insular. Crypto loans and derivatives have to be overcollateralized with cryptoassets, and so the only use case for them is levering up cryptoasset exposure. Flash loans are a unique aspect of DeFi, but they're only really useful for arbitrage of cryptoassets. There remains a huge disconnect between cryptoassets and the real world. Things like NFT attempt to bridge, but it's basically just pretend. Owning an NFT generally provides no actual control or rights over the asset it refers to. Until institutions start creating assets natively on the blockchain, none of this stuff has any impact on the outside world. And it's not at all clear to me that this is going to happen, because there are potentially insurmountable hurdles in figuring out how to harmonize law and the blockchain. This entire ecosystem may turn out to be a dead end, outside of the clearly demonstrated use cases of speculation and crime.
- Vanclief 5y ago
  Thanks for the thoughtful comment. I agree with you that we are not there yet, but that disconnect will eventually be bridged. What we are lacking is a bridge between traditional finance and crypto that goes beyond what crypto exchanges offer. I think it will take time before we get there because we need for institutions and businesses to start adopting it, but this has not been happening for a decade. Ethereum is just 7 years old, and its in its infancy. I think we will need a couple of more speculative cycles before we end up with something useful.
  - acjohnson55 5y ago
    But what I mean to say is that the legal system and the blockchain may simply be irreconcilable, without losing the benefits of each, as a mechanism for consensus. If the regulatory system requires an override, then what's the point of extremely complex, expensive, and slow distributed permissionless consensus? It may well turn out that permissionless blockchains are only really appropriate for markets beyond the purview of regulators.

acjohnson55 5y ago

I'm not at all sure blockchain tech will change how we do finance. Literally every finance or finance-adjacent company has been trying to figure this out for the better part of the decade, and it just doesn't add up. Ethereum is very cool. Aave and Compound are very cool. But today, the whole ecosystem is super insular. Crypto loans and derivatives have to be overcollateralized with cryptoassets, and so the only use case for them is levering up cryptoasset exposure. Flash loans are a unique aspect of DeFi, but they're only really useful for arbitrage of cryptoassets. There remains a huge disconnect between cryptoassets and the real world. Things like NFT attempt to bridge, but it's basically just pretend. Owning an NFT generally provides no actual control or rights over the asset it refers to. Until institutions start creating assets natively on the blockchain, none of this stuff has any impact on the outside world. And it's not at all clear to me that this is going to happen, because there are potentially insurmountable hurdles in figuring out how to harmonize law and the blockchain. This entire ecosystem may turn out to be a dead end, outside of the clearly demonstrated use cases of speculation and crime.

Vanclief 5y ago
Thanks for the thoughtful comment. I agree with you that we are not there yet, but that disconnect will eventually be bridged. What we are lacking is a bridge between traditional finance and crypto that goes beyond what crypto exchanges offer. I think it will take time before we get there because we need for institutions and businesses to start adopting it, but this has not been happening for a decade. Ethereum is just 7 years old, and its in its infancy. I think we will need a couple of more speculative cycles before we end up with something useful.
- acjohnson55 5y ago
  But what I mean to say is that the legal system and the blockchain may simply be irreconcilable, without losing the benefits of each, as a mechanism for consensus. If the regulatory system requires an override, then what's the point of extremely complex, expensive, and slow distributed permissionless consensus? It may well turn out that permissionless blockchains are only really appropriate for markets beyond the purview of regulators.